Starting an Online Store vs a Physical Store: Pros and Cons Chart

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So you want to open your own store but don’t know where to start? Should you open a physical storefront or do you want to start an online store instead? In this review, I will be comparing starting an online store vs a physical store. Both business models have their pros and cons but which one is the best for you? I am going to help you answer these questions because I had these same questions as well. I also wanted to run my own shop and I have tried the physical route and failed!

In the 90’s I first tried selling handmade jewelry, selling wasn’t the problem but I ran into a problem with scalability and couldn’t grow it very far. That’s what happens when you are still a kid and know very little about business. Then we fast forward and it is 2011 – 2012, I tried selling Creative Memories Scrapbook materials, I would host scrapbooking parties at my home but not very many people would show up, I couldn’t get additional bookings, and only sold 2 products that year to other people. Very discouraging to say the least.

One thing that did work for me was that I am really good at fixing computers and doing other very nerdy things! People would pay me to fix their computers for them and do consolation work, that was great but there was a downside to this too. I would never have a steady flow of customers to make that business model successful, I was doing it after my 9-5 job, we moved away and I couldn’t keep and my current customer base.

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Just case if anyone was wondering, I was still rocking the mom’s life, while I was doing all of that! Now we jump to 2019, I am still working a day job but I jump in with both feet and start blogging. Yes, I do make money blogging and is a lot more flexible than the other options I tried above, but I still have that desire to run my own store.

So why did I share my personal story of struggle and failure with you? If you are like me and have always wanted to start your own but struggled and failed, then you are in the right place and in good company! I want to encourage you and share what I have learned. Now we are going to get into the meaty goodness of all the research I have done starting an online store vs a physical store.

online vs physical store

What is the difference between online stores and physical stores?

Online stores do business over the internet like Amazon and Shopify stores. So you do not have to stand behind a counter from 9-5 every day waiting for customers to come through your door. Your customers will go online from a computer or smartphone and visit your store from anywhere in the world. You can run your store in your home and you don’t have to keep inventory at your house!

With a physical store, you have to purchase and keep stock of your products with no guarantee that people will buy. With a physical store, you will be anchored to a physical location like a mall or storefront with set hours of operation. I tried the physical store scenario and it didn’t work for me. So I am going to break down the pros, cons, and a rough cost to start-up a physical store first.

Physical Store Pros and Cons

Pros Cons
  • Customers can touch and feel the merchandise before buying
  • Customers receive human interaction during their buy experience
  • A physical store will start making money and foot traffic as soon as they open their doors to the general public
  • When you are out of stock of your product your customer can possibly go elsewhere to get it
  • Harder to scale your business for growth because it requires a big financial investment
  • Your customers can find the product cheaper online
  • Lack of foot traffic in the store
  • Poor shopping experience because of customer service or location
  • Starting new product lines requires making a big investment and can be risky
  • When you store closes for the night, you can’t make any money
  • When you go on vacation or to an appointment you will have to pay someone else to watch the store. Or you close the store and you can’t make any money
  • Dealing with employees and the HR paperwork that comes with it creates its own challenges
  • You have to buy and store all of your product upfront
blogging mistakes to avoid

Physical Store start-up costs:

• Cost for product shelving and racks. – $270 to $2780+ each
• Cost of Point of Sales (PoS) system to track sales. – $60 to 1300+ per unit
• Inventory tracking system. – $598 to $ 3900+
• Product to fill your store. $3500+ (low estimate)
• Cost of utilities for your business. (water, sewer, trash, internet, electricity, etc.)
• Some states and/or cities charge business taxes for the location you are running your business. Please check with your local government on that requirement.
• Cost of rent for the building. A rough estimate of the last 3 bullets – $2,644

To help you total the rental costs for your area, you can use this tool to calculate the business rental rates here. –

So it would not be a stretch estimate for it to cost $10,000 on the low end to start a physical store! I don’t know about you but I don’t have that type of money available. Most people get a loan to start a business and it takes months to get all the logistic iron before opening your doors.

Wow, that is a lot to consider when starting up a physical store! Then I started to wonder how that stacks up to an online store? Would I have the same costs and limitations as a physical store or not!? So, I wanted to find the answers to these questions. Here is what I found out about the pro’s, con’s, and a rough cost to start-up an online store.

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Online Store Pros and Cons

Pros Cons
  • It is easy to compare prices and set your product prices accordingly
  • Customers have more access to a variety of products
  • There are no checkout lines to worry about
  • It is more covenant for customers to send gifts to others when shopping online
  • Products sold online are often cheaper than those sold in stores
  • Your online store is open to the world 24/7
  • You are still making sales while you are sleeping or on vacation (You can’t do that with a physical store.)
  • Easier to scale your business for growth without making a big financial investment
  • You are not stuck to a geographical location but available to everyone with interest access
  • You can open new lines of products and diversify your revenue streams without making a big financial investment
  • All the money you save on rent and other costs can be re-invest in creating a good digital marketing strategy
  • No extra employees so you keep more of the profits
  • It is so much easier to track sales, reports, analytics, and inventory with online store services like Shopify, and I highly recommend it
  • Start-up time is considerably less than a physical store
  • Delay in delivery of your product to your customer
  • There is no guarantee of the condition of the delivery
  • Shipping charges can be higher than the product cost
  • Not correctly pricing products in the online store
  • Products can’t be tried before they are purchased (Making a short demo video or provide a link to a sizing chart to help the customer.)
  • Lack of personal interaction in the online store (A chat-bot can help a little there.)
  • Poor shopping experience because the store is difficult to navigate
  • Not enough pictures or poor quality pictures to help the shopper see and understand the product
  • Frauds in online shopping
  • It will take time to start generating a profit but once it gets started it can only go up from there
online vs physical store Starting a Blog That Pays - bonus

