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Should your business go online?

Online retail is becoming a dominant sector of the retail market with sales continuing to rapidly increase. As a retail business owner, it is crucial for you to understand the importance of your business having an online presence. This is because online retail sales are becoming more dominant than high street sales which means that if you do not have an online store, you will be severely restricting the sales of your business. Here are the advantages and disadvantages of having an online retail store.

Should your business go online?

Advantages

Access to market and wider audience of customers

During the rise of online retail, there has been the development of a wide range of online marketplaces e.g. Amazon. This means that you will be able to set up an online shop on an online market place easily and free of charge. This will enable you to be able to sell products quickly and easily without incurring costs. This shows that using online marketplaces will boost your sales and widen your profit margin. When you open an online store, your customers will not be limited by geographical factors. This is because customers will not travel to your store so distance will not deter customers away from your store. This will allow you to target a wider audience which will lead to more customers visiting your website and purchasing products. Creating an online store will allow you to maximise your business’s potential by boosting sales.

Reduce Costs

When you open an online store, you will not have the costs of running a premise which means that you will have less overheads. This will significantly reduce your costs which will give you the ability to maximise your profit margin. Do you have effective marketing? Due to saving a substantial amount of money on your premises, you will have the funds needed to improve your marketing and improve your customer’s experience on your website. If you have good marketing and provide your customers with a good experience on your website, you will be able to attract more users to your website which will increase your sales. When you open an online store, you will not need employees to serve your customers which means that you will be able to substantially reduce the number of employees that you hire. This will severely reduce your costs as you will be able to reduce the number of wages that you pay.

Opportunity to grow your business

When you open an online store, you will have a wide range of opportunities to grow your business. This is because you will have the ability to use online marketing methods to target new customers which will increase the number of visitors that your website receives. An E-commerce website will enable you to increase your customer’s satisfaction by using website analysis tools to identify your customer’s needs. This will give you the relevant information you will need in order to improve your products and customer experience. This will allow you to satisfy your customer’s needs which will encourage them to become loyal and repeat purchase. When you begin to sell on the internet, you will not have the constraints which physical stores will have. This means that your growth will not be limited and will allow your online store to become established and successful.

Disadvantages

Costs

Even though you will not have the costs of running a premise, there are still a wide range of costs that you will incur when operating an E-commerce website. When you decide to build an E-commerce website, you must hire website developers to help plan, design and create your website. This means that you will incur a substantial number of costs before your website has even started to generate sales. If you do not hire professionals to build your website, your website will be of poor quality which means that you will be unable to provide your customers with a good experience. As an online store, it is crucial for you to ensure that your website is constantly running. If your website goes down, you will not satisfy your customer needs which will lead to your sales being restricted. As a business owner, you may be mistaken and think that you will not need premises when you have an online store. However, you will need a premise to store all of your stock. This means that you will still have a certain number of overheads which will increase your costs. In order to attract customers to your website, you will have to invest into online marketing. In order to run a successful online marketing campaign, you will have to prepare a substantial budget. This is because you will have to invest money into promoting your posts so that users see your promotional material. Remember, running an online store is not as cheap as you think.

Security

Due to the online retail sector growing quickly and generating a high traffic of customers, it has led to internet criminals targeting websites in order to gain your customer’s information. If your website is hacked and third parties have access to your customer’s information, your reputation will be severely damaged. This is because customers may lose money due to their information being accessed by criminals which will cause customers to avoid your website. This shows that if your website is not secure, your sales will be severely reduced. As the owner of the website, it is vital that you invest in the latest security systems to ensure that your website is secure and your customer’s details are safe.

Customer Trust

If you only operate as an online website, you will struggle to gain your customer’s trust. This is because you will not have a physical business which has a history which may lead to customers thinking that your business is illegitimate and that they will get scammed by your company. When customers purchase products from a physical store, they will be able to build a relationship with the employees which will encourage them to purchase the product. However, there will be no interaction between the customer and the business which may prevent customers from buying from your website. This will limit your sales. It is recommended for you to provide your customers with an online chat as this will allow them to ask questions about your product. Remember, communication is key to selling products.

Is it time you ditch your physical store?

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