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Small Business E-Commerce: Starting Your Business

 

OBJECTIVE: E-commerce is the sale of products and services over the internet, and the fastest growing segment of our economy. It allows even the smallest business to reach a global audience with its product or message with minimal cost. In this session, you will learn if an e-commerce website is right for your business, how to set up a website, tips for developing a successful site, how to manage search engine placement, and how to get started on eBay.

  • E-Commerce Overview
    • What is E-Commerce?
    • Is an E-Commerce website right for your business?
    • The three segments of E-Commerce
  • Money Transactions
    • E-Commerce Considerations
    • Alternative methods of online payments
    • Money transactions summary
  • Setting Up a Website
    • Registering your domain name
    • Hosting your website
    • Building your website
    • Hiring a professional website developer
    • Designing your own website
  • Tips For Developing a Successful Site
    • Make your site easy to use
    • Provide useful content
    • Encourage customer feedback
    • Develop a mailing list
    • Encourage Social Media
    • Make sure your website is optimized for mobile viewing
  • Online Marketing and Promotion
    • Search engines: your primary marketing tool
    • How does your website rank?
    • What are people searching for?
    • How to manage search engine placement
    • Key components of successful search engine marketing for a website
    • Outsourcing search engine optimization 
    • Targeted e-Mail
  • E-commerce platforms
  • Top Ten Do's and Don'ts
  • Business Plan

 

E-commerce Overview

What is e-commerce?

E-Commerce is the sale of products and services over the Internet. It is the fastest growing segment of our economy; E-Commerce sales are expected to reach $550 Billion by 2020 and will grow by over 17% just in 2016. Shopping on smart phones is expected to drive this continuous growth as smartphones continue to get larger and consumers become more comfortable with the technology. Engaging in E-Commerce allows even the smallest business to reach a global audience with its product or message with minimal cost. The sale of products or services on your website can generate sales that will make the difference between success and failure.

There are three segments of E-Commerce you should be familiar with. The First segment, Online Shopping (B2C) is the most well-known segment. The second segment is Business to Business (B2B) where businesses sell to other businesses or buy from a wholesaler. The last segment is the fastest growing segment, Consumer to Consumer (C2C). This segment gives individuals and sole proprietors the ability to sell items on sites such as Ebay and Etsy. It is important to understand what segment you are in because it will change the way you market your site and interact with your customer.

Is an e-commerce website right for your business?

Probably. Much depends on the nature of your business. Websites such as Amazon.com have an established place in the market, and their sheer size, name recognition and the relationship of trust they have with their customers allows them to dominate this market with good pricing (due to economies of scale) and remarkable customer loyalty.

However, if you own a local company, there are several ways to reach new customers, get them to know you better and have them keep coming back for more. You might want to offer notices of special promotions or in-store special events. Trust will become the cornerstone of building your e-business. As Warren Buffett has said, "If you don't know jewelry, know your jeweler."

A website doesn't need to exist solely to sell your product online. It could supplement the sales of your already established retail store. If you sell a unique product, such as wheat grass or gourmet chocolates, you might find success reaching others around the country (or the world, for that matter) who do not have access to these products in their own towns.

Using the Internet for conducting e-commerce will not assure you of being able to compete favorably with large established competitors. They already have the inventory, delivery and marketing systems in place, and they can deliver the orders just as cheap as (or more cheaply than) you can. Yet, the beauty of the Internet is that it provides a global audience of potential customers and it never closes.

Your customers will have access to information about your business 24 hours a day, 365 days a year. You can add pictures, audio, video, news, and so much more. Your customer will even be able to buy from you 24 hours a day. So, your website address should be promoted everywhere including your stationery, sales forms, and advertisements.

A website can transform a local business into one engaged in global commerce. But you will need to be aware of the advantages and disadvantages of international trade outlined in our Session 11 in the Business Expansion course.

