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Building an Online Store -
What You Need to
Know to Start Selling Online
by John Lally
A recent nationwide study* of small businesses
revealed that 78 percent indicated their company benefits from
having a Web site. In addition, more than a quarter (26 percent)
of those that don’t currently sell products online plan to add
e-commerce capabilities to their site within the next two years.
The question these small business owners have is how?
Despite what you may have heard, you don’t have to be a computer
whiz to learn how to build a profitable Web site. All it takes
to master online selling is a clear idea of your business, a
realistic sense of your level of technical expertise and a
strategy that integrates both.
To sell online, you first need to know the products or services
you want to sell, how you will fulfill orders, and the sales
approach you will take.
Offering
First, you should decide what you plan to sell. Consider whether
your products or services are a good fit for online selling. Are
other businesses selling similar things online? If so, is there
room for your business? For instance, if you want to set up a
Web site to sell books, you should consider whether or not your
products are unique enough to compete with Amazon — one of the
top 10 most-visited sites online.
Fulfillment
While you’re thinking about what you’re going to sell, you
should also consider whether or not you can quickly and
efficiently fill orders. If your sales suddenly increase, do you
have systems set up to handle that? What will your shipping and
handling policies be? What is your return policy? Research shows
that good customer service is very important to online buyers.
How will you handle customer inquiries and issues? Many visitors
are still wary of shopping online. Creating a sense of trust
through clear explanations of policies and with strong customer
service is essential. If these pieces are not in place, you’ll
lose sales.
Commitment
You’ve now thought about what you’re going to sell and how
you’re going to sell it. Before you investigate the different
ways of achieving your goals, you should consider one more
question: Do you have the commitment it takes to launch a
successful e-commerce venture? In many ways, running an
e-commerce business requires much more efficiency than an
offline, traditional business. It also requires commitment
because the Internet is always changing. Those who profit most
from online sales are business people who are not afraid to
constantly grow and adapt. E-commerce is a huge opportunity, but
it does take work. Once you are online, the work does not end.
It’s vital that you market your site (using online and offline
methods) to increase its success.
Strategy & Approach
Finally, you have to decide on an approach. Do you want to sell
from your own Web site, or take the quicker route and add your
products to an established site? Or do you want to hire someone
else to do it all for you? There are advantages and
disadvantages to each approach.
Selling From Your Own Site
Creating your own site is the best e-commerce avenue to take if
you’re serious about selling online. You can control all aspects
of the customer experience and create relationships that will
lead to future sales. In addition, you can better market your
own site by featuring your URL (your site’s Web address) in all
offline advertising and paperwork including invoices, shipping
packing slips, etc. With your own site, you can use search
engines and pay-per-click keyword advertising to market your
site and increase your visibility.
That said, your approach to implementing e-commerce on your site
should be determined based on the number of products you have to
sell.
Business: You want to sell 1-10 products on your Web site;
Solution: Online Portfolio.
If you only have between 1 and 10 products to sell online, you
may want to create a basic online portfolio (catalog) with
images, descriptions and prices. This will allow your customers
to easily and conveniently browse your product offerings online.
Implementing a basic online portfolio is the easiest solution to
do yourself, and doesn’t require you make any special
arrangements for online payments. Customers who see a product on
your site that they
would like to purchase simply mail, phone, or fax orders to you
for fulfillment.
The only drawback to this option is that many of your customers,
already accustomed to the ease of purchasing online, may go
elsewhere because you don’t have credit card purchasing
capabilities on your site. If you feel that this describes your
customers, then you might want to consider a storefront-building
application.
Business: You want to sell 11-100 products on your Web site;
Solution: Online Storefront.
If you have between 11 and 100 items for sale, you should
consider using a storefront-building application to create an
online storefront. Using your online storefront, visitors can
browse and pay for items completely online.
An online storefront should consist of a catalog and a shopping
cart. The catalog area of the storefront contains images and
descriptions of products. Products are typically organized into
categories that let visitors easily find what they’re looking
for. Most catalogs include pages with smaller images of a number
of products, so visitors can browse and compare. When a visitor
clicks one of these thumbnail images, a page with more detail
about that particular product appears.
