START AN GOOD E-COMMERCE
Introductory
"It is
time for us to stand and cheer for the doer, the achiever, the one who recognizes the challenge and
does something about it." - Vince Lombardi.
How does
ecommerce differ from entrepreneurialism? Well, the former is dependent on the latter. What this means
is that for every ecommerce business
there is an entrepreneur that had to balance risk and reward and determine to move forward
with a business plan, proposal
and ecommerce site.
Entrepreneurialism is bolstered by the ability
to develop a business that can reach
around the world and back.
Entrepreneurialism is the mindset
and soul of a business; ecommerce is how an entrepreneur
can realize a very personal dream.
Entrepreneurialism is a patchwork
quilt of ideas
that seeks out likeminded consumers through ecommerce.
These two roles are uniquely different, but also distinctly compatible in the development
of an online business. In all phases of development, the entrepreneur should express positive emotion as the very thing
only dreamed about comes closer to becoming a reality.
There are many wannabe
entrepreneurs who have dreams, but they gather
dust in the back of minds because of fear, poor choices or other
limitations that make it difficult
for these individuals to consider developing their own business.
Did you know
that President Abraham Lincoln, one of the most revered Presidents in history,
had a track record that indicated he was less than an ideal
candidate for success? He had little formal education coupled with personal, political and business loss. He
often seemed to side with the minority political opinion and he even went through
bankruptcy.
Yet it was this
President that brought about the end of slavery in America. It was his belief in justice
and freedom that caused him to rebound
from failure
after failure. He
learned what he could from the mistakes and discouragements
he encountered. In the end he prevailed in the radical alteration in how America
treated its citizens.
You may have tried using your entrepreneurial ambitions in an ecommerce
setting and failed. In that knowledge you may be gun shy about giving ecommerce a second try.
If there is
anything to learn from the life of President Lincoln it is that no matter how difficult things get it does not have to signal
the end of a dream.
Difficult circumstances can simply be the mechanism needed to come at
the problem from a new perspective
of perseverance.
“Many of life's failures
are people who did not realize how close they were to success when they
gave up.” - Thomas Edison
Chapter 1: Accounting Principles
Ecommerce was seen as a passing
fad or gimmick when the pioneers of the process
began.
Certainly, being
tied to a computer screen to make a purchase you would need to wait for wouldn’t
hold the interest of consumers. Yet inroads were
made and sales were conducted.
One of the prevailing difficulties associated with early online transactions was the safety
of personal financial information. As hackers
gained access to non-encrypted data it was a rallying
point for many ecommerce businesses. There
had to be a better way to do
online business.
The Debut of Encryption
Webopedia
describes encryption this way, “The translation of data into a secret
code. Encryption is the most effective way to achieve data security. To read an encrypted
file, you must have access
to a secret key or
password that enables you to decrypt it.”
The keys to
ecommerce were given back to online business when transactions became encrypted. The privacy of customer data allowed ecommerce to become a viable option
for consumers once more.
Suddenly the world of cottage industry and extensions of brick and mortar stores began to flourish and
entrepreneurs began to willingly dip their toe
into the cyber frontier.
This was a new way of doing business
in the cutting edge of intangibles. No longer
did business owners absolutely need a sales staff, no longer was an outgoing personality required for business
startup, no longer did business mean a storefront.
Business Without Borders
The possibilities expanded as more and more businesses began to recognize their business could be presented in a global fashion.
Business had been so associated with a town, region or district, but online business could be conducted without barriers or distinctions.
Ecommerce allowed
the ‘every man’ an opportunity to explore the world of business.
What had been seen as elite and unattainable was suddenly an archaic
notion. Ecommerce thrived on a ‘no discrimination’ policy.
Entrepreneurs of all ages, racial distinctions and economic levels
began to find value in marketing to a worldwide
clientele who cared more for the product
than the arena of personal definition that often-made brick and mortar
business more difficult.
