Web Sales
You Want Sell Your Stuff On The Web.. .
A large and rapidly growing number individuals and businesses will do their product research and vendor selection on the Web – even though they will pick up a phone or get into a car when they actually buy. If you aren’t on the Web, you may not be considered at all. Think of your website as another form of marketing, for example if you hand someone your business card they can go to your web site later and learn more about your business. The more information that they can find on your web site may influence them to do business with you.
You may have all of your products on your web site as a sort of virtual catalog. Whether or not you need to make credit card sales on your Web site is another question entirely. It depends on your business model and your customer base. It may be absolutely essential, or it may be a lot more trouble than it’s worth. We can help you make this tough decision.
If you want to establish apure e-commerce operation – selling exclusively on the Web, be aware that for the first couple of years practically everyone is losing money, lots of money. Some e-commerce operations make money right away, but many of them are working pretty hard to do it. Web Marketing, SEO web design and several other factors are essential to getting the business you need to make money.
On the other hand, an e-commerce site could bring in additional income without a whole lot of additional effort for an already established business. It isn’t going to be effort free, nor risk free, so proceed with care, but since you have to put up the Web site anyway please keep the following tips in mind:
Some Hazards of Web Selling
Web selling is just a version of catalog selling. The same rules apply and it has the same problems – just more so – and it has a few unique problems all its own. It has been estimated that 8% of on-line transactions involve fraud. That’s nearly one in every ten!
- Competition: When you offer the same products as your competitors, when you have hundreds of competitors, all only seconds away, when shopping comparison sites compare prices from all of them in a matter of seconds, the guy who sets his price the lowest gets the order. Watch your margin and protect your profit.
- Advertising Expenses: Advertising costs can be way higher than expected, much higher than for traditional businesses. In addition, you will want to market via the Search Engines, because your competitors do. You will want someone to manage your ad campaigns to get the most out of your marketing dollars.
- Warehousing and Distribution: Amazon.com used to boast of having none, but, as they and other industry leaders have found, you really do need all that warehousing and distribution infrastructure, and they’ve had to build it from the ground up. This gives “brick and mortars” a big advantage when entering e-commerce, they should already have most of that in place.
- CC FRAUD: Certain e-commerce sites have found they were taking as many fraudulent transactions as good ones, and it’s put some firms out of business. The risk is all on the merchant. If you get hit by credit card fraud in a “face-to-face” transaction, the bank take the loss, but if you get hit with credit card fraud in an e-Commerce transaction you take the loss. This is particularly a concern if you deal in goods (tools for example) that are easy to fence. It takes specialized training to be able to fight credit card fraud and to access the risk of a transaction to avoid fraud altogether. The level of fraud is forcing some e-commerce sites to sign up with clearing engines that apply complex rules and tests to detect bad charges. This adds yet another expense.
- Price Changing: This type of fraud has become quite popular, because it’s easy to do and many shopping cart programs are vulnerable. On the check-out page, the purchaser clicks the “view page source” button, saves the raw HTML to his own computer, modifies the pricing and “publishes” the changed page back. If the shopping cart software accepts the “publish”, the purchaser gets a really good deal on your product. We are aware of this practice and know how to avoid it.
- Breaking & Entering: It isn’t your merchandise they’re after, but you customer information, including credit card information, so they can defraud sites out of their merchandise. Sometimes, though, it’s just to vandalize.
- Chargebacks: Customers often ask the credit card company to reverse the charge because they are unhappy with the product. Not only do you take the loss, but you will be hit with high fees and may need to submit a deposit. If you are in a business that is traditionally high risk for turn arounds, you will be hit with these fees whether you have a lot or not.
- Returns: Like a catalog house, you’re selling based on descriptions and pictures (unless pictures is what you’re selling, or other Web content). You have to be prepared to handle a fairly high percentage of returns.
- Shipping Costs: In and out. The biggest cause of abandoned shopping carts is the customer’s sudden realization how much the shipping and handling charge is going to be.
Successful Selling
To succeed in retail e-Commerce, you need an angle, preferably an angle that isn’t easy for others to duplicate. Examples where e-Commerce can be successful are:
- Businesses that control the supply of product, eliminating competitors or increasing their cost.
- Businesses that deal in products so obscure nobody else wants to be bothered. For this kind of business, the Web can open a worldwide market.
- Businesses that have specialized knowledge difficult to acquire but necessary to sell the product or for use or enjoyment of the product. This takes careful handling because you can’t just place this knowledge on your Web site. A competitor will link to your site as his information resource and say “Make your selection here, then come on back to Al’s Discount Widgets to get the lowest price!”. The round trip takes only seconds.
- Established businesses who operate associated e-Commerce sites as a convenience to customers who already know and trust them.
- Businesses offering immediate gratification through a local presence. For instance, companies with a local delivery service allowing them to deliver your order in a matter of minutes (some of these are already in operation).
- Businesses that have low overhead, deliver nothing but the Web pages themselves or downloaded material and use Google Adsense or other affiliate campaigns to create revenue. This works with sites such as Blogs who have a steady supply of fresh content to educate or entertain the target audience.
Implementing an e-Commerce Web Site
Due to the extreme labor intensive proposition of Web Sales we are currently not seeking new clients. However we are always open to new partnerships, so if you are a manufacturer looking for someone to put a face on your online presence and turn it into a profitable venture give us a call.
E-Commerce sites are designed and implemented the same way as any other Web site, a process explained in our article The Process of Designing Your Web Site, but involve special additional considerations.
The top consideration is security. Don’t neglect it. Many sites have ended up notifying thousands of customers that their credit card information had been compromised. Not only must you carefully configure the security options in your software you must monitor security bulletins for each of the products you use and install updates and patches whenever they are posted.
The next biggest consideration is that your hosting service (unless you host your own site or co-locate) supports the full range of e-commerce features you require. You will probably also link to outside engines for such things as fraud detection, credit card processing and even your shopping cart.
Software for implementing e-Commerce is available from many vendors, at prices ranging from a few hundred dollars to tens of thousands of dollars. As always with software, what you pay doesn’t necessarily reflect the quality of what you get. We always promote using Open Source Software whenever possible, the low cost and community support make open source a great low cost option for a business venture that will end up costing thousands to do properly anyway.
Keep in mind that e-Commerce on any scale is expensive, so you must intend to do enough business to make it worthwhile. Your e-Commerce site must be promoted and advertised at least as intensively as for a physical store.
If you are a manufacturer, distributor or even a small mom and pop outfit with a small storefront and you are looking to partner with an experienced Web Sales firm then give us a call. We can discuss the possibility of a partnership that could grow your business and expand your sales from local or regional to national and even international.