Which is a benefit to businesses of online distribution?

• A. Lower start-up costs
• B. Higher operating costs
• C. More paper documents
• D. Need more stores

Answer: (A)

Online distribution changes the cost structure of a business, making it much cheaper to start. You don’t need to rent or fit out physical shop premises, you can operate with fewer or cheaper staff, and your inventory can be managed more flexibly. The initial investment is typically focused on a website, payment setup, and online marketing rather than building stores, which keeps start-up costs low. Because the overhead of running physical outlets is reduced, it’s easier for a new business to begin trading online. The other ideas describe outcomes that don’t fit online distribution: higher ongoing costs would reduce profitability, more paper documents aren’t needed when everything can be digital, and needing more stores contradicts the idea of reaching customers mainly through online channels.