The Pros And Cons of Starting An Online Business

It seems like everyone is making money online these days. Every day there is a new person claiming to be raking in the big bucks because they opened an online store, so it is natural for many of us to wonder about starting our own. Anyone who has done any background research into this will know that there are many sources and courses online toting one method or another, but what are the actual pros and cons of each? Here, we will seek to explore the benefits and drawbacks of the best online business models.


Affiliate Marketing

Affiliate marketing is a performance based system by which a promoter of a product, or ‘affiliate’, gets paid a commission on sales that they have influenced. When done correctly, affiliate marketing is a highly lucrative source of income. Affiliate marketing is a popular way for many to make money online, and it is easy to see why. It is easy to set up and requires no initial investment. You don’t even need to run your own website in order to start affiliate marketing as you can utilize free blog websites and/or social media platforms such as Instagram, Twitter or Pinterest in order to promote products.

Another benefit is that you do not have to dedicate any time or resources to designing a product of your own. All you need to do is simply pick something that you feel consumers will buy, and promote it. Affiliate marketing is also very flexible; you can run your business from the beach, your bed – wherever you feel most comfortable.

But there are drawbacks. Affiliate marketing as mentioned, is a commission based system. Commissions vary between products and profit margins are usually slim, meaning that to be successful, one needs to generate large numbers of sales or go for high margin products. Another con is that affiliate marketing requires patience; no one ever gets rich overnight. You need to build up a following, have large numbers of people who regularly see your work, whether it be blog posts, posts on social media etc.


eCommerce / Dropshipping

Selling items online is another popular way to make money online, and it has many benefits over selling something in a traditional, physical store. If you sell online, through one of the many different eCommerce platforms (Amazon, Alibaba, Shopify to name but a few) you have global access. Anyone, anywhere can click a link and land on your page, see what you are selling and be inspired to buy. Setting up an eCommerce store is also simple and inexpensive. Sites such as will provide you with templates and guidance in creating a store, all one needs to do is pay for a domain name and you are good to go.

For those who do not wish to pay for their own site, there are methods such as dropshipping, that allow you to promote and sell products without spending anything. Another pro for selling items online, is again that it can be done from anywhere that you have an internet connection, which I am sure plays a large part in its current popularity.

Now, lets move onto the cons. Setting up an online store is easy. Choosing the right products to sell is not. There is high competition, and it can be hard for a beginner to cut into the market. It helps if you really niche down when it comes to selecting a product, but even then there is no guarantee that you are going to see the sales that you expect. Another downside is that if you are sourcing your items from an overseas supplier, it may be hard sometimes to guarantee the quality of the product. This can result in you ordering numerous amounts of a faulty item, or worse, a customer receiving faulty items and requesting a refund – meaning you would then lose money due to shipping fees.

Amazon FBA

What is fulfillment by Amazon? Basically it is a system set up by Amazon, by which people can store their inventory in one of Amazon’s giant warehouses (for a small fee) and when it is purchased by a customer, Amazon ships it out (again for a small fee). The benefits of this are obvious from the start; Amazon is the world’s largest online retailer, and their shipping times set the industry standard. Any item that you would sell would be with the customer within 2 working days, which is a great way to keep clients happy and hopefully returning to purchase again.

Amazon also has some of the best warehouses in the world, capable of receiving, storing and processing hundreds of thousands of individual packages a day. Items held here will be subject to Amazon’s careful storage regulations, ensuring safety and insurance in the unlikely event of product destruction. So what are the downsides?

For one thing, having lots of physical stock in one place is potentially a great way to lose money. If you purchase 1000 units of something and then are unable to sell, you are not only going to be losing money from the initial purchase, but are now going to be losing money due to Amazon’s storage fees, which whilst being cheap, are going to quickly add up over time.

There is also the issue of Amazon sometimes lumping all products together. For example, if you have decided to send 500 units of guitars to Amazon to store, they may store them with other, different guitars as one unit. What this means is that when someone finally does buy one of the guitars, they may end up receiving a guitar different to the one they ordered.

In conclusion, each of these methods has their ups and their downs, but all three have been proven time and again to work. All you need to do is pick the right strategy for you, make sure it is something you are going to enjoy doing regularly over the weeks and months that it will take you to (hopefully) be successful. A good online course will be able to move you forward much faster and give you a greater chance for success. Online reviews are important and Drew’s Review provides some unbiased and honest reviews from someone that actually buys courses and reviews them online.


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