Running an Online Shop: Pros and Cons

Today I’m introducing my first ever male guest blogger Trevor Ginn of HelloBabyDirect.co.uk!  Dadpreneur Trevor is going to give us the basics on running an online shop. It would be great to have a few more blokes around here, so if you’re a dad who started a business to spend more time with your baby or toddler and would like to be featured on Business Plus Baby then drop me a line! Anyway, over to Trevor…

The huge amount of money which parents spend on products for their newborns inspires many parents to think about setting up some sort of baby focused retail businesses.  The baby sector is an attractive option for would be entrepreneurs as it has been hardly been touched by the recent downturn.  Recession or no recession, people still have babies.

An increasingly popular option is to ignore the traditional brick and mortar shop in favour of selling online.  This strategy is in many ways sensible as, while the rest of the retail sector is in the doldrums, online sales are still experiencing double digit year on year growth.  Buying online has great advantages for parents in terms of convenience and increased product availability.    In addition, the barriers to entry online are much lower than traditional retail.  So how easy is it to set up an online baby shop?  This post looks at the pros and cons of this business opportunity.

Pros

Easy to start

Sites such as eBay and Amazon make it easy to start selling online.  These marketplaces have a huge, international user bases which allow sellers to get off to a flying start.  Very limited technical knowledge is required, although a basic understanding of HTML can help to make listings more visually attractive.  There are also no set up costs to sell on eBay or Amazon.

For people with more technical know-how, setting up a transactional website is also not as difficult as it used to be and there are lots of solutions available off the shelf at a very low cost or even for free.  OS commerce and Magento are popular open source solutions for creating an online shop.

Cheap

An online retailing business can be started on a very limited budget.  All that is required is some stock and an online presence on eBay or Amazon or your own website.  This is all easily achievable for around £2000-5000.

(Note from Helen:  If you want to know how to do it for less than £200, check out How to start an online shop on a budget)

Sales 24-7, worldwide

Unlike a high street shop, sales on the Internet can be made 24-7.  The Internet also opens up a business to an international audience.  Around 20% of eBay sales are international and the current strength of the Euro makes UK prices attractive to people in the Eurozone, even when additional postage is considered.

Not limited by geography

An online retailing business can be run from any location and an expensive high street location is not required.  Many sellers work from home, although this may become difficult as sales grow.

Cons

Admin intensive

Running an online shop is hard work.  Creating product listings are time consuming and maintaining the product catalogue is a never ending job.  The proposed VAT increase, for example, will mean the retailers must reprice all their products.  In addition all sales should be packed and dispatched on a daily basis.

Customer service

There is no getting away from it, customers can be a pain.  Being a retailer involves dealing with the general public and so it is important to be patient.

Solitary

Running an online retailing business involves very little face to face customer contact and so can be a little lonely.

High competition, low margins

Let’s face it, the web is where people go to get bargains and consequently competition is fierce.  Margins in online retail tend of be lower than on the high street and so retailers need to compensate by selling more.

About the author

Trevor Ginn set up and runs the online nursery shop HelloBabyDirect.co.uk and you can read his blog at www.trevorginn.com



Why is it always about mums?

I began this website because I thought starting a business would give me the flexibility that my job couldn’t. Looking around, I saw lots of other new mums struggling with the same things as me – not wanting to miss their child’s first few years by working full-time, not wanting to spend a fortune on childcare and being disappointed by the part-time jobs on offer. And I wanted to help.

Helping people take back control over their working and family lives has to be a good thing, doesn’t it? For cultural and financial reasons, it tends to be the mum who works part time and manages the family while dad works full-time. But surely we should be moving towards a more equal sharing of these responsibilities? By encouraging mums into business, am I keeping mums in the home and dads in the office?

I hope not, but I do have good reasons if I am. Starting a business and becoming a parent are both tough learning curves. Doing both together is enough to make your head spin. Changing the traditional roles, starting a business and becoming a parent all at the same time is a step too far for most of us! Plus I’m blogging from my personal experience – I would love my husband to work less than full-time and spend more time with our children, but we haven’t found a way to do it yet. When you’re starting out in business and parenthood at the same time it helps if there’s at least one steady income in the family. And it takes time to get a steady income if you’re building up a business.

There are dads out there who have started businesses so that they can see more of their children. A few people (including my brother, in fact) have asked me why I don’t include dads in Business Plus Baby, so I wanted to redress the balance a bit and introduce Dadpreneur Week. The trouble is I haven’t exactly been inundated by guest posts from dadpreneurs! If there are any men out there who have started a business so they can spend time with their babies or toddlers and would like to be guest bloggers, please do send me a message!

You’ll be able to read a post from my one and only dadpreneur guest blogger tomorrow – I hope to feature a few more blokes around here soon!

Creative Commons License photo credit: jessica.garro