Is Online Business Good Or Bad? (My unbiased take)

Thinking of getting into an online business? Great! I cannot recommend it enough. I have been a full-time work-at-home dad for five years now. Establishing my business on the Internet enabled me to provide for my family and be present in their lives at the same time. But while I wish every father to have their own online business, the truth is, it is not for everyone.

Online business is generally a good idea. It has low overhead costs, enables you to work anywhere, and exposes your business to a much larger audience. But it may not be for you if you like working with people face-to-face, or prefer a more stable income. Running an online business can be lonely and unpredictable.

Is online business for you? In this article, we will take a look at when an online business is a good idea, and when it is not. Read on to get insights into whether an online business is for you. Please note, however, that these are based on my own research and experiences as an online entrepreneur. The purpose of this article is for information only and by no means intends to give professional advice.

Husband and wife discussing.
Thanks to my wife who trusted and supported my decision to stay home and do business online.

Is an online business a good idea?

  • If you are comfortable putting yourself out there. Credibility is an essential part of online business success. No one generally buys from someone they do not trust — no matter how great the product is. This is especially true on the internet where it is effortless to hide behind an avatar or a persona. Online shoppers are extra cautious, and they can easily smell if something is not right.

    Online business is a good idea if you do not mind putting yourself out there. As internet entrepreneurs we expect people to give us their money and attention without seeing us face-to-face. It’s only fair to show transparency about ourselves by uploading real pictures and writing a short background about who we are. Best if you can set up a profile page, a blog, or an online business card. See also: How To Make An Online Business Card? (5 Steps)
  • If you have low start-up capital. One of the most compelling reasons to get into an online business is its low start-up cost. With some research and a few trial-and-error, you can even start an online business using 100% free tools and services. I can’t think of other ways to establish a legitimate business on a meager budget today besides venturing over the Internet.

    I was actually broke when I decided to focus all my efforts online in 2017. Through prayer, study, and hard work, I thank God that my online business grew to something that can provide for my family’s needs. So yeah, an online business is a good idea when you have low starting capital.

    Check out this post if you want to see the paths I took to make money on the Internet full time : How Much Do Stay At Home Dads Make? — My Actual Numbers
  • If you are willing to play the long game. I hate to break it to you. But contrary to popular belief, online business is not a get-rich-quick strategy, or an easy way to make money. Many times business “gurus” overhype the potential of online businesses, so they can sell their courses. They promise things like freedom and big money in less than three months. Do not bite into it. Online businesses are real business that requires a large amount of time and dedication to develop.

    On average, online businesses such as blogging and e-commerce may take, at least, 24 months to be profitable. Starting an online business is a good idea if you don’t mind playing the long game.
  • If you value freedom over prestige. I am not sure if this is true as a whole or is only exclusive to the culture where I live in. But there seems to be a stigma toward being an internet entrepreneur. Many see online businesses as bogus businesses. That those people who engage in them are either lazy or not skilled enough to create real businesses or get decent jobs.

    It took me a while before I was able to embrace titles like “online seller” or “blogger” because they just do not sound prestigious. I even get the don’t-you-have-an-actual-job look from my in-laws whenever they visit our place because they always see me at home with the kids. Numerous times they have sent me links and asked me to consider getting jobs abroad. I admit I feel offended at times. But as long as I can provide for my family, I don’t think I need to explain myself.

    If you are cool about working without getting any awards and recognition, then an online business is something you should greatly consider. See also: Is Being A Stay-At-Home Dad Bad?

Advantages of an online business

  • Low start-up and overhead costs.
  • You can work from anywhere you want.
  • You will have a larger audience.
  • Online businesses can serve customers 24/7.
  • Low risk and easier to pivot to another business in case it didn’t work.
  • Growing support for online entrepreneurs.
  • An increasing number of people who shop and do business online.
  • They are generally quick and easy to start.
  • You can run multiple online businesses at the same time.
  • You can hire and work with people remotely.
  • See also: 4 Reasons Why It Is Worth It To Start An Online Business
Working online can be lonely. Man reading book.
Operating a business on the Internet can be lonely at times since you will always be working behind a computer.

When an online business is a bad idea

  • When you plan to be a jack-of-all-trades. A jack-of-all-trades is a person who can do many things but is not an expert in what he or she is doing. On another note, a jack-of-all-trades can also refer to someone who carries a large selection of products — but mostly, if not all, are just common goods.

