Tuesday, February 26, 2013

Doing Business Online

Doing Business Online

The term e-business means different things to different people. To some,
e-business is simply having a Web site and e-mail capability through which
customers can place an order, request a quote, or make a reservation. For other
people, e-business is having a Web site that enables customers to order and
submit their credit card information online, even though their orders may then
be processed manually just like a fax or telephone order. For others still,
e-business means being able to place a secure online order, having immediate
credit card verification, and having fully integrated back-end systems that are
dynamically updated and inform the customer of the latest prices and whether
or not an item is in stock. The point is, the appropriate e-business solution for
you will depend on the type of business you operate, the products and services
you intend to sell, your budget, your target market, what your competition is
doing, and so on.
For instance, a software development company that sells a downloadable
software application (i.e., has no physical boxed version) has no inventory per
se. Therefore, they would not require a back-end inventory database to be integrated
with their e-business system. All they might need is an e-business system
that includes payment processing capability. On the other hand, if you have an
online business that intends to sell books and you want to become the next
Amazon.com, you will require a full-blown, full-featured e-business system to
compete with the Amazon.coms of the world. Otherwise, potential customers
will shop at Amazon.com because their e-business system is more convenient
and easier to use. In this chapter we discuss the features of e-business sites,

online storefront options, taking online payments, and selecting the right
e-business model for your online business.

Getting the Point Across

The consumer is king. This statement is especially true in the e-business realm.
For instance, if you were to visit an offline bookstore to do your holiday shopping,
you might browse through the aisles for a few hours, pick out a few books
you wanted to buy, and take them to the cashier to pay for them. If you asked
the cashier whether the bookstore offered gift-wrapping or shipping services,
the response from the vendor would probably be “no, we don’t provide those
services.” You would be satisfied with this and make the purchase anyway. You
would then take the gifts home, wrap them, and ship them to their various
destinations.
If you are making the same gift purchases in an online bookstore, you expect
to be able to have them gift-wrapped and delivered to any address you
desire. It defeats the purpose somewhat if you have to pay to have the books
delivered to your address, only to turn around and pay to ship them someplace
else. If you are purchasing the books as gifts, you want to have them gift-wrapped.
Again, it defeats the purpose if you have to have the books sent to your address
so that you can gift-wrap them and then reship.
Online it’s a whole different world. Consumers have higher expectations.
Often they shop online for the convenience and expect the online merchant to
meet all their needs. Consumers expect the online merchant to deliver what
they want, when they want it, and how they want it. If you don’t provide what
they want the way they want it, another vendor is just a click away.
Not all possible features of an e-business site are applicable to every business,
but if you intend to be competitive online, you must give your consumers
what they are looking for. You might have something they want, but if they
cannot conduct transactions easily on your site and competitors offer more
point-of-sale service, people will leave your site and shop at another site that is
easier to buy from. This section focuses on some possible e-business features
that you might want to include on your site. Decide which features are most
applicable to your business and implement them into your e-business system.

Storefront Development Options
Depending on your online objectives, your products and services, and your
budget, you might have to develop an electronic storefront for your business.

An electronic storefront is the interface that a customer sees when purchasing
goods on a Web site. The need for an electronic storefront varies with the level
of e-business that your company chooses to implement. The various levels of
e-business are discussed in more detail later in this chapter.
When developing a storefront for your business, you have three options
available. You can
• Use the ASP (Application Service Provider) model
• Purchase storefront development software
• Program and develop your own storefront.
Each option has its strengths and weaknesses, and some are more appropriate
than others, depending on your business’s budget and online marketing
objectives. In determining how to develop an electronic storefront for your
business, you should evaluate the following options and select the one that is
most appropriate for your business.

ASP Storefront Model
ASP stands for Application Service Provider. The ASP owns the storefront software
and operates its own e-commerce server. An ASP licenses out the use of its
software and e-commerce hosting services to clients that desire to sell products
and services online. The software is hosted on the ASP’s server, and as the client
you pay the ASP to use its software and server. This option is often much cheaper
than purchasing your own storefront software package.
When using the ASP’s storefront solution, a client can be quite confident in
the fact that the system will always be up to date. The ASP’s server handles all
system updates, back-ups, and technical support on a regular basis. There is no
need for a business to purchase any extra on-site equipment or software, and
the installation process is fast, straightforward, and affordable.
The ASP’s storefront solution can be integrated with your existing Web site.
The portion of the storefront that is hosted on the ASP’s server can be customized
to duplicate the appearance of your site. This adds to the level of professionalism
and maintains a sense of consistency across all pages of your site and
the purchase process.
The ASP’s storefront model is known for its high reliability, as well as an
unfailing online selling security system. A great benefit of using an ASP’s server
is that business owners are able to access their data from any place, at any time.
The only equipment needed is an Internet connection as well as your ASP server
ID and password.

