Difference Between e-Business & Traditional Business

Over the years, there has been a visible shift in consumer preferences. Today, most people prefer shopping from an online store rather than a conventional store as it gives them the flexibility to order things from an international seller from the comfort of their home with just a click of a few buttons.

While traditional businesses have been around for a long time, the advent of e-businesses or online businesses has taken the business landscape by storm. Although both e-business and traditional business are mediums for conducting business, they are defined by their own unique characteristics and are quite different from each other.

So, in this guide, we explore the differences between e-business and traditional business. Read on!

What is e-business?

Business activities conducted over the internet or any other computer network are called e-business, which is also commonly referred to as electronic business or online business. It includes all kinds of business activities like trade, commerce, etc., which are conducted electronically.

What is traditional business?

Traditional business has been around for ages and they have been the foundation of several industries. This type of business is usually a brick-and-mortar establishment that has a loyal customer relationship and strong supply chain.

In a traditional business, the products and services are offered through a local shop or store, and these businesses typically cater to local customers. You must physically visit these stores to purchase a product. However, these stores give you the experience of physically touching and getting a feel of the products before buying them. This aspect is not possible with an e-business.

Also Read: What Is Business? - Definition, Concept & Types - Udyog Plus

Knowing the differences between e-business and a traditional business entity

Now that you know the meaning of e-business and a traditional business let us delve into their differences.

• Operating cost

  One of the most significant points of difference between an e-business and a traditional business is the operating cost. The e-business has a much lower operating cost as compared to a traditional business. This is because all activities of an e-business are done online.

  
  

  The traditional businesses, on the other hand, have a higher operational cost mainly because to run such a business you may need to invest in a space; you may have to buy or rent a shop. Additionally, you would have to incur utility expenses. This significantly reduces the profit margin.

  
  

• Business operating hours

  Most traditional businesses have limited operating hours. This means a traditional business owner if your customers want to purchase products from the local store, they may have to do it only during business hours.

  
  

  On the other hand, in an e-business, there are no limitations on business hours. You can keep your business open to your customers round the clock and all through the year. This allows the customers to purchase things at any time as per their convenience.

  
  

  And, since e-businesses are active 24x7, customers prefer buying things from an online store, and they are more likely to return for recurrent purchases. These benefits also include free shipping (typically with a minimum purchase value), faster delivery, and special discounts and offers.

  
  

• Contact between sellers and the buyers

  The e-business facilitates direct contact between the buyer and seller. This means that if you are a customer, you can directly purchase from the seller of your choice. Because of the direct transactions between the seller and the customers, the cost of products you may find in the online market is much cheaper than the offline shop.

  
  

  On the other hand, in a traditional business, you may not always directly contact the seller to purchase the goods. Instead, you may have to rely on the intermediaries. This may increase the purchase cost for you.

  
  

• Geographical barriers

  Another major difference between e-business and traditional business is that when you start a traditional business, your target audience is only limited to the local people. Although you can have your products delivered to customers’ homes, the distance can be a hindrance.

  
  

  Whereas, when you start an online business, and list your products on an e-commerce platform or sell through your own website, your market becomes wider. Since, most of the e-commerce companies have their own logistics and delivery system, it makes it easier and affordable for you to send your products to customers across cities or even countries.

Conclusion

Thus, it is quite evident that there are many differences between e-business and traditional business. The former is a new style of doing business; it is easy to set up and maintain. Also, the cost involved is less as compared to a traditional business.

If you are an aspiring business owner, and want to set up a local offline business or start an online business, you may need certain initial investment. You can get the financial support you need by applying for a small loan from Udyog Plus, one of the leading NBFCs (non-banking financial companies) in India.

It offers an unsecured business loan of up to Rs. 2 Lakh without any documents. You also don’t have to submit any ITR (Income Tax Returns) proof. Also, the easily only application process and quick approval combined with same day disbursal ensure that you get access to the funds immediately. Also, the interest rates are quite competitive and you get the loan with flexible repayment terms to suit your needs.
So, why wait anymore? Visit the Udyog Plus website, apply for the business loan and take your first step towards making your dream of being a business owner a reality.