Internet commerce does not involve any paper money but it uses the credit money in order to put it on the internet. Quite simply put, e-commerce is business done on the web. It provides ease of entry and portability and the ability of staring a business without leaving your home.
Compare that with opening a brick and mortar store. You would first need to find a physical location. Commercial rents can be quite staggering and commercial most lessees are looking for a long term contract. It is quite difficult to commit to anything long term when building a business as future revenues are difficult if not impossible to project. After securing the location you would need to furnish the interior of the store, purchase liability insurance and find employees unless of course you will be the full-time employee. Brick and mortar stores require staffing during store open hours which sometimes may amount to 12 hours days, seven days a week.
In addition to the initial startup costs there will be ongoing expenses such as utilities, marketing, sales tax (your business will pay local sales tax) to name just a few recurring expenses. Can you see how costly this may become and this is before you subtract the cost of your product (inventory) to see if you can realize a profit. Below are some recent statistics (please note “pre-recession statistics”) from SCORE:
Small Business Survival Rates
Small Business Openings & Closings in 2008:
There were 627,200 new businesses, 595,600 business closures and 43,546 bankruptcies.
Seven out of 10 new employer firms survive at least two years, and about half survive five years. Findings do not differ greatly across industry sectors.
Opening a business online by contrast can be very appealing from both a cost and convenience stand point. You will need a computer and an internet connection. A place to work from, presumably your home, items to sell, a camera to upload pictures from and an e-commerce platform or your own website. Of course, this is a rather simplified view of e-commerce start up but essentially that’s it.
eBay offers a tremendous startup opportunity for new business owners. eBay allows a broad range of sellers and variety of items, great for the casual seller “hobbyist” to the full time “corporate”, from household items to corporate jets. You need to possess a few personal characteristics; creativity, tenacity and an entrepreneurial spirit.
“With more than 110 million active users globally, eBay is the world's largest online marketplace, where practically anyone can buy and sell practically anything. Founded in 1995, eBay connects a diverse and passionate community of individual buyers and sellers, as well as small businesses. Their collective impact on e-commerce is staggering: In 2009, the total worth of goods sold on eBay was $60 billion -- $2,000 every second.”