Setting Up Shop in Cyberspace

With research firms projecting e-commerce revenues of more than $100 billion in 2003, businesses large and small are considering jumping into the electronic commerce marketplace.

The Internet is quickly becoming a crucial factor in many small companies’ growth strategies. According to an e-merchant study released earlier this year by Internet market research firm Keenan Vision, the number of e-merchants will number 400,000 in 2003.

Yet, building an electronic storefront may seem particularly daunting to small businesses and retailers as the maze of e-commerce products and services available makes it easy for a merchant to get lost. Many small companies find building and hosting a Web site on their own to be cost-prohibitive, and generating traffic to their sites can also prove to be a difficult undertaking.

Clearly, building the right foundation for successful e-tailing takes careful consideration and solid strategy, but the step-by-step process that follows should help demystify the process and provide an easy-to-follow guide.

It’s also important to note that a full-service transactional Web site may not necessarily be the right strategy for all merchants. If you do not have products or services that lend themselves to the Web or if selling online is not a key objective for your company, you may want to consider a “brochure” site that promotes your business and helps create foot traffic at your brick-and-mortar office or shop. A brochure site does not sell products or services online, but instead is meant to be informational and serve as an advertising/promotional tool.

5 Basic Steps

There are five basic steps to complete before transacting business on your Web site. You may select separate vendors to assist you in each step or look for a vendor that provides an integrated solution. Choosing one vendor that offers a suite of e-commerce services can simplify the process (and save time and money).

The following outlines the steps you need to consider when moving your business online.

1. Domain Name Registration

What’s in a name? Plenty when you are an e-tailer. It is not only your company’s brand name, it’s also your address in cyberspace. Once you’ve selected what that name will be, you must register it with InterNIC, the agency that registers and maintains a database of domain names. You can obtain a domain name directly from one of many providers, and NetworkSolutions.com and Register.com are just a few examples of these registrars. However, your Internet Service Provider or your e-commerce service 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 your site yourself or have a provider build it for you. If you choose to build your site yourself (either by purchasing a related software package or using a “browser-based” store-building package that you download from the Web), keep in mind you will not only have the initial task of construction but also the ongoing responsibility of making modifications to the site.

With many Web building services and software products available to assist businesses in designing a Web Store, you do not have to take on this project by yourself. However, even with a Web building service provider, you still must consider several critical issues to ensure that the site you build meets 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 to be? 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 product catalog. You’ll need to provide necessary information on each product, i.e. description, color, size and price. This catalog is expandable, so that you may add to it as your business and product offering grows.

After the product catalog is completed, your Web building vendor can publish your Web site online.

3. Server Hosting

Another major decision that businesses joining the electronic marketplace must face is whether to buy a server and host their Web site in-house, or to outsource the entire operation to a service provider. For many smaller businesses, outsourcing is the most viable and cost-effective option. Establishing your own operation is complicated and can take several months to set up, whereas using a hosting service can take less than an hour to set up. It will also speed the time it takes customers to download pages on your Web 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 and a gateway to connect all these elements of the payment process. You also will need cash register software to help easily calculate sales tax as well as shipping charges, and may want to include a shopping cart function as well.

In order to start transacting business and accepting payments, you must first open an account with a merchant bank. Checking out dozens of merchant banks to find the one for you can be an arduous process, but a fully integrated solution eliminates the need for this task.

Once you have established an account, your merchant bank retains the services of a payment processing company to “acquire” transactions of your customers, secure the funds from the customers’ credit card issuer and place that money into your merchant account. This is the last part of the payment solutions 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 your Web site is, no one will come to it if they don’t know you are there. This is where driving traffic and transactions becomes an essential element of your e-commerce plan.

The first step in building traffic is registering your site with search engines. Again, there are vendors that will do this for you. For registration, you will need to think of “META tags” or key words that will be 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 real shopping mall, having your storefront in a shopping portal not only gives higher visibility but helps draw in “window shoppers.”

Another advantage of being a part of a virtual mall is the possibility of cross promotions with other e-stores. You can establish relationships with sites that reach a similar demographic group and offer premiums in exchange for links, referrals and demographic information. For instance, you and another e-merchant could include taglines about each other’s stores in your purchase confirmation e-mails.

In Conclusion…

Now that you’ve read about the five stages of building an electronic storefront, take a deep breath. These five steps may sound a bit cumbersome, but remember, you can streamline that process by using an integrated e-commerce solution. Companies such as First Data Merchant Services take you through every step with just one provider and one bill. Best of all, you can start transacting business in less than a day.

Congratulations. After completing these five steps of development, your electronic storefront is open and ready for business, 24 hours a day, seven days a week, accessible to the millions of consumers logging onto to the Internet each day.

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