An Interesting Paradigm
A phenomenon that
has taken place in many ecommerce stores is the advent of a growing percentage of online sales while brick
and mortar store
sales are either
static or in a slight
decline. This seems to
indicate a change in the purchasing decisions and shopping patterns
of consumers.
Perhaps in the future we will see more product fulfillment centers and fewer
brick and mortar storefronts as ecommerce continues to gain steam as a premier
shopping alternative.
Chapter
2: Ecommerce - The Positive Negative
Here are so many positives in
opening an ecommerce business online.
For instance, your business can be open 24 hours a day, seven days a week and it can be open on holidays even when you are personally enjoying
the festivities.
Ecommerce is typically much less expensive
to start than a brick
and mortar counterpart. In many ways it may seem
like a no-brainer to rush headlong into an ecommerce store.
However, some of
the negatives should also be considered. For instance, your website may be geared to a worldwide audience, but when you
launch the site it is simply
a little-known commodity on the edge of
cyberspace. It’s tough to have a grand opening online
because it can take a while for consumers to find
you.
So much rests on the rankings
of site engines to help ecommerce stores get up and running.
One of the things that consumers like about ecommerce
shopping is also one of the things that business owners find
most challenging – no personal contact
with buyer. Your automated ecommerce solution helps maximize productivity while minimizing direct
interaction with customers.
Some sense of
contact can be initiated through autoresponders that provide helpful tips and/or instructions to assist
the buyer with their new purchase or in understanding your business a little bit better.
Online businesses have discovered ways to present
the possibility of
consumer input…
1) Business Blog
(Blog) - This allows you to post personal
items about the product,
yourself and your ecommerce store. For certain customers this provides a personal touch they may still
desire. It also allows you some level of personal
interaction with consumers.
2) Forum – This allows business owners to
read up on what customers are saying
about the product. Questions can be answered and elements of the personal
touch can be clearly seen.
3) Feedback Form – Allow consumers the opportunity
to provide feedback (both good and
bad) that will be automatically posted on your website. This can help other customers make a decision
because the feedback did not originate with a
member of your ecommerce team.
When the feedback
is bad make sure to respond and if the product truly is not a solid performer make sure to remove it from your lineup
of available products. Even unhappy
consumers can appreciate your willingness to do the right thing.
Most consumers
are happy they don’t have to talk to a sales associate. As a business
owner you should also be thrilled
that this knowledge
provides you with an opportunity to reach out to
disenfranchised consumers with a product
they need in an environment they are comfortable with. Just make sure your do your best to optimize your
website so search engines can rank your site in
the best possible
way.
Chapter 3: eCommerce
Fundamentals
eCommerce can be VERY complex. To
offer a world class customer experience,
retailers must incorporate technologies and functionality that
exceeds rising customer
expectations.
On the flip side
however, site fundamentals still play a very large role in converting visitors into customers. Many
retailers surprisingly lose sight of these site basics and leave significant sales on the table. This brief examines
4 quick “fundamentals” every eCommerce manager cannot afford to lose sight of.
Think Fast
Speed has become less of a problem due to the penetration of broadband, but don’t forget that a significant
number of people still shop by a dialup connection.
When creating a site framework, designers and e-commerce teams should ensure that the site is developed with pages
loading in less than 9 seconds
(over a dial-up connection).
Our recommended page size is within 60-70k
in bytes. At that amount,
sites will likely load
within the maximum wait time of 9 seconds. Online retailers should avoid flash at all costs within
their transactional site. Flash’s artistic aspects
may help you establish a brand presence – but it will likely lose potential
customers before they have even searched
within your store.
Image is important
Images are a very
important aspect of selling online and are often neglected. All product
images should be of the highest resolution possible, be much larger than the product
page original, and have
multiple views.
Dynamic imaging capabilities can improve the user experience to an even higher level by increasing interactivity
(zoom & rotate). At a minimum
– retailers should
have at least two additional views outside of the
product page image to help build emotion.
Be my guest
Shoppers do not
like being forced to do anything, especially when they are ready to open their wallets.
