7 Pros and Cons of Starting A Solely eCommerce Brand – Info Branding

A Look at the Upside and Downside of Relying Strictly on eCommerce

There is no doubt that eCommerce is a great idea. If you have a brand that sells, well, anything, eCommerce should be a component in the way you do business. There are numbers to back that up; eCommerce sales are expected to grow to $4 trillion by 2020 on a worldwide scale. Last year in the US, eCommerce retailers made $322.17 billion!

Those numbers are only expected to grow. There are lots of advantages to having an eCommerce part of your brand, but what about relying solely upon an eCommerce storefront? Well, that’s where things get a bit murky. Let’s look at the pros and cons of starting a solely eCommerce brand.

The Pros

1. Low Startup Cost
Physical retail stores have to pay up to thousands of dollars up front in rent alone. One of the best eCommerce benefits is the low startup cost. Rent is only one factor; brick and mortar shops need store signs, inventory, sales equipment, and much more. They also must have a physical staff to man the shop. eCommerce brands need almost none of that to get started.

Example: If you use a popular site like Shopify, to get started, you are looking at maybe $3000 a year in “rent.” You don’t need physical items like sales equipment or even a staff. You may not have to buy your inventory in bulk, depending on your business, which will also save lots of money upfront.

2. Sell to Anyone, Anywhere
Relying on only one physical location means you are limited in who you can sell to. In the world of eCommerce, a new brand can sell to customers around the globe. You can constantly discover new audiences, from the U.K. to South America.

3. The Shopping Experience 
eCommerce allows for a personalized shopping experience for each of your clients. Plus, it allows you to easily keep track of who’s buying what, where and how often.

Example: You can easily retarget a customer who visited your store by showing them an ad for a product they added to their cart but maybe didn’t buy. You can also personalize upsells based on what the customer has browsed through or what you think they might like based on their buying behavior.

4. Customer Data Made Easy
That shopping experience can translate into useful data for eCommerce shops. One of the best eCommerce advantages is that you can easily gain access to data analysis about your clients. You can get your customer’s name, mailing address, e-mail address, and phone number. That means you have at least 3 different ways to communicate and build a relationship.

There are a few downsides to operating solely online. Let’s look at the cons to an eCommerce only brand.

The Cons

1. Highly Competitive
In this world, you need a niche. And guess what, the best niches are often the most competitive! The more competitive your corner of the eCommerce world is, the more expensive and difficult it will be to reach your audience.

Also, how will your brand stand out? You’ll have to be highly creative and dedicated to making your eCommerce brand work. It may start out as a side gig, but if you want this to be the only way you make money, look forward to long hours.

2. Shipping the Goods
Customers are beginning to expect free shipping and short shipping times from online businesses. Can you compete? When a customer shops in person he or she can take the product home right away. It’s instant gratification. Is your product worth the wait? You run the risk of losing people at checkout when they see shipping costs and a timeline.

3. Physical Retail is More Popular
The numbers don’t lie. Physical retail is in decline, BUT it is still a more popular way to shop.

Example: Look at Amazon. They are one of the most popular ways to shop. In fact, they are the largest online store. However, they are building and testing physical stores in large cities.

People still like to browse, compare, and buy in person.

There is a ton of potential in an eCommerce brand, but it can feel a bit like putting all of your eggs in one basket. While the great advantage of low startup cost is incredibly attractive, you may find yourself longing for a brick and mortar shop after you get started.

RUSSO is a strategic branding agency that uses consumer insight to change the conversation; forming emotional connections with the target audience. To learn more, click HERE to subscribe to our podcast.