    The Internet is a noisy place. Your business can easily get drowned by the noise if you do not offer anything exceptional. It is far better to promote one great product than a lot of ordinary ones. This is often called niche marketing. If you consider yourself a jack of all trades, you might find it difficult to find your footing online.
  • When you love working with people face-to-face. Operating an online business means you will be working behind a computer ninety percent of the time. And the usual way to get in touch with other human beings is through email, chats, or video calls. You may find it lonely to run an online business if you have an extroverted personality who loves working with people face-to-face.
  • When you do not have the patience to learn about technology. Simply put, if you do not like technology, you shouldn’t start an online business. Doing business on the Internet can be more challenging than most people think. Not only are there tons of things to learn, but there is also a probability that what we have learned today may already be obsolete next year. Technology is constantly changing. And it requires a certain amount of passion from our end to keep up and make our business thrive in the online space.
  • When you prefer a stable income. Getting into an online business is a risk. While it is a good kind of risk, it is still a risk at the end of the day. What this means is online businesses are not guaranteed. If you are a person who is comfortable earning a stable income each month, being in a business, in general, is not a good idea for you.

What are the disadvantages of online business?

  • The learning curve can be overwhelming.
  • Increasing competition.
  • Cost may pile up if you are not careful.
  • Security issues.
  • Delay in customer support.
  • An online business is a non-tangible asset.
  • Your business can be easily copied.
  • Difficulty adapting to the fast and constant change in the technological environment.
  • Your success may be at the mercy of other internet companies like Google, Facebook, and Amazon.
  • Running an online business may lead to loneliness.
Photo with the Jaguar in Clark Safari, Pampanga
Picture with the Jaguar at Clark Safari, Pampanga. Praise God that online business worked for us. Because of it, we can take a short vacation even on ordinary days.

Summary

Online business is an excellent vehicle toward a more flexible family life. As much as we like to recommend it to everyone, the reality is that not all will find having a web-based business fitting to their talents, personality, and circumstances. It has its fair share of pros and cons that influence whether getting into an online business is a good idea for an individual or not.

Recommended tools

  • Chromebooks — The laptop I use to run my online businesses.
  • Income School — The school that taught me how to create an online business through blogging.
  • Spread Simple — The platform I used to build my online store.
  • Bluehost — The web host I used to start my blogging business.
  • Dotcal — Create your free booking page here. You can use the code TheLearningDadBlog50 to get 50% off for 6 months if you ever plan to go pro.

See also

Follow the Journey

This journal is my way of making sense of the lessons from the journey. Get the next full entry delivered straight to your inbox.

Why Are Online Stores Successful? (5 of many reasons)

E-commerce has grown tremendously in the past decade. In fact, the global online retail business is projected to reach $5 trillion by the end of the year; a growth of over 256% since 2014! Lots of studies have theorized about the forces behind the success of online stores. But if you are a person who is just starting out, the data they have presented may be too much to grasp.

I have been a full-time work-at-home dad for quite a while now. I operate several online businesses, which include Chromebook Store PH, an e-commerce store that sells laptops. Every day I thank God for this opportunity, because I can provide for my family while being involved in their lives at the same time. I know I still have a ton to learn as an internet entrepreneur. But in this article, I will list my 5 real-life, beginner-friendly observations about what makes online stores successful.

laptop with glass and coffee cup.
Online stores enable you to work anywhere you want.

1. Online stores make products searchable.

If you are in a hurry and do not have the time to read the entire article, then this takeaway is already more than enough reason to why online stores are successful. I cannot emphasize the importance of ‘search’ in online selling. According to data, 81% of internet consumers conduct online research before purchasing a product. This is true for me, and there is also a good chance that it is also true for you. When we plan to buy, let’s say, a Bluetooth speaker, don’t we usually to go Google and search for:

  • “What are the top Bluetooth speakers today?”
  • “Where to buy the cheapest Bluetooth speakers?”
  • “Are Bluetooth speakers worth it?”
  • “Best Bluetooth speaker brand?”
  • “Bluetooth speakers near me.”

Because of this, online stores will win the searching customers 80% of the time. They did not only make it convenient for people to find them, but they also attract those who have buying intentions. That is why search engine optimization or better known as SEO is a lucrative skill in today’s digital age.

