What Is An Online Business?
If you are a regular internet user, you might have come across the term ‘online business’. This is a commonly mentioned phrase in the online world, but few people actually understand what it means. So, what is an online business?
This article will provide you with a clear definition of what online businesses are and what makes them different from other types of businesses.
Before we go any further, it is important for you to have an idea of what the words ‘business’ and ‘online’ mean to make sense of the phrase ‘online business’.
Business can be described as the buying and selling of goods and services with the goal of making a profit.
The word ‘online’ on the other hand is an adjective that describes any activity done over an internet network using electronic gadgets such as smartphones and computers. The phrase ‘online business’ is therefore used to describe any commercial activity which is conducted online with the sole intent of making money.
Features Of An Online Business
Online businesses have distinctive characteristics that set them apart from other types of business. Here are some features of online businesses which make them unique:
- All transactions are transacted over the internet
For online business, all the important commercial dealings are conducted online. The business has to have a website or social media page where they advertise or showcase all the goods and services being offered to potential customers.
Customers who are interested in purchasing whatever is being offered have to visit the seller’s website or social media platform to select what they need and make a purchase order.
When making an order, the buyer will be asked to make payments by wiring money to the seller’s bank account or pay using their credit card. Upon payment, the seller arranges for the goods to be delivered through a courier service to the physical address provided by the buyer.
If the buyer pays for an online service, they will be provided with a special access code which will be used to gain access to an online portal where the service will be provided.
- Online businesses can be conducted without a physical address
Online businesses don’t require any physical interaction between the buyer and the seller.
Such a business model provides convenience for both the business owner and the customer. As a customer, you can easily purchase anything you want over the internet and have it delivered anywhere you like. The advantage for the seller is that they can conveniently run a business even from their homes and by doing so avoid incurring the added expense of renting an office or a shop.
- Online businesses enjoy less geographical limitations
Any business will immediately be in a position to reach a global market once it goes online. This is due to the fact that internet can be accessed almost everywhere in the world. As a result, any online business can be noticed by anyone who has unrestricted access to the internet regardless of where they live.
In addition, an online business doesn’t need a permanent physical location to operate from. It is therefore possible for such a business to maintain a virtual presence across the world without having to go through the costly and formidable task of setting up offices everywhere it wishes to operate.
Common Online Businesses
The list of businesses that can be effectively conducted online is huge. Here are some most popular forms of online businesses:
1. Online retail
The largest chunk of online businesses consists of companies which sell merchandise online. Such businesses maintain websites which contain catalogues of the products that they sell. Buyers can view the entire product catalogue and make a purchase online. The most famous online retail stores are Amazon.com and Alibaba.com which have become multi-billion dollar corporations.
2. Online learning classes
In recent years, online classes have become popular among those who wish to gain useful life skills or take college courses. Such courses are highly marketable due to their flexibility. Learners are given the freedom to take these lessons at their own pace whenever they feel like without having to be physically present in a college class. Lessons and other learning material are made available to learners through a website upon payment of the course fees.
3. Online service provision
There are several specialized services that are in high demand but don’t require physical interaction between the customer and the person providing the service. Such services include writing services, graphic design, accounting and many more.
A person who is adequately skilled in such a service can set up a website where potential clients can seek their help in accomplishing specific tasks. The seller then provides a quote for the service and proceeds to complete the job if the buyer agrees to pay for it.
As recently as 20 years ago the business world has become a very different place and it can be daunting to keep up with the changes. An online business can be extremely rewarding and is something that shouldn’t be overlooked when considering creating your own business.
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I hope this post has answered the question ‘what is an online business?’ but if you need any other information please get in touch by using the comment box below or writing to me using this link.