How to Expand an E-Commerce Business to a Brick and Mortar Store

Post Date: June 27, 2019

While e-commerce is growing, there is still a steady demand for in-store shopping experiences.

It is common for e-commerce companies to consider opening a brick and mortar store at some point. Even Amazon is getting into the act with Whole Foods and standalone Amazon stores.

While you may hear friends stating they have not gone to a retail store in years, the statistics point to a different reality. 

In 2018, there were $517 billion spent in the United States on online retail sales, a 15 percent one-year-jump. However, that figure represents just 14.3 percent of all retail sales. Sales in physical stores also jumped in 2018, albeit by a smaller percentage (3.7 percent).

Those figures should be top of mind when entrepreneurs consider whether to expand their offerings beyond e-commerce. As seen in the recent post, Have Entrepreneurial Dreams? Watch These 11 Industries in 2019, there is an opportunity with many different business types.

Expanding an e-commerce business to a brick and mortar store is a matter of bringing your business expertise and some new considerations to bear.

Factors to Consider

If you are considering launching a physical store, here are some things to keep in mind.

  • Does it Make Sense? Not all businesses lend themselves easily to a hybrid model of e-commerce and brick and mortar. While it may seem daunting if your expertise is in the digital space, expanding into a physical location can be a profitable venture, especially for businesses where it is important to see and feel the actual items. Other times, customers may provide feedback that they want to see a physical storefront.
  • Prep Work Needed. As with your online store, you will need to do the due diligence, including determining what capital funding you will need for the expansion. Creating a business plan also makes sense, because the physical location will take different planning, marketing, and market research than an e-commerce site.
  • Different Expense Types. With a brick and mortar store, you will incur some costs that are different from those associated with an e-commerce business. You will need to build or lease the location, design the store, and incur increased overhead costs such as electricity, phone, cable, and insurance. You will also need to hire, train, schedule, and manage however many employees it takes to cover your hours of operation. You will also need to factor in safety and security considerations for your storefront, employees, and merchandise.
  • Create the Experience. With a physical store, you need to consider the in-person equivalent of UX on your website. In-person customer experience is important. What tone and image do you want to present to customers? How will merchandise be organized and displayed? If your e-commerce involves technology, will that be incorporated into your physical store? These questions need clear answers as you identify space, location, and the store layout.
  • Secure Flexible Funding. There are more moving parts with a physical store than with an e-commerce site. That means additional resources are necessary to expand your business.

Benetrends is a visionary when it comes to helping companies with innovative funding solutions to open or expand a business. For decades, our 401(k)/IRA rollover funding solution, known in the industry as a Rollover as Business Start-Ups (ROBS) strategy has provided financial support at multiple stages of business launch and expansion. To learn more, download The Definitive Guide To 401(k)/ROBS Business Funding


Categories: Blog

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