Pros & Cons of an E-commerce Business

26 Jun , 2017 Blog

Pros & Cons of an E-commerce Business
  • Pros

Starting up an e-commerce business is quite affordable nowadays as compared to before. Buying a domain now and acquiring hosting is less than $100 which is pretty affordable for most people and almost every business organizations. With the availability of wholesale and drop-shipping companies, having large inventory of products is reasonably priced as well. Running an online business is much more cost effective as compared to a physical store as you would not have to pay rent for an online website and you would not being paying employees either.

Selling goods and services online opens organizations up to a significantly bigger customer base than they can access with a physical store. With an online business website, organizations aren’t constrained to pitching the local communities. Customers all around the world have access to the sites, altogether boosting the potential for profit.

Unlike physical stores that shut down at a certain time, online stores are open 24×7 and never shutdown. An e-commerce business is open round-the-clock, which increases sales and helps generate profits at any time of the day. Moreover, businesses that sell niche products usually have a limited audience, thus having an e-commerce business allows them to increase their customer base to a larger audience.

  • Cons

Even though an e-commerce business has quite a few advantages, it has a lot of drawbacks attached to it as well. It is harder to interact and cooperate with the customers in person and this may become a reason to losing a customer. This is not the case in a physical store, by having a physical store; employees can interact and build a relationship with the customer. Since this option is not available with an e-commerce business it may become a drawback.

E-commerce businesses have a lot of competition amongst each other. As a new business it is harder to gain the trust among customers and stand out in the market. Each product sold on an online store is also sold by several of different websites increasing competition. There are several hundreds of online stores globally, therefore e-commerce business need to work harder to stand out as compared to businesses that have a physical store.

Moreover, since all processes in an e-commerce business are online they may face quite a few technical issues. If certain problems occur on the website or anything related to the website the business will be shut temporarily to fix the problem and this will lose sales and customers.

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