Foundations For an E-Commerce Business

To build a successful business you need to start on firm ground. And a good place to start is to ask yourself the following questions:

"What are my primary aims in life?"   Do you want free time? Do you want to learn how to manage people? Do you want to create money for a specific goal?

"Where do I see my company in ten years time?"   What size company will it be? What will it be selling? What role will you be playing in it?

"What exactly is it that I'm selling?"   All widgets are the same. What you're selling goes beyond a lump of metal in a box or a piece of code on a website. Are you selling reliability, glamour, status? How are you communicating with potential customers at a subconscious, emotional level?

"Who are my potential customers?"   If you don't know who your customers are you can't sell to them. What are their personality types? What values do they have? Where do they live? What pressures are they under? Why should they come to you?

"What is my business model? "   A business model is a means of extracting value (often money) from a situation. A business model is a dance between you and your customers, giving a little here, taking a little there. Are you upselling? Cross-selling? Using loyalty cards, loss-leaders or affiliates?

"What is my business strategy?"   Your business has to chart choppy waters. Looking ahead, can you see any potential dangers? Will you have to change your pricing or your products or market your products in a new way, or create a new market? What will your competitors be up to? Do you plan on outwitting them or on co0perating with them? If your customers don't like what you're doing, do you have any backup plans?

"How will my website help my customers? "   Your customers may be fast and hungry, or they may be slow and dreamy. They might be looking to buy NOW, or researching for a long-anticipated Cruise holiday and prepared to wait for months. They might want interaction with others, or simply an anonymous resource to utilise. Whatever it is they want, your site has to deliver it or your customers will be GONE.

"How will my website help my business?"   A website has to work for you. And to make it work, you need to know what you want from it. Is it going to deliver leads? Is it helping customers research an offline purchase decision? Is it a branding opportunity? Are you making direct sales?

Start Small, Think Big!

One of the simplest ways to start selling on the internet is to use E-Bay, where you can test the waters for your product or even branch out temporarily into an E-bay store (be very wary of E-bay though - read their forums). Or, if you have products that fit into Amazon's portfolio then Amazon Marketplace and Amazon Zshops are possibilities .

Once you feel confident that your product is selling you can then set up a 'proper' website and drive traffic to it from your temporary E-bay or Amazon store whilst working on gaining visibility for your website in the Search Engines.

Alternatively, both Yahoo! Merchant shops and Microsoft Office Live offer relatively cheap ways of creating a 'proper' e-commerce site with its own domain name. However, to make such sites look professional you still need to employ a designer (since the templates are simplistic and you need some design skills). Furthermore, to accept payments you still need to jump through all the hoops of applying for a Merchant Account. These packages are relatively simple to understand, are easy to set up and manage and provide a low-cost, low-risk means of testing your business model - often with excellent support and information - but are essentially transitional websites limited by the resources and terms and conditions of the host provider.

At some stage you will need to put your e-commerce site on a more professional footing.

Shopping Cart Hell

There are many different shopping carts available, but they broadly fall into two categories.

Open-Source carts (such as Zen or OSCommerce) are free, and are built by many different programmers contributing their time voluntarily. However, there are two main drawbacks:

1) Carts can be designed from the programmers' point of view rather than from the users' and can thus be technically brilliant but ridiculously over-complicated.

1) Major updates can take years once the original passion behind the project has died.

Whilst passion drives the development of the Open-Source carts, money drives the development of commercial carts.

Commercial carts pay mortgages and therefore there's an incentive to constantly update them. The downside is that this is often unnecessary. It's also profitable for some companies to sell the same software every month through recurring monthly fees, usually justified by unnecesary bells, whistles and 'support'.

At the moment there are hardly any good quality, affordable shopping carts around for the small business owner on a budget. Most carts tend to be complex to look at (read 'confused and messy') and difficult to administer and won't integrate invisibly into existing sites. Changing the 'look' of them is usually very hard work.

The only cart that I whole-heartedly recommend for it's ease of use, focus, support, design and cost is from ecommercetemplates.com.

Painful Details

When choosing a shopping cart you should look for a cart that's easy to use and administer and that ideally blends invisibly into an existing site and costs a one-time fee.

Shopping carts need (among other things) site search (so that you can see what customers are looking for), clean links (no javascript), 'permalinks' (simple and user-friendly), cross-linking capabilities (when you select an item you notice a link to a complementary item), the ability to design your own pages for different sections of the cart, templates, headers (h1, h2 etc.), unique title tags from the database (for Search Engines), the ability to add to a shopping basket without commitment, a clear indication of where the user is within the cart, and good reporting facilities (logs).

Carts shouldn't have frames (using frames means pages can't be bookmarked or linked to) and cookies or session IDs shouldn't be used until they're required for order tracking (so that search engines can spider the site),

When you customise your cart you should ensure that you have easy navigation, fast-loading thumbnail images, shipping information and costs BEFORE you get to the checkout, credibility (contact information, privacy policy, a good looking design, testimonials, warranties), alternative payment methods (the ability to phone through a credit card order), detailed descriptions (concise and emotionally appealling copy), no distractions (piped music, talking avatars, flashing banners, off-site links), a help page, friendly error messages, and easy to understand weights/measures/phone numbers.

Credit = credibility

To receive credit card payment from a customer on your own website you need a Merchant Account. Merchant Accounts look professional and allow you to access your money within a few days.

A Merchant Account will have many hidden charges - annual fee, batch fee, AVS fee, encryption fee, chargeback fee, monthly minimum fee, cancellation fee - on top of the up-front application/set-up fee, discount rate, transaction rate, debit fee, statement fee and customer service fee - so it pays to check around!

On the whole a low-volume startup would probably be best advised to avoid fixed-monthly costs and to go for variable but higher transaction charges.

Paypal Sucks?

If you choose to use Pay Pal you should be aware that when things go well they go really well but when they go badly you can find yourself in deep trouble. Where a fraudulent chargeback arises (a customer receiving your goods but claiming not to have done so and then demanding their money back) Pay Pal can help themselves to money from your bank account and freeze your Pay Pal account. You may find Pay Pal customer support less than helpful (read around). Here is a YouTube video from October 2006 that explains the PayPal mindset succintly.

Here's a credible forum devoted to payment processing options.

An alternative to Pay Pal is Google Checkout.

You Don't Need to be A Genius!

There's a huge amount to get right when starting off in E-commerce, but none of it is rocket science.

All it takes is a bit of application (effort) and a passion for what you're doing!