What to Consider When Setting up an Online Business

0 Comments May 13

People sometimes assume that making a success of an online business is simply about ‘putting up’ an attractive-looking website.

If only things were that simple!

Anyways, the first thing to keep in mind is if there is no market for your product or service online, then however attractive your website might be, the chances are you are going to fail.  You need to verify the basic feasibility of your business idea through things such as market research and competitor analysis before you start – just as you would need to with any business start-up.

The next steps are really about crafting your basic sales proposition around the nature of online trading.  That subject is rather too broad for a brief article but it’s all about designing the way you do business to emphasize the strengths of the Internet while downplaying some of its inevitable limitations.

To do that, you need to sit back and think a little bit about just what those strengths and weaknesses are.

Here are some basic pointers to get you started.


  • Relatively low start-up costs. Compared to opening-up a conventional shop and employing people to work in it, setting up an online business is decidedly ‘cheap’!
  • Access to a global audience. No longer are your potential clients restricted to those people who happen to be walking past in the high street on a given day.
  • Being part of the global information revolution. Vast numbers of people around the world are now permanently connected to the Internet and therefore your opportunities to reach them run through much of their day rather than just the odd hour or two.
  • Easy and quick to change things, such as your brand and look-and-feel.
  • Little or no human intervention from an initial browsing through to payment. Often human intervention is only required in the area of packing and shipping, so, costs are reduced and the scope for human error likewise.
  • Off-the-shelf solutions. You no longer need to have a team of programmers and IT experts to set up your site for you and instead can buy a solution that is more or less ready to go out of the box.


  • There remains a fairly significant percentage of the population who are resistant to this sales channel. That may include some potentially very affluent members of the older and retired population segments.This means you need to put more effort into making your sales funnel look as “un-salesy” as possible and focus more on educating your viewers.
  • Making your site visible to your target audience and standing out from the crowd is a highly specialized skill set that you may need assistance with and you will need to pay for.
  • For some types of sale (e.g. shoes) consumers still like to see, feel, smell and perhaps try the item before making a final decision. Some buyers may be put off online shopping by being unable to do this on the Internet.
  • There are some statistics that suggest, partly linked to the above point, that returns may be much higher as a percentage of Internet sales than high street sales. That can be a significant cost and administrative overhead you cannot avoid, partly due to legislation.
  • People are more critical of products and services. As it is easier to complain instantly and electronically than it is via telephone or face-to-face, there may be a tendency for a higher number of questionable customer behaviours and related Customer Service issues.


It’s important to think about the above factors when you are designing your business and the way you will interface with your clients.

Remember that a business plan and overall design structure is just as important with an online business as with any other – and arguably more so.

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This post was written by daeb

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