Setting Up Shop in Cyberspace
With research firms projecting e-commerce revenues totaling more than $100 billionin 2003, businesses large and small are considering jumping into theelectronic commerce marketplace.
The Internet is quickly becoming a crucial factor in many small companies'growth strategies. According to an e-merchant study released earlier thisyear by Internet market research firm Keenan Vision, the number ofe-merchants will number 400,000 in 2003.
Yet, building an electronic storefront may seem particularly daunting tosmall businesses and retailers; the maze of e-commerce products andservices available makes it easy for a merchant to get lost. Many smallcompanies find building and hosting a Web site on their own to becost-prohibitive, and generating traffic to their sites can also prove to bea difficult undertaking.
Clearly, building the right foundation for successful e-tailing takescareful consideration and solid strategy, but the step-by-step process thatfollows should help demystify the process and provide an easy-to-followguide.
It's also important to note that a full-service transactional Web site maynot necessarily be the right strategy for all merchants. If theproducts or services you offer do not lend themselves to the Web, or if selling online isnot a key objective for your company, you may want to consider a "brochure"site that promotes your business and helps create foot traffic at yourbrick-and-mortar office or shop. A brochure site does not sell products orservices online, but instead is meant to be informational and serve as anadvertising/promotional tool.
Five Basic Steps
There are five basic steps to complete before transacting business on yourWeb site. You may select separate vendors to assist you in each step or lookfor a vendor that provides an integrated solution. Choosing one vendor thatoffers a suite of e-commerce services can simplify the process (and savetime and money).
The following steps outline the things you need to consider when moving yourbusiness online.
1. Domain Name Registration
What's in a name? Plenty when you are an e-tailer. It is not only yourcompany's brand name, it's also your address in cyberspace. Once you'veselected what that name will be, you must register it with InterNIC, theagency that registers and maintains a database of domain names. You canobtain a domain name directly from one of many providers - NetworkSolutions.com and Register.com are just two examples of theseregistrars. However, your Internet Service Provider or your e-commerceservice vendor(s) will often perform this task for you.
2. Web Store Design
The key decision at this step is to determine whether you plan to build yoursite yourself or have a provider build it for you. If you choose to buildyour site yourself (either by purchasing a related software package or usinga "browser-based" store-building package that you download from the Web),keep in mind you will not only have the initial task of construction butalso the ongoing responsibility of making modifications to the site.
With many Web-building services and software products available to assistbusinesses in designing a Web store, you do not have to take on this projectby yourself. However, even with a Web-building service provider, you stillmust consider several critical issues to ensure that the site you buildmeets your vision and needs:
What products/services do you want to sell?
What do you want the look and feel of your logo and your site overall tobe?
What type of navigation tools do you want to use?
By what forms of payment do you wish to transact business?
How are you going to calculate tax and shipping charges?
Once you've made these decisions, you are ready to develop your productcatalog. You'll need to provide necessary information on each product, such asdescription, color, size, and price. This catalog is expandable, so that youmay add to it as your business and product offering grows.
After the product catalog is completed, your Web building vendor can publishyour Web site online.
3. Server Hosting
Another major decision that businesses joining the electronic marketplacemust face is whether to buy a server and host their Web site in-house, or tooutsource the entire operation to a service provider. For many smallerbusinesses, outsourcing is the most viable and cost-effective option.Establishing your own operation is complicated and can take several months'setup time, whereas you can get set up in less than an hour if you use a hosting service. A hosting service will also speed the time it takes customers to download pages on yourWeb site, improving the customers' experience on your site.
4. Payment Solutions
In order to become truly e-commerce enabled, you must have the following:
- payment software
- a merchant account
- payment processing services
- agateway to connect all these elements of the payment process.
You also willneed cash register software to help easily calculate sales tax andshipping charges, and you may want to include a shopping cart function as well.
In order to start transacting business and accepting payments, you mustfirst open an account with a merchant bank. Once you have established an account, your merchant bank retains the services of a payment processing company to "acquire" transactions of yourcustomers, secure the funds from the customers' credit card issuer, and placethat money into your merchant account. This is the last part of the paymentsolutions equation
5. Traffic Coverage
"If you build it they will come."
If only it were that easy with e-tailing. However, no matter how great yourWeb site is, no one will come to it if they don't know you are there. Thisis where driving traffic and transactions becomes an essential element ofyour e-commerce plan.
The first step in building traffic is registering your site with searchengines. Again, there are vendors that will do this for you. Forregistration, you will need to think of "meta tags" or keywords that willbe associated with your site.
In addition, one old rule that still holds true in the virtual economy is"Location, location, location." Much like putting your store in a realshopping mall, having your storefront in a shopping portal not only giveshigher visibility but helps draw in "window shoppers."
Another advantage of being a part of a virtual mall is the possibility ofcross promotions with other e-stores. You can establish relationships withsites that reach a similar demographic group and offer premiums in exchangefor links, referrals, and demographic information. For instance, you andanother e-merchant could include taglines about each other's stores in yourpurchase confirmation e-mails.
Now that you've read about the five stages of building an electronicstorefront, take a deep breath. These five steps may sound a bit cumbersome,but remember, you can streamline that process by using an integratede-commerce solution.
Congratulations. After completing these five steps of development, yourelectronic storefront is open and ready for business, 24 hours a day, sevendays a week, accessible to the millions of consumers logging onto to theInternet each day.