Ecommerce Pros and Cons
So, you’ve been thinking about starting your own online business – that’s great!
But, perhaps you’re still unsure whether an ecommerce business is the right option for you.
Don’t worry today we’re going to go through our list of advantages and disadvantages to getting started with your own ecommerce business. By the end of this post, you’ll have all the information you need to make the best decision for you and your future business.
Are you ready?
Let’s get started!
Advantage 1 – Low Financial Cost
Generally, ecommerce businesses cost a lot less money to start and run than a physical storefront would. If you were to get started with your own physical retail store, you’d likely have to commit a large amount of money to renting and renovating a location, renting storage space, and purchasing the products you hope to sell. When you’re running an ecommerce business, you won’t need to commit such a large upfront investment before you can start selling. Instead, you can use an ecommerce platform, like Shopify, to set up your own store (with custom designs) for less than 500 AED. Of course, you’ll incur monthly fees for your Shopify subscription, but this will likely be very cheap compared to what it would cost to upkeep a physical location.
Advantage 2 – 24/7 Potential Income
Unlike physical retail stores, ecommerce stores are always open. This means that you have the potential to generate income 24 hours a day, 7 days a week. Think about it. When you’re running an online store, it doesn’t matter when your customers want to shop – the choice is in their hands. Your marketing campaigns will be running all day, so they could make a purchase at 4pmin the afternoon, or 4am in the morning. Now, compare this to physical stores, which tend to be open from 9am – 7pm. It’s clear that ecommerce entrepreneurs have so much more time every day to generate sales.
Advantage 3 – Sell Internationally
From the very first day that you launch your ecommerce store, you’ll be running an international business. You can sell to customers in every corner of the world, if you want to. Or, you can just sell to customers in one country – maybe even your own. The choice is yours!
Advantage 4 – Easy to Showcase Bestsellers
When you’re running an ecommerce business, it’s fairly simple to showcase your best-selling products to potential buyers. You can create custom graphics to promote them on your stores homepage, build a dedicated category for them, and curate marketing campaigns to promote them. Your best-sellers are proven products from your store, so lots of customers will be interested in them. They also say a lot about your brand, so ensure that they’re easily visible for visitors to your online store.
Advantage 5 – Can Encourage Impulse Buys
One great thing about eCommerce stores is that you can encourage customers to make impulse buys. If you provide them with an attractive product page, some high-quality images, and the correct sizing for the products, they’re going to be much more eager to buy. But, it’s the scarcity tactics that you can use with your online store that will really entice buyers. You can add countdown timers to alert your potential customers that a sale is going to end, or showcase that there are limited quantities of a product that they’re looking at. These work to create a sense of urgency, prompting your customers to click “buy. ”If they’re interested in your products, they won’t want to miss out.
Advantage 6 – Remarketing Possibilities
When you’re running an ecommerce business, remarketing your products to buyers is a great way to generate more revenue. But it’s something that’s pretty difficult for physical store owners. As an ecommerce entrepreneur, you can target people who abandoned their cart while they were shopping at your online store. You’ve already done the hard part – you’ve piqued their interest with your products, secured their interest enough to get them to the checkout stage, but they dropped off for whatever reason. Maybe they were distracted at work, or their kids needed help, and they forgot about your store. But – they were interested at one point – so just send them an email to let them know that their product is still available. You’ll be surprised how successful this tactic can be. Now, when you’re running a physical store, this strategy isn’t really possible. It’d be the equivalent of running after a customer who was browsing your store and shouting:
“Hey, I think you forgot something! ”
Not many customers would respond by turning around and going back into your store.
Advantage 7 – Scaling Your Business is Quick
Every entrepreneur wants their business to be successful. And when that happens, you want to double down on it. Eventually, you’ll find that you need to scale up your operations to meet customer demand, or you’ll end up missing out on potential sales. Now, when you’re running a retail store, a lot goes into scaling your business. You’ll need a larger store, more storage space, more products from your suppliers, more sales staff… the list goes on.
It can end up being a lengthy process. And during that time, your business’ growth might stagnate. On the flip side, when you’re running a dropshipping store, your main concern when scaling your business will be making sure that your marketing budget is sufficient, and that your ads are optimized. All in all, it’s a lot easier to scale an ecommerce business. As you can see, there is a lots of reasons why starting an ecommerce store has advantages over starting a physical storefront. However, there are some disadvantages getting into ecommerce and in the interest of being honest with you, let’s talk about some of those disadvantages.
Disadvantage 1 – If Your Site Crashes, You Can’t Sell
This is perhaps the worst part about running an ecommerce business. If your site is down, you can’t make any sales. And not only will you miss out on sales during the time that your store was down, you’ll also damage the reputation of your brand. That’s after you’ve worked so hard to draw in potential customers too, and they might never return to make that purchase. So, it’s clear that you’ll need a stable platform to host your store, if you want to run an ecommerce business, like Shopify. If you use Shopify to create and run your store, you can rest assured that your store won’t be going down any time soon. Their service will stay up and running, even during peak shopping events like Black Friday and Cyber Monday.
Disadvantage 2- Ecommerce is Highly Competitive
In the world of ecommerce, popular niches are much more competitive than physical retail stores. After all, you’re not just competing with stores in the vicinity, you’re competing with all the other online stores in the world. With this in mind, you’ll need to make sure that your store stands out from crowd. There are plenty of ways that you can make your store unique. For example, you can offer hard-to-find, high-quality products, you can launch engaging marketing campaigns, or you can build a relationship with customers with fun social media accounts.
Disadvantage 3 – Shipping Your Products
When a customer makes a purchase at a physical store, it’s likely that they’ll be able to take the product home right away and start using it. But, when shopping online, a customer might not receive their product quickly, which could put them off making a purchase. It’s a disadvantage, but it’s important that you’re transparent about your shipping times with your customers. Let them know when they can expect packages, and they’ll be much more forgiving if the shipping process takes a little longer. A great way to counteract this disadvantage would be to offer free shipping with all purchases. If you don’t charge your customers for shipping, they’ll be much more likely to finalize the purchase, even if your shipping takes a couple of days.
The best part?
You don’t have to lose money to facilitate this tactic. Instead, you can simply incorporate the shipping fees into the price of your products. This way your customers will love your service, while you maintain the margins you need to make a profit.
So, what do you think about the pros and cons of eCommerce? Did we leave anything off our list? Let us know what you think in the comments below.