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1.0.2 E-Commerce Guide
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Well, at least that's what the late night infomercials would have you believe...
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Are You Ready?
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Success on the Internet involves:
- having a great product
- attracting a targeted market
- selling and satisfying your customers
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How To Do It
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01. Create the online content.
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Content is King!
The one thing that controls the success or failure of a website above all else is content. Content is King. You customers must have a reason to visit the first time, two weeks later, and six months later. They need a reason to recommend a friend to your site. The best reason is content.
You must offer value added content. Too many websites consist of "brochureware", an electronic version of their tri-fold sales brochure. BUY, buy, buy! Brochureware is fine for the first month or two, but you had best start adding some real customer oriented content soon after.
Value Added Content
The most successful sites learn what their customers want and then give it to them!
What do customers want? Information!
You know something that your customers would find extremely valuable. Put it on your website. This could be tips and tricks for using a product, how to select a service, 5 ways to do something better - faster - easier!
Here are some ideas from successful sites:
- Whitepapers - Detailed technical information and suggestions on how to use a product.
- News - Not the newspaper news, but industry news related to your product or service. The kind they can't get anywhere else.
- Freebies - Provide electronic goodies, such as, screen savers and shareware, that can be instantly downloaded.
Pretty Pictures
Your site needs to have a professional look. Hire someone to create your graphics. If you can't afford a professional, hire a college or high school student.
Limit the number of pictures on your homepage. Your homepage needs to load quickly (7-10 seconds). Your customers want to be satisfied now. They are just one mouse click from leaving!
Use the same color scheme and navigational elements on each page. First, this gives you a "corporate image." Second, a common peeve among web surfers is poor navigation on most sites.
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02. Host the content on the Internet.
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Hosting The Content
After creating your content, the next step is to host the content on the Internet. One problem: most small businesses cannot afford the cost of purchasing a dedicated web server and renting high speed Internet access lines.
The solution is simple. Rent space on a computer that's already connected to the Internet. Thanks to cheaper hard disk drives, storage space is widely available at very little cost. You should be able to locate a hosting service for as little as $10-20 per month, depending on features and extras.
Domain Names
As part of your hosting solution, you will also want to register a unique domain name for your website. The domain name allows your customers to enter a shorter and easier to remember address to your website. Having your own domain name also will make any future changes of hosting services much less difficult.
Domain names are licensed for $35 per year. While a domain name can be registered with any of the six authorities, it is best for novices to register a domain name through their chosen web hosting service. Registering through a hosting service ensures that required domain name servers (DNS) are quickly and properly configured - a technical nightmare for both techies and non-techies. Most reputable hosting services assist in the registering of domain names at no extra cost.
You can check if a domain name is available by using the Whois service at:
Register.com
Register.com provides a clear, simple series of online forms to help register a new domain name. They also provide a simple online tool to administer their domain name servers, making it easy for novices to direct their domain name to their web server or host.
Network Solutions
Network Solutions also provides online forms for registering and managing domain names, but the process requires knowing the primary and secondary DNS server addresses.
Unix or NT?
For the average website, which operating system and brand of web server is not important. Only when you want to customize your site with databases, scripts, and dynamic features does the question of Unix or NT come into play.
Unix / Linux and Apache web server
Most hosting services are based on the Unix/Linux operating system and the popular Apache web server software. Thus, there are many sources of help and information available to the novice webmaster. Hundreds of customized CGI scripts have been written for the Apache server which can automate just about anything an e-commerce site needs.
Windows NT and Internet Information Server (IIS)
Second in popularity are hosting services based on the Windows NT and IIS operating susyem. One of the key advantages of using an IIS hosting service is that you usually can use Microsoft Frontpage to not only design, but also to manage the website. IIS also provides active server pages (ASP) which allows databases and processing of program scripts using Visual Basic script or Javascript. Windows NT/IIS is commonly found among small business using Microsoft products for their existing in-house network.
Minimum Features
Regardless of the operating system chosen, there are key features that should be considered a bottom line when choosing an e-commerce hosting service.
