In the business world around, competition is inevitable. We all accept that as it ultimately provides mutual benefits for both consumers and businesses. But with the evolution of consumer behavior, we now have e-commerce stores running parallel to offline businesses. Not just that, online selling is booming and has made India the eighth-largest market for e-commerce.
If you are in the middle of planning a business and wondering whether to start selling online or offline, you should know the following statistics first:
- The e-commerce market revenue is projected to cross the mark of US$113.50 billion in 2023.
- The rate at which this revenue will grow during 2023 – 2027 is expected to be 13.96%, making the projected market have a volume of US$191.40 billion by 2027.
- The number of users in the Indian e-commerce market is expected to reach the bar of 1,091.1 million by 2027.
If you are also expecting the future of commerce to be a mix of offline and online, it is important for you to know the fundamentals right. There are huge differences between the structures of both offline and online business models. Let’s get into the details.
What is Offline Selling?
Offline selling, also known as brick and mortar selling, is a mode of business that involves selling products or services through one or more physical stores. It requires the prospects to visit your store in order to buy from you.
In India and around the world, offline commerce forms a majority of the business revenue before the onset of online selling. All the retail or wholesale shops you see around form a part of the offline selling mode. The importance of these stores can be gauged from the fact that many customers still prefer to view the product physically before buying it instead of dealing with virtual assistants.
Benefits of Offline Selling
It helps form long-term customer relationships
Having a brick and mortar store allows you to interact with your customers, meet them in person, and understand their needs and preferences firsthand before showing them the product range you sell. If your offline selling strategy, product pricing, and the way to deal with customers converge on the buyer’s needs, you will be able to make a significant base of loyal customers.
Customers can see the product in person
One of the primary benefits of offline selling is that the shoppers can see the items to be purchased in person. It fulfills the desire to touch, see, and feel the product which is quite prevalent among many customers in India, especially those who are not yet a part of the everything-online culture. Besides this, the buyers will also get the opportunity to connect with you or your team to ask questions about the product or raise queries if any. It’s the overall offline customer experience that an online-only retailer finds difficult to replicate.
Lesser rate of returns
When it comes to buying at an offline store, people make the purchase decision after carefully checking out what’s best for their needs. They can do the trials of items in the first place as an advantage of buying from a brick and mortar store. As a consequence, it leads to a reduced return rate.
What is Online Selling?
Online selling, popularly known as e-commerce, refers to the purchase of goods and services via the Internet. It requires you to have a business website or mobile application where you can add all the products you want to sell online and make them available to prospects. On the other hand, customers can also scroll through the available products on your online store at their convenience without having to visit your offline store. As a part of the customer journey, you will also get paid online for every order you receive.
There are many reasons that make online selling a more lucrative alternative to selling via an offline store.
Benefits of Online Selling
Lesser operational cost
The cost of starting an online business is comparatively less than establishing an offline business. This is because you do not necessarily need a customer-facing outlet but just a storage space to keep your product inventory. When it is about sales, a lesser number of workers can work well in the backend to pack, process, and ship the orders received. This is one of the reasons why online sellers can sell at prices lower than an offline store.
No restrictions on the location to be covered
As long as you sell good quality products or services that are sold almost everywhere, online selling allows you to target a bigger audience residing in different cities, states, and countries. In other words, you can sell anywhere across the world through your online store provided you meet the related regulations and standards.
Interesting Read: What is PCI-DSS Compliance & Why It Matters for Your Business
Round-the-clock sales
An online store remains open 24×7, which means there are no restrictions on the period during which your customers can buy from you. This is different from offline selling through brick and mortar stores where customers can only visit during open hours. From a business perspective, allowing your buyers to place orders online at their convenience can increase sales and profits.
Easy to operate the business from anywhere
Online selling also eliminates any regional constraint that an offline business usually faces. You can have your warehouse located anywhere in the world and still run an e-commerce business successfully by targeting a global or region-specific audience. Obviously, this will require you to be prepared for order fulfillment with the help of a renowned logistics partner.
For a better understanding, let’s look at the differences between offline and online selling at a glance.
Online Selling vs. Offline Selling: Detailed Comparison
| Parameters | Offline Selling | Online Selling |
| Customer reach | Limited | Global |
| Upfront cost required | More | Less |
| Operational cost required | More | Less |
| Availability to customers | Limited | 24×7 |
| Customer experience | Better as a buyer can touch and feel the product before purchase | Largely depends on the UI/UX of the store and interaction with the support team whenever needed |
| Scope of persuading buyers | Higher as the salesmen can guide the buyers toward the right products | Largely depends on how the products are displayed and discounts |
| Ease of driving traffic | Comparatively difficult to attract local audience | Quite easy through organic reach and online marketing activities |
| Operational feasibility | Requires an offline store | Can be operated from anywhere |
| Business marketing/promotion | Difficult to track return on ad spends and to attribute sales to advertising efforts. | Precision tracking of customer acquisition costs, return on ad spends is possible. Multi-level attribution of sales to various marketing channels is also possible. |
| Business expansion range | Local | Global |
| Customer support | In-person support | Virtual support |
| Customer retention rate | High | Comparatively low |
| Rate of refund or return | Low | High |
| Scalability | More time, capital, and effort required to scale a business | Less time and money required to scale a business further |
| Competition | Moderate to high | Mostly high in generic markets (low in specific niche) |
| Brand visibility | Visible to a limited audience unless advertised digitally | Can be globally visible to potential customers |
| Maintenance | High infrastructural cost involved | Less cost required |
| Trust factor | Word of mouth popularity builds trust | Customer reviews can make an online store trustworthy |
| Payment acceptance | Mostly by cash or through QR code, POS machines, or payment links | By cards, net banking, UPI, etc. via payment gateway |
Offline vs. Online Business: Which Way Should You Go?
The offline vs. online selling comparison above can place you on the right track to establishing a business. However, you still need to consider various factors before finalizing your decision. Ask yourself the following questions before selecting between online and offline selling:
- How much money can you spend in the initial stage?
- Are you comfortable with using technology to accept and process orders?
- How many members can you afford in your team to run a business?
- From where will you source products?
- What kind of products would you like to sell?
- What is the profit margin for selling different types of products both offline and online?
- How can you promote your brand in both offline and online spaces?
- What will be the cost of brand promotion?
By capitalizing on the e-commerce trend, you can catapult your business to greater heights. On the other hand, there is nothing bad about running an offline business as it has its own advantages. While it is up to you to decide which way you want to go, you can benefit from both these modes of business by turning toward an omnichannel business strategy. Accordingly, you can select a payment solution provider that supports omnichannel payments with its wide range of payment products.
Whether you sell online or offline, Paytm for Business has your omnichannel payment needs covered with its wide range of payment products. QR codes, POS machines, payment links, or payment gateway, we have it all for you.
FAQs
What is online selling and offline selling?
With online selling, you can keep your store open for target customers 24×7. There is no such restriction on the period during which a customer can buy from you. Offline selling, on the other hand, allows customers to visit your brick and mortar store during open hours only.
What are the advantages of online selling?
With online selling, you can reach more customers as the reach is bigger. Also, lesser upfront costs is required to start an online business.