Leading online storefronts also include a shopping cart, which
recreates an in-person shopping experience by letting visitors
pick the products they want as they browse through the catalog,
and then go through a “check out” to actually purchase them.
At check out, visitors pay for their purchases using a credit
card. Online storefronts with 100 or less products often use a
third-party service such as PayPal to process credit card
payments. These services deal with verifying the credit card
information and transferring money between accounts. More
advanced online storefronts with a large number of products can
set up credit card processing right on their own site, but it’s
more complicated.
Business: You want to sell more than 100 products on your Web
site; Solution: Advanced Online Storefront.
If you are selling more than 100 products, you should consider
advanced storefront-building software from companies such as
Cignant, Digital River and Interland, with features such as
inventory tracking and the ability to perform automatic price
adjustments for different shipping options, sales tax, and
discounts. Advanced storefront-building software can be very
complicated, however, and may require some knowledge of computer
programming. Unless you are technically sophisticated, you will
likely need some help to work with all the features.
Most businesses that implement an advanced storefront solution
also add the ability to process credit card orders right from
their own site, which allows a more integrated user experience,
quicker access to payments, and better tracking of money and
charge backs. However, setting up your site to take credit card
payments is a complex undertaking, and really only pays if you
are selling in very high volumes or at high prices.
Selling from an Established Site
Selling from auction sites or digital malls is quick and easy,
but can be costly and doesn’t provide much opportunity to build
your own brand.
Online auction sites like eBay allow anyone to add an item for
sale. You can either set a fixed price or let people bid to
purchase the item. Payment for the item(s) is handled by the
auction site, which takes a percentage of the purchase price. A
merchant who sells goods on an auction site handles fulfillment
— shipping the item to the customer who purchased it.
Although popular and easy to use, auction sites have some
drawbacks. They tend to take a high commission from sales. If
you decide to use an auction site, you will want to consider
whether or not the site’s commission percentage will negatively
affect your profit margin.
Auction sites also have strict rules about selling directly to
customers, which leaves little opportunity for you to promote
your own brand: your business name and logo. For instance, when
a customer buys your custom-made picture frames on eBay, she
generally will not know the name of your business. So, when her
friends ask her where she purchased the frames, she will most
likely say, “on eBay” as opposed to saying, “from Smith’s Custom
Frame Shop” which would provide your business with some
additional promotion. For some business, the loss of brand
recognition is not a concern at all. For other merchants who are
interested in building their brand name, this may not be the
best choice.
In addition, merchants don’t have total control of fulfillment
and customer care. So, a customer who has a bad experience with
one merchant on an auction site may be unwilling to buy from
another, totally unrelated merchant.
A digital mall is an e-commerce site on which you can create
your own storefront and feature your products, just by uploading
pictures and filling in forms. Altura International, CCNOW, or
Yahoo! Store® are examples of a digital mall.
Having a storefront on a digital mall is similar to renting
space in a real mall. You’ll pay a monthly fee, and the digital
mall may also take a percentage of the products you sell. The
upside is that you won’t have to worry about processing credit
cards or setting up a shopping cart — it will all be handled for
you. (There are sometimes extra charges for these services.)
In most cases, you won’t have much control over the design of
your site in a digital mall. There will be a limited number of
templates from which you can choose, and very little opportunity
for customization or building your brand.
Business: You want to sell a service on your Web site;
Solution: Online Scheduling Tool.
A new generation of online scheduling tools, such as those from
AppointmentQuest, Time Trade and Office Tracker have brought
e-commerce to businesses that focus on selling services. Online
scheduling can be an invaluable resource if your business relies
on scheduled appointments to make sales.
For instance, a hair salon could enter the days and times that
salon staff is available for appointments. Customers would then
simply access the salon’s Web site and review the current
appointment schedule to set up and pay for their own appointment
using a credit card.
If this sounds like it could work for your business, you might
want to use an online scheduling tool that can take payments as
a visitor makes an appointment. As with storefront-building
software, online scheduling tools usually have options for
accepting online credit card payments either through a
third-party service or directly on your site.
Rest assured, there’s an e-commerce solution for everyone —
whether you’re new to the Internet or a programming guru.
John Lally is area vice president for Interland, a leading
provider of Web hosting and online services for small and medium
businesses.
Contact Vox Novus Media today to let us help you create your
website!
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