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Overheads Associated with Operating an E-Commerce Store

It’s been said more times than one would care to count that if you’re really low on capital yet you still harbour a desire to get into that type of business which could grow into something really lucrative for you, your best bet is to look online. A web based business can go up and be fully functional within a matter of hours, if you know exactly what you’re doing; and this is true whether or not you have web development and/or programming skills.

The efficiency of setup online means that the natural direction for starting your new venture would most likely be that of the e-commerce world. Buying a ready-made e-commerce solution could mean you have a fully functional e-store ready to use in a matter of minutes, for instance, and there are many such solutions available these days, some of which are really intuitive and offer an optional support service. If you deploy the best of such ready-made e-commerce solutions, you and a mate of yours could each start out with the very same ready-made solution and yet you’ll both have completely different e-commerce sites, both in appearance and in added functionality. The basic functionality naturally has to remain the same in that you’ll be adding some products and/or services to sell using the same admin system and then what you’d essentially be left with is the marketing side of things by way of direct involvement in your e-commerce business. The appearance of each of your sites can be completely customised to match the colour scheme and layout of your brand colours, but, even if you don’t have a formally registered business, you can still get an e-commerce site up and running.

As far as the overheads and other running costs associated with operating an e-commerce business though, there are more of those involved than what might be initially apparent. Sure, the main overheads associated with operating a brick-and-mortar business are totally removed by the fact that you’ll be operating what is essentially a virtual store, so there’s no rent involved – at least not in the traditional sense – and you won’t have to pay for the likes of property taxes or cover the costs of health and safety compliance inspections.

Your “rent” comes in the form of your monthly web hosting fee, which is more expensive the greater your traffic and usage, while the cost for the domain name is often akin to buying virtual property, with prices ranging from spare change to million pound addresses – and these come with an annual renewal fee in place of something like rates and taxes.

If you’re going to be selling physical products however, whatever those goods may be, the convenience that customers gain from shopping for tyres online and other goods has a whole lot more to it than what they see when interacting with your website. It’s not like the images of those physical goods magically manifest as the real deal once ordered and paid for: they still have to be stored somewhere and that’s where some of the associated costs of running an e-commerce website come to the fore. Fortunately, in most cases you can off-set those costs as well, like having your supplier ship directly to the buyer once the order has come in the payment is completed (known as drop ship), but then there are risks associated with that as well as limitations on your margins and competitiveness.

There are risks associated with having your own warehouse to house the goods and ship them from as well – and in addition to – security risks associated with operating a website over which sensitive data such as credit card information is transmitted.

Many e-commerce providers market their products as an all singing-all-dancing quick earner, that will do the hard work for you. Buying a ready-made e-commerce solution may seem like a simple and affordable means of establishing a new business from scratch, and in many ways it is – but there is still a lot to consider and costs involved that are often invisible or difficult to measure at the outset. Therefore, it is important to fully research your options against a business plan, to ensure you know the direction you want your business to grow in, and the costs and requirements associated with realising the steps of that plan.

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Hello there!
Hello there!

My name is Gary, a 31 year old Tech Loving marketer passionate about home tech and coffee.

I'm a Programmer for hire working with small to medium businesses.

I network in Warrington, Liverpool and Manchester in the North West, England.

This website is my online notebook dedicated to tech, marketing and finance.

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