A dummy’s guide to ecommerce, #1

This is an introduction to Ecommerce aimed at people who know nothing or very little about the subject. Which, judging from the number of people I get questions from, is a fair many of you.

Firstly, learn the jargon: selling online, e-tailing (yuk), web and Internet stores – these are all the same thing, and are simply just different ways of saying “ecommerce”. Ecommerce is what you are doing when you sell something via the Internet, it’s that simple.

Next, go and read all the articles on this website about web marketing. You need to look into that before you start your ecommerce activities as your shop will sell nothing without customers and this HAS to be started at the same time you begin planning your ecommerce empire. Now, continue…

Bravado has no place in most businesses. You can’t know everything about everything, so if you know little or nothing about ecommerce, then that’s an important thing to know! Knowing that, you can do something about it – you can learn. Listen to the experiences of anyone you know who sells online already, search on the Internet and look at some of the website links on the right. Find out what you can about how ecommerce applies to your area of business and, perhaps most importantly, take a really good look at the businesses who are already selling your products and services online.

Innovation is a great aspiration but don’t get carried away with it. If you’ve got a great idea then there is a chance, albeit minuscule, that it is both original and viable, but there is a much greater chance that it is neither. Don’t try too hard to be different with your shop design or methods of selling, there are conventions online that customers are increasingly used to, so use them well and you will sell more.

This goes equally for the goods you want to sell. As a general rule, if what you sell is already being sold via mail order, then you probably have a viable ecommerce idea. If your goods are fixed price then even better. If though the products you are selling must be touched, tasted or smelt first, then your challenge is greater because as you must realise, customers can do none of these things via a computer (yet!). However, the success of online cosmetics, grocery and clothing stores demonstrates that even these barriers can be overcome.

Think about your prices. The Internet is associated with low-cost shopping and for good reason. The startup costs for an ecommerce business are usually at most 20% of the cost of setting up shop on a high street, and the running costs are about the same fraction. All up, it costs you FAR less to do business online so your room for manoeuvre on pricing is that much greater. People expect to get a good deal online, so you have to give it to them or someone else will. Aside from price competition, quality, rarity and exclusiveness, work well – as always. Think about why people would want to buy from your shop, in the end people buy if they feel the value you offer outweighs the price you charge.

OK, so you’ve got a great idea, now you need some ecommerce software. This is nothing more than a fancy database website that can take credit card payments securely. Simple eh? Well, that’s actually where it all goes downhill for many people, so this is one place where I am not going to advise you to talk to people or see what Google ‘thinks’. I know better, so if you want to make your ecommerce experience a happy one, do as I say, do exactly as I say. Don’t look on the web because it’s a forest of wild claims and jargon (mostly meaningless) and don’t talk to anyone except an experienced ecommerce specialist because no one else has any real basis to advise you.

I estimate that only about 15% of businesses should even consider buying into a custom-built ecommerce ‘solution’, and this only because the way they need to sell their goods is complicated. For the other 85%, there are many ready-made mature ecommerce applications which have been on the shelf for ten years or more and that are used by tens of thousands of shops already. Choose one of these – it will slash your startup and running costs and bonsai your time-to-market. The only thing to be careful of is that you really think through how you want to sell your goods, and make sure you choose ecommerce software that can accommodate that.

Now having decided on an ecommerce system you can take a little breather and think about your site’s hosting. Your shop will be open, taking orders 24 hours a day, at least that’s the plan. Hosting (along with your domain name) provides the ‘address’ on the internet where people can find your shop, and ecommerce hosting is just like normal hosting except it must be very reliable and it must be secure. Usually ecommerce hosting costs more than normal web hosting and there are sliding scales of prices to go with the sliding scales of quality, reliability and security that you opt for. I’d advise you to get the best you can afford, and look out for hidden costs that might be triggered if your shop gets really successful.

Security is a priority for both you and your customers. You need to know that your site is safe from hackers and fraud, and your customers need to know that you take seriously your responsibilities to look after their private and financial data. Make sure your shop’s ordering system uses the industry standard SSL encyption technology, most ecommerce systems do. And remember to tell your customers how secure your site is, it breeds confidence.

Which leads us on to the subject of taking payments, which is after all, what this ecommerce exercise is all about. There are several ways to get hold of your customers money: you can store their credit card details online and download them to your computer (if your bank allows you to) or you can pay a company to process them in real-time for you when a customer places an order. Both have pros and cons and this will be the subject of next week’s guide.