Online shoppers hit with unfair pricing

Major consumer electronics companies are forcing internet retailers to pay more for goods to sell online compared to the high-street

15 November 2005 18:26 GMT / By Stuart Miles

Major consumer electronics companies are forcing internet retailers to pay more for goods to sell online compared to the high-street in a move to stop online e-tailers getting a competitive edge.

The move means consumers heading online for DVD players or televisions in the run up to Christmas could be put off buying online because of the higher costs compared to the high-street.

This year internet shopping will be worth £19.6 billion, and £5 billion only this Christmas - 9% of all retail sales. Of that £5 billion 20% is expected to be electrical goods with users trusting sites to deliver product on time.

According to, IMRG, the e-retail industry body, some manufacturers recently introduced schemes, known as DUAL PRICING that forces competitive dealers to pay significantly more for its TVs and other goods if they sell them online, deliberately making these dealers uncompetitive and killing their trade, thereby stifling competition and introducing the probability of price inflation.

IMRG today warned that one global brand in particular is not trading fairly. It has also pledged that unless the manufacturer stops the practice it will name and shame them.

"It's scandalous", commented one affected dealer. "This manufacturer, who we have worked with for many years, encouraged us to be innovative and trade online, and we've had a roaring success together".

The scheme cynically positions Dual Pricing as 'rewarding' bricks-and-mortar retailers for having physical shops, rather than blighting internet traders for being efficient and increasingly popular with consumers.

"This scheme is either illegal or should be", a senior European Commission representative advised IMRG. "We should look at this".

The argument for Dual Pricing is that it costs more to run a physical shop than it does to run a virtual shop, which is neither true nor relevant with retailers getting kick backs for end of aisle display points and marketing in shop windows.

Some businesses view internet trading in general as an unwelcome innovation, and product search engines like our own shopping service in particular as a threat because of the power they give to consumers.

With 9 million broadband connections in the UK and the average consumer likely to spend £816 on average in 2005.

Full tags

Gadgets, shopping