Following are the benefits of online business over offline business.

Benefits of Online Business

1) Low Setup Cost

Online business does not necessarily require cost of renting and maintaining premises. However, if you do not have your own computer and internet connection, then it will lead to some cost.

2) Low Marketing Cost

Internet marketing is cheap means of marketing goods or services as compared to offline marketing media. It has global reach, which reduces the cost per customer. In addition, it provides high quality targeted traffic (potential customers) as compared to other mass communication media such as Television and newspapers.

Internet marketing is pull marketing rather than push marketing as in case of mass communication media. Pull marketing means customers approach to business. While push marketing means business approach to customers. Therefore, internet marketing provides already motivated customers who have interest in goods or services offered by the online business.

3) Flexible Timings

Online business can be performed using part time employees  on work from home. Part time employees costs much cheaper than full time employees due to reduced legislative requirements regarding working conditions, pensions, health and safety, redundancy payments etc.

4) Work from Home

Online business owner/manager can work from home using part time or full time work from home workers. Co-ordination between online business activities can be created by video conferencing, instant messaging, email, bulletin broad, phone etc.

5) 24/7, 365 days a year Non Stop Trading

Online business remains open day and night and in holidays.

6) Earn in Foreign Currency

Owner/Manager can charge customers in many different currencies such as US dollar, British pound, Euro Dollar etc.

7) No Academic or Professional Qualification Required

Owner/Manager is not required to have formal qualification. Owner/Manager may have additional skills and experience beyond formal qualification, which he/she can use to add-value to their online business.

8) Be Your Own Boss

Online Business enables person with little resources (Computer, Internet connection) with the exception of knowledge to start his/her own business. Many software are available for free download such as email client, ftp client, blogging scripts, HTML editors etc. List of these software can be downloaded from

9) Save Travelling Time & Expenses

Online business can be operated from home as in my case. Therefore, it results in savings in valuable travelling time and money.

10) Wide Spread Market Reach

Online business do not need to rent or buy a land in commercially sound area. Online business can operate from any remote location around the world.

11) Free Analytical Information

Online business can make use of free web analytics softwares provided by web hosting provider, search engines etc. Popular search engines such as Google, Yahoo, Bing (formerly MSN) provides web analytics software free of charge.

12) Automated Accounting

Online business leads to automatic sales ledger accounting on cash basis. Shopping cart softwares & credit card processing companies provide date, customer name, address etc for each sales made. Invoices are automatically generated and sent to customer instantly after making payment.

13) Customized Service to Visitors

Online business allows customer to register with websites. Websites such as You Tube crack customer website surfing behaviour (time spent on each webpage, number of webpages viewed) using cookies. It allows customer to get relevant information on goods or services when they login to their account.

14) No Difference b/w Small & Entities

Online business can create a perception of large sized business using well-designed and fully functional website. Customer generally, do not seek for physical location, legal status such as sole trader or public limited company.

15) Improved Profitability

Online business results in improved profit margin by removing middle men from value chain. Value chain is the series of organization involved in delivering product to end consumer.

Limitations of Online Business

1) IT Skills Required

Online business requires the knowledge of technical jargons, HTML coding, ftp client, email client at minimum. Client is the software installed on your local computer rather than webserver. Glossary of eCommerce can be downloaded from

2) Internet Marketing Skills

Online business involves pull marketing as stated above. Therefore, promotional tactics is slightly different from offline marketing. Online business provides little chance to negotiate with customer. Customer will leave the website, if they did not like the goods or services, price offered by the website.

3) Hackers Attack

Internet is intended to share information publicly. Default position of internet is disclosure rather than concealment. Hackers can steal confidential customer information, delete, change website contents, database etc.

4) Product Piracy (For Digital Products)

Sellers of digital products are subject to additional risk. Hackers attempt to guess the file path where the product is stored. In addition, people upload files to file sharing websites, emailing files to their friends make it very very difficult to enforce copyrights.

5) Credit Card Frauds

Credit card fraud are of different kinds such as identity theft, false chargeback etc. Identify theft is person using other person credit card without his/her permission. Chargeback is claiming his/her money back through credit card service provider such as VISA, MasterCard etc on the grounds that they did not receive goods or service or received goods or services of wrong specification.

6) Continuous Learning

Online business is very dynamic in nature. New ways of doing things constantly emerge. Therefore, you need to keep your knowledge updated to sustain profitability and growth.

7) Takes Time to generate cash flows

If have not existing popularity from offline business, then it will take time to create awareness among web surfers.

Remedies for Limitations of Online Business

1) IT Skills Required

Use WYSIWYG html editors to avoid html coding, WYSIWYG html editors will do all the html coding in background while you are working in foreground just like word processing software MS Word.

2) Internet Marketing Skills

Internet Marketing can be automated using PPC (Pay Per Click) programs offered by major search engines such as Google, Yahoo, Bing etc.

In addition, it can be outsourced to affiliate marketers by establishing your on system or outsourcing affiliate program at ClickBank®.

For establishing your own program online business person will require affiliate tracking software and establish a system of payment to affiliates. It is not recommended for new online businesses.

New online business can instantly run their affiliate program by signing up to third party affiliate programs such as ClickBank® (Market Leader). It will enable online business to quickly get access to thousands of affiliates to promote their goods or services.

3) Hackers Attack

Web hosting provider & domain name registrar that have sound security features such as SFTP (secured file transfer protocol), email encryption & domain name locking respectively etc will reduces this risk to certain extent.

If you have planned to use third party softwares or scripts, then make sure they are free from any spyware and keep those software or scripts updated whenever updated are available.

Do not use descriptive folder and file name.

4) Product Piracy (For Digital Products)

Use DRM (Digital Rights Management) software for websites & products.

Offer your affiliate program that will motivate your customer to promote your product for commission rather than sharing them with others for free as they have a share in your income. I have used ClickBank® affiliate program to reduce the risk of product piracy.

5) Credit Card Frauds

Use third party payment processing companies such as ClickBank® who have customer service center to prevent chargebacks. Good thing is that signup fee is very low and only payable after approval. It means there is no risk of loss due to rejection.

I personally use ClickBank® to sell my Step-by-Step eCommerce/eBusiness Implementation Guide eBook for Webmasters Beginners, Intermediate & Advanced Level. This article is only a overview of this eBook available at

Establish sound internal control systems to counter claim fraudulent chargebacks. It includes formal and clear refund policy, disclaimer, reliable courier service able to provide proof of delivery etc.

Obtain chargeback insurance cover. It is available in most of the developed countries. However, it will lead to cost of premium depending on your risk profile perceived by insurance provider.

6) Continuous Learning

Participate on C2C (Customer 2 Customer) websites such as (Physical/Digital goods), Scribd (eBooks Only) to avoid the need to create and host own website. It does not means that businesses cannot participate, even businesses can participate to sell their goods or services. However, it will not provide long term growth opportunities. Third party website will control your future growth prospects.

7) Takes Time to generate cash flows

Buy already well-established website. However, it will require significant investment and reduce percentage return on investment. Further more, if you cannot sustain the customer base after acquisition, then the value of your investment will reduce.

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