May 31, 2018

What are the Benefits of e-Commerce to Your Business?

by Digital Marketing Institute

Do you run a retail business that’s doing well and you’re wondering how to expand sales globally? Are you hesitant to break into e-commerce because of security concerns, or simply a lack of understanding about that element of business?

If you’re in any kind of retail or are thinking of it, or if that’s where your clients are, there’s never a better time to gain a better understanding of what it takes to sustain an e-commerce business.

Staying Competitive

According to Entrepreneur, plenty of people will continue to shop in-store, and this market is still far larger than online shoppers. Online shopping is expected to grow at a great pace, with 56% of Gen Xers and 67% of millennials in the US being the most likely demographics to make purchases.

It’s actually important that you learn about e-commerce as soon as you can because it (especially mobile e-commerce) has grown by 300% over the last few years with revenue of $700 billion in the US just last year. It is expected to make up 17.5% of global retail sales by 2021 (up from 7.4% in 2015), and sales are predicted to hit $4,878 billion in the next few years.

Going Global

It goes without saying that brick-and-mortar setups are bound by location, and depending on your product or service, this could be key to your revenue. But even if you think that your business 'needs' to stay local, expanding globally could allow you to expand into new facets of your business.

For instance, if your business is primarily service-based, you may want to complement your local offerings with products that people can purchase online from you, such as a hairdresser offering specialty accessories. It may also be that you are able to tap into the travel and tourism market more easily if you move towards online selling.

Lowering Costs

Because e-commerce tends to carry far lower costs than brick-and-mortar setups, adding an online component to your existing business doesn’t need to be a high-risk investment and in fact, in most cases would be a far better choice than opening another storefront if that’s something that you feel you could easily lose money on.

Why is it lower cost to run an online store? Here are a few important points to note:

Sales on Advertising

Digital advertising is inexpensive compared to traditional channels and can be more easily adjusted to fit varying budgets. You can use a blend of traditional and digital to market your entire operation, or even switch to primarily digital and save a lot of money.

Email is just one example of a simple digital tool that remains a cost-effective and simple way to send information to segmented markets (check out a simple tool like MailChimp if you’re looking to get started on email marketing).

Save on Staff

You won’t have to pay in-person staff and in fact could consider integrating something like a chat-bot into your social media and customer service activities instead of live help. You may also want to hire an overseas virtual assistant or marketing specialist if you are looking for people to handle customer service or other activities on a 24-hour basis.

Save on Rent

There will be some initial costs to do with web setup and maintenance – for instance, integrating a Shopify account into your current website, or even doing an overhaul. Shopify costs only a few thousand per year, and for this fee, you also get to use other built-in features that will help you run our business more smoothly. This is especially the case if you are already paying for space to store inventory and are willing to ship from your location.

Better Targeting & More Personalization

Digital marketing and selling models such as those that use e-commerce may allow you to gather, synthesize and use customer information and data more easily than traditional channels. This is especially the case when you consider retention activities like customer loyalty programs – essentially you can track their buying habits more carefully which offers the opportunity to target marketing and promotional efforts in a more accurate way.

To this end, you’ll also find that there are greater opportunities to personalize your promotions and other offerings as you have data about your customers integrated automatically into the system. If you know how Amazon “recommends” items that it thinks you like, you can easily do that as well. You can also segment and personalize based on specific location, spending habits, or cart abandonment rates.

Upselling and cross-selling may also become easier as you are not stuck with an uncomfortable face-to-face situation where the customer may be turned off if they feel pressured. You can simply provide suggestions for add-ons as a part of the shopping cart process and let the buyer go from there.

Different Traffic Streams

You probably already have a website set up to support your business, but is it getting much traffic? Developing an online presence can help you understand your market better so that you can offer them new and innovative products as well as promote your on-the-ground store.

How do you do this? Search Engine Optimization on your site is key and digital marketing strategies can be huge when it comes to customer research and targeting your marketing both online and offline.

Easily Scale and Grow

One key benefit of running a business online is that you can easily optimize and scale your budget in accordance with all other aspects of the business, and it’s not too difficult to scale your business should you see your customer base expand and grow.

For instance, if you are running Facebook ads, you can easily adjust these in accordance with purchasing behavior. And even if you find some dips or shrinkage – say, if your offerings tend to be seasonal, you can adjust your marketing and inventory in accordance with these changes as well.

A more Pleasant Customer Experience

For many tech-savvy individuals who are used to making online purchases, they may not know that for a lot of people who are used to it, it’s just a smoother and more comfortable experience for many. Not only does a customer not need to leave the comfort of their own home, but they also get to avoid traffic, parking, and pushy salespeople trying to upsell or interrupt your conversation with a friend.

When a shop is set up right, the ease of searching, browsing, and ordering can easily outweigh the extra shipping cost. This is especially the case if special features such as live chats that are set up to answer customer questions 24-7, a feat which is becoming more and more affordable if you consider overseas outsourcing or chatbots.

Passive Earnings

If you can keep your shop open 24-7 and you are able to expand your offerings to a global audience, this means that you have the potential to create a passive income stream – that is, your revenue doesn’t necessarily rely on great salespeople or opening hours. When you and your customers are no longer restricted by logistics such as location and time of day, you have plenty of opportunities to boost revenue in new ways.

Things to Note (Possible Drawbacks)

Though in most cases it’s going to be fairly smooth and low-risk to open an e-commerce component of your business, you’ll want to bear in mind a few things. For one thing, you’ll want to ensure that you invest in a highly professional web developer/designer (or agency) to help you set up a solid system for your website that will be sustainable and secure over a long period of time.

Another possible disadvantage has to do with your products. For instance, if you have something that’s wearable and fit-focused, it can be hard to have people know what they’re getting. To this end, you’ll need to ensure that you offer a well-developed return or exchange policy in place for customers to know that it will be worth it because they can’t actually try items on.


In a general sense, it’s typically pretty easy, low-risk and low-cost to start an e-commerce business, whether or not you already have a brick-and-mortar store. So long as you pick your products wisely and have an appropriate business plan, there’s plenty of potential for passive income and high ROI over the long term.

E-commerce certainly may not be right for everyone, or it may not even be the right time for you, but it’s important to consider an e-commerce-based strategy if you have a retail operation or even an idea you want to put into action over the next several years.

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