Lately, the channel has failed to respond to the more advanced buyers who want customized configurations. Retailers still have a limited number of configurations on stock for the buyers to chose from. In contrast, online PC sellers allow the shoppers to mix and match components and create a truly customized configuration. Traditional retailers incur costs maintaining physical stores which are much greater than the costs associated with the maintenance of a web site. In addition, they have to build and support physical inventory, which the online PC sellers can avoid.
Retailers incur additional costs from inventory inefficiencies.
Market information limitations. Companies that sell directly over the Internet can collect valuable market information they can use to refine their offerings. For retailers, on the other hand, such market information would come at much higher price. Online Competitors Many companies have realized the advantages offered by the Internet and have setup online PC sales businesses. The retailers face competition not only from other members of the traditional distribution chain that bypass them using the Internet, but also by companies that were not originally part of the channel.