Forcing a shopper
to register on your site before purchasing is a sure way to drive a
portion of your traffic to your competitors.
Too often, shoppers do not have the time or the inclination to fill out a lengthy form explaining what types of information they desire.
Always offer
the ability to checkout as a guest. You will see less customer leakage
within the checkout
process and can still offer the
option to register when the sale is completed.
Make sure it’s “above the fold”
Your homepage
is the most important page within your eCommerce store.
It sets the initial tone for
the shopping experience and offers your best
promotions and products to your visitors. Users typically visually scan
a web page from top to bottom and
then from left to right. All critical content and navigation options should be obvious to the shopper without
having to scroll down. If you have
your best promotions “below the fold” – you can bet that a large percentage of browsers are not scrolling down to
see it.
Chapter 4: All About Personal
Accounting
When you have a small home-based business, and are basically
just starting there are many ways to make
a large leap ahead.
One of these
great methods is to sell online merchandise. An online store can be set up relatively easily and e-commerce has been proven
to be quite successful.
There are many sites online these days that make e-commerce an excellent
decision for your business.
Microsoft now
offers a great service known as Bcentral, and is offering great deals on server and hosting packages that
run on a monthly scale, or basis. This
is a great tool for the individual that is looking to delve into the e- commerce
field. If you have an idea for a catalog, and need tools to get it up and
running such as templates, and logo creators this could be your solution you’ve
been waiting for.
Not only will you
receive the templates and the graphic creators, but also you will receive the quaint shopping cart in the top right-hand
side of the page. Having the
opportunity to track and control orders and sales is made very easy as you will receive automated conformation through e-mail.
Being able to become a member
in the PayPal system is also a good idea, as you can never have enough payment
options attached to your
site.
This just
increases your chances of sales. You will also be given the opportunity to keep track
of customer traffic
to your site as well.
This makes for a very handy
service indeed.
Another great service is provided by eBay, the stores offer a very popular alternative and have a sliding fee scale
to fit most businesses needs and budget.
The basic service is for the smaller of the businesses that have a smaller
volume of traffic.
This does not
mean that you will not have access to some great tools for your site. You will not be
able to keep track of the flow of traffic
or sales with this service and there is a very limited
directory, yet it is still a good service for
someone who is just starting out. The next level of the eBay service will provide
more for the business that may be needed
as time goes on.
It places your
priorities in relation to the product you are trying to sell; knowing
exactly what the consumer is looking for makes it easy for them to adjust
your targeted areas. You will get some traffic reports and sales figures,
but not many.
The third and final level of the eBay store program
is exactly where you want your business
to be placed. This is the premier spot
or the center stage. This is
the place where the bulk of the strongest traffic
will be located.
This will give you
a much stronger shot at making those sales.
Chapter 5: Everyday
Accounting
If you have a product oriented
business, the Internet offers a unique ability to reach a broad audience. With
new technology, it is easy to build your own
e-commerce store.
E-commerce Store
Today's world is an E-commerce (electronic commerce or e-com) world. E- commerce,
clearly termed as web commerce, basically means selling of merchandise or services over the Internet
with electronic transactions and also
through a secure network. E-com is not merely buying and selling or providing services but it is also a method
of advertising and marketing through an electronic system as well.
E-com also means
facilitating the progress of commercial transactions electronically. Right now, e-com is a well-established technology in all major countries. In most cases Internet
marketing requires you to have your own E-commerce
store for maximum return.
Requirements of an E-commerce Store
Building an
e-commerce store is not an easy job. Software is required that can manage customers as well as their
needs. E-commerce software should be
able to handle inventory, shipping and handling costs, taxes, dispatching and payment processing of client's orders.
You may encounter many options when setting out to build an e
commerce store.
Before choosing
any of them it is important to have a clear view of your requirements. Technical requirements might include coupons,
tracking systems, customer login
options or any number of other things. Other
requirements include what type of impression you want to provide to your valuable clients.
