Jan 31, 2012

Checklist for the Aspiring E-Commerce Owner

In a previous post, I pointed out that E-commerce is real business. If you’re an aspiring E-commerce owner, that means you need to do many of the same things as a “bricks and mortar” startup. Write (and execute) a business plan, secure your suppliers, budget your cash and prepare for customers.

That’s just for starters. Some of the additional issues you need to deal with are specific to E-commerce. Other problems are related to those experienced in bricks-and-mortar business, but are complicated by the remote relationship you have with your customers. They all need to be resolved before your E-commerce storefront accepts its first order.

Images and information for all products

Online consumers are loath to buy something they can’t see. They also aren’t very likely to purchase anything from item listings that are slim on product information. According to a study on E-commerce usability published last year by the Nielsen Norman Group, “bad content” — a dearth of product information — was responsible for over half of the user failures to purchase.

Bricks-and-mortar customers can see, touch and usually lug around the items they want to buy before making a purchase. A web page with item images and information is as close as your customers are going to get to your products. Quality images (plenty of them, too) and detailed product information will help ease a site visitor’s decision to buy.

Inventory, fulfillment and returns

This all should be part of your business plan (you’ve got one of those, right?), but if it’s not, it’s time to step back and take care of the details before you have a flaming wreck on your hands.

Inventory is typically the easiest issue to address for most of the E-commerce startups I’ve dealt with. They’re typically small- to medium-sized businesses that have product on-hand, or at least in a nearby warehouse. In these cases, the biggest issue for them is figuring out how much of each product they have on hand — sometimes they’re just not so great at accurate record keeping. Regardless, before your storefront goes online, you need to have a firm grip on your supply chain and your in-stock products.

If you plan to do E-commerce through drop-shipping (where the product is shipped directly from a distributor to your customers) or through remote fulfillment (“pick-and-pack”), an iron-clad agreement with your vendor(s) regarding stock levels, processing times and priorities, and customer service absolutely must be in place before you open for business. Getting products into the hands of your customers is your most important process, and you don’t want any surprises from your vendors to gum things up.

Payments and Security

Most people I know start their new E-commerce business to make some money. Our consulting staff at Netsource brings up the subject of payments early in the project planning process, so it doesn’t slip through the cracks. But I’m always surprised how many aspiring site owners haven’t given it any thought until we bring up the subject. Payment processing and banking arrangements are an expense — fairly small ones, granted — so they should be included in your business plan before your first chat with a developer.

Ditto regarding your website’s security. An SSL certificate is required for your site to securely handle payment information. Plan for that expense early on. Make sure you select a payment gateway vendor that provides all of the services you need. Don’t include in your plan any type of scheme to keep customer credit information “on file” or to store the information for manual processing through a point-of-sale terminal. Industry security standards generally prohibit web hosting companies from storing credit card info. Many payment gateway companies, however, offer services to accommodate a number of different recurring billing scenarios.

Shipping

Even the site owners who start off with a good business plan frequently overlook their shipping details. The most common problem is that what they want to ship and what automated shipping interfaces will accept may be two different things.

Odd sized items and products that require motor freight shipping cause the most problems. Common carriers like UPS and FedEx can accommodate odd or over sized items through their E-commerce interfaces, but additional setup time and planning is required. The selection of freight shipping rates they make available is extremely limited and usually expensive.  On the other hand, very few motor freight carriers offer an automated interface — and the interfaces that exist are usually quite complex because motor freight rates are calculated based on a large number of variables.

If you plan to ship items that don’t fit in standard shipping cartons, start the discussion about shipping with your web developer early in the planning process for your website. Putting off the topic of shipping can lead to more nasty surprises and project delays than you want to think about.

Marketing

If you build it, they won’t come. Unless you do something to capture their attention. Visitors won’t  automatically start landing on your website just because it’s there. Building site traffic takes planning, work, more planning and more work.

While there are a number of  help-yourself marketing methods you should pursue, your website development project needs to put a lot of effort into solid SEO. The natural search success of a well-optimized website will do more good for your business than anything else. Budget for some paid search advertising as well to help jump-start the flow of site visitors.

You

A new E-commerce website is just a tool; you’re the mechanic. The nuts and bolts don’t come together unless you make them. A good E-commerce software package can make your job easier, but there’s simply no such thing as hands-off selling. Somebody has to serve your customers. Somebody has to answer questions. Somebody has to drive sales, maintain vendor relationships and run the business. Unless you can afford a big payroll, that “somebody” is usually going to be you.

You want to make money by selling stuff online? Plan to invest a lot of time in the process. Remember, you’re only going to get one shot at turning each visitor into a happy customer. Be ready; be committed to your new business. And make that one shot count.

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