Setting Up An Ecommerce Business: The Pros And Cons

Ecommerce is now a massive industry and yet also a relatively young one. Nonetheless, it has already made one its earliest practitioners into a billionaire: Jeff Bezos, who set up Amazon in 1995 as an online bookstore, is now worth $75.6 billion and has overtaken Warren Buffett to become the second richest person on the planet.

Pros & Cons of Starting an eCommerce Business

Setting Up An Ecommerce Business

eCommerce is one of the most exciting industries to invest in today, and the great thing about it is that it does not need to cost nearly as much as setting up a business with a more traditional commercial focus.

Buying a premises is expensive enough but then you have to fit it out, hire and train people to work in it, insure them and the property itself and only then actually open your doors to your customers. If you would prefer to set up a business online, there are still costs that you should consider.

If you are going to be selling products, you’ll need a depot or warehouse to store them in prior to their being sold. You will also need to hire people to work in that depot.

Besides, one of the disadvantages of shopping online compared with going to a store is that the customer does not get their purchase immediately. Depending on the shipping costs that the customer chooses, they can expect their item in three to five days.

You will, therefore, have to pay for the transit of the things that you sell. You may want to set up your own delivery infrastructure but a much cheaper option may be to just outsource that aspect of the business. To succeed, you will need to calculate just how much you will need to sell to offset these costs. An easy option available is Stowfly, a network of shops and stores where orders are safely received and handed over to your end customers avoiding the problems of theft and USPS missing package.

Another sometimes expensive aspect of eCommerce is the entire digital infrastructure that you’ll need. First, you will have to invest quite a bit of money in servers that are secure and reliable. This is another aspect, that at least initially, you should think about outsourcing. Then you have to design your own website which takes a lot of money too.

eCommerce Business

The secret to effective websites is that the interface is so simple that the user does not need to be taught how to use it. Google, for instance, exemplifies this trait: it has just the name of the engine and a bar to input your search. Hiring web developers is going to be another initial start up cost but you should know that you’ll need to keep them once the website is built. Websites are always experiencing bugs or malfunctions and they can always be improved anyway.

Something else to consider is making sure that you know exactly to whom it is that you are selling. Some products are age sensitive, such as films and games, and if you are going to be sure that you are not selling these products to the wrong people, you should consider a unique solution that allows you to scan and authenticate your customers’ identities. It protects you from potential lawsuits as well as certain types of fraud.

Ecommerce is not an easy business to get into, but if you do it right, it can make you immensely wealthy.

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About the author

Michael Austin

Michael Austin is a Internet Entrepreneur, Blogger, Day Dreamer, Business Guy, Fitness Freak and Digital Marketing Specialist. He also helps companies to grow their online businesses.