Online companies lower the price of items to account for shipping costs and compete with retail stores.  How does this affect what you pay for items?

Expert Answers
pohnpei397 eNotes educator| Certified Educator

If online companies reduce their prices by the exact amount of the shipping costs, "you" are not affected in any way.  Let us say that there is an item that would cost you $55 at a retail store.  Let us say that the online store would like to sell it for $55 as well but that it cannot because you will also have to pay $5 shipping.  If the online store lowers its price to $50, you will not be affected.  You will still be paying $55 regardless of how that price is broken down.  It will make no difference to you if $5 of the $55 goes to the shipping company.  Therefore, this action by an online company would have no effect on the price that you pay.