What Are the Advantages of Online Retailing?


Quick Answer

Advantages of online retailing include lower start-up costs, lower operating costs and a broader customer reach. In addition, the online retail environment offers many marketing opportunities.

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Full Answer

Setting up an online store is a lot cheaper than setting up a brick-and-mortar store. Setting up a website, registering a domain name and paying for hosting is much cheaper than renting a physical location. In addition, the operating costs are much lower. Online stores do not require utilities or property taxes. Most online retailers also require fewer employees than the average brick-and-mortar store. Because they have fewer costs, online retailers can often offer products for lower prices than traditional stores. This can result in higher sales, as customers tend to be price-conscious.

Online stores are able to reach far more customers than traditional stores. Brick-and-mortar operations are limited to customers located in the area. Online stores can reach anyone with an Internet connection. This is especially beneficial for retailers who sell niche products.

Online retailers can benefit from digital marketing opportunities. They can advertise on social media platforms for very little money and send coupons and promotions digitally. They can narrowly target customers and reach out to them directly. In addition, it can be easier to measure the effects of marketing efforts in an online environment, as retailers can track traffic, sales and buying behavior.

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