2017-11-30 00:00:00 Running a Business English Determine if online merchandising is right for your by weighing the pros and cons and answering some basic questions about your retail... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/12/Employee-in-retail-business-sorts-through-online-merchandising-orders.jpg https://quickbooks.intuit.com/ca/resources/business/retail-business-online-merchandising/ Pros and Cons: Is Online Merchandising Right for You?

How to Start An Online Retail Business Successfully

Pros and Cons: Is Online Merchandising Right for You?

In the age of modern technology, reaching your customers and interacting with them is easier than ever before. The online retail process of selling products or promoting your business is enhanced by the presence of social media and the popularity of mobile devices. When it comes to starting your small online business, you should ask yourself some basic questions, and determine if the advantages outweigh the disadvantages of becoming an online retailer. Ask yourself:

  • Am I internet/computer savvy?
  • Can I create an engaging website?
  • Is my product/service unique?
  • Can I handle making money slowly?
  • Will I reach my target customers easily?

In order for your online retail business to be successful, your answer to each of these questions should be “yes.” Creating an online retailer has many perks, but to determine if online merchandising is right for you, you need a clear idea of the benefits and the pitfalls.


Two of the top advantages of becoming an online retailer are the cheap startup costs and simple setup process. Rather than leasing a brick and mortar shop, standard website packages are pre-customized and relatively inexpensive, while physical stores come with a number of legal and financial challenges. With an online retail business, it is effortless for you to stay open 24 hours a day, 7 days a week. Increased selling time equals increased sales, and customers appreciate the convenience of shopping when they have some free time. Without the need for cashiers or loss prevention, online retailers require less employees to run the business, which reduces your operating costs. The opportunity for theft decreases considerably without physical customers handling your products.

Another major advantage of an online retailer is the ability to grow rapidly and reach customers nationally and internationally. With a strong social media presence and innovative digital marketing, you can gain customers from all around the world, rather than a specific geographical location. The ability to collect information about customers using analytical programs on your website helps you understand the insights and shopping habits of your customers. Obtaining this data at a physical store proves difficult and time-consuming.


An online retail business usually doesn’t start making money quickly. This business needs time and effort to grow, which you may see as a major disadvantage. Offering the customer the convenience to shop without salespeople has advantages, but less physical contact with customers makes it harder to sell them additional products. The absence of face-to-face interaction and communication reduces customer loyalty and trust. Brick and mortar locations have employees to provide confidence and reassurance to their customer, while websites have an impersonal feel. One disadvantage of online retail is security and fraud. With the rise of identity theft, customers may be cautious about shopping on your website for fear of entering their personal information.

Other disadvantages include a reduced impulse to buy and customers’ minimal interaction with your merchandise. Physically touching the merchandise helps sell products, as some customers need to feel the quality and see the texture to make a purchase. Online retailers can not offer customers this benefit. With an online business, your advertising costs rise as you grow the business, and infrastructure costs increase as more products require storage.

When deciding if you should start an online retail business, pay close attention to the advantages and disadvantages that apply to your business. If the pros outweigh the cons, then the business has the chance to grow and become successful. If the pros don’t outweigh the cons, try to make some changes to your approach until you place yourself in the perfect position for success.

Chapter 2.
Checklist for Setting Up an Online Retail Business 2 min read
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.