Exploring the Advantages and Disadvantages of an Ecommerce Business

Exploring the Advantages and Disadvantages of an Ecommerce Business

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Exploring the Advantages and Disadvantages of an Ecommerce Business

eCommerce Business

Online sale has been predicted to increase $4 trillion by 2020. And there is no better time to own an eCommerce store than now when everything has been made so simple that you only need to start. However, even though there are lots of benefits of starting an eCommerce business, there are also downsides.

The benefits of opening an eCommerce business include low startup costs, high potential of profits, showcase your products to a worldwide audience, among many other things. The disadvantages, on the other hand, include expensive ads for highly competitive niches, high site crashes. People can’t test things before making a purchase, and so on.

In this article, we are going to discuss in detail the advantages and disadvantages of the eCommerce industry and how you can make enjoy making sales online without any obstacles. Continue reading for more knowledge.

Advantages of eCommerce business

Here are some of the reasons why you should start an online business today:

Low startup cost

Funding has always been an issue for startups, especially those who decide to go the way of mortar and brick. You will need to think of a location for your physical store, store design, equipment and inventory, and so much more. All these things will cost a considerable amount of money that you might not even have enough left to trade appropriately.  

But with online trading, you only need to build your eCommerce site or rent a virtual store with Shopify and start trading. Moreover, when you have an online store, even if you’ll need employees as the business grows, they can work remotely which saves time and money for everyone.

Non-stop sales

When you operate a physical store, there is a time where you’ll need to stop selling because it’s late, or there is a general closing hour where your shop is located. This limitation may make you lose buyers, especially those who close from work late and might want to stop over to make some purchases.

But an eCommerce business is always available for buyers to look through and purchase what they need, even if it’s 2 am. This flexibility makes it easy for buyers of all types to patronize you and become customers if they like your services.

Moreover, you don’t want need to have to pay employees extra to be on a night shift. All you need is an automated ordering system that will help in processing orders for your customers to receive a confirmation mail when they make purchases.

Wide coverage

With online sales, you can reach an international audience without having to leave the shores of your country. Think about it; no need to get a visa, purchase a flight ticket, and other rigorous activities involve making your business global. And if you are into drop shipping, you can get products from sites that offer free shipping to your customers, saving you tons of money. The opportunity to trade nationally and internationally is a great one, and you shouldn’t take it lightly. You get increased profits more than those who are only operating a physical store.

Encourages impulse buying

Impulse buying and online sales go hand in hand because what attracts customers most of the time is the clarity of the picture displayed. It looks high quality and class, which drives impulsive buying. It’s quite different from products on shelves that look boring and lackluster. Take advantage of this and create attractive photos of your products to attract more customers. 

Another way to drive impulsive buying is by showing the number of products remaining to make the buyer want to purchase before it finishes.

Ease of retargeting

With the use of Facebook pixel or even the Shoelace app, you can easily retarget those who visited your store and ended up not making a purchase. Some of these buyers might have also added some products to the cart but ended up not checking out. With the necessary retargeting apps, you can find out your website visitors and resell to them.

You can also stay top of mind with your customers after they’ve made a purchase by collecting their email addresses and send them updates about new products which will make them visit your store from time to time. In an offline store, it might be difficult for a first-time buyer to remember where your store is located and except your products were exceptionally good, you might not get a repeat purchase.

There are many advantages of eCommerce but let’s look at some of the disadvantages:

Disadvantages of eCommerce

Here are some of the cons of trading online:

Highly competitive

The popular niches are already saturated, making it highly competitive with the seller trying to bring down their price or offer free delivery services to have a competitive advantage. Also, ads for these niches are more expensive than the less popular ones, which make it difficult to make profits, especially when you do wholesale.

If you are to beat this disadvantage, you have to look for your competitive advantage, which would not also deprive you of your profits. Another thing is to monitor your competitors to see what they are doing wrong and how you can improve on it to attract customers.

Site crash

One of the disadvantages of having an eCommerce site is that it could crash at any time, and no one would be able to purchase anything from you during that period. Reasons for site crash include a massive surge of traffic, which may happen after a campaign or television ad, which was highly converting. To prevent this from happening, you have to use the right hosting site, which can prevent such from happening.

Not everyone trusts online sales

Most people are still not 100% sold on the issue of online sales due to the stories they’ve heard or experiences they’ve had. There have been issues of clothes appearing oversized or products not as appealing as they looked online. What about the ‘touch and feel’ experience? People don’t get to experience that when shopping online. 

However, that does not take away the fact that people would still prefer shopping online from trusted vendors who have proven to be legit and provide high-quality materials rather than stressing themselves trying to locate a physical store that sells what they need.

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