In our previous post, we discussed some of the industry secrets to creating and maintaining a successful ecommerce store . Since the Internet gained mainstream popularity over the past two decades, most small retailers with a brick and mortar store have created a complimentary online presence, including a website and social media accounts. Many of these stores have also opened Ecommerce stores or have chosen to sell products through a larger host company such as Ebay, Amazon, and Etsy.

Should You Keep Your Physical Storefront?

Despite the rise in Ecommerce, there are scores of small businesses that have chosen, either by necessity or choice, not to shutter their physical storefronts for a variety of reasons. Choosing to go digital-only continues to be a viable option for many small businesses and entrepreneurs, especially those that are struggling to compete against large “big box” retailers such as Walmart and Target. However, being an online-only store is not in itself a guaranteed recipe for success. Should you shutter your brick and mortar storefront and go online only?

The Advantages Of Going Online Only

The advantages of shuttering a brick and mortar storefront are obvious to many entrepreneurs, as they mostly involve drastically reducing overhead and expenses. Operating a brick and mortar store is expensive, as costs include rent, utility payments, renovation and fixtures, inventory, payroll, and the patchwork of other costs and expenses involved in hiring and retaining employees. Ecommerce companies can, in turn, operate and even thrive with fewer expenses, as web hosting and licensing costs are typically significantly less than rent. Depending on the nature, size, and scope of your inventory, your business may not require any additional physical space to operate. Furthermore, smaller online retailers can outsource most or all their IT functions, and advanced communication tools like online chat and Google Voice can allow a single person to administer many customer service functions as well, eliminating the need for additional employees or staff.

The Advantages Of Retaining Your Physical Storefront

The primary advantages of retaining and keeping your brick and mortar storefront revolve around both solidifying the reputation of your online business and keeping it diversified. While it is significantly cheaper to go online only, there are risks and costs involved with doing so as well. Even by utilizing the best online tools and services, there is no guarantee that your business will succeed in an online marketplace that is extremely crowded, and differentiating yourself from your competitors can be difficult. Some entrepreneurs like to consider that their brick and mortar storefront is their primary connection to their community. In the minds of many consumers, a retailer with a physical presence is more reputable than one that is completely virtual, as they feel as though the retailer isn’t a faceless, invisible entity without a reputation within a community to protect. Finally, going online only is “putting all of your eggs in the same basket,” as you can no longer depend on the diversification of having two distinct avenues for selling your products.

What Should You Do?

The single most important factor to consider is the ongoing profitability and viability of your physical storefront. If you’re losing money, there are no other factors to consider that would make keeping your physical storefront open a practical or sensible option. However, if you believe that the financial advantages of drastically reducing your costs outweigh the issues that arise from going online only, closing your brick and mortar store may be just the boost your Ecommerce store needs to reach the next level. No matter which option you choose, make sure you are properly investing in advertising, marketing, and branding so that your business continues to be relevant and growing well into the future.