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Pros and Cons of Opening a Brick and Mortar Store for Your Online Business
December 14, 2018
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Pros and Cons of Opening a Brick and Mortar Store for Your Online Business

Owning an online business can be an exciting venture, especially if your inventory is in demand from customers. If you own a popular, lucrative online business, you may be contemplating the possibility of expanding your business into a brick and mortar store. This can translate into new opportunities for your business, additional sales, more visibility and an overall more successful business.

Of course, expanding to a physical establishment isn’t the right decision for every business. In this post, we’ll detail the pros and cons of opening a brick and mortar store, so that you can determine if it is the next step you should take to grow your online business.

Should You Open a Brick and Mortar Location?

Pro: You’ll Form Personal Relationships with Your Customers

When running an online business, most of your customer communication is completed online, over the phone, or through social media. This doesn’t always allow you to connect with customers the way that you might want to. That’s why expanding into brick and mortar retail can be valuable. Having a storefront for customers to visit will enable you to form relationships with these patrons. You can assist them in-person, get to know them, and show them first-hand how your brand can make their lives easier. In turn, they may be more likely to become loyal customers!

Con: You’ll Need to Hire In-Store Employees

Once you open a brick and mortar store, you’ll need to hire employees to assist customers, manage inventory, and oversee the store. While you may already have staff that works on your online business, you won’t want to decrease these efforts. You may also need employees with different skill sets, since working in a physical store requires other abilities.

By hiring more employees, you’ll need to have more cash available for payroll costs. Prior to recruiting new staff members, you should review your budget and verify whether your business can afford this. To start, it may be prudent to hire one or two employees, and then recruit more staff members as your location grows.

Pro: You’ll Make More Sales

Since you’ll be providing customers with another way to purchase your inventory, you’ll generate more sales. You’ll likely gain new customers, or patrons who may have heard of your business but aren’t keen on online shopping. If you’re serious about growing your business, having a brick and mortar store will allow you to have two different ways to sell your products. Plus, you might even consider offering certain products that are exclusive to your store, to create interest amongst in-store shoppers.

Con: You’ll Have Extra Bills to Pay

Although the extra sales will be beneficial to your business, opening a brick and mortar store will also increase your monthly bills, thus causing you to have more financial responsibilities. These costs could be rent, inventory, electric, property tax, payroll, among other expenses. So, before you take the leap and open a brick and mortar store, ensure that your business will be able to sustain itself while paying these bills.

If you’re unsure that your business will be able to afford these added expenses, consider applying for a small business loan. Once you receive additional financing, you can invest in the quality of your brick and mortar store, and won’t have to worry about dipping into other areas of your budget to pay for store costs.

Pro: Customers Can See Inventory In-Person

While shopping online has its benefits, such as convenience, purchasing items in-person also comes with considerable perks. Some shoppers may prefer to see items in-person prior to making a purchase. That’s why you should advertise that your online business has expanded into brick and mortar retail, so uncertain customers can come see your inventory for themselves! Plus, you may have fewer returns since people can see what they are purchasing prior to buying it.

Con: You May Have Less Time to Dedicate to Your Online Store

Since you’ll be focusing on brick and mortar retail, you may find yourself neglecting your online business. If your online store has proven to be lucrative, you shouldn’t completely abandon this operation. Remember how your business began, and aim to put equal effort into your online and brick and mortar stores.

Conclusion: Consider Your Business’s Long-Term Goals

Now that we’ve reviewed the benefits and downsides that come with opening a brick and mortar store, it’s time to consider if it’s the right decision for your company. Since you’ve already successfully launched and grown an online business, take the lessons you’ve learned and consider how you could transition your ecommerce brand into a physical store. Although there could be challenges along the way, you might find that having a physical store could boost online sales, and grow your overall business.

If you have tips for business owners that are interested in opening a brick and mortar location for their online store, share your advice in the comment section below!

Editor’s Note: This post was updated for accuracy and comprehensiveness in December 2018.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].
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