In as much as there are similarities between online and offline businesses there are several differences in the ways they are managed and the cost of running them. Having a proper Knowledge of these discrepancies would certainly help to prepare you to face the challenges that you are likely to meet along the line.
Some of the basic differences between the offline and online businesses are:
1. Location: while an offline business requires a physical location like a building/business premises, town, city or store to operate, the online business does not need to be based in a particular part of town for people to reach it. It only needs a domain name and a hosting company. Therefore while an offline business can be limited to a specific geographical location that of the online is visible to the entire world.
2. Publicity: Means of publicity for an offline business are mainly handbills, billboards, television, radio, word of mouth, Newspaper, etc. But that of the online is usually through adwords, Newsletters, article writing, forums, social media, etc.
3. Contact: physical contact is usually a feature of the offline business. The buyer gets in physical contact with the seller most of the time before a transaction can take place. But online, physical contact is not necessary. Contact can be made through e-mail, live chat, and a click of the mouse after paying a visit to the seller’s website.
4. Product sample: It is usually difficult to describe a product offline, making it mandatory for the buyer to pay a visit to the store before he/she can have a proper understanding of the product. The seller may not be able to provide proper explanation through televisions due to the high cost of advert placement. The customer on the other hand doesn’t get proper understanding just by reading leaflets, billboards or newspaper. But online, this is easily handled through visual display and video marketing which cost little or nothing. You can even do your recording with your mobile phones and upload it to Youtube for your customers to view. Youtube does not even charge you a penny for that.
5. Trust: It is easier to trust a marketer offline because you know his physical shop; you know his human face, and you can easily recover your money through legal procedure in case of any fraud. But this is almost impossible online especially in this age of spamming and technological advancement where somebody can use another person’s picture to represent his profile picture online. Most times customers don’t know who to report a fraud case to online. Sometimes it is difficult for a potential customer to buy products online because of the fear of disclosing his credit card details.
6. Running cost: it is relatively more expensive to maintain an offline business because it need you to hire a shop, maintain equipment, hire staff, advertise, etc. but offline, you don’t need equipment; you need little or no staff. You also need only a little money to build your blog or website. While payment of house rent could be a Herculean task, offline, domain/hosting renewal costs less than $100 annually.
In my next write up, I shall complete this series. So expect it tomorrow.