2. Online stores have low starting and overhead costs.

Affordability is one of the most obvious reasons for the success of online stores. You can start an e-commerce website from virtually $0 to $500, and have a monthly overhead cost of $0 to $20. Success sometimes isn’t the absence of failure per se, but the failure of not trying. Online stores are amongst those ultra-rare, low-risk, high-reward types of investment — which make them worth the shot. Below is a simple breakdown of how much I spend/spent on my e-commerce site:

E-commerce platform by SpreadSimple$156 (yearly)
Logo design via Fiverr$20 (one-time)
Google Ads$30 (monthly)
Social media scheduler (Social Champ)$0
A table showing my typical expenses for running an online store.

I have written an article about the cost of starting an online business in detail. You can see it here: Things You Need To Start An Online Business. It is a complete cost breakdown as if you do not have anything, like a laptop, an internet connection, or a phone.

3. Online stores can offer products at a lower price.

In relation to the point above, online stores have the margin to offer products at a more affordable price. Based on a study, the number one reason why people shop online is free delivery. Number two is its ability to give coupons for additional discounts. Here are the rest of the top reasons why people shop online:

1Free delivery53%
2Coupons/discount41%
3Reviews from other customers35%
4Easy return policy33%
5Quick/easy online checkout process30%
6Next-day delivery28%
7Loyalty points27%
8Lots of good comments on social media22%
9Knowing the product is environmentally friendly21%
10Ability to spread payments without interest20
A table of the top 10 reasons why people shop online. Source: Global Web Index

But these are just icing on the cake. From my standpoint, shoppers generally get better value when they purchase online than in brick-and-mortar stores. An ideal example of this is my wife’s online jewelry business. People patronize her diamonds because, at the same price, she offers bigger and better quality stones compared to other jewelry stores. I hope this will make sense. But practically speaking, online shoppers get more value because most of their money goes to the product itself, not to the store’s operating cost. Online store owners such as my wife do not need to put on a big markup to sustain their business.

4. Online stores can reach more people.

My online store has already served customers from different parts of our country. That’s definitely something I cannot do with a physical store. Even more, with the right products, an e-commerce website can serve customers from other parts of the world! In fact, according to statistics, cross-border shopping has been on the rise. 57% of online shoppers say they have purchased from an overseas retailer in the past six months. Below is the average percentage of consumers who made overseas purchases by continent:

Continent% of consumers who shop overseas
Europe63.4%
Asia-Pacific57.9%
Africa55.5%
Latin America54.6%
North America45.5%
A table showing the average percentage of consumers by continent who made overseas purchases in the last six months.

5. Online stores can serve shoppers 24/7.

60 percent of shoppers say they have made online purchases from 12 am to 4 am. I can confirm this data because about 50% of our inquiries are received between 2-4 am. Being able to respond to my customers’ queries, even while I am sleeping, is one of my favorite benefit of an online business. It is also perhaps the most underrated. Just imagine how much sales we’ll lose if we don’t have an online store.

What I do is set up an autoresponder and publish an FAQ (Frequently Asked Questions) section, so people can get their answers during those hours. There is also a “buy now” button where they can use to process their orders once they have decided to make a purchase. For those who have further questions, I can respond to them during office hours.

But why are people shopping online late at night? Based on an article by BBC, the answer is “It’s the only time.” People tend to go online at bedtime because they are too busy in the morning. Here are the top five items bought during bedtime:

  • Duvet covers
  • Televisions
  • Laptops
  • Mobile phones
  • Freezers

Bonus: Online stores have growing support.

The reality is, just like anything else, the online store business cannot be successful by itself. There are many services available on the internet today that make e-commerce a viable business. Without them, online stores won’t become what it is today. Here is a list of some of the most essential support online stores need to succeed:

  • Delivery services. This is a vital element, especially for stores that sell physical products. An online entrepreneur no longer needs to invest in and maintain its own delivery fleet.
  • Payment gateways. Online shoppers have become more comfortable purchasing online because of payment services like PayPal and Stripe. Not only did it make paying easier, but it also enables them to contest any scam transactions.
  • Online courses. It has become much easier to start an online store business because of e-learning. Aspiring online entrepreneurs can simply follow step-by-step guides when building their own e-commerce sites.
  • Freelance services. It is okay if you are not tech-savvy. It is okay if you are not good at web development. Whatever tasks are outside your expertise, you can outsource them to freelance service marketplaces such as Fiverr. There, you can hire a video editor, a copywriter and many more. Freelance services have torn down many barriers to starting and operating an online store.
Food delivery.
Delivery services are one of the essential support an online store needs.

