Online selling is the in thing at the moment. However, starting out with a new online business is not a child’s play. You will be faced with a number of questions. Is selling products online always a good idea? Are there any potential risks?

Just like any other land-based business e-commerce also has its own cons and risks. One should be completely aware of all of these pitfalls and make an informed decision before plunging into the online world. Here we will discuss a few of those disadvantages and risks associated with e-commerce.

Is an e-commerce website suitable for your business when selling products online?

E-commerce might be a really convenient way to expanding your business and reaching out to global customers. However, selling online might not suit every kind of business. For example research over the years has shown that people are more reluctant to buy furniture online. The main reason being, they do not get to check the comfort factor beforehand.

Even selling other products, especially perishable ones, over the internet is not a good idea. Hence before setting up an e-commerce site and investing in the setup process, it is always better to consider the viability factor.

  • Customizing your website

Simply downloading and modifying an e-commerce template may not be enough. You might feel like adding several personal touches to a number of features and aspects from time to time. This will again lead to some changes, updating and thus the allied costs which have to be kept in mind before starting a website.

  • Customer satisfaction

One of the major shortcomings of selling products online is acknowledging the lack of personal interaction between the buyer and the seller. In a brick and mortar shop, the shopkeeper or the salesperson may be able to interact with the seller and convince him to buy a specific product. It is even possible to answer customer queries instantly during a sale in the shop.

However, these factors are mostly missing in e-shops. The ability to feel and touch an item helps the customer to make a decision most of the times. One may include a customer helpline number or a chat box window to answer customer queries which do solve a part of this major problem.

  • Maintenance

Although the maintenance cost of an actual shop is a lot more than an online store, there are certain maintenance costs that one just cannot ignore. Even updating the product catalogs and their prices is a necessity that cannot be avoided.

  • Investment

Besides the cost of setting up your own website, there are some costs you will have to consider before starting out. Firstly the delivery charges; you will need to either absorb the shipping charges in case you want to offer free shipment of your products. This is quite a challenge for nascent businesses.  You may also want to include the shipping charges either in the selling price of the product or separately, which might raise the price forcing customers to avoid your online store.

Either way, it is a tough decision to make and demands a good initial investment of capital. Secondly, especially if you are looking forward to setting up an apparel store, you will require fine quality photographs of your products.

A drab photo may make your product look inferior. Sometimes you may even need models for certain products, especially women’s clothing, accessories, and lingerie, which is certainly a huge cost. So diving into e-commerce half-heartedly is always a bad idea unless you are ready to make these investments in order to make your business thrive.

The Costs of Selling Products Online

Having an e-commerce website is great in more ways than one, as you can operate your entire store from anywhere you want, and you can have your store open round the clock! And if these weren’t all, probably one of the best advantages of selling products online is that it drastically cuts down on expenses. The most evident reason for this is that e-stores do not need a physical shop that you need to maintain, which will add expenses such as rent, power bills, interiors, etc.

You can have the hub of your e-commerce operations at very cheap premises, which can be your unused garage to a shed that you rent at a very nominal fee. Also, you need less staff to help you run your establishment, as there is no physical shop and customers to assist and engage.

Other than this, you can expand your store as and when you want, and keep on adding separate wings and subsidiary sites and as many products as you want, without much expenditure. However, that does not excuse you from assessing the one time and maintenance costs that you need to incur to make your web store any good.

 A rough estimate of what it would cost to create online business

create online business

  • Approximate Overall Costs:

Some expenses need to be taken care of when selling products online, but then again, there is no need to worry, as these expenses are way less and meager compared to the expense of running an actual shop. If you are planning to market products online, then there will be domain costs and cost to keep registered business emails. But all these expenses will not even come to more than $200 a year if you are calculating on the basis of a 100 products.

The most expensive event while starting an e-commerce site is the time when you hire developers to design a site for you, and this can be anything close to $600. But this is a one-time expense, and one design will be good to go for a long time. This again is the cost if you are calculating on the basis of a 100 products.

Other than these expenses, Search Engine Optimization (SEO) and Search Engine Marketing (SEM) are two domains that can cost you a bit, but not too much, and these are optional, and you only have to pay if you wish to make use of these facilities. The website, on the other hand, will cost you a monthly fee, which will be quite small, and will depend on the number of products that are there.

  • The Annual Expenditure:

So to sum it up, we can see that if it’s a tiny business, then a yearly cost of keeping it afloat is something around $2000, while if you are aiming a little higher with up to 2000 products, then the cost will be something around $6000. And lastly, if you have a shopping website with over 10,000 products, then the total annual cost will come to an approx $33,000, which is still really low, compared to what you would have had to pay if you were to run an actual physical outlet with these many products.

The figures listed in this article are merely estimates. If your friend or relative decides to set up the website for you or offers to SEO your site, then you’ve saved something. There is also the option of using cheap but effective services. Check out our guide to sell online products. Whatever you do, just make sure you don’t penny-pinch too much as it can affect the quality of your business.