Online Store start-up costs:

• Cost for Online storefront – I recommend Shopify – $150. (You will also get all the track sales, reports, analytics, and inventory software with Shopify.)
• Product samples for you to try before offering them in your store – $250.
• Mockup photography for your products – $100.
• No extra utilities cost for your business since you are at home.
• No extra cost of rent for the building since you are at home.
• Plan for taxes!
• Training and mentorship course to set you up for success. (Optional but highly recommend for success! See below for a great training opportunity!)

The estimated cost is $500 on the low end to start an online store! The setup costs of an online store are far less when compared to a physical store. Online stores are not tied to a physical location and their customer reaches far beyond the store’s front door. Keeping a large variety of products is not an issue for online stores.

Also, they are not confined by any physical constraints and can have a bigger selection of products. Physical stores give a personalized experience to each customer and it becomes easier to build one-on-one relationships with them. However, this issue can be overcome in a few ways by the training I will be talking about later.

Please remember the numbers above are a cost estimate and can change with the type of business you want to run and location. If you are going to start your online store with Shopify without any additional training, then yes it is possible to start an online store for $500 but training will help you reach your business goals much faster.

You don’t have to be a big name brand to crush it on Shopify! You can be a small online store and still rock it like no one business! Why do I say this can be possible for you on Shopify? Because you can learn everything you need to know about running your Shopify online store with the right training and mentorship. Where can you find this training, that I think is out of this world awesome? You can find it here: Bling Your Shop

online vs physical store

I would highly suggest taking the Bling Your Shop training if you’re are serious in starting your online store. I firmly believe in self-education and learning from someone who is a success in running an online store. Adrien has taught costless other women how to be successful in running an online store and she can help you too!

I wasn’t successful before because I didn’t have a teacher or a mentor to coach me in what I should or shouldn’t be doing! This time I am going to invest in myself as I did back in college and pay for this training. I investing in myself back in college and it has paid off for me. I know if I do it again with the Bling Your Shop I will see the results that I so desperately desire!

If you have the same drive and desire I have, then don’t wait any longer!

Take these two steps today!

1) I would encourage you to sign up for your free trial of Shopify today!
2) Go sign up for the Bling Your Shop training!

You can’t ask for a better teacher to show you the ins and outs of how to run an online store! I hope this post was helpful and encouraged you to get started today. The reality is that with every day that passes without you creating your online store, you’re losing money. An online store is a minimum investment for all the benefits it can bring you.

Physical vs Online Store

I make a commission from purchases made through links in my posts, at no extra cost to you. Read my disclosure for more information.

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16 thoughts on “Starting an Online Store vs a Physical Store: Pros and Cons Chart”

  1. Thanks for sharing this, as always, I love how you break everything down into benefits and negatives. I’ve tried both and seen I do better online.

  2. I had a little business sewing ice skating costumes in my teens. It was an eye-opener to try to juggle what the customer wanted with what I could produce. I haven’t been tempted to open a store since!

  3. It seems like an online store is a great way to get started and test the market out. Once you have enough money you could open a physical store if needed. I would much prefer to see clothes in person but I am very tall so I have to do most of my shopping online. Since the pandemic I have been doing more shopping online because of the convenience – even if it meant a delay in getting my items.

  4. Well, this is quite a nice article and well-thought-out. It’s me several years ago. After I got married and had a young child I decided to work from home. Guess what? I was a Creative Memories consultant in the late 1990s. I retired (when my husband did) in 2008. So, what to do? I was offered the opportunity to illustrate a children’s book so I started watercolor painting. I opened an ETSY store, but the fees at the end of a year plus the shipping costs, shocked me and I closed the store. I now sell online to POD (Print-on-Demand) stores. Thank you for a great read.

    1. Michelle - Nerdy Moms United

      Annie thank you for sharing your experience with us. It is interesting that you did Creative Memories, ETSY, and POD businesses.

    1. Michelle - Nerdy Moms United

      Chad, you are right! Shipping cost on physical products can cut into your bottom line. I would suggest plan when you planning out your costs. When you are dealing with digital products that is less of an issue.

  5. Thank you for another excellent article. Are there other places where anybody can get that type of info in such a perfect approach of writing?
    I have a presentation next week, and I am searching for such info.

    1. Michelle - Nerdy Moms United

      Thank you, Jillian! I hope you presentation goes well. I have other articles in this same topic that might help you in your research.

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