Thinking of starting an online business? A look at the advantages over a physical shop

Considering the current state of the economy and rising unemployment, many people are turning their thoughts and attention to starting their own business. Before we had the Internet, your only option was to rent or lease a business office or store space, which naturally involved a considerable sum of money before you ever opened your doors for business. Depending on the nature of your business, it was likely that you'd also need to hire at least one or two sales people or other support staff. Other costs included taxes to be collected on goods sold, as well as quarterly tax payments for employees. You might also need to make modifications to your shop to suit your business.



Today, you can start an online business on a shoestring budget, schedule your work hours around school, your day job, taking care of your kids – all the normal conditions of everyone's life. You can also more easily handle your sales without hiring a sales staff. While you should expect to be working hard to get your online business off the ground, you can keep your regular job to ensure that you can make ends meet

until your business starts to turn a profit. So it's clear that you make the transition from employee to online business owner far more easily than you might with a brick and mortar venture.

Let's take a look at some of the other advantages you can realize with your online business.

1. With proper, effective marketing techniques, you can sell your goods to millions of people. The brick and mortar shop doesn't have this potential.

2. You can establish affiliate relationships with other businesses, advertising their related, but not competing, products and thus expand your inventory - and income through commissions, which can be substantial, depending on the product. For example, if you establish an online gift shop which consists of handmade art objects, you might sell any number of books that provide background on the particular art form, historical notes and the like. Generally, you can expect anywhere from 15-35% of the cost of the book, with your affiliate stocking and shipping the item. The brick and mortar business concept requires that you stock, track and ship from your shop, increasing your cost of doing business. The online business model thus creates passive income, reducing the amount of time you must invest conducting business.

3. Responses to customer inquiries are easily automated, increasing customer satisfaction, whereas in a shop, you need the immediate, one on one interaction. Sure, many inquiries will require that you write the customer to address specific issues, but an automated response system allows you to acknowledge the customer, letting them know you'll be getting back to them shortly.

4. With an online business, you can gain even more exposure through reciprocal links, with the added advantage of boosting your search engine rankings. The search engines do pay attention to links, both incoming and outgoing. (Be sure to focus on links to sites which provide high quality information and products.)

5. An online business simplifies your accounting, with an irrefutable paper trail of transactions.

6. Keeping in touch with your visitors is virtually free. You don't need to incur the postal fees to the extent that you would in paper mailings. Newsletters delivered by email increase word of mouth referrals, as your customers can forward your email to interested friends and neighbors, at no cost to themselves. Similarly, ebooks and other downloadable materials decrease your cost of doing business.

The only real disadvantage of an online business? If you're the type who loves the personal interaction with each customer, you may not derive that sort of satisfaction to the extent you'd like. In this case, you can always have a physical shop as well as your online business. Unless you've got money to burn, all you need do is wait until your online venture produces the income sufficient to fund your local shop. Personally, I'd be just as happy to use that money to interact with people on a beach in some tropical island vacation spot, while enjoying a prosperous online business peopled with happy and loyal customers. You decide which works best for you.