The Risks Of Running An Online Store
It’s becoming increasingly popular to begin an online store, due to the ease of creating a website thanks to the many web-building sites available, as well as shopping sites such as Shopify. Whether this is a career idea or a side-hustle, it’s possible to make a tidy income, provided you sell something people are interested in. But – and there is always a but, isn’t there – you do need to be aware of some of the risks involved, for both you and your customers.
Consider the following risks.
The risk of fraud
Research has suggested that around 50% of small businesses fall prey to fraud. Most commonly, this is through hacking. If you store your customer’s data online, hackers can break into your databases and use the information for all manner of nefarious purposes, one of which is pretending to be the customer when buying from you with stolen credit card details.
Tip: Online security needs to be your number one priority, as your reputation and profits will suffer as a result. Firewalls and antivirus software need to be installed on your computer as your first line of defence. You should also consider using identity verification software as another means of safeguarding your business and your customers. Jumio prevents fraud in this way, so take a look at their website.Your online business depends on these measures, as even though your business may be small, you are still of interest to those cyber crooks.
The risk of the competition
Your store won’t be the only place customers can go to for the goods you sell. You are up against other ecommerce stores, all looking for a slice of the proverbial pie, as well as the online giants such as Amazon and eBay who sell nearly everything. To survive in business, you need to do all you can to battle against the competition who are desperate to secure your customers.
Tip: You need to do your research, so have a look at what your rivals are up to, and vow to do one better. From having a quality website to providing better customer service, there are loads of ideas here on how to quell the threat of your nearest rivals. Go through each of them when you are going through your planning and research phase, and consider anything that is relevant to you.
The risk of losing money
Partly due to the competition, you may not see the profits you are hoping for. However, they aren’t the only problem. There are the various expenses you need to consider, such as buying what you need to sell on your store, paying for advertising to promote your small business, and dealing with shipping costs when delivering your goods. Particularly when starting out in business, you may find yourself spending more than you have coming in.
Tip: It’s about being frugal and finding ways to cut costs. You could barter with your supplier, for example, and buy in bulk to make discounts. You can use free advertising, using social media as a means to promote your business. And there are many ways you can save on shipping. The costs may be high, but they can be reduced, so research each area of your business to minimise your expenses.
Should you be put off running an online store because of the risks? Not at all, provided you minimise the risks by following our advice. An online business can bring in the money and quell your boredom if you’re a stay-at-home mom, so if you have been considering starting something, give it a go! And if you have already started an online store, let us know your tips, giving us all the benefit of your experience.