Good Day sindy-ga,
Although each industry might face unique challenges and benefits, all
industries share some of the negative and positive events.
A common misconception on e-commerce business is the "build it and
they will come" attitude. This belief is probably the largest reason
for the downfall of so many E-commerce ventures.
The simple reason for the downfall of "build it and they will come"
belief is that even the best-built web site in the world will generate
no income if it is not found. Although search engines will bring in
visitors after a while, very few customers will purchase something
through a web site on their first visit. Now that the visitor has
found a web site, they need a reason to return a few times, before
they are likely to spend money. New content, a free service of some
sort, news, etc, are some of the ways web sites encourage users to
return, thus creating brand name recognition usually required for an
online sale.
These days, banner ads are more aimed at creating brand name
recognition than bringing in customers. The low click through rates
(generally hovering around 1%- 3%) and even a smaller percentage of
repeat visitors have forced the industry to take a new look at what
banner ads do for the advertiser: they tend to do a pretty good job
creating brand name recognition, and not so good of a job linking up
customers willing to spend money with suppliers offering the product.
Having said all this, you might already have guessed some of the
challenges in using E-commerce:
- Time consuming, not just at start up
- Costly, since a lot of work is involved
- Implementation, how do I do all of the things mentioned?
If money and time is not an issue, implementation can still be a large
stumbling stone. The market is saturated with people willing to do the
job, but not all those willing are capable. Sorting them into these
two groups can be a challenge.
Now let's look at the upside of e-commerce.
Chances are that if you are offering a product, or service you have
some sort of hours of operation during which you deliver those items
to the customer. Although only a small percentage of services can be
provided 24/7 on the web through automation, almost all product sales
can be accomplished 24/7 via E-commerce.
E-commerce web site vs. a web site without gives you access to
customers around the world, and a better income though added impulse
purchases. If you are offering a speciality item, you now may have a
niche not only in your town or city, but also in your province/state,
country, or even the world. I think if you look at cd-now.com or
amazon.com you will probably find that a lot of their sales are of
products difficult or impossible to find in a local store. If you are
providing a unique item or items, E-commerce is your door to becoming
a niche provider in a much larger area than you are currently serving.
If you currently have a business, e-commerce should be looked upon as
a project: a project is meant to bring in a percentage of profit. A
business itself should never be a sole project, but a combination of
projects. If something happens and a project falls through, the
business should be able to continue.
In a healthy environment, with an existing business, ideally the
e-commerce will become a percentage of your business income, and not
the bottom line. At least start out with that idea as it keeps you
from putting all the eggs into one basket. Just as you would not
convert your whole business to serve a single customer to the best of
your ability, letting the other customers go, I would not suggest
converting your business to meet online customers needs, and saying
good bye to the present clientele.
To address your technology infrastructure requirements, the answer is
that you probably don't need much, at least to start with. Once you
acquire commercial web space (can be done from $6ca / $4us (see
www.clickhost.net) per month and up, depending how much web space and
what type of services you wish to make available on your web site),
and have registered a domain name (cost will depend on the type of
domain you desire, but you can expect to pay $20-$50ca / $15-$35 a
year), than all you require is some sort of credit card processing
service. PayPal (www.paypal.com) will allow you to process credit
cards on your web site without a large investment (I believe
regardless of your needs, the maximum you need to put out up front per
month is around $20). Although I am not familiar with PayPal as well
as I used to be, it is a great solution for a start up venture. I
would not recommend starting out with a service such as Verisign
(www.verisign.com) as last I checked their packages started at $200ca
a month. Although this type of service might be required down the
road, I would advise against using this service as a starting point.
Even the best web site has very (and I mean VERY) few sales in the
first months of going online. I would say it is reasonable not to
expect any sales for a couple of months or so, simply because it takes
a while for people to find the web site, and come back to it a few
times before they purchase. In the mean while, you are looking and
already being a few hundred dollars out.
As I understand, PayPal only offers the service of accepting credit
cards on your web site in US funds only. I am not sure if they are
planning to expand, but as of a month ago, they did not offer credit
card services for currencies other than the US dollar.
For Canadian customers, Canada Post has some solutions, which start at
$29.95 (currentlly offering a one-month free trial). You may find more
information on the services that are available from Canada Post at
http://www.canadapost.ca/business/prodserv/so/default-e.asp
To become an online merchant, as far as hardware goes, all you need in
your office is a computer with Internet access. Unless you wish to
house the whole system in house, at which point you would require
powerful computers / servers, perhaps even routers, networks, etc.
Again, as with the other examples, bigger is not better, and I would
not recommend this as a start option because of the large investment
and the requirement for high technical expertise for setting up and
maintaining of such a system. To be quite honest, I would not
recommend to any business, to own their own hardware and
infrastructure unless they are on the high end of a mid size business,
or beyond. It does not make sense to do this in house, worry about
backups, restores, security patch upgrades, hackers, etc.
In closing, if you have employees you might find resistance from the
less tech savvy on having to deal with new customers, in new ways.
Those apprehensive, and unfamiliar will make mistakes, and some
learning might need to take place. In some extreme cases, you might
find that some employees might need to be let go and be replaced with
someone more willing or capable of dealing with the technology.
I hope this answers your question, and I encourage you to ask for a
clarification should you be unhappy with any part of my answer
(existing, or missing). I am not providing a search strategy as I am
speaking from experience gained through providing Internet based
solutions to many customers over the last six years.
Thank you for your question.
Regards,
slawek-ga |