Study the Sales and Marketing
Cycle to Determine
Your Needs
Before you opt for any of solutions for building e commerce
store, study the basic model of e commerce that represents
the entire sales and marketing cycle. The first building
block of this cycle is audience in which you define
what type of
customers you will target. Second are commodities, in which you characterize the types of products you
will put on the market. Third is customer support
where you will answer the questions and offer solutions to clients' or potential clients' problems.
Next is advertising, marketing
and endorsement where
a business promotes
the products or services. Then there is transaction processing, the most important technical phase of the cycle,
which will handle orders, taxes, payment processing and order delivery.
Transactions may
be automatic or manual. In manual processing you have to enter credit
card information manually
through an offline
terminal. In the case
of automatic processing a client's order form will be setup with a program
that processes and charges the credit card for you.
After that
there are post-deal services regarding how you provide solutions and services after
the sale. Last but not least is brand name with which you will
create a distinctive business image to correspond with customers.
Nobody is going to pay attention to your online
store unless something
catches their eye.
Research your Options
Once you have
defined your needs, you can then begin researching your options. There are two basic paths you may follow when building
an e- commerce store - either buy
readymade software or build a custom system
with components and parts according to your requirements and budgets.
Flexibility
Some business
firms offer gifts and well placed impulse products for better marketing
approaches. This requires
an e-com solution
to be flexible enough to allow various giveaway’s, coupons and
promotions. Also, if your product comes
in a variety of models or styles, with different options and different prices then you must communicate these
factors and portray them distinctively in your online store.
A true
businessperson will certainly follow the patterns of his or her usual clients
as well as those who directly visit the site. Web statistic
tracking tools can be
a great help to this end.
Ease of Use
Some e commerce
stores are very easy to use and require only a few minutes to learn while others are more complex with so many features that
they can be overwhelming. Being able to see a demonstration of software before
buying it is a great help to
determining ease of use.
Scalability
Being able to
grow with your company is very important. If you choose a very simple solution
now, then require a more robust solution
down the road, you will lose time converting your
store. If the URL structure of your store
is not consistent, you can also lose search engine rankings by changing e commerce solutions.
Therefore, it is
important to choose an e commerce solution that can grow with you. For example, some stores owners may not want coupons
in the beginning but then down the road decide it is a good idea. Some stores
may also have limits on
number of products, inventory control and tracking that down the road will be very important.
Security
Of utmost importance to online stores
is transaction security. The priority for any
business firm should be secure transactions. Thanks to Netscape for introducing SSL (secure socket layer),
data can be protected by online store owners.
SSL is an
encryption technology that encrypts a message and the receiver decrypts it by using RSA security. To
enable SSL on your web server you need a digital ID (a form of identification that will recognize
you). Many web hosts
provide SSL installation for anywhere from a few bucks to a few hundred
bucks per year.
Overall, in
building your own e commerce store, four things are essential - flexibility, ease of use, security and scalability. Research
your options before
you make a final choice, and whenever possible, get a free trial of your solution before you buy.
Chapter
6: Fraud Protection And E- commerce
The bad guys that have this debit
card data are not going to attack online
merchants for goods that they will have to convert to cash. They have been walking straight
to the ATMs for the green dollar.
The impact on
merchants in the CNP world will be minimal; certainly, no more than a few numbers
of credit cards but probably
less. I do not think the CP merchants will feel it much
either. Consumers, on the other hand, are going
to take a huge hit.
As you probably
know, credit card holder's liability is limited to $50 under FTC regulations but I do not think
there is any such limit for debit
cards. The card holder is responsible for keeping
the PIN private and shame on him if it gets out and he does
not report the card
stolen.
And yes, the
banks will almost certainly do what they can to keep their card holding customers happy, particularly if
the cleaned-out account can be traced
to a compromised PIN by whoever it shakes out is accountable. Will that responsibility always
be traceable? I do not know. But even if the banks
in the end cover those losses, the cardholder has to deal with his
account being cleaned out and all that goes with it.
