E-merchants avoid effect of petrol price hike

Business-to-consumer online merchants appear to be holding their own in the face of petrol price rises.

Business-to-consumer online merchants appear to be holding their own in the face of petrol price rises.

Woolworths e-commerce manager Richard Harrison says as the supermarket's online sales grow, it is gaining economies of scale, such as volume discounts offered by delivery companies. But petrol rises are flattening that economies-of-scale curve, and the total cost to the customer is near-level at present, Harrison says. "We’d like to try to avoid price rises. I don’t know what the petrol price will do in future, so I can’t make any promises. But I wouldn’t completely discount a rise at some time in the future." CDStar's operations chief, Stuart Clark, says likewise. "We use a number of couriers for delivery and to date we haven't had any notice of an increase of rates from them, and we're not about to ask them. We are aware, though, that this is a possibility, and there may be rises to contend with in future." The Christchurch-based online CD retailer's delivery charge is $3 a CD, with each addition disc costing another $1. On the other hand, Clark says, the rise in petrol charges could persuade more people to use CDStar rather than taking the car into town to go shopping. "This could be a very real saving for people in rural areas."

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