Each client is given a unique user name and password to allow for easy
management of its account. The information hosted on the ASP’s server can be
modified at any time—you can add or remove products at your convenience,
alter the layout, and so on.
This solution is ideal for those businesses that are looking to maintain their
own site but do not want to be responsible for configuring and maintaining the
technical aspects of the e-commerce system. The ASP model is easy to configure
for those individuals with limited HTML knowledge and can be set up and
running in a very short timeframe.

Storefront Software Packages

There are a variety of storefront software development packages available that
enable you to develop your online storefront for your business. If you choose
to use this approach, more technical knowledge of computers will be required
and you will have to find an Internet service provider to host your electronic
storefront.
Storefront software is commonly installed on the same server as your site.
This can be a more involved process, and in some cases it may be necessary to
hire a person with the appropriate technical knowledge to set up and maintain
your storefront. Many medium-sized to large businesses have their own inhouse
team to manage their e-business operations, so this is not an issue for
them. Do some research on features needed and select the storefront option
that best fits your business requirements.


Program and Develop Your Own Storefront

If you have a broad product line, a complex system with different prices for
different customers, or volume discount levels, or if you want a high level of
integration with your accounting, inventory, and sales systems, you may want
to consider developing your own storefront. This requires in-depth technical
knowledge and programming capabilities. If you don’t have the technical capability
in-house, you can outsource this activity to a firm capable of developing
such a program for your business or hire an employee or team to handle the
storefront development.
If you decide to develop your own storefront software, you should ensure
that everything is running smoothly before you launch the storefront into cyberspace.
Every aspect of the storefront selection and purchasing procedure

should be tested and retested to ensure that there are no bugs, miscalculations,
or errors in the process. Once you are sure that everything is working correctly
and smoothly, you then have to find a place to host the storefront, whether it be
on your own server or on an ISP’s server. From that point on, your only recurring
expense is that of hosting your storefront and payment processing and
authorization charges from a payment processing company.


Storefront Features

There are many different features available with different electronic storefronts.
Features vary depending on the storefront option that you have selected. Typically,
higher-end software has more advanced features than that of a template
service; however, some of these features may not be essential to running your
particular online business. The following is a list of features that you should
consider when selecting your storefront development option for your online
business:
• Shopping cart
• Purchase notification
• Inventory management integration
• Client database management
• Integrated mail list
• Searchable product database
• Thumbnail image capability
• Customer e-mail notification
• Unlimited autoresponders
• Shipping and delivery options
• Coupons, discounts, and special offers
• Technical support
• Affiliate programs.

Shopping Cart

An electronic shopping cart is an excellent feature for sites selling multiple products
or services. The online shopping cart system operates much like an actual
shopping cart. Buyers can add items to their cart as they please, and they can
remove items just as easily. As the customers add and subtract items from their
shopping cart, a running total of their purchase choices is dynamically updated.
This is a great feature that shouldn’t be overlooked when you choose your
storefront software.
Purchase Notification
This software feature enables merchants to be notified via e-mail whenever a
purchase is made on their Web site. The e-mail typically states the product
purchased, the purchaser’s contact information, and the credit card information.
This feature is terrific if you use offline methods (e.g., the telephone) to
authorize credit card purchases. You can simply pull up the e-mail message on
your screen and call in to receive an authorization number.
Inventory Management Integration
Does the software enable you to integrate the storefront with your back-end
system? Back-end systems refer to the company’s internal accounting, inventory,
contact management, customer service, and other supporting software
systems. This is a fantastic feature for companies selling multiple products online.
By integrating the back end with your storefront, you can track inventory
levels to (1) ensure that you don’t run out of a certain product or (2) notify
customers that you are out of stock before they make a purchase. More information
on integrating your back-end systems with your storefront is explained
later in this chapter.

Client Database Management

A client database is essential to any business that would like to keep track of the
people utilizing its site. This includes all users who interact in some way with

your site, either by filling out one of your forms, becoming an affiliate of yours,
or purchasing something through the shopping cart. All users will have a record
of their actions in your client database. You can find out information such as
who bought a particular product, who is subscribed to a particular newsletter,
the time a client has been added to your database, and so on. Once a search is
conducted, you will get a list of all clients and their online actions on your site.
With this list, you are able to create a customized mailing list.
Integrated Mail List
Many ASP storefront solutions integrate private mail list software with their
application. It just makes sense that when someone makes a purchase, they
might like to give permission for you to send them your e-zine or newsletter,
your e-specials, or coupons. The mail list application should be able to be fully
integrated with your Web site and should provide good tracking and management
reports. Today it is essential that mail list software have an integrated
spam checker so that your mail can have the best chance of getting through to
the intended recipients.
Searchable Product Database
Practically a necessity for companies selling hundreds of products online, this
feature enables a consumer to visit your site and search through your database
of product listings. Normally consumers will know what they want when they
visit your site, so offering this feature will enable them to go directly to the
product SKU (stock keeping unit) they want, rather than searching through
multiple pages trying to find the product. An SKU is similar to the ISBN number
you find on the back of books—it is a numerical value that identifies an
individual product.
Thumbnail Image Capability
Your storefront software should enable you to place small thumbnail images of
the products next to their listing. The user can then click on the image to enlarge
it and see a better view of the product. This enhances the overall listing
for each of your products in your storefront. Thumbnails also assist in optimizing
your site’s download time. It takes much less time to download several
thumbnail 2K images as opposed to several full-sized 50K images.

