This might just be the end of brick and mortar

Why does everyone think that if you buy from a company that sells product's directly to consumers, avoiding the middleman/retail store, that you save money? Isn't it possible that they are charging the same price that a dealer would sell the same product for in their B&M store, and just keeping the extra profit for themselves?

Isn't it possible that they are charging the same price that a dealer would sell the same product for in their B&M store, and just keeping the extra profit for themselves?

I don't think that there is any question that B&M stores have the potential to add value. If the internet direct price is the same as it was w a B&M dealer, why would a manufacturer go internet direct? There would be no motivation for the manufacturer to continue that arrangement. I would very surprised to find that manufacturers do not deal with an on-line dealer the same way they would w B&M stores, setting minimum selling prices.

"I don't think that there is any question that B&M stores have the potential to add value. If the internet direct price is the same as it was w a B&M dealer, why would a manufacturer go internet direct?"

They would go direct to sell in areas where they don't have dealers. As far as pricing goes, the company’s that do sell both direct and through dealers, usually only sell at full list price. If they sell for less than list, they would be competing with their B&M dealers.

Zd- my point is that I have to assume that the motivation to go to a direct or internet sales model is to be able to lower the price to be able to be more competitive. If you did that and then allowed the internet dealer to set the price at or close to what a more traditional sales model would require, then you'd be shooting yourself in the foot.

"11-23-14: Swampwalker
Zd- my point is that I have to assume that the motivation to go to a direct or internet sales model is to be able to lower the price to be able to be more competitive. If you did that and then allowed the internet dealer to set the price at or close to what a more traditional sales model would require, then you'd be shooting yourself in the foot."

That's not the case, though. For the most part, a company that has both type of retailers makes the internet seller charge the same price. They do it to just reach places that have no local dealers. Also, internet sellers are not supposed to sell in zip codes that are reserved for B&M stores. A good example is Music Direct because most people here know them. They sell brands like BAT and Rega. I know they're not supposed to sell them in areas that have local dealers. There may be exceptions, but this is generally how its done.