Fordham University            The Jesuit University of New York
 


Study Warns Web Buyers To Beware

Contact: Snipe, Michele
212 636-7013
snipe@fordham.edu


NEW YORK - Despite its convenience and the promise of big savings, buying goods on the Internet is not always a bargain. As a matter of fact, in one instance a $75 fleece North Face jacket sold on eBay for $120, plus shipping, according to a Fordham University study. "Internet retail has not depressed prices as much as people thought it would," said Sarah Maxwell, an assistant business professor whose students conducted the study. "People get carried away thinking that they are getting a great deal and end up spending more than the product is worth." Six Fordham graduate business students recently completed the study comparing the prices of goods sold in stores, through catalogs and online. The study shows that finding the best price takes more than the click of the mouse. Consumers still need to do their homework. Take, for instance, 60 printers at Staples, CompUSA and 10 computer e-tailers. While prices at the brick-and-mortar retail stores were basically identical, prices over the Web varied dramatically. There were bargains to be had online, but in some cases the same model printer was selling for 11 to 95 percent more than the lowest online price, according to the study. Buying toys online can also be pricey. ToysRUs apparently considers the Web a convenience for customers rather than a money-saver because most toys are priced the same in stores as they are online, plus $4.50 for shipping. ToysRUs online provides special coupons for Web buyers, but they are only good for use in its brick-and-mortar stores, according to the study. That is not to say that buying online is a bust. The Internet does provide benefits that consumers may not get otherwise, Maxwell said. For instance, car shoppers can access dealer invoices for new cars and other valuable product information online, ultimately improving the buyer's ability to negotiate and drive down prices, according to a related e-retail study done at Fordham's Pricing Center, a research institution dedicated to developing a better understanding of prices and pricing. In some cases, the Internet does provide a more competitive market, changing the cost-based pricing system traditionally used in the United States. An obvious example of the changing market is Priceline.com, where buyers pick their price and the sellers chose to accept or reject the offer. Priceline's success has lead to its expansion into groceries, drugs and a worldwide market. The Fordham University Pricing Center, established in 1996 by the Graduate School of Business Administration, conducts academic research and industry seminars, and acts as an advocate for pricing education in business school curricula. Fordham's Graduate School of Business was established in 1969 and is recognized nationally for the quality, innovation and comprehensiveness of its programs. The school's part-time MBA program is ranked 14th in the nation by U.S. News & World Report. Founded in 1841, Fordham is New York City's Jesuit university. It has residential campuses in the north Bronx and Manhattan, as well as academic centers in Tarrytown and Armonk, N.Y.

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