Business
Online Business vs. Traditional “Brick and Mortar” Business
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An online business is a business that operates only over the internet. The internet is a billion dollar market for both buyers and sellers. The number of people who are buying online seems to be increasing with each passing day. The number of people who sell online also seem to be increasing as much. An online business has no physical address and you can’t deal with these businesses face to face.
A brick and mortar business on the other hand is a business that has physical presence. You can deal with these kinds of businesses in person and you don’t need to be connected to the internet to access goods and services provided by these businesses.
One advantage of online businesses is the huge customer base available. You can sell your goods and services to customers all over the world. It doesn’t matter whether you are located from the United States or India, as long as you provide quality services; you are likely to make sales from customers from South America, Africa and other parts of the world.
In a brick and mortar business, you can only sell your goods and services to people who live near your location. If you want to increase your customer base then you have to expand and move to other locations which require additional cost in terms of setting up new offices, hiring new workers, etc.
The cost of doing business online is also vey affordable as compared to brick and mortar businesses. You could operate an online business from your garage and still be making tens of thousands of dollars in sales. You don’t need to rent and office and employ so many people to run it.
One or two people can run a million dollar online business. This helps in increasing your profit margins. In a real world business, you have to rent offices, hire workers and commute to work everyday. All things being equal, working online is far cheaper than having a traditional brick and mortar business.
Fraud and security is one disadvantage with working online. Because you don’t deal with people in person, you could be a victim of online fraud where people refuse to pay for goods and services you have provided them.
Crooks could also hack into your security system and steal your private data such as credit card numbers, customer contact details, etc. customers are also wary of buying from you if you are not a popular brand like Amazon, Wal-Mart, etc. brick and mortar businesses don’t have much problems with the security issues faced online. There tends to be more trust since transactions are done in person.
