In this economical state the majority of customers are mostly attracted to the cheaper price option. This is because people don’t have as much disposable income, yet still need to shop. With a company such a Thomas Cook, although they offer a few online deals, most of their sales are made in high street shops and their prices are top end. Thomas Cook has recently had to close a fifth of their stores due to lack of revenue. It could be argued that it is due to online prices being lower that sales that would originally have gone to Thomas Cook will have gone to cheaper companies. Companies online can offer cheaper prices as they don’t have as many fixed costs (like rent) to pay for if they owned shops as well. So Thomas Cook cannot compete with the cheap prices as they have more costs that have to come out of their profits from their stores, the staff in those stores and all the training the staff need to work in the stores. Of course there are still costs to being an ecommerce company, for example it is necessary to have workers skilled in ICT who can update and maintain the website.
For a company like Amazon, who is based entirely online, sales are booming. Amazon is similar to E-Bay, as any store or company can sell produce through their site. Amazon has become a major competitor for most non-clothing high street stores and non food sections of superstores. Amazon offers cheaper prices on goods that you could buy in other stores, they also to home deliveries. This will of course directly affect the amount of profits made by the more expensive stores. However if the original producers of the products still sell their produce at the same price whether it goes to an Amazon supplier or a Superstore then the original suppliers will not lose out on profits, they should in theory make more due to the higher number of sales. However for the shop keeper who sells the end