- Free domain name registration and setup
- 10 - 50 MB of storage
- Unlimited traffic
- 1 or more POP mailboxes
- Visitor Statistics
- File Transfer Protocol (FTP) access
Desireable Features
Unless your site is brochureware and you don't have very high expectations, you should strongly consider the following extra features when choosing your host provider.
- Custom CGI
- Unlimited email aliases
- Unlimited autoresponders
- Secure server (SSL)
- Shopping Cart
- Log files access
Uploading Your Website
FTP - The most common method of transferring the content from your computer to your new host account is by using File Transfer Protocol or FTP. You will need to locate FTP software. Two of the most popular are WS-FTP LE and CuteFTP. A great source of Internet FTP software is TUCOWS.
FrontPage - If your hosting service offers FrontPage extensions, you can also transfer your content using Microsoft FrontPage. You will need to configure your host account as a web in Frontpage. Then, just point, click, and drag to manage your site.
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03 Market the website and content.
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Marketing Your Website
So you've got your website up and running. Feels wonderful, doesn't it?
The masses should be arriving any moment now.
Well, don't hold your breath. As of January 2000, there are now more than one billion web pages on the Internet! Also, the largest search engines have only cataloged about 17% of these billion webpages. That means that there is no fast or easy way to locate the other 830,000,000 web pages. Which group are you in?
You need to market your website and market continously. This page contains numerous methods for marketing a website. You need to discover the methods that work best for you.
E-mail Techniques
Although commonly overlooked and discounted by most individuals and businesses, e-mail is the most effective and cost efficient way to drive traffic to a website. One of the best sites on e-mail is Everything E-mail.
- E-mail Address - First and foremeost, your e-mail address should include your product, industry, or company name. Personal names and intials are for personal e-mail from friends and family.
- Signature Files - Configure your e-mail software to use a signature file or tagline. Create a 4-5 line ad for your site which gets attention, gives a reason to visit and provides the web address.
- Mailing Lists - Locate and join 1-2 two large e-mail discussion lists that your target market also subscribes to. You can locate lists at PAML and Liszt.
- Autoresponders - Automate customer inqueries. Use autoresponders to instantly mail out catalogs, price lists, sales materials to visitors. Not familiar with autoresponders? Try the ASBDC autoresponders by emailing calendar@asbdc.ualr.edu. We'll send you copy of our current training calendar.
- Bulk E-mail - Use your customer database to email all your customers with email addresses monthly. Products like Campaign make the process easy. Check with your e-mail service first as they may have a policy against bulk e-mail.
World Wide Web Techniques
In addition to e-mail, there are several web marketing techniques that are highly effective. While time consuming, take the time to register with search engines and develop recipricol links.
- Content - Put some real content on your site. Most commercial sites are "brochureware." Give visitors value-added information and lots of it! They'll come back and refer their friends.
- Meta Tags - Ensure that all webpages include two <META> tags and a descriptive <TITLE> tag. One meta tag should include a list of keywords. The second meta tag should contain a keyword-loaded page description. Include keywords in the webpage title.
- Search Engines - Register your site with the major search engines, such as Alta Vista, Excite, and Hotbot. Don't forget AOL NetFind and MSN. Visit each engine personally. Don't rely on submission websites.
- Recipricol Links - Contact the webmaster at sites that you would like to link to yours. Offer to put a link to their site on your pages in exchange for a link from them to your pages.
- Banner Exchanges - Join a banner exchange. bCentral Banner Network is the largest. You must agree to display other peoples banners on your website; in exchange, they agree to display your banners. Most exchanges will let you purchase additional banner displays.
- Webrings - Join or create a webring. Webrings unite sites by a common theme and refer visitor traffic between member sites.
Off-line Techniques
Lastly, use every opportunity to market your website in your day-to-day operations.
- Stationary - Put your e-mail and web addresses on all your printed materials: business cards, brochures, envelopes, boxes, bags, etc.
- Paid Advertising - You paid good money for those newspaper and magazine ads. Put your web site in them. The same goes for Yellow Pages, radio, and television.