Customer E-mail Notification
This feature enables you to automatically send your clients an e-mail directly
after they purchase an item on your Web site. The message will confirm that
you have received their order, and you can also take the time to thank them for
doing business with your company. This is a great way to provide quality customer
service to your clients.
Unlimited Autoresponders
An autoresponder is a customized e-mail notification with a few added features.
Autoresponders can be used for different purposes, and you can send an
unlimited number of sequential messages. For example, you might have one
general autoresponder for all your customers and a few more-detailed
autoresponders for customers who purchase a particular product. This way
you can ensure a great follow-up for future repeat sales. By using this method
you can offer classes with the lessons delivered by autoresponder e-mails once
per week, as well as train your affiliates on up-and-coming news with your
business. An autoresponder can be set to go out over a period of time and be
composed of one or more messages. Autoresponders are becoming a very powerful
Internet marketing tool.
Shipping and Delivery Options
Another way to provide excellent customer service is by offering different shipment
options to your clients. This feature enables your customers to select a
shipping option that best suits their needs during the checkout period, when
they are finalizing their order on your Web site. Some people like to receive
their purchases in the mail sooner than others. By offering a variety of shipping
and delivery options, you have an opportunity to up-sell, utilizing different
price points for different delivery periods. You could set a specific price point
for each of your delivery options, which may include “next day,” “two or three
days,” “surface, one to two weeks,” and so on. In addition, some customers
may prefer to send individual items to separate locations—perhaps they are
doing their Christmas shopping. Giving the user the option to send each item to
a different location is a great feature to include.

Coupons, Discounts, and Special Offers
Many storefront solutions provide the ability to offer discounts, accept coupons,
and provide for special deals to generate urgency to drive up your sales.
Technical Support
Above all, whether you purchase storefront development software or choose to
use a template service, you should always ensure that the service provider has
excellent customer support. If you have any problems with your storefront, you
should be able to call and receive immediate assistance to remedy your problem.
Downtime or malfunctions in your storefront can hinder your business’s
professionalism, so you should have the best technical support available to help
you solve any problem you may encounter.

Affiliate Programs
A major challenge for new Internet businesses is how to drive traffic to their site.
Some possible shoppers come to your site; they look around and really like what
they are seeing. On your Web site you have a “Join Our Affiliates Program” link.
They click on it, fill out a quick form, and choose a user name and password.
They then will receive an e-mail with instructions and access to referral URLs.
Once they have the URLs, they must send their prospects to your site either through
outbound e-mail or via links from their own Web site. Along the way, your new
site viewers will get tagged as having been referred by the affiliate. If they become
customers and make a purchase, the affiliate will be credited with the sale. Both
you and your affiliate can see this in the order record, using a login page with a
full history of all their commissions. Affiliates are wonderful because they send
traffic your way, and you pay them only for paid customers.
Payment Processing Methods
One of the key components of doing business online is the ability to take payment
for goods and services online. Essentially, taking payment online involves

the ability to successfully transfer payment from the buyer to your bank account.
There are a number of factors you need to be aware of before venturing
out and developing your online business. The main form of payment online is
the credit card, which is the focus of this section. Currently 95 percent of all
purchases online are made using credit cards.
The Advantages of Taking Online Payments
The ability to take payment for goods and services online presents several significant
advantages to you as a business owner. Many Internet users expect
speed and convenience. They want what they want, when they want it. By
offering Internet shoppers the ability to make a purchase and pay for it online,
you’re helping to facilitate their needs and desires. You’re enabling them to
make their purchase at any time of day or night. Basically, your online storefront
is open for business 24 hours a day, 7 days a week, 365 days a year. By
allowing users to purchase goods and services online, you’re allowing them to
pay for items on their own terms as well. Independence and freedom play a
role. Users are able to make purchases on their own without any reliance on
another individual. They do not need to wait for the assistance of a sales associate
to make their purchase, they do not need to wait an extensive period of
time for approval of their purchase because everything is automated, and they
do not need to write down a phone number or other information to contact
someone to make their purchase. It’s on their terms, and they like that.
Automated online payment processing can benefit your business in the form
of reduced costs. You do not need to pay someone to process your transactions,
and you do not need to pay to produce paper invoices and statements. Think of
the additional time automated online payment processing can save you as well.
You or an employee will not have to spend time processing payments yourself.
Your time will be free to be better used on more important business matters.
Having your site set up to take online payments portrays a professional
image and boosts the credibility of your operation in the eyes of the consumer.
It shows that you have taken the time and have invested the money to develop
a well-run operation.
You may experience increased sales. Why? Many of the purchases made
online are impulse buys. Living up to consumer expectations is key to your
success!

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