Cost Analysis: Starting A Retail Store Vs. An Online Ecommerce Business
Written by Kyle Pearce on July 30, 2010
In this challenging economy, how you promote and position your business will be key to your success. For many entrepreneurs who are looking to sell their products and services to a wider audience, a common question is should you start an offline or an online business, or both?
Statistics show that 4 out of 5 businesses fail. This means that if you’re going to succeed in business, you need to understand what your customers want by measuring how they respond to your products. It isn’t enough to maintain a blind faith in the value of your products, you need to be quick to act when something isn’t working. The unsettling fact is that many great products simply don’t sell in the marketplace, but if you’re willing to try and fail a few times you’ll eventually stumble upon a winning formula.
The beauty of starting an online e-commerce business is that you can easily change your products and marketing strategy because you aren’t weighed down by the high cost of expensive stock and the maintenance costs of a traditional retail store. Using inexpensive online marketing, social media and analytic tools you can engage your customers, test different marketing approaches and monitor how they respond to your products without spending tens of thousands of dollars on an idea that may not sell.
Let’s take a look at the differences in startup cost and marketing for offline and online businesses with a brief cost analysis of both options.
Costs of An Offline Retail Store:
Much more money up front.
In addition to your monthly lease payment and the obligation to rent a storefront for a minimum of 6 months to a year, you will have to pay to properly renovate your storefront, create a sign and buy equipment, which can run into the thousands of dollars. Let’s go with a moderate figure of $10,000 for renovation, sign creation, lease closing costs and equipment costs.
Cost of you monthly lease.
Here in Vancouver, a streetfront store in one of the cities’ neighbourhoods costs between $50-75 per square foot. The average storefront retail shop is around 1000 square feet so your monthly rentals costs on the lower end of the commercial real estate market ($50/sq. foot) will be $4166 in leasing cost per month.
Cost for reliable sales staff.
For a retail store you’re going to likely need at least 2 staff members working 9:00 am to 7:00 pm each day of the week. Let’s say you pay your sales staff $12/hour, that will be $240 in labour costs each day, $1680 per week and $6720.
Total Cost:
$10,000 initial investment and then $10,886 per month in costs.
Costs of An Online E-Commerce Store:
Cost of web development for your website.
To get a custom e-commerce website created it will start around $6,000. This would include your entire shopping cart platform, a company blog, social media integration, user reviews and ratings, and full e-commerce analytics tracking of visitors and sales.
No cost for sales staff.
Instead of paying over $6,000 dollars a month in sales staff, you can spend that money driving traffic to your website using highly-targeted PPC advertising. If you don’t want to handle the orders and shipping of stock yourself then you can easily hire someone to do this for you at a fraction of the cost of having sales people working in your store 10 hours a day.
Online marketing is more effective.
Compared to traditional marketing, which is difficult to track, there are many advantages of online marketing.The biggest advantages of marketing an online e-commerce website is that you can track your ROI (return on investment) from every marketing dollar you spend.
Monthly web hosting costs.
To host a e-commerce website on high-speed servers it will cost you around $30/month. You will then want to hire someone to do online marketing for your website and provide technical assistance if you ever have problems with your website which will cost around $2,000/month.
Total Cost:
$6,000 initial investment and $2030/month in costs.
Minimizing The Risk
As you can see the startup costs are significantly lower for an E-commerce website (plus you don’t have to get locked into an expensive long-term lease) than a traditional retail storefront. On top of the expenses for both an offline and online business, you will need to spend money marketing and promoting your new business.
For some entrepreneurs, depending on the products they want to sell, either one of these options could be superior. However, the lower costs and better tracking of marketing for an e-commerce website provides a less risky and easier testing ground to fine-tune your new business model. For retail business owners that want to expand their operations across Canada, the United States and globally, an E-commerce website can help them dramatically expand their overall sales.
Most importantly, for new businesses an e-commerce website allows provides a relatively inexpensive way to test out your products and then easily expand into retail locations and a larger e-commerce system as your customer base increases.
We’re Hiring A Technical Document Specialist
Written by Kyle Pearce on July 13, 2010
About Our Company
SmarttNet is a well established, successful and growing Internet Service Provider with a skilled and dedicated team of creative and technical professionals. We provide co-location, connectivity, online marketing and web development services to clients across Canada and the United States.
As a result of our growth, we are looking for a dedicated and energetic Technical Document Specialist to join our team and provide comprehensive technical document writing skills.
Position Overview
The Technical Document Specialist will be reporting to the Chief Marketing Officer and is responsible for the writing and editing of technical documentation for SmarttNet’s services, products, internal company processes and user manuals. The successful candidate must be able to organize and translate ideas from technical and non-technical sources into well presented and designed technical documents which are created for a variety of audiences.
Core Responsibilities
- Develop and maintain product and service summaries and descriptions
- Develop and maintain installation, configuration, how-to documentation and online help sources for both customers and employees
- Develop and maintain sales and support templates for automated client responses
- Develop and integrate technical illustrations into various documentation
- Develop and maintain product and service white papers for partner and client audiences
- Develop and maintain procedural documents and guides for internal use
- Assist in developing SRS documentation
Secondary Responsibilities
- Review published materials and recommend revisions or changes in scope, format, content, methods of reproduction and binding
- Arrange for typing, duplication and distribution of materials where necessary
- Assist in laying out of material for publication
- Observe service and product development by fellow team members to determine operating procedures and other details for document creation
- Interview development, engineering, marketing and support staff to become familiar with products and services for the creation of technical documentation
- Communicate with clients and partners to help improve documentation and publications
- Create standardized templates to facilitate client, staff and technical writer documentation creation initiatives
- Follow company reporting requirements and provide updates to immediate supervisor on a daily and weekly basis
- Provide assessments and suggestions for improvement of current technical document creation and management
- Perform other duties as required
Job Requirements
- Minimum of 2 years experience in a technical writing role
- Bachelor degree in Journalism, English OR certificate in Technical Writing
- Advanced computer skills in publishing and authorship software including Microsoft Word, Acrobat Pro, Illustrator, and FrameMaker
- Proven knowledge and experience of image manipulation software such as Adobe Photoshop
- Excellent verbal, written and inter-personal skills
- Highly self-motivated individual capable of working with both technical and non-technical team members
- Demonstrated ability to work within tight deadlines
- Demonstrated ability to complete writing assignments according to set standards regarding order, conciseness, clarity, appropriate style and terminology
- Ability to work without direct supervision and
Asset Skills & Abilities
- Prior knowledge and experience with SCRUM
- Prior knowledge and experience with Agile software development
- Advanced knowledge of HTML, XML and other mark-up languages
Benefits
- A salary range of $40,000- $57,000 based on experience & calculated on an annual basis
- Company sponsored training and skills improvement opportunities
- Extended Health & Dental Care following successful completion of probationary period
- 10 paid vacation days per year
- 5 paid sick leave days per year
- Participation in Social Calendar of community and employee activities and events
- Inclusion in the SmarttNet commission system
A Canadian Guide To Google Local Business Citations
Written by Kyle Pearce on July 6, 2010
The local business results that appear when you search for "Vancouver Hotels" on Google.
As I talked about in a previous post on the Top 10 Ranking Factors for Google Places, getting valuable local citations is the best way to dominate the rankings for Google’s Local Business listings. A citation is where your business name, address and phone number is mentioned (or cited) by another website. Since some Canadian businesses don’t have a website, Google is able to crawl any citations in content that mentions a business, even if a website is not linked from that page. However, having an incoming link from a citation source is preferable, as it is likely considered of higher value and the link can refer valuable traffic to your website. Read more…
