There are several reasons why eCommerce is attractive to small business owners. Unlike physical stores, eCommerce does not require capital investments for real estate. The operational expenses of hosting a website online are much lower compared to the money spent on leasing store space and employing staff to handle customers. In addition to this, the target market for eCommerce is much wider than a physical store that depends on customers from a restricted geography for business. This makes it possible to grow exponentially faster than you would by running a store in your neighborhood.
But the opportunities and market size also means that eCommerce is infinitely more competitive. Unlike a physical store, an eCommerce business does not have a captive market. Knowing the price of a product on your competitor’s website is just a click away. The intense competition in the online space is a trigger for price wars which can bring down margins quite significantly.