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Whether you are considering starting up a new retail establishment or looking for a way to expand an existing brick and mortar store doing so with an online web store has several different benefits.

Lower Start Up Costs

Setting up a brick and mortar business is becoming increasingly expensive. First you need to either build or rent a facility to house both your store and to warehouse your goods. Then there is the cost of lights, heating, and the hiring of adequate personnel. This can all run into hundreds of thousands of dollars before you even open your doors. In addition a brick and mortar store needs to carry a variety of different insurances all of which can add up to a quite a bundle and significantly cut your profit margin. With an online store, all you need to do is expend the money to get a good online store website built, and a place to warehouse your merchandise. Your overhead cost is much less and you don’t need to rent a large facility so that you can showcase your products.

Opportunity For A larger Customer Base

With a brick and mortar store your customer base is limited to those people who live in or visit the geographical area where your store is situated. With an online store you have the potential for a larger customer base because people from all over world or at least all over the country can order right off your online store website without having to actually visit the physical location where your business is located. Depending on how well you promote your store and its products there is no limit to just how large your customer base can grow.

In addition, because the cost of running an online store is much less than running a brick and mortar store you can pass on some of those savings to customers which will earn you a good deal of customer loyalty and repeat business.

Less Personnel Equals More Profit

You simply aren’t going to need the same number of personnel to work in your store as you do in a brick and mortar store. Stores usually have systems in place that automatically process order and accept payments so there is little or no need for cashiers. All you really need is the personnel to package and ship your orders and often this can be done by single efficient person working just a few hours a day. The fewer personnel you need to run your business, the larger the potential profit margin will be.

You Don’t Have To Worry About Stolen Merchandise

Although you do need to take precautions to protect your online store and your customers information they types of security you use to do this is less expensive than what you need to protect a brick and mortar store. In addition, you don’t have to worry about potential thieves damaging your store trying to break in or losing large amounts of merchandise to thieves. Since it is far more difficult to steal merchandise from an online store your loyal customers won’t end paying more for what they buy to make up all that lost merchandise.


With all the benefits to running an online store, isn’t it really something you should take the time to consider?

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JC Penney and Sears weak earnings reported recently were not a big surprise to the market. Many said the middle class is gone while other expert and commentators say the business model is sagging. I think neither is true or completely wrong and let me explain you why.

Should US middle class vanish or stop shopping the depression of 1930ies would be referred as a relief from the economy collapse pandemonium and that would be a world scale crisis. Sure that the segment used to sped more during real estate bubble. Money has been pouring into the market with volume unprecedented before, inflated home values naturally resulted in temptation for home equity loans which many took. Also high sales volume in housing market caused a lot of revenue generated in moving, furnishing, building and construction industries. As it usually ends with bubbles this was no different and it ended in a violent burst. What used to generate a lot of funds stopped almost overnight and suddenly saving became important and shopping turned into way more conservative mode.

Both JCPenney and Sears positioned themselves in premium segment of shopping for middle class. This area gets hit first when it comes to savings, while discount outlets don’t have the same level of selection they offset this with bargain shopping. MSRP shopping has also migrated online, nearly every major brand sold at the retail networks has its own storefront in the internet. While bargain is a bit hard to find the selection is unbeatable. With e commerce pushing on one end and discount outlets closing in on the other there is less and less space left in the centre.

While many malls feel empty especially during the week semi wholesale retail seems to be doing well. Costco, BJ’s and SAM’s club keep growing and it always feels hard to find a spot in parking in front of those. Moreover once discount outlets keep eating into premium retail market share with Kohls being the best example of this trend. It used to close the gap between Marshalls and JCPenney but now it seems it started pushing JCPenney out of the market and taking its middle class destination id badge.

I’m pretty confident apparel retail stores would be with us for a while. After all clothes and shoes are probably last thing you’re comfortable buying without touching or trying it first. Showroom case the way we have with Best Buy is definitely a hazard the industry needs to face but with heavy diversity of apparel products I wouldn’t be too worried.

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