Money Transactions

There are many ways to complete money transactions online. If you already have an established website that your clients know, you will probably want to keep it and can add on an e-commerce solution. If you do not have an e-commerce website, you may consider e-commerce solutions offered by major online sites such as Yahoo, Amazon, and Google with little to no web design experience needed. (Enter "commerce solutions" in the search box.) Online auction sites such as eBay, Yahoo, and Google might also offer additional avenues for your business. Payment processing companies such as Square, Intuit and Paypal are yet another avenue for collecting funds online and may offer solutions to use their payment systems in person as well. Consider hiring and/or consulting with an experienced web designer or firm to set this up for you. Their experience can often save you time, money, and unnecessary aggravation.

E-Commerce Considerations

  • Be sure to take into account all your costs such as monthly e-commerce fees, packaging costs, shipping costs, time, etc. You will also want to take into consideration costs associated with your return policies.
  • Some payment processors require a deposit account for customer chargebacks and warranty claims and/or hold money back for a period of time before dispersing to you. Be mindful of these rules and the limited cash flow you might have until you can overcome these guarantee periods.
  • For internet-based orders and shipping, you should check with your State Board of Equalization Office to determine the appropriate sales tax. The IRS "Small Business and Self-Employed Tax Center" provides valuable information and links regarding taxes
  • You will also need to check the states regulations that you are shipping to on tax law, prohibited items and customer warranty requirements.

Alternative methods of online payments:

Cash payments are less advanced but easier to set up. Funds are transferred from the buyer's bank account or credit card to the seller's account, via companies like PayPal. There are also other companies that allow you to accept online payments and provide a smart phone app to process payments in person. Companies like Intuit and Square both have secure payment processing systems that allow you process payments in person with a physical card and also connect to your website for secure processing.

Money transactions summary

Consider issues such as taxes, security, cost, regulations and reliability. If your site becomes very popular, your e-commerce system will need to be scalable to that growth. Many more electronic payment companies can be found on the popular search engine Google.

Setting Up a Website

Before you get started you need to answer the following questions:

  • What types of customers will you attract?
  • How will these customers interact with your website, and how can you make your website promote that interaction?
  • How many sales do you expect to make each month from just your website? What additions would you like to add once you get going?
  • What are your competitors doing on their websites? What do your potential customers like and dislike about your competitor’s sites (use this time to do some competitor research and check reviews).
  • Are you going to integrate a CRM (Customer Relationship Management) system? If so, will your CRM choice integrate into your website?
  • Can your website be optimized for mobile viewing?
  • When looking at website hosting, is there a cap on hosting size or traffic? What is the reliability of the hosting firm in regards to outages? Do they have full packages for hosting, domain purchase and email exchanges? Can you link to your company’s social media platforms?

Setting up a professional Web presence with an e-commerce system can be a big project . Be sure to consult with professionals in this field who have experience in e-commerce, not just web design.

Registering Your Domain Name

Each website has its own unique name, such as Amazon.com or eBay.com. This is your "domain name." It is a unique name that identifies you to all of the other computers on the Internet. There are a number of companies, known as "registrars," that will assist you in registering your website's name.

Find an easy-to-remember ".com" name for your site. Once you've successfully registered your domain name, it will remain in your name and control for as long as you pay to keep it. There are typically promotions that give you the first year for a low price, however you can lock those low prices in if you pay for and register for multiple years. People who type www.yourcompanyname.com into their browsers will be taken directly to your website. To completely secure a name, it's not a bad idea to also buy the .net and .org and .biz extensions for it.

Your company name, trademarks, logos and artwork used on your site will require appropriate trademark and copyright protection under intellectual property laws. Your lawyer should be consulted on this issue in order to avoid unpleasant surprises (for example, the possibility of being advised that your company slogan belongs to someone else). You can also do a quick check at the US Patent and Trademarks office: www.uspto.gov. Remember to frequently check into the patent and trademark office as sometimes it takes months for other company information to show up on the website. Also beware of fraudulent interntional accounts. These sites are opened to try to convince your customers to buy your product or one similar to yours off their websites buy using domains that are similar to yours or off by one frequently mis-typed character. If you have a product that needs to be more protected in this area, it is sometimes important to register the domain names where this could happen to prevent this fraudulent activity.

