Thinking about starting an eCommerce business? Before you commit time and effort to an online venture, consider if it’s the right business model for you.
Whether you want to sell products, services or both, you’ll find that eCommerce has many advantages over brick-and-mortar selling. But even if you’re set on a physical store, you can still leverage eCommerce to reach new customers.
This article covers the many ways online selling can benefit both you and your customers and some reasons that eCommerce might not be the right fit for you when starting a business.
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What is eCommerce?
A combination of “electronic” and “commerce,” eCommerce is the buying and selling products or services online. This type of transaction lets customers purchase physical or digital products whenever they want from any device that can connect to the Internet (e.g., smartphones and laptops).
If you’ve dreamed of starting your own business, whether that means committing all your time and energy or pursuing a side hustle, eCommerce is a tempting option.
Why eCommerce?
Well, in 2023, global retail eCommerce sales reached US$5.8 trillion. By 2027, experts believe online retail sales will surpass US$8 trillion.
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Why do you need an eCommerce website?
More and more customers are turning to digital channels to make purchases. According to the U.S. Quarterly Retail E-Commerce Sales Report, eCommerce sales accounted for 15.9% of total sales in the first quarter of 2024.
But running an online business can have added some costs you should consider, especially if you use an eCommerce marketplace like Amazon or eBay instead of your own website. Transaction fees and other charges on eCommerce marketplaces can be sizable. For example, Amazon has “referral fees” as high as 15%–20%.
If you want a bigger share of revenue, you should consider building your own eCommerce website. On top of cost savings, you’ll get better customizability and more consumer insights.
Advantages of eCommerce
If you’re an entrepreneur who already knows the massive value of the eCommerce market, you won’t need much convincing. But if you’re still weighing the advantages and disadvantages of e-commerce, take a look at these tempting benefits:
Save on initial expenses and upfront costs
When you start your own eCommerce business, you don’t need a physical store to operate from or employees. In fact, if you start a dropshipping business, you won’t even need a place to store your products—just computer access. You can use the huge cash savings from a lack of rent and staffing costs to help you grow your business.
Generate web traffic to reach a broader audience
Online sellers don’t need to rely on foot traffic, traditional media ads or word of mouth. For example, you can boost traffic to your eCommerce store if you start a blog and use online marketing strategies, such as search engine optimization (SEO), social media marketing and email marketing.
Conduct sales 24/7 without a physical store
With an eCommerce or online store, you can ditch traditional store opening hours and sell products while you sleep.
Instead of being stuck behind a point of sale (POS) system at a physical location, you can handle payments online while attending to other business matters, like expanding your product offerings or boosting your online presence.
Enhance scalability for business growth
As long as you build a good website as a foundation, eCommerce stores are easy to scale up as your products increase in popularity or you expand your offerings. By contrast, increasing the size or number of physical stores requires a substantial investment.
Collect advanced customer data
By tracking online shopping metrics, like conversions, cart abandonment rates and customer lifetime value (CLV), you’ll be able to measure customer satisfaction in a way that’s not possible with a brick-and-mortar business.
When you get this all-important data, use it to improve the customer experience. For example, if customers are ditching their digital carts because the checkout process is too long or the shipping costs are high, make changes so that you get a better conversion rate.
Disadvantages of eCommerce
Online selling can be a perfect alternative to in-store sales as long as you can tackle the few disadvantages of eCommerce. Here’s what you’re up against:
Cyber security threats
If your website isn’t secure, you can expose the data and money of your business and customers. If this happens, you could lose consumer trust and face legal challenges.
However, if you put website security front and center, you can mitigate security risks like phishing and hacking. Wix takes a proactive approach to website security with features like strong data encryption and anti-fraud protection, so you can rest easy knowing that sensitive information, such as your customers’ credit card data, is safe.
Logistics with manufacturing and shipping
When you run a busy online store, you need good organization skills and the help of external parties, like third-party logistics companies. If you build a Wix site, you can connect it to various supply chain solutions from the Wix App Market, helping you overcome the challenges of inventory management, shipping and more.
Technical issues
If your eCommerce website experiences technical issues related to your web hosting server, you’ll lose out on online sales and send customers elsewhere. But traditional brick-and-mortar stores are not immune to disruptions, either (e.g., staffing issues, adverse weather events or power outages).
Remote customer service
While online customer interactions are quick and convenient, they don’t have the same touch as face-to-face customer service. That said, you can personalize your online interactions to increase eCommerce customer engagement and improve customer service. Wix has many tools and apps for customer engagement, such as Wix Members Area and Wix Chat.
Benefits of eCommerce for consumers
When you consider the advantages and disadvantages of using eCommerce for businesses, it’s easy to forget the experience of the end-users: your customers. Here’s what’s in it for them:
Convenient remote shopping experiences
Customers love the convenience of buying products from their sofa. Instead of sitting in traffic or standing on crowded public transport to shop at physical stores, your potential customers can get quick deliveries to their doorsteps.
Wide selection of products
Customers can choose from a seemingly endless variety of products at their fingertips. Since physical products are stored in huge warehouses in worldwide locations, they’ll have wider options than they would at physical stores.
Time savings
When you build an eCommerce website that’s user-friendly, your customer base will remember how fast and simple online shopping can be. Consider allowing customers to save their profiles and log in with ease. They’ll appreciate the time and hassle you’ve saved them.
Easy to compare prices
Consumers don’t have to physically travel from store to store to get the pricing information they need. Instead, they can open multiple browser tabs to compare product prices or even use a price comparison site.
If you can keep your prices competitive while generating positive customer reviews online, you’ll gain an edge over other eCommerce businesses in your niche.
Bottom line: Is eCommerce right for you?
If you want to sell products without a substantial financial commitment, then eCommerce could be the right choice for you. With some good organizational skills and a well-built eCommerce site, you can overcome most of the disadvantages of eCommerce and give your customers the shopping experience they desire.
Ecommerce advantages and disadvantages FAQ
What's the most secure ecommerce platform?
If you use Wix to build your eCommerce store, you’ll benefit from enterprise-grade website security featuring round-the-clock monitoring as well as access to a number of ecommerce tools.
How do you choose the right ecommerce platform?
Which ecommerce platform is ideal for small businesses?
What are the meain features of an ecommerce website?