those who have invested Lakhs (few even crores) of rupees in opening a Brick and Mortar Store for such brands will certainly
beat the hell of that brand cause :-
Their initial cost to start a store is HIGH
They maintain a hell lot of inventory which is billed first, provisioned later
They have showroom running cost like Electricity, cooling, staff, etc etc
and their profit margin is now slim as death due to online stores.
while on other hand selling online is cheaper for sellers.
Setting up a Store is just a few click away
Inventory need not include entire range, you bulk buy only items you can sell as hot cackes.
and most importantly, online marketplaces like "shopclues",
flipkart,
snapdeal would offer the prospect
buyers discounts, commission and all are from VC's money or from their portal's revenue which would
enable the seller to sell even below his "landing cost" still yield profit from that loss making sale.
In simpler words,
Take me as a new online seller, and Say a mobile costs me Rs.5000/- I am willing to sell on online portal
and fix a pricing of Rs.5400/- which includes Rs.50/60 as shipping cost as this is the first slot and all portals offer
similar pricing for items upto 500gms, so If sale is made, after paying off everything I still get Rs.290/-
How
(Cost Rs.5000 + Shipping Rs.60 + selling fee +50) Rs.5110
Now in most cases selling portal would offer 6 to 10% off to customer
so even if the phone sold for Rs.4960/- I am still getting paid Rs.200 - 290 for above product cause
that portal is compensating me for discount offered by them, which is from their total revenue.
And the poor shop keeper will have to work his heart off to sell it even at Rs.5300/- which is not possible
as his landing and operating cost is way too high and there's no one to cover up his cost.
Recently a friend who happens to be a marketing senior says,
"vaat lagi hai bhai, my dealers are not buying from us" they are ordering online in fake names
and then selling it on huge profit over the counter.
What we bill them for Rs.6450/- is available to them at Rs.6300 ish online,
and dealers are even ready to kick us physically if we object.
he says I am thinking of switching to some other job, cause company will not let us live with this going on
right under our nose.
and apart from above they are also selling many products online now so the dealer has no regrets if we kick him off our brand.
so my conclusion is, no matter what
Samsung is going to do, they cannot kill online sale in all.
infact Online sale makes a brand popular, and I would consider even online sale helps generates those offline over the counter sale
as words of mouth, and with at ease of home shopping experience and V.I.P. delivery standards have already set high hopes and standards for such online portals which cannot be and should not be killed.
All I can say for samsung, have better control between online and offline retailers rather than killing one of them altogether .