E-commerce myths
Selling online can be an extremely profitable way
to make money. Just think of the opportunities - no shop assistant (so
low staffing costs), available 24/7 (no overtime) and the customer does
all the work and even pays to print the receipt!
In this land of bounty there must be so much money
to be made that surely everyone should be rich beyond their wildest
dreams… or so the software salesperson would let you think.
The fact is that there is a lot of hype about using
e-commerce in your business and you really need to be sure that you
can profit from online sales before you enter the arena.
Dot.Com Millionaires
They exist, and will continue to do so, but are probably
rarer than Lottery winners. I once had an interview with a client that
started “So you can make me £7,000 a week from my web site..”.
I replied that I could not guarantee that level of turnover. “Wrong
answer!” he triumphantly told me. “No, truthful answer”
was my reply.
The fact that a web site has e-commerce ability does
not mean it will be a money making machine overnight. To sell effectively
on the Internet you still need to market your products, it is just that
the customer can buy any time they want, not just when you are open
for business.
If I can sell one product at £1 to I million
customers….
Surprisingly this has always been my dream, and dream
it is. We all hear about the billions of £’s sold on the
Internet annually, and think that the big traders must be doing very
well thank you. But the truth behind these figures is that overall more
money is spent on spam sales messages than on ‘genuine’
business transactions. Spam sales are usually sent out on the basis
that a very, very small percentage of recipients will reply; less than
0.01%
If you're thinking this means that spam is a useful
internet marketing technique then forget it. Spamming is illegal
and can also result in your website and email facility being stopped
by your hosting company. What is legal is the sending of email marketing
messages to people who have 'opted in'. If you have a good sales message
and you work legally you can hope for perhaps a 1% response rate, however
do remember that to get your million responses then even at this rate
you still need to send 100,000,000 mailings, AND you have to pack, send
or download 1,000,000 items!
E-Commerce puts me ahead of my competitors
Again this can be true, but again it is down to marketing
your site. Having an e-commerce enabled web site will certainly show
your business as forward thinking and approachable.
E-commerce allows me to sell anything
It is also true to say that the type of business you
run will ultimately affect how you can translate your business to the
Internet.
Imagine you are a greengrocer who only sells fruit.
You may not think that selling via the Internet is a good idea as the
customer usually wants to smell and feel the goods they are buying,
the same could be true of butchers etc. (although the success of online
supermarkets suggests that these issues are not insurmountable!) However
the customer buying stationery, for example, does not have the same
difficulty, and as such might well purchase as confidently online as
in the high street.
You know your customers, you know how they like to
shop.
All shop systems are the same
No they are not.
The first decision to be made is whether to use the
‘free’ sales systems, the 'in a box' sales systems, or a
bespoke sales system.
Free is not free as it will require the designer to
configure the software for your business, and can be quite limiting
in design, plus you will almost certainly live on the shirt tales of
a designer for the first few months.
Bought systems can be setup from the box and can allow
you to create the whole selling system yourself with a little knowledge
and patience, and a lot of time. These are also often limited in design
and flexibility. The good point is that you will get full support, at
a price, from the supplier.
Within the 'in a box' systems there is often a further
choice of fixed designs - where the software dictates where buttons,
images etc are placed on the shopping page - or flexible page systems
where you can just add a button into your already created pages. You
may find it easier to use a designer or at least find someone who can
advise you exactly how the software works and most importantly how easy
it is to update prices and quantities.
Finally you can buy a designer, several months of
time and have your own special system, but be careful if you change
software supplier or fall out with your designer. Because the product
is unique so are the problems and all the potential bugs!
It doesn’t cost anything else once I have the
shopping system installed
The shopping cart system will always have some form
of support overhead, however there are other practical costs that need
to be addressed as well.
One of the most common problems of running an online
shop is the cost of sending items out to the customers. It is crucial
to your success that this area of your operations can withstand the
potential strain of a busy web site. Will any products you sell need
special packing? Are they heavy? Will a courier allow the physical size?
How do you deal with foreign orders?
What about the storage and supply of raw materials?
Are your goods time critical, seasonal or perishable?
The overall cost
Web sites that sell products to customers cost money
to run, and sometimes that can be quite a lot and affect your ROI (return
on investment). Extended costs include secure server facilities. If
you take debit and credit card payments you will need to integrate a
sales package with your merchant account or pay a % of each sale plus
handling to a third party gateway provider.
You will need to spend a great deal of time ensuring that the web site
is kept up to date with prices, special offers and a range of other
housekeeping duties.
One thing that will have a bearing on the success or otherwise of your
venture, and is totally within your control, is getting a good designer
for your web site. At this point it is worth remembering the old adage
of paying peanuts and getting monkeys. There are many people out there
who want to take your money and have little concern about the final
solution to your business needs. You need to be careful and select your
designer with care and be prepared to pay for a good designer. Ask some
of the questions mentioned above, especially about payment providers
or sales systems.
Most importantly don’t be rushed
into a shopping system, make sure it is tailored for your requirements.
And finally....
E-commerce can be a very cost-effective way of increasing
business and, handled properly, can increase your client base and provide
substantial new revenue streams. Few businesses these days can afford
to ignore the internet as a marketing tool. However, e-commerce is unlikely
to prove an effortless route to instant riches and will need work, proper
marketing and efficient administration to maximise its potential.
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