Doing business today in this digital world can’t be assumed to be a cakewalk for all small business owners unless you implement the right business strategies.
Tom has his own Furniture brick and mortar store and he opens all day to look after the sales. But recently he notes that people are going behind online stores sitting in front of their computers, selecting their desired furniture, adding them to the shopping cart, finally settling the bill via credit card and sitting back relaxed waiting for the product to arrive at their doorstep.
See, the importance of e-commerce in today’s internet world…This is it!
When you start up your with your business plan, you should be able to draw a conclusion whether you need to have an exclusive online shop alone or one in addition to a physical store. It all depends upon the goals and strategies and markets you’ve set for your business.
First, let’s see in simple terms about what an e-commerce store is and a physical store is and the basic difference between them.
An online store is a form of electronic commerce wherein you have a virtual shop (website) and customers directly buy products or services from you over the web platform using a web browser. A physical store commonly called as Brick and Mortar store is a shop which has its physical presence in a place and it’s usually a building with production facilities and store for selling the products where customers can walk into and directly purchase and get on-spot.
But dude, they both sell products and both are stores!
Merits And Demerits Of An Online Store vs Physical Store
It’s always good for any new business person to analyze the competition in the market before jumping into the process of establishment. Usually, the competition is more intense in the online market than the physical market. How? For setting up a physical store, you can easily survey a particular area and analyze the competition and set up your store accordingly in a different place where less number of competitor stores are present. But online? It’s a vast platform where multiple businesses are already established with the same products that you offer. So, unless you offer something unique it’ll be hard to survive as a start-up e-store.
The main success of a retail business, either online or offline, depends on the catch of a customer base.
With a physical store, your potential customer base is very limited.
With an online store, your potential customer base is vast and wide.
When you operate on a new physical retail shop, your marketing strategies for attracting customers are very limited. You are controlled with the limited physical space you have and so changing logos or arrangements or shelves or even your products on a seasonal basis may be difficult and so building up a customer base could be a challenge.
Whereas in the online store, changing a logo or design or customizing your website or changing products’ prices or whatever marketing changes you gotta do, you get it done within a few minutes and marketing would be within your fingertips.
When it comes to the discussion regarding the costs of opening an online or retail shop, setting up an e-store is less expensive than opening a brick-and-mortar shop.
When you open up a retail shop front, you need to pay the rent, you need to settle the utility bills, and you need to take up the maintenance costs……and the list goes on. Whereas in an online store, the main costs incurred to you will be for technical support and web hosting. With an e-store, there is no need for you to put pains in decorating the store, cleaning the store or purchase units or display units. Man, you can also do your own work in managing your e-store, so no additional employees and salary cost too.
The costs directly related to your online store will be a website, shipping, and online payments. You just pay for your desired domain name, payment for the website developer and e-commerce platform, which may be little costly, but not as much as maintaining a retail shop.
For products of high value such as furniture, designer clothing, jewelry, accessories and cars, a retail shop will yield you a higher profit margin for individual purchases. According to a recent study conducted by the California Institute of Technology, it’s found that customers pay more bucks for products that they can view in person. Instead of considering the cost of the items that you sell, you have to consider the number or quantity of the items that you sell.
On the whole, a physical store will be profitable for you if you have a selected number of products; and an e-store will be beneficial for you if you have an extensive collection of products.
Advantages Of A Product Selling Online vs A Physical Store
Before starting up your business either via online or by setting up a retail shop, it’s necessary to analyse which option to go at the first step. Here are the advantages of selling your product online vs. a physical store.
1.Good Reach To Potential Target Customers
Why have you started this business? Of course, your answer would be “for my daily bread”. Yes, any business owner’s first target would be getting a good amount of income through their business and the first step for this is customers. Once you get potential customers for your product, then you’ll slowly start reaching that point which you aimed for in your business.
Opening a shop front and sitting will not get you more customers compared to an e-store. There are nearly 1 billion using the internet today, which indirectly means that 1 billion people could have access to your store very easily. When you compare this demographic count with your city or country’s total population, you would know the reach of your business online. A physical store’s customer count would be nothing compared to it.
2.Measurable Results Via Online Marketing
As a continuation of the above benefit of getting good reach to potential target customers, your next question would be “How do you get visible and reach such a large number of customers?”
The Answer: Online Marketing and Search Engine Optimization (SEO).
Online marketing is the number one success secret of developing small business owners to gain a potential target audience through the internet by adopting suitable marketing strategies. The reason why online marketing gets acceptance over traditional offline marketing strategies is that its results can be tracked and changes can be made as and when possible. You can always improve and make changes to your online marketing campaign according to the measured results at much lower costs than direct marketing efforts.
3.Less Start-Up Costs
The difference in start-up costs between an online and a physical store ranges between hundreds to thousands of dollars.
What are the costs incurred during setting up your physical store?
Property tax, utility expenses, insurance, rent and employee salaries.
All these would cost you so much when compared to an e-store.
As an e-store owner what are your expected expenses?
Professional website development, domain name and website hosting, monthly fee from a payment gateway and purchasing an SSL certificate.
Bro all these would just cost you a fraction of the above mentioned expenses of opening up a retail shop.
On the whole, you can start up an e-store with costs ranging from $2000 to $5000 with a low monthly fee, instead of taking up so many pains and bucks in hands while opening and setting up a retail store.
4.Easy Changes And Modifications As Per The Market Trends
This is one of the best-known advantages of an e-store.
Say, for example, you’re doing apparels business and today you’re gonna give some special offers on selected dresses and you need to change the price of the product.
Now, with an online store, you go straight to your laptop, open your website’s backend, change the prices of the specific products and sit and watch the changes in your website, within a matter of 5 minutes.
With a physical store, imagine the big tasks involved in it. You need to change the price tag of each product, price on the shelves and other displays and also your inventory system. This will consume the bulk of your time.
So, changes can be made easily in your e-store than in your retail shop.
By looking at the above benefits of selling your product online over the retail store, you may now think that you’ve committed a mistake by just owning a retail shop. Or you may even get confused thinking that you should only own an e-store and not a physical store. Cool down, buddy! You’re not over with it yet…..
In simple words, the best solution for your overall business growth is to integrate digital marketing into your brick-and-mortar business. You can just combine online marketing into your retail shop for enhanced returns through it. Being a smart business owner, you need to know how to differentiate between the two and combine them for your sales in a smart way. Having both a retail shop and an online shop will be quite advantageous to you if you know which sale should be utilized in which platform. For example, there may be certain products which are sold more on your website. Utilize online shop for that. Similarly, you may have certain potential customers for some products in your retail shop and make use of them too.
With the emerging trends and popularity of online shopping, it is noticed that many businesses are merging both online and physical shops to reap the benefits of both online and local presence. Overall, an e-store works wonders for your business via the latest technologies, whereas the benefits of owning a physical store too standstill.
So, it’d be wise if you know the pluses of both sides and make them co-exist for your business; neither of them can exist alone.