Differences Between E-Business & Traditional Business

1 Differences in Overhead Costs

E-business models generally have lower overhead and startup costs compared to traditional
business models with brick-and-mortar stores. Eliminating the need for location rent, staff
and utilities that are necessities with brick-and-mortar locations help businesses improve
profitability.

Those who choose a brick-and-mortar model also need an e-commerce presence. Web
costs for development and marketing aren't eliminated in traditional business models.Many
new e-commerce models utilize affiliate marketing with large companies such as Amazon or
drop-ship companies like Shopify. This model further lowers overhead costs by eliminating
the need for inventory completely.

2 Importance of Consumer Convenience

The growth of online retailers such as Amazon has made it difficult for traditional stores to
compete with consumers who seek a convenient shopping experience. However, there is
still a group of consumers who prefer the process of a live shopping experience and the
opportunity to physically examine products or try on clothing. There are others who enjoy the
personal interaction provided by brick-and-mortar businesses.

Not all businesses are adaptable for strict e-business models. Attorneys, doctors and
dentists can't provide services exclusively online.

3 Varied Marketing Strategies

Businesses that are exclusively online usually have a much larger digital marketing budget
than a traditional business. Traditional businesses typically diversify marketing to attract
customers from both local areas and from online demographics.

E-commerce businesses spend more time on blog, social media and search engine ads.
Facebook pages have become popular avenues for e-business marketing and viral brand
awareness. Some e-commerce businesses rely exclusively on low- or no-budget marketing
campaigns, while others sponsor ads with big budget campaigns.

Traditional companies often utilize the same avenues online, although sometimes to a lesser
extent. Brick-and-mortar stores may need print ads, mailers and other niche advertisements
such as ads on bus benches or grocery store wagons. Radio and television commercials in a
local market are others ways traditional businesses target new customers.

4 Reputation to Consumers
Brick-and-mortar stores tend to give consumers greater confidence that the business is
legitimate. Being able to walk in, see the inventory and walk out with immediate service is a
big factor in keeping consumers going to traditional businesses.

New e-business models take time to develop a solid reputation online. It takes consistent
and targeted marketing to keep the target market engaged.

5 Time and Accessibility

E-commerce businesses are always open, and consumers can usually complete a
transaction in minutes. Driving to and from a traditional business, viewing the merchandise
and talking with salespeople — even the possibility of standing in line waiting to check out —
all take up valuable time. E-commerce businesses can sell products and services 24 hours a
day every day of the week.

Few traditional businesses are open 24 hours a day, although some are. Most
brick-and-mortar businesses close on holidays, and many are open only five or six days in a
week.