For many budding retailers, making a choice between an online and offline storefront can be difficult.  This is not surprising seeing as both options have compelling pros and cons.  This is why many new retailers tend to vacillate between either option.  Well, we will try to help you simplify the entire process so you can make a decision and move forward with your new venture.

 

Online Storefront

Online storefronts have much appeal these days.  Unlike the past where considerable coding and programming skills, as well as significant upfront costs, were required, new ecommerce platforms are affordable and require little or no programming skills.

With the emergence of easy-to-setup and affordable ecommerce platforms like Amazon Webstore, and Shopify you can set up your store to promote your products easily.  Beyond that, there are the cheaper startup costs, low office rental costs, a 24-hour open storefront set to take orders even when you’re asleep, increased reach, cross-sells, upsells, and more.

Regarding cross-sells and upsells, Amazon does this really well.  Once a prospect adds a product to their cart, Amazon shows them associated products that other customers possibly bought at one time or the other.

This is excellent if you have a wide selection of products listed on Amazon and are looking to cross-sell or upsell more of your products.  You could also create a script that will do this for you easily.

The disadvantages of listing your products on an ecommerce storefront include the fact that your ecommerce store platform solution provider will take a percentage of your profits – usually between 3 and 7 percent.  Customers also tend to make fewer impulse purchases because they can’t feel or touch the products, lower profit margins from shouldering shipping costs, reduced revenue from customers having to pay shipping costs, and possible online advertising expenses.

Should I Start Online or Offline?

Creative Commons License
General store by Alex Eylar, on Flickr.  This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic License.

 

Offline Storefronts and Retail Stores

Selling your products offline also has its benefits.  For instance, if you can get your product on the shelves of top retailers, you could sell more products than from mere displays.  Your product will also benefit from foot traffic along the aisles.  Your product is also likely to benefit from the free repeat exposure that comes from being on the shelf.

Customers also have particular preferences.  For instance, some customers want to feel and inspect what they are buying.  Others just want to take their items home that same day.  Some just want to be able to enjoy the shopping experience.  Ultimately, this largely depends on the customer in question.  Whatever the reason, selling your products offline provides your customers with these “instant” rewards.

Offline shopping also encourages privacy in the sense that customers who are uncomfortable with divulging their private details can pay with cash instead of their credit or debit cards.  As the retailer, there’s less risk of assuming shipping costs to get your prospects to buy as most would walk in and pick up their items.

Customers are also comfortable with buying offline because it is easier and faster to return faulty or unsatisfactory product items.  This is particularly important if the client is trying out your product for the first time.

There’s also the added benefit of customers buying your products on impulse.  The downside of selling offline however includes the fact that your market reach is highly limited.  If you have a product that can be useful to virtually everyone, then limiting your selling to your offline storefront means you’ll only attract customers from your immediate locality, and that can limit your revenues.  There’s also the added disadvantage of overhead costs, rent, amenities and extra hands to fill your orders.

 

So What’s the Best Option?

Marry the two.  Have an online and offline storefront.  This way, you’ll benefit from both channels.  In fact, more people are doing their research online before walking into stores to purchase their items.  Some are doing in-store and online pricing comparisons.

Others will come into your store, see what you have, place the order online on their mobile phones while in the store.  However, if you are strapped for cash, set up an online storefront or list your products on ecommerce platforms like Amazon and fill orders from your garage.

Also, pitch your products to local retailers – may take time before they get back to you, but it’ll be worth it if they agree to put your product on their shelves.  Then as your revenue grows, you can gradually expand and grow.  Don’t forget – to sell in either location you will need barcodes to track inventory.  I recommend going through a vendor, and you can start your search for a vendor with Speedy Barcodes.

 

Oscar King is a freelance writer specializing in small business topics.  He provides guidance and advice to entrepreneurs wondering where to go and how to make it.  If you are interested in learning more about Oscar you can visit on Google+.

Tom
 

Arnel Ariate is the webmaster of Money Soldiers.

Click Here to Leave a Comment Below 1 comments
Shobir @ Millionaires Giving Money Blog - July 21, 2015

My personal preference is online. I like to find products which are in demand and can be stored and shipped from abroad. I like the idea of outsourcing most of the business which allows you to free your time. Tim Ferris is definitely an inspiration for outsourcing an online retail business. Great post, thanks for sharing.

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