Online business, also known as ecommerce, is a business model that involves buying and selling goods or services using the internet. Over the last few years, ecommerce has grown up to 300% since the first ever online sale in 1994.
In 2021, ecommerce accounted for 18% of global retail sales,which is approximately 4.9 trillion U.S Dollars. This figure continues to go up every year as more and more people make their purchases online.
Advantages of online business
Having an online business provides many benefits over a traditional business.
How do you like the idea of being your own boss? Being able to work from anywhere you want? How about the ability to scale your business quickly when needed? Want to reach customers all over the world?
Online businesses provide all of these benefits and more, and in this article we will discuss some of the greatest benefits of an online business.
If you have an internet connection, online business ideas and some basic web skills, you can create an online business and begin selling your products or services to customers across the world.
Here are some unique benefits of an online business compared to traditional brick-and-mortar stores.
1. Low Operating Costs
If you’re considering going into business, whether it’s full-time or part-time, an online business might be the perfect fit for you.
One of the major advantages of an online business, especially in the current ecommerce environment, is low start up cost. You can start your online business with little or no money in your home.
When you run an online business, you’re not paying for expensive overhead like retail space or major equipment. Your overhead costs are much lower than they would be if you were running a traditional brick-and-mortar business. The initial financial risks involved in starting up a business are also considerably less.
Additionally, many online businesses don’t require major starting capital—meaning there are minimal costs to keep your new business running.
This means that if you want to start a small side business, it could actually be quite affordable.
2. Easy to Scale
Growing a business can be tough, especially if you don’t have enough capital on hand.
An online business can scale easily, and with fewer costs than traditional businesses. There are many tools you can use to scale your online business with little initial investment.
For example, you can make use of cloud-based tools to supercharge your productivity and output. With a variety of tools to choose from, scaling up is practically effortless and instantaneous.
3. Become Your Own Boss
Many people who work for others want to strike out on their own. They enjoy running their own businesses but don’t have a business idea or any clue how to start a business.
So they decide to become their own boss. How do you become your own boss?
Before you can become your own boss, there are several things you need to know:
- What type of business do you want to run? Online or offline?
- What legal and tax requirements do you need?
- Who will be involved in your team?
With these questions in mind, you can determine what kind of business you want to establish and how you plan on becoming your own boss.
As a solo entrepreneur you enjoy the perks of being your own boss and taking decisions on your own terms. An online business affords you the opportunity to work on your own terms and to be as innovative as you possibly can.
4. Better Customer Support
With millions of potential customers at your fingertips, you’ll never have to worry about customer support. Having an online business gives you the opportunity to easily reach out to your customers through email or social media.
You are also able to answer your customers queries and resolve their problems without consuming much time or effort.
You can easily send and receive messages with your customers using a platform like Facebook or Twitter. Customers are much more likely to stay in touch with you as a result—and it means that if they do have any problems, they will get help much faster than through a traditional business.
And when all else fails, provide them with information on how to contact you via email or telephone.
5. You Can Sell Multiple Products From One Website
With an online business, you can sell multiple products and services from one website. Plus, with social media such as Facebook and Instagram, you can market your company to millions of people instantly.
Whereas with a traditional store it might take years for word to spread about what you’re selling –– not so with an online business. You can market your products or services with multiple channels reaching millions of people from all over the world.
6. Available Globally
One of the biggest advantages of starting a business online is that you can do it from anywhere.
This opens up your marketplace exponentially. Rather than being confined to one geographic location, customers from around the world have access to your products and services.
This also means that as your business grows, so does your potential customer base.
In fact, because ecommerce only requires a website or even just an email address to begin selling products/services, your reach extends beyond customers based in geographical areas where your business might be difficult or impossible otherwise. It’s almost like creating low-hanging fruit for yourself!
7. Taxes Are Lower For Online Businesses
Most online businesses are set up as Subchapter S corporations or limited liability companies, which means they can take advantage of pass-through taxes.
That is, if you make a profit, it goes directly to your personal income tax return and is taxed at your ordinary income tax rate. Compare that with having to pay self-employment taxes (Social Security and Medicare) as well as federal and state corporate taxes on all profits.
It’s no wonder most small business owners who file their taxes on Schedule C report losses rather than profits: It’s simply not worth it for them to be treated like a corporation. Having an online business ensures you get to keep extra profits for yourself.
There are many benefits of online business compared to traditional businesses. As ecommerce continues to grow many people are taking advantage of the unique advantages of an online business.
Once you’ve started a business, it is easy to grow it online. You can also easily scale if your idea catches on.
Since an online business has low operating costs, you can operate a smaller company with fewer employees and get more output for less money.
Your customers will benefit from easy customer support and better customer experience from interacting with you via email or live chat.