Hosting your website

Your online business will need a place to reside. You may choose to buy (by having your own network server) or lease (by having your site hosted by a Web-hosting service). In most cases, people find it much easier to lease hosting space. For a monthly fee, the web host handles the technical details, and you are free to spend your time developing content for your website. Most of the companies that you can buy your domain from will also offer hosting packages for your site. It is important to also chose a hosting company that will provide a quality email program that is attached to your domain. In this case, cheaper is not always better. Check the hosting companies packages to purchase a domain with hosting and email as well as read reviews on user ability and reliability.

Hosting services can also provide "user statistics," which track the number of visitors to your site.

Building your website

You will need to decide whether to hire a professional web developer to create your website or to produce your own site "in-house." Both choices come with costs and benefits. If you decide to create your website, it is advisable to have an employee who is skilled and experienced with web design.

If you have a real desire to learn how to create your own site, spend some time with online tutorials on creating your own site. Your credibility is at stake, and if your site is difficult to navigate, has broken links or images or out-of-date content, you will not engender trust with your customers.

Most of the companies that you can purchase your hosting and domain packages from have some website templates. If you choose to use a template from one of these sites, make sure that the design is customizable to prevent you from looking like everyone else. You will also want to make sure the website it easy to use so it is important to do your research and visit other company’s sites that have used the template designs. Make sure the templates allow you to integrate some tools to engage your customers such as a blog and allows you to link your site to your businesses social media pages.

Tools such as Adobe Dreamweaver® allow you to create a website without any (or much) prior knowledge of Web design. These "what you see is what you get" editors are similar to programs such as Microsoft Word in that you insert text and graphics onto your page and specify the appropriate links. Pre-defined templates give a consistent look and feel to your entire site and built-in tools allow you to globally change navigational links throughout your site.

These programs have improved significantly in recent years but are not a perfect substitute for a professional web developer/designer. Advanced features are difficult to implement. When having someone else design your webpage, once completed, ask for all the files related to the website on a flashdrive. This way, if for some reason the designer is no longer available and something happens to your site, you can give these files to another designer to work on.

Hiring a professional website developer

Before hiring a web developer, it's important to determine

  • The purpose and budget of your website, as well as the ongoing maintenance needs.
  • Who will provide the content and who will own the copyrights for these materials.
  • Whether the developer will be responsible for both design and marketing of your website.

Look at other websites the developer has created and ask for references. Did the developer deliver the product in a timely manner at the quoted price? Did the developer listen effectively and present a product that matched the company's vision?

Once you've identified your developer, get a written contract that specifies the responsibilities of the developer, the timelines for project completion and a complete budget for the total project. This should include arrangements for ongoing maintenance of the site. Keep in mind the developer you choose is someone you will most likely have a long-term relationship with as you add and improve the website. Ask for the files related to the website. This will insure that if the developer is no longer available and changes need to be made or something happens to your website, you can hire another developer to work on the project.

Contracting out your website offers several advantages. A professional developer has the technical knowledge to create a site that works with all browsers and should be fluent with the current technologies. Investing in a professional developer will allow you to spend more time on creating a successful business and less time learning the new trade of being your own website developer.

Tips for Developing a Successful Site

Make your site easy to use:

While it might be tempting to have a cutting-edge website - don't forget the basics. You will fail if a visitor can't navigate successfully through your site. Provide clear, easy-to-understand navigational tools on each page of your site. Make it easy for a visitor to find your contact information on every page. Keep the site up to date and change the navigational tools when needed.

Provide useful content: Don't just sell! These days, it's not enough to have a website that lists your products and provides a shopping cart for purchases. If you want your visitors to return, you'll want to provide meaningful content. A CPA's site could publish tax tips and offer links to IRS forms. A catering service could offer articles on how to host a successful party.

Encourage customer feedback via online forms and e-mail:

Pay attention to the valuable information your customers can give you. Ways to improve online feedback are spelled out in our Session 3 in the Business Expansion course.

Develop a mailing list: Most consumers resent junk e-mail, also called "spam." A far more appealing strategy is to develop a mailing list. Invite your customers to "opt in" to receive a newsletter or notices of specials running at your business. Make this information relevant and useful for your customer. Consider providing a "coupon" that will give them a discount on their next purchase. And, always give the recipient an easy means to "opt out" of receiving future e-mails. 

