Online store vs physical shop. What are the big differences?

25.02.2020 1,356 7

Martin Pramatarov

So you are a business owner with a physical store and you are thinking of expanding your reach. You want to have an e-commerce store to sell online. What should you consider before starting? What are the differences between your current store and the new online platform that you are considering?

Cost

The physical store is expensive. You need to pay rent, services, and employees. An online store has different costs. The platform can be free to start if you know a bit about content management systems (CMS). There are options like Woocommerce, Magento and more.
The things that you can’t evade paying are the domain name (between 10 and 100 USD per year approx.), SSL certificate (15 to 150 USD per year), web hosting (50 – 300 USD per year) or dedicated server (500 – 5000 USD per year).

If your store is small, you might be able to manage it alone, but if it grows bigger, you might need to consider hiring more people to administrate the site. Yet, it will be far cheaper than a traditional store.

Market size

The shop that you have might be known in your neighborhood or even your town. With an online store, you can have a far greater reach. You determine the size. It can be limited to your city, region, country or even international. There are many more clients out there that might be interested in your products. Just don’t forget to think about how many products you can supply. You don’t want to end up showing “out of stock” signs to your clients.

Marketing

There are plenty of online stores. You will need to invest in online marketing. You can start with Google and Facebook ads. They both provide very good targeting methods. This way you can direct your advertising efforts to specific groups of people who are most likely to buy your products. You can use other modern methods like contentment marketing and influencer marketing. Content marketing creates a connection with your costumers with blog articles and other content. This can increase your brand worth and popularity, while influencer marketing can reach new audiences with many costumers for a good price. Take advantage of both of them.
The marketing decisions will be different from the traditional store. You can change prices faster and dynamically, create easier promotions, and have greater flexibility.

Customers’ loyalty

Because of a convenient location, you might have many regular customers, no matter what product you are selling.

In the online space, when it comes to common goods, customers’ loyalty is very low. If your store has common items, you will have the extra task to create a connection with your clients. Invite them to sign up for e-mail marketing, give them coupons, create games. One big advantage is if you can create a recognizable brand. This will separate you from the rest of the online stores out there.

The physical aspect of products

Unless you are selling services or digital products, this can concern you. People want to touch and see the products. The photos and even videos on your online store are sometimes just not enough. There will be many returned goods because the people didn’t like them when they got them. You can have a very high return rate for clothes and shoes. Try to include size calculators and accurate photos of the items. This can reduce the rate.

Here the physical store will always win.

Law

The law could be more complicated for an online store.

Depending on where you are selling, you might be under a different law frame. This is especially true for e-commerce sites in Europe. If you are selling in another country, the consumers there might have extra or different rights from those in your home country. Make sure you get prepared in advance.

Even in your country there might be different laws for online selling and typical, physical selling. Extra warranty, tax policies, return policies and more. Make sure you obey the law.

Logistics

When it comes to a physical shop, people just come in and get their product. If the product’s size is very big, you will need to provide a local logistic service to transport it. For an online platform, you will need to have a whole logistics network or partner with one of the logistics companies on that market. It will be very useful to add an API (Application programming interface) on your platform that calculates the price for shipping so your clients know the total price before buying. You can also provide free picking up in your physical store to lower the costs.

Payment methods

You will have extra expenses because of the payment methods. You might need to buy an extension or add-on for your online e-commerce platform to support a specific payment method. The cost of the transactions varies between the methods, but it won’t be 0 unlike the case with cash payments.

The advantages of online stores are huge. A broader market and a fast and easy buying process. It can really boost your business. Just prepare properly. It can be so beneficial that you can completely go online and forget about your physical store. If you are on that path you can check out our web hosting plans here so you can prepare your budget for e-commerce.