Higher inventory levels, in turn, mean greater costs, inventory inefficiencies, and limited flexibility to respond to customer's specific demands. Configuration flexibility limitations. During the past decade, the traditional channel had to efficiently distribute large volumes of PCs to relatively unsophisticated consumers. The distribution model that developed moved large quantities of standardized configurations through the channel. 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.