The Biggest Budget-Busters for Online Businesses and Brands

The Biggest Budget-Busters for Online Businesses and Brands

The Biggest Budget-Busters for Online Businesses and Brands

Oct 18

The Biggest Budget-Busters for Online Businesses and Brands

As technology continues to evolve and change our daily lives, it also presents new and unique challenges for businesses. Where it was once only possible to market products and services through physical store-fronts and mail catalogs, businesses now can reach virtually anybody in the world through online platforms and stores.

While the thought of not having to maintain a physical store-front seems like a cost-effective situation, there are still many notable expenses that online brands must consider. In order to give budding entrepreneurs an idea of what they will face, we’ve put together a list of some of the biggest budget-busting line items that online businesses will face when opening their virtual doors.

Financial Services

Online businesses may not have to worry about the brick and mortar concerns that plague many traditional brands, but plenty of conventional concerns still remain. One major budget-buster is financial services.

Bigger businesses may have to hire one or more employees with bachelors of accounting degrees, along with a variety of other employees, contractors or firms to help manage the day-to-day finances. Some examples include legal advisors, human resource managers and procurement specialists.

Shipping Costs

Online businesses don’t have to pay rent, but where one advantage exists, a disadvantage also appears. Online businesses that provide products to consumers must face the daunting reality of shipping costs, which can quickly add up (learn more about how to reduce shipping costs).

One reason why shipping costs are so massive for many online businesses is because shipping costs have to be dealt with twice. Not only do businesses have to charge or absorb shipping costs when they provide products to customers, but they must also pay shipping costs when ordering the products that they resell (or the materials necessary to produce their products).

This means that any online business has to carefully weigh whether to pass on the cost to the consumer or absorb the cost themselves. In either case, it creates a financial stress-point that traditional businesses don’t often experience.


Reaching new audiences and growing an online business’ customer base takes time and dedication. In particular for those businesses just starting, the costs associated with online marketing campaigns can truly break a budget.

Ideally, online brands will have somebody with a bachelor’s degree in accounting or higher to help manage the logistics of marketing campaigns. This is because calculating true return on investment is so crucial to overall business success. While marketing can be expensive, campaigns that generate more value than they cost are ultimately justifiable expenditures.

Hosting Costs

As an online business grows, so does the need for bandwidth, storage and web expertise. Many online businesses face budgetary woes when their store-fronts begin to expand rapidly. Hosting packages generally require businesses to upgrade their hosting packages above and beyond what is needed at the moment, requiring an unjustified increase in spending.

Storage and bandwidth are big concerns, but so is general web maintenance. As any online business expands, other considerations may need to be made. For instance, a website may need to be completely redesigned in order to accommodate a massive increase in traffic. Complete site redesigns for online businesses routinely cost thousands of dollars, presenting brands with a stressful financial ultimatum.

While there are some costs that online businesses avoid when compared to brick and mortar businesses, they are often replaced by new and different challenges. Any new business’ budget can be tested by these four struggles, causing growing pains for online brands seeking to expand. While they may be difficult obstacles to overcome, online brands can solve these issues by maximizing efficiency and cutting costs in other areas.

301,862 total views, 1 views today

The Biggest Budget-Busters for Online Businesses and Brands, 10.0 out of 10 based on 1 rating
VN:F [1.9.22_1171]
Rating: 10.0/10 (1 vote cast)
VN:F [1.9.22_1171]
Rating: +1 (from 1 vote)


Leave your comments