Advantages and disadvantages of starting an online business

In this technology-driven age, the e-commerce boom is going to be there for quite a long while. Online businesses are the in-thing, with there being over 225 million active websites. Before you join the e-commerce craze, it is important to arm yourself with information on both the pros and cons of this type of business. Below is a list of the merits accruing to online business owners, and the drawbacks accompanying them:

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Advantages:

Freedom

Most people are seeking freedom from the inconvenience and transport costs of having to leave their homes and report to their physical stores every day. An online business enables you to work from absolutely anywhere with a reliable Wi-Fi connection. You can work from home, the park, your favorite restaurant or the library. Some e-commerce platforms come with robust mobile apps that enable you to run your store on the go, and POS apps for clients with physical stores.

You can start a store with little capital

Unlike a brick and mortar store where you will have to worry about rent, electricity and other overheads from day one, online stores eliminate all those overheads. You only have to worry about monthly fees charged by your hosting platform. If you are on an even tighter budget, there are plenty of free options that will work just fine.

The ability to outsource

If you require some extra help running your store, like a web developer to further customize your themes, then you can readily seek help online. Sites like Upwork and Fiverr provide the best freelancers in the market for as little as $5. The ability to outsource for the needs of a physical store would be far more complicated and expensive.

The ability to go global

An online store enables you to expand your horizons way faster than a physical store would. With a physical store, setting up an overseas branch would mean tonnes of paperwork, legal procedures, and human resource logistics. The internet has no boundaries, which overlooks the need for international business management logistics. With an online store, all you need is to advertise more and integrate international payment processors like PayPal, Stripe, Amazon Pay and Authorize.net. Engaging the international market increases your sales by a significant margin, improves your corporate image, and gives you the feel of international business without ever having to leave.

Reduced marketing costs

To advertise your physical store would require fliers, billboards, TV ads and other traditional, expensive and relatively ineffective methods. Using the internet is a far more effective, cheaper and better alternative. Most e-commerce platforms incorporate multi-channel selling which enables you to sell and market on all major social networks as well as your blog or WordPress site. The internet gives you access to millions of users daily at a small fee. Moreover, with internet marketing, you can adapt your marketing strategy to fit your target market. With an online store, you can also market your products through emails and newsletters.

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Automated systems

Online businesses are made many times easier to manage by the advent of automated systems that reduce your load of boring, repetitive but essential tasks. Functions like automated sales and tax calculations, inventory management, report generation, and transaction analytics enable you to save time and handle all these tasks efficiently. Again, you do not have to worry about errors in your books as most algorithms are often 100% accurate. The automated reports and analytics enable you to focus on other business matters and make sound business decisions.

Better flow of information

The internet enables you to share and obtain knowledge and information quickly. A website allows for your potential customers to quickly view your products’ images, specs, and price, as well as your physical store if you have one. Again, business documents and webinars are easier to send among business partners.

Online stores are easy to update

If you would like to rebrand or keep your store relevant, all you need to do with an online store is design a new logo and incorporate it.

Reaching a wider audience

With an online store, you can reach customers living outside urban areas who may want to avoid transport costs and long lines associated with physical stores. Moreover, SEO friendly e-commerce platforms enable your site to rank higher on search engines, meaning better chances of making a sale. With an online store, geographical boundaries are not a barrier. Anyone can access your store at any time or place, so long as your website is running. we recommend you take a look at this great online website builder to start your business: Shopify.com/website/builder 

Scalability

With an online store, you can reach customers living outside urban areas who may want to avoid transport costs and long lines associated with physical stores. Moreover, SEO friendly e-commerce platforms enable your site to rank higher on search engines, meaning better chances of making a sale. With an online store, geographical boundaries are not a barrier. Anyone can access your store at any time or place, so long as your website is running.

Disadvantages

Reduced contact with customers

Online store owners rely on ratings and reviews to interact with customers, hence removing the personal touch. Furthermore, many customers prefer to inspect the product before buying, especially if it is a high-value item, which is not possible with online stores. Other customers that may need an item urgently or are seeking instant gratification may avoid online stores because of the waiting period and high costs of expedited shipping.

Security issues

Many people still identify online business with scammers, computer viruses, identity theft, and other unpleasant things, which may make them shy away from online buying. In addition to scammers, most people also doubt the safety of online transactions.

Disadvantages

Technical hitches

Websites are not 100% reliable as they may crash, hang, glitch, or shut down altogether, leading to massive losses. This tends to happen mostly during high-peak seasons when many people are trying to access your site at once. However, you can avoid this by choosing an e-commerce provider that offers unlimited bandwidth.

Bad reviews

Websites are often victims of bad publicity. Unlike a physical store where a dissatisfied client will speak to you in private, a bad review is seen by all, including potential clients.

Conclusion

Online business may have its disadvantages, but the advantages by far outweigh them. Online business is the way to go to reach the maximum number of customers for your business.