Fraud Protection on the long term
The big concern
for the merchant, on line and off, is if the consumer confidence disappears. We already have confirmation that
confidence in online transactions has
been falling a bit. This first debit/PIN compromise by itself is survivable, but if it turns out that it was not a one-time
thing and we have all of a sudden
discovered that PIN transactions are not as safe as we thought. Well, then on line merchants are in trouble and brick
& mortar could be in trouble as well.
And I wonder how
long the banks are able to calm down their debit card holders. When will they begin
to pass the losses to the cardholders like they already pass them on to the online
merchants now? It could become a matter of continued existence.
Chapter 7: Improve Conversion Rates –
Effective Content
Your site is fast and getting
traffic, but conversion rates are disappointing. You may have problems with the tone of your content
Do You Believe?
You must have
passion for the product or service you are providing. If you don’t believe in it, why should visitors
to your site? A lack of belief will result in weak content and poor
conversion rates. If you are selling quality,
you are doing the prospect a
favor. The tone of your site should reflect this in the content.
To effectively convert prospects, every entry page of your site must tell visitors:
1. What you offer,
2. How they will benefit,
and
3. Demand they take action.
Entry Pages
Many sites have conversion problems related to entry pages.
Most people automatically envision the home page as
the sole entry path to the site. Sweat, blood and
tears are spent making the home page just write.
Conversely, a fraction of the same effort is applied to internal pages.
This is a fundamental mistake.
If server
statistics are checked, you may be surprised to find significant amounts
of traffic entering your site through
internal pages of your site. Yes, a large percentage of visitors are
entering the site without seeing the home page.
If your “hook” is only on the home page, your conversions will suffer.
Make sure you have a concise summary
of your service and the benefits on every entry page to
the site and conversions will improve.
What You Offer
Tell visitors
exactly what you do with the first sentence.
Don’t be subtle.
You only have a few seconds to get their attention. Don’t waste
it. The opening
sentence should
read something like, “At XYZ, we offer quality tools at wholesale prices.” Bam! The prospect knows exactly what you are
offering and if it fills their need.
Benefits
Tell your prospect how they will benefit
from doing business with you. Don’t assume they understand it. Again, be
blunt with something like, “You save money when you buy from us because we have
a low overhead and free
shipping.” Bam!
Now the visitor knows you sell tools at a low price. This combination should result in shopping activity
if they have any need for the tool products.
Demand Action
What do you want prospects to do when they visit your site? At the end of
your content,
make sure you tell them. “Click here to order” is a perfectly
fine statement, but adding a benefit is optimal. “Click here to order
with free shipping” is a superior
demand. Regardless, make sure you tell them what to do and make
it is easy as possible
to take the requested action.
If you are offering quality,
you are doing clients
a favor. Make sure the tone of your
site reflects that fact.
Chapter
8: Managing An Ecommerce Business
Many ecommerce
business owners have a hard time understanding
trends. An ecommerce business runs on the same cycles as a brick- and-mortar business.
The dot com
industry learned that ten years ago. They believed they could ride the wave forever, then everything
crashed. This left many people wondering what happened. The fact is, nothing happened. The ecommerce business community worked like all
markets do.
Tracking a
business’s cycle is easy. All the business owner needs to understand is a few basics, and track how
they interact, and how that interaction effects
profits. This can be done on a simple spread
sheet, or in a table
in Word.
The Consumer
Sales techniques come and go. In today’s market, the best way to sell is
by creating a relationship, and /
or educating the consumer about the product.
In the sixties appliances were sold by promising to make mom’s life easier.
In the eighties
men stood on platforms in malls and laughed at their wife’s stupidity, and challenged the men passing
by that if they wanted their tomatoes sliced
properly, they needed
to purchase the knife on sale. Both of these
sales techniques would fail today because the consumer has changed.
The new marketing
tool is a web site. It is still so new that most business owners mistake it for a digital brochure.
Even the simplest website is capable of drawing consumers from a large area, and varied demographic.