Summary

In general, online stores have become successful because they have provided both sellers and buyers with a win-win situation. They make products searchable, give customers better discounts, and allow them to be served anytime, anywhere. All these while enabling online store owners to enjoy the convenience of working anywhere and earning bigger margins.

See also

Sources

Follow the Journey

This journal is my way of making sense of the lessons from the journey. Get the next full entry delivered straight to your inbox.

Are Online Businesses Real? (And how do they make money?)

I don’t blame you. I also didn’t believe you can create a legitimate business over the internet and work from anywhere you want. That you can provide for your family while being involved in their lives at the same time. These just sound too good to be true. But I took the risk anyway. I ventured into the online space in 2017 to see it for myself.

Online businesses are real businesses that earn money by making the internet a better place. Thousands of online entrepreneurs were able to pay their bills by providing netizens with a more efficient way to shop, learn, communicate, be entertained, and operate their businesses.

It has now been five years since I became a full-time work-at-home dad. It is an opportunity I thank God for every day. Because of online businesses, I was not only able to put food on the table. I also got the chance to eat with my family at breakfast, lunch, and dinner. Read on to learn more about how online businesses work.

Ikea living room
Checking out the living room exhibit at the biggest IKEA in the world.

Do online businesses make money?

E-commerce alone is a trillion-dollar industry. Global online retail sales are forecasted to reach $5 trillion by the end of the year. A growth of more than 256% since 2014. Furthermore, three out of ten of the most profitable companies in the world are internet-based businesses. Google, Amazon, and Facebook.

With these figures, I guess it’s safe to say online businesses do not only make money — they actually make A LOT of money! Listed below are the world’s top 10 internet companies and their net worth.

World’s top 10 internet companies

NameBusinessOriginNet worth
Alphabet Inc. (Google)Search engineUSA$1440 Billion
AmazonE-commerceUSA$1101 Billion
Meta (Facebook)Social mediaUSA$545 Billion
Tencent HoldingsOnline advertising & servicesChina$414 Billion
AlibabaE-commerceChina$223 Billion
Salesforce.comCRMUSA$158 Billion
Booking.comOnline travel servicesNetherlands$87 Billion
NetflixOnline streamingUSA$83 Billion
JD.comE-commerceChina$67 Billion
BaiduSearch engineChina$41 Billion
A table of the world’s top internet companies and their net worth. (Updated May 2022)

Okay, I know these numbers can be overwhelming for normal people like us. If you want a more relatable figure, below is a breakdown of my online gross income since 2017. Check my post How Much Do Stay At Home Dads Make for details.

YearAnnual Gross Income
2017$46,500.77
2018$25,174.02
2019$27,270.96
2020$34,179.59
2021$23,595.06
Here is the data of my earnings as a full-time stay-at-home father who operates several online businesses.

How do online businesses make money?

Online businesses do not make money out of thin air. Something I cannot say the same about cryptocurrencies and NFTs. To be successful in any business, you must provide something helpful or valuable that people are willing to trade their money for. Below is a list of how a typical online business generates income:

  1. Product sales. This is income made from selling physical or digital products. An internet entrepreneur can start an online selling business by putting up an e-commerce website or by joining an online marketplace. See this post to learn the different ways to sell online: What Are The Examples Of Online Selling? (Here are 7).

    Top examples of physical products:
    – Consumer electronics.
    – Food and beverages.
    – Apparels and accessories.
    – Furniture and home furnishings.
    – Pet products.

    Top examples of digital products:
    – E-books and audiobooks.
    – Music and movies.
    – Video and audio courses.
    – Software and online tools.
    – Online and printable templates.
  1. Service fee. This revenue is generated by providing remote assistance to online customers. Online professionals can render their services via their own page, or through freelancing marketplaces like Fiverr.

    Top examples of online services:
    – Virtual assistant
    – Copywriting
    – Graphic designing
    – Video editing
    – Search engine optimization (SEO)
  1. Sales commissions. This type of income is mostly enjoyed by content creators. They write blogs or create videos about certain products, and get commissions for every successful referral. The official term used for this online business model is affiliate marketing. The average affiliate commission rate is between 5-30%.

    Top examples of affiliate networks you can partner with:
    – ShareASale
    – Rakuten Advertising
    – Amazon Associates
    – ClickBank
    – Impact
  1. Subscription. Subscription-based products have gained a lot of traction lately. It is a way to make money by offering members-only content or services. Many online business owners are shifting their focus to this business model because it generates recurring revenues.

