If you’re contemplating starting a retail business, you may be on the fence about whether to make it a virtual store or a brick-and-mortar. Here are the pros and cons of each to help you in your decision.
Online Retail Benefits
The really wonderful thing about starting an online retail business is how easy and affordable it is. As long as you’ve got your inventory and an ecommerce website, you’re ready to go. You can operate from anywhere, and you don’t have to pay high-priced commercial rental rates.
Even if you don’t have a fancy ecommerce website, there are easy all-in-one options available for you, such as Amazon, Etsy and eBay. Each offers built in ecommerce solutions and credit card processing. All you have to do is plug in your product descriptions and upload a photo. The bonus is that these sites get a ton of traffic, so you’ll get more exposure than you would by starting from scratch with your own site.
Getting found online is also fairly easy, and definitely affordable, if you use social media and internet marketing.
Online Retail Drawbacks
Some items don’t sell as well online as they do in person. If you’ve got high end handmade crafts or art, you can post them to Etsy, but it might be months before anyone stumbles upon your glassblown vintage owl collection. If you sell in a category with a low search rate, you may find an online ecommerce business less successful than a physical storefront.
While marketing your website is easy, it does take effort (really that’s the case with any business, online or otherwise). If considering starting an ecommerce site, make sure you’ve got time and budget to dedicate to marketing it.
Having the perfect store nestled in a row of eclectic shops and restaurants can help you connect with your community. Your shop can be a hangout spot for your customers, who are more likely to buy from you repeatedly if your store is homey enough to make them feel comfortable.
Being located near other high-traffic retail can give you a boost in sales that you wouldn’t see online. Consider this when shopping for real estate.
There’s one thing that’s hard to really grasp before you’re knee-deep in debt for your retail store: it’s expensive. You’ve got your rent, inventory, salaries and other overhead, and you have to sell enough product to cover all of these expenses each month. Even more if you actually want to turn profit. You lock yourself in to years of expenses once you sign that lease, so it’s a commitment you have to be willing to accept long-term.
Sometimes there are quirks about the location you choose that you don’t see initially, like a difficult-to-maneuver parking lot, or proximity to a business that drives yours away (tattoo parlor next to your doll shop?). These can cause you stress and financial troubles that force you to come up with a better solution sooner rather than later.
Whichever option you choose, do your homework on what kind of investment you need, as well as what locations would be ideal for your company.
Photo credit: bjearwicke.