Question

Does selling over the web offer better margins than selling in stores? Why or why not? What are major factors affecting the profit margins?

Read the WSJ article:

How the Web Drags on Some Retailers:

https://www.wsj.com/articles/how-the-web-drags-on-some-retailers-1417477790 (If it doesn't open, you should be able to highlight it, right click and depending on the browser it should give you the option to go to the link)

Thank you!

Answer 1

Yes selling over the web offer better margins than selling in stores because of the following points :

1. LOWER SET UP AND RUNNING COST
The cost of setting up an e-commerce website is mush lower than that of an offline businesses. whole sales system for business is automated through online services. company can therefore save cost on staff, wages and some other business costs, such as electricity, rent and heating costs.

2. BUSINESS CAN BE OPERATED FROM ANYWHERE
Online selling can be operated from anywhere at any time. there is no any geographical restrictions which you normally face in offline buinesses. One can successfully oversee the e commerce business.

3. SCALEABILITY
E commerce websites are very effective in selling their products. Resources can be scale upto unlimited range depending upon the capacity. They allow you to grow your business upto any extend.

4. NO OPENING TIME RESTRICTION
Online business can be opened at any time. there is no time restriction on opening and closing of shops like in offline business. they have restriction of openong and closing their shops. this is great way of increasing profits.

5. HIGHER MARGIN AND BETTER CASH FLOW
If someone's business is involved selling within the trade industry sector,and an e-commerce website will allow them to sell at higher margins. That will make the profits as they make on your products even higher.