Forex vs eCommerce: The Ultimate Guide to Making A Career Working from Home
Whether you’re looking to earn a living or build a nice side hustle, you’ll likely have turned to the internet for suggestions. Two of the most prominent ways to make money online are forex trading and eCommerce.
These two markets are about as different as could be, but where they are similar is in how lucrative they are. Some stats to prove this point:
• The foreign exchange market is the largest in the world. In 2019, it reached an outstanding daily trading volume of $6.6 trillion!
• The eCommerce market is equally vast. Sales in 2019 of online retail goods reached $343.15 billion, and analysts project that by 2024, it will reach $476.5 billion.
Clearly, there’s a lot of money that you can make in either market. So, how do you know which is best for you?
Numerous factors go into making this choice, some of them personal, some of them practical. In this guide, we break down the differences between these markets and review your options. By the end of this guide, you’ll have a clear picture of which market is better for you to start a lucrative side hustle or launch a new, profitable career.
Forex vs eCommerce: The Different Business Models Explained
Before we get into comparison, let’s first understand what Forex and eCommence are.
Forex is a portmanteau of foreign currency and exchange. An easy way to think of it is by comparing it to stock trading, except instead of stocks you are trading currencies.
Currency is constantly fluctuating in value which is what makes the forex market so unpredictable. This high volatility nature is also what makes it such a potentially lucrative market.
If you are completely new to foreign exchange trading, you may benefit from expanding your knowledge with sites like ForexToStocks.
ECommerce is short for electronic commerce or internet commerce. It refers to the online purchase and sale of goods or services.
Generally speaking, it’s a far more consistent business model than forex trading provides. However, this lack of volatility can mean it takes longer to turn a profit. It also takes a greater commitment.
The Question Is: How Do You Decide?
We outline the factors below to help you decide yourself which market is more suitable to your intentions, finances, and personal and practical considerations.
Short-Term vs Long-Term
Before we get into anything, if your intention is to get-rich-quick, you are in the wrong place. Neither of these paths is likely to grant you that. In fact, any trading model that claims to make you millions in minutes is probably built on falsehoods. That’s not what we’re looking at here.
However, it is likely that you’re looking to make some substantial money, otherwise why bother? Where it becomes divisive is how you want to go about making that money and how committed you are to long-term gains.
Forex trading isn’t ideal for those looking for a secure, consistent form of income over a period of years. Despite the absolute best approximations by experts, it’s still a completely unpredictable market.
However, that volatility is what can provide quick returns on investments. This market may prove highly profitable in a short amount of time.
If you intend to earn money for longer with less of the risk attached, a small eCommerce business may be perfect for you.
There are a variety of eCommerce business models out there, the most common of which being business to consumer (B2C). With the right business model and market, you can earn a steady stream of income for years to come.
Your Available Funds
Your funds tie into whether you need to focus on short-term or long-term profiting:
Forex is not for those with limited expendable income. As mentioned above, it’s a volatile market. It isn’t entirely a bad thing as it means your investments can prove profitable quickly. However, it also means your investments can drop their value unexpectedly. These losses are impossible to account for fully, so you need to prepare for the worst.
How do you prepare? By setting aside the money you can risk losing. Nobody likes losing money, but it’s par for the course for FX trading. You can minimize the likelihood of losing money, but it’s still a fairly inevitable circumstance.
With that in mind, it’s pretty strongly recommended that you don’t trade with this month’s rent. If you have the available income, however, foreign exchange trading is a potentially lucrative place to put it.
eCommerce is similar to an extent, but it does at least provide some security. You shouldn’t open an online store using this month’s rent, but returns and profits are easier to manage.
By following market trends and identifying profitable patterns, you can maintain a pretty consistent monthly income.
Your Appetite for Risk-Taking
The fact you’re even considering leaping into the worlds of forex trading or eCommerce means you have some taste for risk. However, the extent of that risk-taking streak will be the ultimate decision-maker.
If you’re afraid of risk, forex trading isn’t for you. It’s unpredictable and is entirely motivated by a high-risk high-reward mentality.
Trading foreign currencies always comes with varying degrees of risk. you have to think about not only the ever-changing exchange rate but other factors, such as volatile social and political situations in other countries.
eCommerce is all smooth-sailing, but by comparison, the risk is lower. The reduced risk is especially true if you utilize one of the many eCommerce platforms available to give you a jump start.
If you choose to move forward with a B2C model, the risks largely pertain to selecting the right products and marketing strategies. These are more manageable but require a degree of patience and commitment.
Your Aptitude for Market Research
Market research is vital for any industry, but especially for these two markets.
If you’re under the impression that market research is exclusively useful for eCommerce site-owners, think again. It’s also vital for forex trading.
While no value forecast can ever truly predict the future, it can identify patterns and allow you to place your investments at the best possible opportunity.
As mentioned earlier, with foreign exchange trading, you also have to know more than the financial markets and exchange rates of other countries. You also have to know the various situations that impact their economic standing.
If you don’t want to lose money, you have to know how global events will affect the economic market in which you trade.
In eCommerce, you need to keep an eye on a few interrelated items: consumer behavior, current, and Competitors activities (pricing, marketing, etc.)
There’s nothing wrong with taking some inspiration from the competition. Indeed, it can make you a better seller.
Markets become saturated quickly, but with the right research, you can make your products stand out. If you’re selling the same popular product as everybody else, why would anyone choose your brand?
Market research ensures you don’t fall victim to being just one of the masses of sellers.
To summarize everything we’ve said: If you’re willing to take risks and desire a quicker ROI, forex is your path. If you want consistent income and are willing to wait for it, eCommerce is more your speed.
There are unique pros and cons to each, and neither guarantees success. The superior option for you entirely comes down to your personal circumstance and outlook.
Author: Bowen Khong
Bio: Bowen Khong is a freelance digital marketer, and he enjoys writing about FinTech, productivity tools and marketing.