Although traditional business and e-business are both based on the sale principles, they differ substantially in how they showcase goods, the target audience they appeal to, and their convenience. If you’re not sure which business model will work best for you, the traditional business model or the e-business one, there are a couple of things you should consider. Doing so will help you understand the major differences between a traditional business and an e-business.
Paperwork and Costs
Both traditional businesses and e-businesses require a fair amount of paperwork, including a business license, tax ID number, and insurance. However, when looking at the costs of setting up a small business, a traditional business comes with higher costs which translate into the rent or purchase price of a physical location, renovation and repair costs, security costs, and staff costs. In terms of initial costs, an online business is far less demanding and requires only website-related costs. Both businesses need a software inventory management solution, accounting software, and office productivity suite to run effectively.
Type of Products or Services
Clothes, cars, food, furniture, art, or cosmetics are the kind of products that many consumers want to see, feel, and try before buying. Consumers pay more for products they can view in person, according to a study conducted by Caltech. Other types of products, however, such as printer suppliers, stationery, and books don’t come with an expiration date and are not prone to damage on the road, and tend to be better suited for online retailers. At the same time, services such as copy-writing, consulting, accounting, or translation may be carried out online much faster.
Demographics and Convenience
In a brick-and-mortar shop, customers can see, touch, and try products, but only during open hours. An e-business, on the other hand, is open 24/7 through its website, saving customers energy and appealing to those people who lead busy lives and don’t want to waste time shopping. Men seem to buy as much online as women, but research shows that online shopping is driven by young consumers, more specifically, those aged 18 to 34.
The Danger of the Home-Run Business
E-businesses, since they can be set up and run from home, can really blur the line between home and work, making serious demands on the owners’ time, who often must have very flexible schedules and be very involved in their business. Software inventory management, such as the online inventory system DataQlicks, simplifies inventory management and acts as an inventory planning tool. Features such as a 2-tab inventory management view and control, enhanced with sales forecasting and order management, makes stock control easier, saving you time and money.