Online businesses (or e-businesses) are operated primarily or entirely through the internet. The practice of running an online business is nearly as old as the internet itself, and as web technology has become more sophisticated the platform has become versatile enough to enhance almost any business in any industry.
What are the most common types of online business?
- Running a website: many businesses operate primarily by providing information or a service through a website alone. Sometimes this is a paid service, but often it is supported by advertising which is displayed. Whether they provide news, a community or anything else, these are the most common forms of online business.
- Online stores and marketplaces: using eCommerce systems allows business owners to sell their products directly or indirectly online. Many offline businesses eventually find value in expanding their market with an online store.
- A blog or personal site: while most of these types of websites do not generate significant income for their owners, there are notable exceptions. When done consistently and with a clear intention, blogging can be a viable career, with income created through advertising, affiliate marketing or an online store component.
- Social media accounts: a relatively new type of e-business is the social media influencer model. These accounts have been built up by generating desirable content and then offer products either directly or through affiliate marketing.
What are the advantages of running an online business?
The most notable benefit of online businesses is the low barrier to entry. Setting up a website is easy and affordable, with many DIY options now available. An online business can often be operated from home in its infant stage, which means the business owner saves even further on rent, utilities and insurances, while also giving them flexibility and worthwhile tax deductions.
Another key benefit is that a website is available 24/7, allowing an online business to generate income all year round, rather than just during standard business hours.
What are the downsides to running your business online?
There are a few drawbacks to running an online business, the first being security. If a business owner does not set up their systems correctly or tries to cut corners, they may expose themselves or their audience to online scams, hacks or viruses. By using qualified professionals to build their site and ensuring their security certificates and Content Management Systems stay up-to-date, this risk can be mitigated almost completely.
The other main drawback is competition, as others can enter your marketplace as easily as you did. If you are not offering a novel product, this can result in a ‘race to the bottom’, where you continually lower your prices and eat into your margin in order to secure market share off a cheaper competitor.
It is also important to educate yourself on the proper use and management of your IT systems. This may require some level of education if you have not utilised a Content Management System or an FTP portal before. The smartest choice for business owners is to rely on the professional advice and service of qualified online specialists.