The Advantages And Disadvantages Of E-Commerce For Business

With the development of e-commerce, more and more entrepreneurs are thinking about their own online store as starting a business or as an addition to an offline project. An online store is an expansion of the geography of customers, an unlimited assortment, savings on the premises under the store, access to new markets.

But is it all cloudless and simple? Of course not. As with everything, online sales have their pros and cons, both sides of the very same coin. Let us consider the advantages and disadvantages of developing your own online store in more detail. Understanding the intricacies will enable you to overcome obstacles. You will be guided from making mistakes. Let's find out the whole underworld of e-commerce!

Your online store: the pros

• Gives the owner flexibility in time planning, more mobility, and personal responsibility. The online store can be easily managed from anywhere in the world with access to the internet. Such a business in most cases does not tie to the place and time but on the contrary, provides freedom of movement. The e-commerce owner himself plans his time, allocates resources, makes strategic and organizational decisions.

• A relatively small budget for opening an online store. You can run the site on a paid or free CMS. The cost of creating and developing a site is smaller compared to renting a shop and furnishing it. But in general, the opening of a retail outlet online is cheaper than a fixed one, at least due to the savings in renting space for a store. By the way, there are options for launching an online store without investments: on a free CMS, with a free template, according to the dropshipping scheme (when even the presence of goods in the warehouse is not required - you act as a kind of intermediary between the supplier and the end customer). At the start of the project, you will not even need staff - operational functions can be performed independently. Such an opportunity is an undoubted advantage, isn't it?

• Simple taxation. For beginners, a simplified taxation system is available with a minimum tax payable and simple reporting. Some desperate businessmen initially do not register a business at all: they launch a store, test a niche, look at how sales go, and then they are registered as an FLP and register entrepreneurial activity with all that it implies. Although this is a risk - you can get a fine for illegal trade.

• The speed of starting a business. Technically, an online store can be launched very quickly, just a few days after the decision is made, you can already have a full-fledged project for the sale of any goods. Another thing is to find suppliers with favorable prices, to establish contacts with them, and further actively promote the project, to attract customers. But in general, the timing of the start of sales is incomparably small against the background of traditional business.

• Unlimited number of items. When working on dropshipping, you do not need to keep goods in your warehouse. You can simply indicate all the names of goods that you have access to through intermediaries on your online store. So, the range can be almost unlimited. Whether this is good or not depends on the niche and the chosen target audience.

Your online store: cons

• The need to master the administration of the site. This stage will seem especially difficult for people who don’t have experience in managing e-commerce. You will need more than a trial and error to successfully master the administration of your e-commerce. You have to examine the information on working with the store's administrative panel and content management, store promotion.

• High competition. Most of the profitable and popular e-commerce niches have long been mastered by numerous market players. Therefore, you will have to make your way through uneasy work, bypassing experienced representatives of this business in order to select at least market share and take more or less stable positions. But over time, with effort and perseverance (as well as finance), everything can be achieved. By contracting e-commerce development to web development companies, you can rank high on search engine.

• Commission payment systems. Immediately take into account that the more options for payment you provide to customers, the better. A wide range of payment and delivery methods is a manifestation of loyalty to your customers. But each payment system will charge a fee for carrying out payment transactions.

• Cooperation with delivery services. It all depends on who pays for shipping and return shipment of money when paying by cash on delivery - online store or buyer. In most cases, the payment falls on the buyer.

• Disputes with customers. Get ready for the fact that you have to solve many conflicts related to customer dissatisfaction. There will be complaints about the quality of the product, its characteristics (size, color, material), delivery times and much more. When buying in a traditional online store, the customer is personally convinced that the product exactly matches his expectations. Online shopping is more complicated. Yes, and the human factor cannot be ruled out - an error when ordering can be made by both the buyer and the representative of the online store. The main thing in such cases is to solve issues in a civilized and legal way. And sometimes, it's better to just make concessions to the client, even if the truth is on your side. So you will avoid additional costs and save your reputation as a loyal customer-oriented company.