Running the online business in the same building as the store should be an advantage for vendors. Yes, there's cost with a storefront vs a warehouse and retail footage is more expensive than warehouse space, but unless you run the business out of your home you have to pay rent somewhere. Why not put it in a place where you can also sell to walk in customers?
There would be a couple of salaries to pay, but those people could switch off and work in the warehouse when walk in traffic is lower. I would expect to pay 10% more for the convenience of being able to stop by and stock up and I do run by on a whim and get what I need these days.