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Retail
7 minutes read

What are the Limitations of eTailing?

by Alvaro Insignares
Retail
7 minutes read

There are many advantages to Internet sales, but what are the limitations of eTailing? In the past, the only way you could buy products was to go to a physical store. Your choices were limited to the stock that the store had on hand, and your shopping window was limited to the hours of the business. Now, thanks to Internet technology and eTailing, you can sit in the comfort of your home, browse through a huge selection of items, and shop at any hour of the day. 

When it comes to eTail, there are advantages and disadvantages. Generally speaking, the advantages of any aspect of eCommerce can outweigh the limitations. This is especially true for established businesses with consumer trust. However, it is important to understand the limitations or disadvantages of eTailing before you start an eBusiness. Internet sales can be a great business opportunity, but keep the following information in mind. 

The Disadvantages of eTailing

eTailers face a number of limitations that physical retail stores do not. The main limitations of eTailing include:

  • Lack of physical experience
  • Difficulty building customer relationships
  • Development and maintenance costs
  • Shipping and delivery costs
  • More difficult for customers to make returns 
  • Consumer trust and security 

eTailers can certainly overcome these limitations with the power and flexibility of Internet sales tools, like a powerful website or an app with great User Experience. If you’re starting an eBusiness, it is important to keep these limitations in mind when you are creating a business plan, determining your costs, and weighing the risks of going into business. 

Lack of Physical Experience

Lack of touch and other sensory experiences can put eTailing at a disadvantage to brick-and-mortar stores. People like to see and hold an item before they purchase it, especially if they are unfamiliar with the item. 

Certain items like clothes and instruments may need to be held or felt in person before a customer decides to buy. For example, many shoppers like to try on clothes before they buy them to ensure that they fit properly and like how they look in them. Many musicians like to play an instrument before they decide to buy it because every instrument has a different feel and tonal quality. 

The fact is there are many items that a customer may want to see, feel, or hear in person before purchasing, especially if it is a more expensive item. eTailers may be able to offer more inventory choices and 24/7 shopping, but they can’t offer the physical experience that traditional retailers can. 

Difficulty Building Customer Relationships

The business-to-consumer marketplace relies heavily on creating positive customer relationships. This helps create repeat customers, boost cross-sales, and build brand trust and loyalty. 

eTail and other eBusiness ventures have a more difficult time building solid, lasting customer relationships because they are not communicating face-to-face with customers. Good service is good service, and if you can provide good service, good value, and good products, you will be able to build brand loyalty in any business. However, eTailers lack the ability to connect physically with customers, offer them face-to-face expertise and guidance, or help them in-store through the sales process. A dedicated sales staff that can speak with customers and walk them through the products you are selling is a major advantage physical stores have, especially when it comes to selling big-ticket items.

Development and Maintenance Costs

eBusiness owners need to think about how much it will cost to develop a website and mobile app for their business. The app development process is just the initial cost. eTailers also need to consider the costs of the following:

  • Website UX/UI and performance optimization
  • Search engine optimization (SEO)
  • Inventory control
  • Data security 
  • Order fulfillment 

Website and app maintenance is an ongoing process and expense. These costs need to be considered when you think about starting an eTail business. To be fair, brick-and-mortar stores also have ongoing expenses such as lease, utilities, payroll, etc. Still, before you begin an eBusiness or conduct Internet sales, you need to understand that web development and maintenance is not a one-time cost. 

Shipping and Delivery Costs

Another limitation eTailers need to account for is shipping and delivery costs. These costs will affect the margins and may affect how much you will end up charging for your products. Delivery services, especially quick delivery services, can be costly. eTail businesses also need to consider the costs of shipping and packing materials. The other disadvantage of shipping your products to your customers is that long shipping times, damaged items, or lost deliveries can all affect your brand reputation and hurt your customer satisfaction

More Difficult for Customers to Make Returns

Returning an item to the store can be difficult, and policies for returns vary from store to store, which can be frustrating. However, at least people know where to go and how to return items to physical stores. 

eTailers are hurt by the difficulty of returning items. For one, customers who are on the fence about purchasing an item may be less likely to do so if they feel like they might want to return it. Returning items requires shipping them back to the store, packaging them correctly for shipment, dropping them off at a post office or shipping business, and potentially paying for the cost of shipping. Even the easiest online returns processes are more difficult than physical stores. Furthermore, the costs of returns could be an additional cost that the eBusiness needs to cover as many eTailing ventures cover the costs of return shipping. Returns are something that no business is excited about, but for Internet companies, returns are far more difficult and costly. 

Consumer Trust and Security

Today, more people are comfortable shopping online than ever before, but trust and security remain the biggest limitations facing eTailers. Some consumers are still wary about sharing their credit card and personal information with third parties. Despite the proliferation of secure payment gateways that keep customer payment information secure, some people will always be skeptical about the security of eTail shops. If your eTail website doesn’t look professional, clean, and easy to use, you run the risk of consumers not trusting you. This will hurt sales. The User Experience of your website is one of the most important aspects you can work on to build consumer trust and confidence. 

Final Thoughts

eTailers have many advantages over traditional retailers, but there are limitations and challenges that need to be fully considered before going into business. One final thought that you need to think about is customer traffic. Just because you create an eBusiness does not mean customers will appear. Physical stores benefit from being seen in the mall or on the street. eTailers need to market themselves more aggressively because their visibility is limited

eTailing creates a lot of opportunities for businesses to reach customers around the world. There are many positive aspects of eBusiness and Internet sales that we didn’t go into, but that doesn’t mean that they don’t exist. The purpose of this piece is not to discourage eTail shops from going into business. Rather, we are hoping to inform prospective eTailers on some of the challenges they may not have previously considered. Teaming up with a development partner can help ease some of the initial challenges facing eTailers.

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