Businesses conducting online sales will need to continue through the final three steps:
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04 Collect and Record Customer Orders.
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Collecting and Recording Customer Orders
After attracting the visitors to your website, the next step is to collect and record orders. There are several methods in use by web merchants:
Printable Order Forms
The simplest method and the least popular with your visitors is to provide a printable order form. This solution is the easiest to implement for the merchant; however, this method is not effective as the customer might misplace the form or change their decision to purchase. If you were a customer, would you really want to print a form, fill it out, hunt for a stamp and mail it?
Toll-Free Telephone
The next easiest solution and more palatable to your visitors is to offer a toll-free telephone number. This method is even more successful when combined with accepting COD orders. As the internet is never closed you must ensure that orders can be taken around the clock
Shopping Carts
The hardest solution to implement and the best for closing the sale is an electronic shopping cart. Many web hosting services offer free use of a shopping cart script as an inducement to use their services. Shopping carts vary in capabilities and ease of use.
Minimum Shopping Cart Features
There are a few key features that should be considered a bottom line when choosing a shopping cart.
- Easily add, modify, and delete items
- Customize the interface to match your web site
- Calculate taxes and shipping charges
- Validate credit cards
- E-mail notification of orders
Desireable Shopping Cart Features
You should strongly consider the following extra features when choosing your shopping cart.
- Upload product database or spreadsheet files
- Images of products
- Real-time credit card clearing and processing
- Customer order status tracking
Locating a Shopping Cart
Hosting the Content, the best solution is to select or move to a hosting service with a built-in shopping cart. Then, just follow the hosting services directions for loading your cart. Recently, several website offer free shopping carts and hosting services to commercial websites.
Among these are:
Freemerchant.com
Bigstep.com
Adding a custom shopping cart is not for the faint hearted. You can download and modify one of the dozens of pre-written shopping cart script from sites, such as, CGI Resources. While not extremely difficult, it is very time consuming to install and test a shopping cart script.
An easier solution for a non-cart enabled website is to use a third party shopping cart such as CCNow or iFulfill. These companies host your shopping cart on their servers. You merely add scraps of HTML to your webpages to connect each product to the shopping cart. Most third party shopping carts allow only the sale of hard goods.
Testing the Cart
After configuring and loading the cart with you inventory, you should test the cart. Pretend that you are a customer and try to purchase several items. Verify that the cart is correctly tracking the order and that all applicable charges are correctly added.
If your shopping cart validates credit cards, you will need to use your own credit card information or a credit card test number. Validating a credit card only verifies that the credit card number was entered correctly by using a check sum formula. The following are common credit card test numbers.
Do NOT attempt to use these numbers for purchases.
Improper use of these numbers may constitute credit card fraud and may be a felony.
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Visa
4111111111111111
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MasterCard
5555555555554444
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American Express
378282246310005
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Discover
6011111111111117
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Processing Credit Card Payments
Congratulations! You've made the sale, took the customer's order and have their credit card number.
How do you convert this information into cash?
Using Existing Systems
The easiest method of processing credit card payments for many small businesses is to process payments using their existing merchant accounts. Credit card information from the online shopping cart is cleared manually using existing VeriFone hardware or software. If you plan to have a real "bricks and mortar" business and an e-commerce site, this may be the best option.
Automating Payments
The second option is to hire a company to process just the online credit card payments. These companies usually charge a 4-5% transaction fee and have a minimum monthly charge that ranges from $20 to $50. This method is ideal for existing businesses with a fairly large and regular volume of sales.
The Yahoo! index provides a list of over 150 companies which offer credit card merchant services.
Alternatives
Several companies now offer third party billing and processing of credit cards for a flat percentage of the transaction. For an average fee of 9%, these companies will clear the credit card transaction using their merchant accounts and cut you a check for the transaction minus the transaction fee. Payments are either deposited in your credit account or checks are cut and mailed.
- CCNow - collects 9% of your total sales in excess of $100.00. No setup fee; $9.95 monthly fee.
- ClickBank - collects $1 plus 7.5% of the total amount charged to a credit card. There is a one time setup fee of $49.95. Only for digital products (delivered over internet).
