It is the most arousing topic for each and every businessmen while starting a new venture. What kind of business should I start, traditional or e-commerce? let's discuss traditional business then will cast some limelight on e-commerce business.
What is Traditional Business?
Traditional business is a local store which offers its services or products to its local customers. It is a set-up where customers will have to visit the store physically to buy the products.
Basic Needs, Framework, and cost of Traditional Business:
Decade 10 years ago, people had only one option to begin a new pursuit. There was no idiom like e-commerce to set up their business online all over the world. Following are some of the facts of traditional business:
Cost of Infrastructure: In traditional business, infrastructure cost is very high. Renting and buying office is always expensive in offline business.
Cost for employing staff: You need to hire staff for sales, accounts, management and security.
Huge investment in maintaining Stock: It becomes compulsory for each and every retailer to maintain stock of the products he is dealing with due to which a huge amount of money remains blocked in business.
Locality Limitation: Choosing the correct location is a very important aspect. Your store has to be located centrally so that the customers can visit easily.
Time Limitation: Traditional showrooms run for limited time like from morning to evening and from Monday to Saturday only.
Less scope for Expansion: Little space of showroom/ office will limit the chances of expanding the business in future.
Offline Business Promotion Activities & Expenses:
The main aim of any businessmen is to earn profit which requires promotion in order to increase the customers, generate sales and profits. You can promote your business through below mechanisms.
Business cards for your brand and numerous personalized giveaways.
Highlight your infrastructure and real structure skills through open houses.
Design brochures for your products and distribute to everyone.
Run ads of your business remove through via newspaper, magazines, radio and TV.
Pamphlets, banners, posters for your showroom and brand.
Mouth to mouth Publicity.
Radio and TV advertisement is costlier in the market and not every business representative could afford this advertisement investment.
In today’s scenario there is no need to elaborate E-commerce business. We all are well aware about e-commerce and online shopping using e-commerce websites. Well, E-commerce business is the strategy of selling products online through web rooms on some special price, offer price, and discounts. Generally, people are moving from offline business to online business due to wide use of smart-phones, laptop and desktop. In today’s world, e-commerce has become a necessity not an option.
Set-Up Strategies for E-Commerce Business and Plan Cost:
If anyone wants to set up their online e-commerce business, then they need to follow some strategies, which are different from Traditional business like,
Cost of Designing: Website designing is the most important part to sell products online. There is no need to invest in infrastructure, renting and buying office in online business at all.
Stock Management: There is no need to keep all products in stock initially; you can tie-up with the vendors or sellers to arrange products after receiving order.
Tie up with Shipping Agencies and Payment Gateways: You also need to tie-up with various shipping agencies (DHL, FedEx, DTDC, etc.) to deliver the product timely to the customer. You also need to integrate payment gateways (CCAvenue, Paypal, PayU, etc) to receive online payments from your customer.
No boundation of location: Online stores are just a click away from you. It is easy to visit online store than offline store. Area or City doesn’t matter.
Time Accessibility: Online web-rooms run for 24 hours. Anyone can buy products anytime even on holidays.
Global Reach: It is easy to expand your online business globally since physical presence of the customer is not required.
Better customer service: In e-commerce business you can serve your customer better since you remain in direct contact with them. You can answer their queries much faster via e-mails and live chat.
Financial Investment: Any Merchant can start online business without spending much money because ecommerce platforms are available which are providing free ecommerce stores.
E Commerce Business Promotion Activities and its Expenses:
You can promote your online business by various means like
Enhance your online brand reputation?
Create and update your website blog
Send newsletter to your subscribed visitors
Use Social Networking sites to spread around the word
Digital Marketing or online marketing
Paid Advertisement on Google, Face book and affiliate marketing
Let us conclude, which business is more beneficial? We would prefer you to go with E-commerce Business; since it has captured huge market in the world and very less scope has been left for Traditional Market/Business.
If we talk about the risk factor, then we would say traditional business is more risky as compared to E-Commerce business. Online business requires initial investment for designing a website and promotion. (You do not need to keep the products in bulk at your offline store).
In E-Commerce, Investment (input) is less and chances of positive results (output) are more. In Traditional Business, Investments are large and there is no guarantee of return. Therefore it is preferable to go for E-commerce business rather than Traditional one.