Online Business VS. Offline Business - Which is better?

Online Business VS. Offline Business - Which is better?

When it comes to running a successful online or offline business it all really depends on the person.  If you want to get into an offline business or online business you will really need to sit down and think of your skill sets as well as everything else I'm going to list below.  You may not realize a lot of things that I will cover, but no single person knows everything so don't feel bad about that  

When I started off working online I only wanted to do it so that I could not answer to a boss.  Fast forward to today and I am my boss, which is really nice   I do want to start up a brick and mortar type of business, maybe a bar and grill, but that will take time and planning before I ever step food into that industry.  Right now I'm pretty much 100% online expect for my 1 physical product that I sell online lol.  I don't have a shop that I sell out of and I'm not partnered with anyone yet that is buying from me at a wholesale price, but that time will come eventually

Now then, Below are some pros and cons about online and offline businesses.  Read through them in order to get a better understanding of what you would prefer.  Don't forget that you can always do a hybrid business model where you have a physical store to sell out of but also list your products all over the place online.  A lot of businesses are starting to do that in order to increase their sales.


Online Business

Pros:

1. Able to sell 24 hours a day
   When you're working with an online business you really never have business hours.  This is due to the fact that your website does not sleep and will be up and running while you're away, sleeping, or even dead (hopefully not).  You can sell products for the entire day and if you make some sales when you're asleep you just fulfill them when you wake up.
   
2. Don't have to talk to all your customers
   Essentially you won't have to talk to the majority of your customers over the phone because you're an online business.  If you write everything up so it's very clear such as your shipping times, costs, check out process and product descriptions then people will be less likely to call you because 99% of them know how to purchase an online product.  Now you will have to talk to those 1% people who don't know what they're doing, and that's unavoidable.
   
3. Low start up fees (sometimes)
   Websites typically have a much lower startup fee than a physical location.  With a website you have to worry about a domain with privacy ($40 or less), hosting ($40 a month or less) and your design ($315 or less using wordpress).  This means your total investment to start up would be around $205 compared to the physical location that might charge you $3,500 a month just for your lease.  And that $3,500 a month usually has to be paid annually in order to show the owner you're serious, so it's actually $38,000 for your first month.  This isn't including all of the inventory you need to stock up on and all the branding materials as well.  In the end, if you cut corners, you're looking to start up and pay around $40,000 to $45,000 your first month.  That's crazy, right?
   
4. Better ROI
   Online businesses usually have a better ROI due to the fact you can start them up for such a low investment.  If you do the advertising just right you can actually get an insane ROI.  Plenty of times I've heard people getting a 1,000% ROI which is a staggering amount, but you don't hear that with brick and mortar type businesses too often.  I myself have had 1,000% to 3,000% ROI months due to new tactics I've used.  Sometimes they stick and sometimes they fade, but you have to be trying in order to figure it out
   

 
Cons:

1. Distant from clients usually
   Not talking to clients can be a bad thing as well as a good thing.  If you don't respond to phone calls because you just don't want to talk or you let emails build up because you don't want to respond, you may not be in business long.  I use to have a problem picking up my phone when I just wasn't feeling it, so I had to outsource that job to a friend and I just pay per call.  I don't get many calls because I have a chat app on my websites that goes right to an app on my phone and I can respond just like a text message, which is super convenient
   
2. No foot traffic
   Having all of your business online means you don't have a physical location and that means no foot traffic.  Foot traffic is basically people that use their feet to walk into your store, hence, foot traffic lol.  With online businesses you don't get that random person coming by and saying "Let's see what this place has inside!" because if they do see your ad, they're usually looking for you already lol.  Online businesses rarely capture those random visitors who just stumbled upon your website.
   
3. Harder to get recognized within your community
   Having your business fully online means that it won't get seen by people in the community.  I've noticed a lot of businesses getting locations in a downtown area just to showcase their products.  I know one of them and he said that he loses money on his storefront based on the sales it brings in, but the local purchases through his website due to the marketing the business does increases his sales much more than what the store is costing.  Being online and not offline means that you can't capitalize on those people who want to come back later and purchase.  Sure you can set up some re-targeting, but you're still paying for those clicks lol.
   

Offline Business

Pros:

1. Client loyalty
   With an offline business that has a physical location you will notice that you have a good amount of loyal customers that will always come to you for what they need.  Think of it, even with chains like Walgreens who sells their items at a higher price than most places, you will have a ton of frequent shoppers.  If your staff is nice, they people buying items will always come back for more. 
   
2. Easier to get referrals
   When you have happy customers they will likely refer people without you asking.  If they talked with you in person and were able to get the product as soon as they purchased, they will usually say good things about you to their friends.  Having a good experience when shopping while talking to someone that works there is always an amazing thing when it comes to marketing.  You can help the clients out with whatever they need, give them recommendations, and if you try to save them money they will love you forever lol.  It's tough to do this online because there's always that distance between you and an email, chat conversation or phone call.
   
3. Sense of accomplishment
   When you have a successful physical location you have a sense of accomplishment.  I don't know this since I'm almost 100% online, but I do have friends who say it's nothing like an online business because you can go into work everyday and see what you've built from the ground up (not literally).  Gaining that sense of accomplishment is one of the best things you'll ever feel in your life and I hope I can get that one day when I do venture into a physical location
   

Cons:

1. Costs more to start up
   As I explained near the top of this CD, it will cost you a lot of money to start up a business that is at a physical location.  On the low end you're looking at $40,000 to $45,000 and sometimes it can get much higher than that.  If you're looking to start up a McDonald's then you better hope that your bank account has at least $3,000,000 in it lol.  Physical location start ups cost more because you will usually have to lease out a business space in a mall, strip mall, downtown area, etc. which is basically you paying rent to put a business in someone else's business.
   
2. Can't sell for the entire day
   You will always have store hours, unless you're a 24 hour drive through selling $3 hamburgers lol.  Compared to selling online where you're always open, a physical location is usually open from 9am to 9pm depending on the day of the week.  That will cut out 12 hours of your day where you can't make any money through the business.
   
3. Lower ROI
   The ROI of a physical location is usually lower due to the fact you have to pay a lot for the lease up front.  If you did 100k online and 100k offline, your online sales will have a much better ROI since you only have to pay around $450 a year for your hosting.  Sure you would have to pay for advertising, but you'd have to do that for your offline methods as well.
   
4. Must talk to client (this is a con for me lol)
   When you run a physical location you're suppose to talk with everyone that comes into your store.  I myself would hate doing this, so if I every do get successful enough to run an offline business I will definitely have a management team doing all the talking lol   Talking to your foot traffic is crucial when it comes to sales.
   

In Conclusion:
I guess it really just depends on which type of person you are.  Do you want to sit at home and not talk to anyone while making money online or do you enjoy getting out and talking to random strangers who could potentially be your next buyer?  I myself prefer the online method because I can work from my home office or my couch while watching TV, but that's just me.  What would you guys and girls prefer?



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Razzy