Encourage social media: Make sure that your site has clear access to “like” or visit your social media platforms. This is another way for you to engage your customers and it is expected!

Make sure your site is optimized for mobile viewing:

The majority of growth in the E-Commerce sector is due to browsing on smart phones, with an estimated 80% of internet browsing being done on a smart phone. Just because you build a website, doesn’t mean it will show correctly on these smart phones. Make sure that your site has a “mobile” version and test it frequently for issues.

Online Marketing and Promotion

There are thousands of well-designed websites, but very few are visible on the search engines. Almost 90 percent of Internet users today use search engines to find the information they need. Yet, many businesses are not registered with search engines. Over 3.5 billion searches are done per day worldwide. Search engines have a great capacity to drive traffic to your site, yet few new entrepreneurs have the know-how to tap into this resource.

Search engines: your primary marketing tool

In the past, the methods that search engines used to rank pages were primitive and easily deciphered for savvy webmasters to manipulate.

Times have changed and gaining a high rank on the top search engines has become extremely competitive. Today, submitting your website to a large number of free search engines will only result in your e-mail address being added to a large number of spam lists. Search engines are now looking to provide quality listings for their users, but also to turn a profit: hence "paid listings."

How does your website rank?

It is important to monitor your search engine rankings so that you can track changes, monitor the ones that you need to improve and identify engines with whom you are not listed. If your customers did a search for specific keywords on a search engine, would they find your site? Are you in the first 10 results or the first 30? The average visitor scrolls through 1.8-page results during a typical search. If your business does not appear in those first 1.8 results, that could translate to lost business.

What are people searching for?

"Search volume" is the number of times a specific keyword is searched over a period of time. Having knowledge of search volumes will give you a sense for what is being searched for and what keywords you may want to focus on. The goal is to find keywords or keyword phrases that you feel would drive qualified traffic to your site. These keywords need to be in line with the content you have on your site and should be unique. Keep in mind the amount of competition for each keyword and be creative in finding different keyword combinations that others may not have tried yet.

How to manage search engine placement

It takes hard work, market research, educated decisions, and even trial and error. There are ways to improve your rankings - and actions to avoid that will hurt your rankings. While you have the option of hiring a search engine consultant to manage this important responsibility, you can also do this yourself. Here are the factors that go into search engine placement and how to better optimize your pages for search engines.

Key components of successful search engine marketing for a website

  • Start with a descriptive domain name: The domain name you choose is important. It is so very important because the name itself can help your website be more relevant to search engines. Pick a domain name that is easy for your clients to remember.
  • Submit to the top engines: Submit your website for review and indexing only to the top search engines where people are actually doing their searches such as Google, Yahoo, MSN, etc. Be careful to read the submission guidelines for each search engine before submitting. For example, have a look at Google's search engine guidelines. Check in with Google frequently as they sometimes have classes for the business owner on how to master optimization on their platform.
  • Make sure your business also has a home: Register for google places and other business listings. The more your business is visible on the internet, the higher your optimization will go.
  • Focus on your homepage: Your homepage is the single most important page on your site. Your homepage represents your business and its image. Make sure you focus on developing the content and the relevancy to search engines for this page.
  • Develop content rich pages: Add content that includes keywords and phrases you are targeting. Many search engines consider the location of the keywords in your site along with their frequency to assess how relevant your site is to those keywords.
  • Keep an eye on your competition: Stay informed of your competition's rankings. Top-ranked pages rank well for a reason - so see what you can do to be more competitive! Can you offer something they do not offer?
  • Add new content: Keep your website fresh and updated with new content. Your visitors will appreciate it, and the search engines will look favorably upon it.
  • Networking with others: Expand your "link popularity" by gaining more inbound links to your site. Get the word out and let other sites know about your site and how to link to it. The more links coming into your site, the more doorways you open for visitors to find you.
  • Title Tags: Make sure the title tags across all the pages on your site are relevant to that particular page. Your domain name is not a good idea for a title tag. Make sure your title tag fits what your business does and matches content on your website.
  • Pay Per Click Advertising: Consider "pay per click" strategies such as Google.com and Bing.com to enhance your overall marketing strategy. Pay per click now offers local search options to better reach a targeted audience and will allow you to choose a maximum dollar amount per day that you are willing to spend to fit your budget.
  • Review your activity logs: "Activity logs" or "server statistics" provide you with statistics on the number of visitors coming to your site, where the visitors come from and what keywords are used. Some Web servers/hosts provide this information free. Google also offers this as a new free service called Google Analytics.

