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Retailing to Etailing

Jan 1, 2009
by Christopher Heine

Independent retail businesses still without a website are not alone. According to a recent study by research firm, Warrillow & Co., a whopping 59 percent of small businesses do not have a site yet.

These businesses are leaving money on the table. Here are four strategies for getting started, followed by a trio of tips for bringing in sales:

1) Decide Goals

Taking specific aim is integral to successfully launching new endeavors. Before contracting with web designers and other service firms, a retailer needs to figure out how exactly it is going to employ the site.

For instance, will the site be used strictly as an online catalog where shoppers can scroll through the current stock but need to place a call for an order? Or will it entail full-fledged e-commerce, including automated order fulfillment and payment processing?

Quick tip on information technology (IT) services: If you are bringing aboard an IT pro to oversee the website, whether as a staffer or freelance help, require creative samples that visually demonstrate that the candidate can fulfill your company's needs. Be prudent and avoid wasting time and money on a dud; there are plenty of quality pros out there.

2) Affordable Solutions: Yahoo

The wisest etail startups begin small and build from there. Many times, they do not want to deal with registering a URL name and storing the data in-house. Luckily, there are methods to launching e-commerce around those pain points.

There are three services that startups use: Yahoo! Store, eBay and Amazon Commerce, and there are not a lot of differences between them. Each offers hosted web stores, as well as payment systems that deliver the credited or debited monies into the merchant's account. All three have different programs available when it comes to shipping services (e.g., getting the products from the brick-and-mortar storage location to the consumer's address).

The key to all of the services is that they are generally affordable, letting retailers digitally display thousands of products to the world without great financial risk. Here is the pricing breakdown for the starter kits:

  • Yahoo! Store offers a program for $39.95 per month. It costs $50 to set up, and there is a 1.5 percent transaction fee.
  • Amazon Commerce offers a 30 day free offer. After that, merchants pay $59.95 a month and a 7 percent transaction fee.
  • eBay's Basic Store program costs $15.95 per month, but the site recommends that the program be used for people who plan on doing only $100 in monthly sales.

Merchants who want to start out a little bigger will choose eBay's "Accelerate Sales" package for $49.95 monthly. The site suggests this package to people who forecast doing $500 in monthly sales. eBay's "Maximum Exposure" package costs $299.95 per month and is recommended for doing $5,000 in monthly sales.

To be clear, for stores hosted by Yahoo!, Amazon and eBay, their web code, not your specific domain name, will appear in the URL.

3) Developing a URL

If merchants want a standalone URL, one of the first things they have to do is register a domain name. To begin, domains should involve either your brand name or product line and be punchy. In terms of the latter point, long URLs are to be avoided if possible.

Merchants should create a list of a dozen or so good domains and then whittle it down to the best few. Once that list is set, start checking in with web services like GoDaddy.com, Register.com and Network Solutions to see which of the URLs are available. Then, pick the best possible option. If you are not satisfied with the result, don't settle. Start over. Brainstorm for better available URLs until you are satisfied.

Even though domain names are cheap (often less than $10 a year), getting the right one can mean a world of difference when it comes to getting more traffic to your site.

4) Fulfilling Orders

Merchants will also want to start slow when it comes to managing order fulfillment. Do not even think about renting warehouse space until you get the hang of e-commerce, and more importantly, until you see substantial growth in operational profits. Warehouses are tremendously costly and can sink etail businesses if they try to grow too fast.

If there is not ample room in the current space, get creative. Is there room in the garage or basement at home? Is there a good deal locally on a small storage rental? At any rate, the best practice for new etailers is to start slow and hope you can build sales to the point of supporting a more formal warehouse operation.

Tips for Launching Etail

Whether using a hosted solution (Yahoo!, Amazon, eBay, etc.) or employing a branded URL, there are a few key ideas that new etailing merchants need to know about.

1) Create Email Functionality

Merchants must let customers communicate with them via email. If not, you will look like a fraudster. Put a customer service area in the website that includes copy along these lines: "Contact us via email at customerservice@XYZ.com." Also in the customer service section of the website, merchants need to show a physical mailing address and phone number if they want to establish trust and legitimacy with the consumer.

When customers do send email inquiries, it is a best practice to answer them within 24 hours. This idea revolves around the old sales tactic of jumping on leads while they are hot, although response windows of 48 to 72 hours are also permissible.

2) Take Email to Next Level

Doing etail the right way does not stop there when it comes to email. To reap the full benefits of ecommerce, merchants should also let online visitors sign up for enewsletters and special promotions.

This takes extra work, and it may not understandably be the first thing on the agenda when launching a website. However, email marketing is largely considered the most cost effective advertising medium available. Just think about the overstock in the store and how it can be liquidated via emailed special offers, freeing up space for new hot products.

There are a handful of email services providers (ESPs) who specialize in small business applications and offer affordable prices. A few include Constant Contact, Emma Email Marketing and ExactTarget; each aids merchants in managing their email list and promotional campaigns.

They can help merchants get started by putting up an email signup box. At the same time, if there is an IT pro in-house, you might be able to marry his or her technical expertise with some marketing common sense to launch your email program alone.

3) Bill Me Later

Accepting payments for orders in an accurate and secure manner is an enormous part of ecommerce. PayPal offers a service for accepting funds, and the consumer audience appears to trust sites that use it. Merchants who utilize eBay stores will be automatically offered PayPal. Standalone sites can also go directly through PayPal to get their service.

However, merchants might not want to stop there. Sales have been proven to increase for retailers that employ the services of Bill Me Later. The company lets consumers establish and use a credit line for orders. If a site uses Bill Me Later, a button will appear at its shopping cart checkout page.

Furthermore, rather than having to pull out a credit or debit card and type in the card numbers every time, the customers can simply click the button, input an email address to confirm their account and be on their way with the purchase completed. And, here is the real kicker: The credit lines are interest free for 90 days, so consumers love the service.

According to research firm, MarketingSherpa, Newegg.com ran a test that showed customers using Bill Me Later spent 82.26 percent more than the ones who simply employed credit or debit cards. Testing Bill Me Later is not a new etailer's first priority, but, after getting established, it is definitely worth some thought as a way to increase etail dollars.

Setting up a new business or changing your current model will always require some trial-and-error, but there is unlimited potential to make money and establish a successful business online. Some of the truly great companies began in homes and garages. The world is rapidly changing, and if you have the foresight, you can change your business right along with it. For more information, visit these sites:

Yahoo! Store:
Tel.: 866-781-9246
Website: http://smallbusiness.yahoo.com/ecommerce/

Website: http://pages.ebay.com/storefronts/start.html

Amazon Commerce:
Website: http://www.amazonservices.com/amazoncommerce/

Tel.: 480-505-8877
Website: www.godaddy.com

Tel.: 877-796-8264
Website: www.register.com

Network Solutions:
Tel.: 800-333-7680
Website: www.networksolutions.com

Constant Contact:
Tel.: 866-876-8464
Website: www.constantcontact.com

Emma Email Marketing:
Tel.: 800-595-4401
Website: www.myemma.com

Tel.: 866-362-4538
Website: www.exacttarget.com

Website: www.paypal.com

Bill Me Later:
Tel.: 866-528-3733
Website: www.billmelater.com

Warrillow & Co.:
Website: www.warrillow.com

Website: www.marketingsherpa.com

Topic: Business Strategies

Related Articles: web business  e-commerce 

Article ID: 892

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