How to run a successful online retail business

Save on storefronts by starting an e-commerce store


This is Part 3 of a 4-part series about saving for a small business. Just joining in? Read Part 1 and Part 2.

The prevalence of online shopping and services is great for entrepreneurs looking to launch their businesses. If you’re in that category, it might even make you question whether you even need an actual storefront.

So before you take out a small business loan to pay for a lease, take a look at the benefits of starting an e-commerce business. Going digital could give you the chance to make your mark in a niche market that may have otherwise gone unnoticed.‬‬

Comparing the cost of a storefront vs. e-commerce

Renting a space can be expensive. If the lease weren’t enough, there are also hidden costs that can quickly eat up your funding. When you lease, you have to pay electricity, utilities and other monthly costs.1 Plus, you might have to fill that space with furniture, in-store displays, signage, registers and more. Let’s not forget upkeep on the space. Having a storefront also means buying cleaning supplies and stocking the restrooms. The list could go on and on.


When you add up all those costs, you can see why e-commerce might be a great option for a budding small business. You will have to pay for web hosting fees and might want to invest in a great online experience and site design. But in the end, you could save a ton by skipping a storefront. Though every business will be different, you can do a little research on your industry to see the possible savings.

Ways you could save by going online

E-commerce helps you cut costs on operations, but the benefits may not stop there.

  • You might reach more people for less. Online advertising helps you target your audience more effectively, without the big budget. Online ads might make it easier (and cheaper) to reach people who are more likely to visit your site. You can get started with any budget, whether it’s $100 or $500, meaning you could spend less time marketing to the wrong people and save more for other business expenses.
  • You’ll have choices. All the variety in the e-commerce world lets you choose what works best for you and your budget. You might prefer building a custom website yourself or with a private developer or you could use existing platforms or marketplaces, where all you have to do is set up your own account. You can choose the best fit for you, without spending money on features you don’t need. The power to choose lets you save money and invest in other areas of your business.

Creating a budget for your e-commerce business

Ready to get started with your online retail business? The expenses may be a little different than traditional retail, so keep a few things in mind to create a budget.

First, you might want to open a personal savings account. Doing this could help you keep personal expenses separate from your business expenses. After that, start thinking through your startup costs

By doing your homework and taking the right steps, you’ll learn how to start an online retail business and set yourself up for success.

In Part 4 of the series, take a look at how to cut costs and save money for future growth once you’ve launched your startup.


This site is for educational purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

  1. Calculate your startup costs (undated). Retrieved February 25, 2022, from https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs.

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