There are three
variables it must contain to be effective. The first is graphics. Image is everything. The second is content. The web
site is a wonderful place to educate
future clients, stay in touch with current
clients, and send out
newsletters and emails informing clients of events they would be interested in.
Trends
Many trends
affect the types of products
and services people
will purchase. Is this the time to bring out a high
carbohydrate treat, when 17 million of the late Dr.
Atkins’ books are sold as soon as they are released?
When everyone is downsizing, is it the time to make a new office
divider that gives
the workers more privacy and comfort? It might be, if
there is a way to make it possible to address some of the cubicle etiquette problems.
All businesses
have trends that directly affect their success. Finding these trends
is one way to ensure
a business’s growth.
However, ride it, then abandoned for the next trend.
It is important to remember that trends
are started by society. If television does not strengthen the believe that
‘skinny is beautiful’ then Dr. Atkins empire
would crumble. If people were more social then cubicles would not have replaced
the typing pool.
Life Cycle / Business Cycle
When a business
is in its infant stage, there is an over population of potential customers, because the business has not created a
niche. Meeting the demands of your
customers is important, but always be aware that trends change, and life cycles
come to an end. That is why business owners should update
their marketing information at least once a year.
Every product has a life cycle. Every
business has a cycle.
A good manager
watches the trends carefully. Sometimes a change of advertising venue is needed. Other times may demand a new
product. Maybe the product needs to
be changed to meet new market demands. It is
the business owner’s job, and marketing manager, to make stay a few months ahead of the game.
Staying ahead
of the game can keep a business
one-step ahead of their competition
Chapter
9: Shopping Carts and Online Stores
Setting up an internet shop can
be very confusing and bewildering, especially if you are someone with very limited
technical knowledge.
With hoards and
hordes of solutions available, offered by thousands upon thousands of website
design companies and software developers, it is easy
to choose a system that may not necessarily suit your business.
Many companies
have spent a lot of money on their ecommerce website solution, only to find that it does not work for their business. Unfortunately for them, this usually means a trip back to the drawing board,
arguments with their developer and
inevitably the need to spend more money so that the site will work in
exactly the way they want to.
So, what can be
done to make sure that the shopping cart solution you choose is the right one for your business? First of all, you
must have a clear idea of what you
want to achieve from the site. Spend some time to make good notes and write down a clear and concise
plan and method of operation for your site.
If will help very much if
you take a good look at
your
competitor’s websites, especially the successful ones.
Visit your
competitor’s sites, browse through the various sections, making notes about the structure of the pages,
the site navigation and anything else of interest. Ask yourself questions as
you check through the site. Are you able to quickly find the items you are searching for?
Is the checkout
system simple to use? These are just some of the elements you should be looking at. Compile as much
information as you can, take the best
constituents and combine them with your own ideas to create a well- defined
and structured plan of
what you need. Once you have put together a well
thought out site plan with all the required features, it will make up good a brief that can be worked on by a website designer.
How you go about turning
your site plan into an actual website
will depend on the budget you have to spend. There
are many options that can be explored, from shopping cart software that will enable
you to build your
online store
yourself through ready
built, off the shelf solutions
right up to completely
bespoke programmed websites built from the ground up by a competent
web development company.
Whatever route
you take, you should spend time researching the various systems and improving your knowledge so that you can make the
right decision before committing yourself
to spending lots of time or money on your
project.
Although you can spend a small
fortune getting you on line store
up a
running, you really don’t have to. There are simple to use systems
which use tried and tested technology to get you
up and running in a short period of time.
Many of these systems don’t require you to have any technical knowledge
either.
To take credit card payment for goods online
you will have to make use of a web based payment gateway. There are
many to choose from but all of the payment
processing solutions make profits by charging you a percentage of the transaction fee, so you must make
sure to take this into consideration when calculating you profit margins.
Look for an ecommerce system that is readily
configured to use the payment
gateway you choose. This way, once you have opened your merchant, account all you need do to start to take
credit card payments through your website is enter
your merchant account number into a web page form in your site
admin.
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