However, it looks as though these plans may be hitting a bit of a snag in Europe. There are reports coming in that many manufacturers are objecting to their products being offered online at discounted prices. There are reports that companies such as Citizen Watches and some of the leading electrical companies are refusing to supply online sellers.
What is annoying eBay is that some manufacturers will only permit their items to be sold online if they are sold at the standard manufacturers recommended retail price. Any retailer who ignores this can find that the manufacturer will no longer supply them. EBay claim the manufacturers’ are engaged in these practices just to protect their higher prices.
However, this backlash was inevitable if you look at the facts. High Street retailers have huge expenses in the form of rent, business rates and staff salaries. Pure online retailers do not require expensive premises or incur many of the other costs associated with running a big store. As a result they can work on a much lower profit margin than the “bricks and mortar” retailer and sell their products chaeaper.
To overcome this problem many established retailers have launched their own online businesses. They see this as a way to increase their sales with only a minimal cost for those increased sales and this way they can compete with the pure online sellers.
It is getting very difficult for some companies to compete in the market place as customers come to their shops to view products but then go online to buy them. If this trend continues then in time it could lead to a complete closure of the high street as we know it. Having just about survived the growing competition from the major supermarkets unless they get the support of manufacturers many of the high street names will disappear.
Currently there are European commission plans to permit the blocking of online sales by retailers who do not have a “bricks and mortar” business. They are also seeking powers to fix the price of new items for the first two years after launch. Such legislation could have serious consequences for many businesses.
Whatever the eventual outcome there is no doubt that online retailers of new products whether they be large or small concerns could be affected,