    Top examples of online businesses that offer subscription-based services:
    – Netflix (Movies and TV series)
    – Spotify (Music and podcasts)
    – Canva (Online graphic design tool)
    – MasterClass (Online learning)
    – Scribd (E-books and audiobooks) — Try for 60 days free.
  1. Advertisement. See the banners in this article? It is an example of earning income from advertisements. Making money through ads is somewhat passive. I get a small amount for every person reading my content for at least ten to thirty seconds. Earning through ads is great, but it requires lots of hard work. You must produce quality pieces of content that will engage your audience. I hope I am serving you well right now. Thank you so much for reading!

    Top examples of online businesses where you can earn from ads:
    – Blogs
    – YouTube
    – Mobile games

    Be sure to check out Income School if you plan to make money from blogging and YouTube. They were the ones who taught me how to turn this blog into a real online business.
  1. Rental. There are a couple of ways to earn rental income online.

    1. Blogs — Advertisers can rent ad spaces on your websites where they can put up their banners and link them to their own sites. The rental rate will vary according to the quantity and quality of your traffic. But the general rule of thumb is: monthly rental rate = average monthly traffic divided by 10. This means you can charge $1,000 for every 10,000 visitors you have on your blog.

    2. Airbnb — Airbnb is an online service where you can rent, and rent out, properties for lodging. If you have unused spaces, like a condominium, a duplex, or even a bed space, you can list it on Airbnb and earn rental income. This is one of my favorite ways to make money online. All you have to do is sign up for an account, dress up the house you are hosting, and wait for guests to contact you. You can use my referral link to get a bonus of at least $10 on your first reservation.
Family eating IKEA Swedish meatballs.
They say IKEA’s Swedish meatballs is a must-try. They are actually not bad. We enjoyed the dining experience overall!

Online businesses that pay

Online selling, blogging, and hosting properties online are the online businesses that pay my household bills. Overall, they give me a combined average of $900 to $1,600 monthly net income. What is good is there is still a lot of room for growth. This number is way below the industry’s average.

  • Online selling
    I sell Chromebooks in the Philippines through an e-commerce site made with SpreadSimple. It earns between $400 to $1,800 net income per month; Of course, there were months when we got nothing. The biggest barrier I have observed in this business is competition and consumers’ trust issues. You have to handle your transactions transparently, and give a personal touch to the way you assist your customers. Do not automate everything.
  • Blogging
    I was hesitant to include this business here since I only started monetizing it early this year. But overall, this blog has made about $90 from an affiliate commission; and generates an average of $6 a month from Ezoic ads. The numbers are a bit embarrassing, but in truth, the income I got on this blog is one of the most satisfying pay I have ever received.

    The challenge in this business is that it takes a long while to make it profitable. You have to prepare yourself mentally if you plan to take this route as you can get easily discouraged by the slow process. One way I deal with it is to have accountability partners. I have classmates at Income School who are earning $1,000-$4,000 from their blogs. That made me have something to look forward to.
Ezoic payment history.
A snapshot of my earnings at Ezoic.
  • Hosting properties online
    I host three condominiums and a parking lot online. They make a monthly gross profit of between $300-$1,600. My tenants usually come from online classified ads like Carousell and Facebook Marketplace, but I prefer to transact via Airbnb to minimize the risk of fraud.

    The two cons of this online business are:
    1. It is not 100% online. From time to time, you have to go to your property to make sure it is presentable and well maintained.

    2. Bad tenants. I have hosted a couple of tenants who damaged the property and egressed without paying their rents. Make sure to develop a firm screening process if you plan to venture into this business.

Summary

Online businesses are very real. Not only to world-class companies, but also to a normal person like me. It eased the tension between my work-life and family life. Giving me an average net income of $900 to $1,600 a month working at home. I hope every parent can experience the freedom of having an internet-based business. But with that said, bogus online businesses are also real. There are lots of scammers out there, so please be careful. Always do your research first before investing and committing to any kind of business.

Check out these amazing tools to help you build your next online business:

  • SpreadSimple — Create and manage an online store via Google Sheets
  • Chromebooks — Google-based laptops.
  • Designrr — E-book creator.
  • Canva — Online graphic design tool.
  • Fiverr — Hire freelancers to help you with content, design, and other stuff.

See also

Sources

Follow the Journey

This journal is my way of making sense of the lessons from the journey. Get the next full entry delivered straight to your inbox.