- iBill - collects 15% for up to $10,000 in sales per billing period. There are no setup or monthly fees. Limited to sales of access, content or services.
- iFulfill - collects 9% of the total amount charged to a credit card. There are no setup or monthly fees.
- NetBanx - collects 5% to 8% (various additional fees). Targeted at UK-based businesses. Setup fee of í75 ($130) for one item or í125 ($200) for 2-10 items
- PayPal - collects 2.9% plus 30_. No setup or monthly fees. Commonly used by eBay auction merchants.
- Verotel - collects a 19% commission on sales of content subscriptions. There are no setup or monthly fees.
- Verza - collects 4.9% plus 99_ per transaction. There are no setup or monthly fees. Note: chargeback fee of $15.
This method is best used in the initial start-up period when the number of sales doesn't justify the expense of monthly minimum merchant account fees. Eventually, as sales increase, it will be less costly to convert to a standard merchant account.
Factoring
Warning! Be very careful not to factor a credit card number.
Factoring involves ordering a second time with the credit card number. It is generally illegal in most states to collect a customer's credit card number and then re-enter that same number into another merchant's ordering system. This is a common mistake among small businesses that sell products which are drop shipped by a second business, such as a manufacturer or wholesaler.
The Arkansas Code of 1987 states in 4-59-502:
(a) A person authorized by an acquirer to furnish money, goods, services, or anything else of value upon presentation of a financial transaction card or a financial transaction account number by a cardholder, or any agent or employee of such person, who, with intent to defraud the issuer, acquirer, or cardholder, remits to an issuer or acquirer, for payment, a financial transaction card record of sale, which sale was not made by such person, his agent or employee, is guilty of financial transaction card fraud.
(b) Any person violating this section is guilty of a Class C felony."
If you're not swayed by the moral or legal argument, don't do it because it's easy to get caught. All it takes is one customer initiating a chargeback, and you can lose your merchant account forever.
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06 Fulfill customer orders.
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Fulfilling Customer Orders
After processing the customer's payment, the final step is to fulfill the customer's order to the customer's satisfaction.
In-house Fulfillment
The least expensive method for most businesses is to pack and ship customer orders in-house. You should have a designated area for packing into boxes and storing boxes awaiting pick-up by parcel services. The U.S. Post Office, Federal Express and United Parcel Service offer tips and helpful information to beginning shippers.
Outsourcing Fulfillment Services
One of the quickest methods to quickly fulfill customer orders is to outsource the process to a third party. Your product can now be warehoused, inventoried, packed, and shipped by companies specializing in fulfillment services. Most of these companies also have the capability to process telephone and mail orders as well.
The Yahoo! index provides a list of over 50 companies which offer fulfillment services.
Fulfillment Problems
Overselling
One of the most common problems with e-commerce sites is selling inventory that doesn't exist. It is crucial that inventory be monitored and re-ordered on a timely basis.
Slow Response Time
Real or perceived, online customers want their products quickly. One of the best methods of reducing customer anxiety is tell the customer what actions are being taken and their estimated time when thanking the customer for their order.
Returns
Things come back. You must develop a Return Goods Policy and clearly state it on your site. Requiring a Return Authorization number in order to return an item is a one way to turn off your customers. Many online businesses require customers to call a 1-800 number, endure perpetual hold, and request a RA number before merchandise can be returned. Avoid using RAs, if at all possible.
Charge Backs
A charge-back is created when a cardholder refuses to accept a purchase on a monthly statement. Generally, merchants must keep their charge-backs to less than 1 percent of total monthly transactions, or 2.5 percent of total dollar volume.
Visa will charge noncompliant merchant accounts a $5,000 "review fee" in the first month of charge-back violation, escalating to $25,000 in the sixth month, plus a $100 per-charge-back handling fee. MasterCard is even more aggressive: After two months above the charge-back threshold, a merchant must pay a $25,000 fine per month. At six months, that fee jumps to $50,000. At 10 months or more, the fine is $100,000 per month.
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