Outsourcing search engine optimization

If you would like to outsource search engine optimization, ask your professional consultant for the names of previous clients or "case studies". Speak with these clients to determine what, if any, improvements they experienced. Make sure that unethical or questionable practices are not used that will be harmful in the long run.

Targeted e-mail

E-mail allows you to communicate directly with your customers. It is also one of the most abused forms of online advertising. Nobody enjoys receiving unsolicited e-mail touting a business or service. While it is possible to purchase huge mailing lists of e-mail addresses that can be used for marketing your product, you are likely to turn off large numbers of potential customers by engaging in this practice.

Instead, opt-in mailing lists are now the preferred method of establishing e-mail lists of customers who are genuinely interested in your product or service. Consider creating an online newsletter. Make it informative, useful and worth reading.

Finally, remember that each e-mail should also contain instructions for how the recipient can be removed from the e-mail list. 

E-commerce platforms

When starting your own business and promoting your product online, it may be appropriate to start considering selling your product on 3rd party E-commerce platforms such as Amazon, Ebay, Etsy, Ebid etc. If you are looking to be noticed more in the international space, Alibaba might be a good platform to get started on. No two sites are the same and no two sites will sell to the same market and customer.. It is important to research all E-commerce platforms and watch your sales and traffic carefully. You have to be quick to identify problems with marketing and product and be willing to change and adapt quickly.

How to get started

To sell on 3rd party E-commerce sites, you will need to register and then verify your identity. Registration is a quick and easy process. Verification will be a little more involved, but is a necessary process to ensure that eBay remains a safe marketplace. Once you have completed these two steps, you will have a "Seller's Account" and will be able to start listing your items for sale.

It is important to also protect your identity. If you will be selling out of your home office to start with, it is advisable to get a P.O. box with a suite number (UPS Stores have these) so that you can easily ship and receive shipments.

Listing basics

  • Write a good title and description. This is essential. Take pictures when possible.
  • Specify what payment methods you will accept, and your return policy.
  • Focus on order fulfillment- this is the key to maintaining your online brand. Manage orders by giving up to date shipping information. There are applications that can help you do this.
  • Don’t forget about customer service. Make sure to be available and give expectations for return calls/ emails when customers have questions.

Top Ten Do's and Don'ts

THE TOP TEN DO'S

  1. Create a website to complement your business.
  2. Hire a professional to create your website.
  3. Use a .com website domain name that is descriptive of your business and easy to remember.
  4. Register your domain name. Keep your account information in a safe place.
  5. Develop a mailing list to better connect with your visitors.
  6. Provide updated useful content on your website in order to encourage visitors to return.
  7. Encourage customer feedback via online forms and e-mail.
  8. Learn how to, and continually implement, ways to improve your placements on top search engines.
  9. Keep your eye on your competition's rankings and get pointers from its sites.
  10. Consider eBay as a means of selling your product and gaining traffic to your online store.

THE TOP TEN DON'TS

  1. Assume a website will assure you of competing favorably with large, established competitors.
  2. Turn your customers off with an unprofessional website.
  3. Incorporate unusual or unique web design styles that are difficult to print or save.
  4. Make it difficult to navigate your site.
  5. Permit out-of-date content to remain on your site.
  6. Rely on graphical buttons.
  7. Try to create a website on your own unless you are a web designer.
  8. Make it difficult for people to find your contact information.
  9. Turn off your customers with unsolicited e-mail advertising.
  10. Weigh your pages down with too much graphics and media.
 

Business Plan for Session 12: E-Commerce

You can now continue to assemble your business plan. We provided Microsoft Word template for this section below:

Section 12: E-Commerce

The full template for all sessions can be downloaded as one document:

MOBI Business Plan Template

 
 

 

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