How to Set Up, Part 1

by Melissa Campanelli, March 27, 2006 Entrepreneur Magazine

So you want to set up an e-commerce site. While it may seem daunting at first, don't fret. The following is an overview of different ways to go about it. Simply pick the one that's right for you, and log on.

Going Solo
Many experts and entrepreneurs believe that building your own website is a no-brainer, thanks to the inexpensive, easy-to-use and sophisticated e-commerce services available.

"If you're a one- to two-person firm, [you have] someone on your staff [who] can design a website and you only sell a few products, there's no reason not to do it yourself, particularly with the out-of-the-box solutions available nowadays," says John Jantsch, a marketing coach, author and creator of the Duct Tape Marketing system for small businesses.

Jantsch, who lives in Kansas City, Missouri, built his site, www.ducttapemarketing.com, in 2001 and says you can create a robust site for less than $150 per month, plus a few hundred dollars for software. Popular tools include Microsoft's FrontPage, for $199, and Macromedia Dreamweaver 8, for $399.

After setting up your website, you'll need a shopping-cart software program or service so you can take orders, calculate shipping and sales tax, and send order notifications. This costs about $29 to $79 per month. The most popular options include GoEcart.com, 1Shoppingcart.comand ShopSite Inc.

Your next step should be to obtain an internet merchant account from your bank, allowing you to accept credit card payments online. If your bank turns you down, try others--and consider offering to move all your accounts to that bank to up your appeal. Or you can perform an online search for "credit card processing" to find a variety of companies offering accounts to budding online businesses.

You'll also need a payment gateway account, which is an online processor that hooks into both your customer's credit card account and your internet merchant account. The gateway verifies information, transfers requests and authorizes credit cards in real time. Leading providers to smaller merchants include Authorize.Net, CyberSourceand VeriSign.

An even less expensive way to get started accepting online payments is to use PayPal, an account-based system that lets anyone with an e-mail address securely send and receive online payments using a credit card or bank account. PayPal is free, but the company charges 2.9 percent plus 30 cents for every transaction under $3,000. The company also has a product called PayPal Website Payments Pro, which offers basic shopping-cart functionality and costs $20 per month plus transaction fees.

Of course, you still have to actually host your site. You can do it yourself on a computer that can be dedicated as a web server and that has a broadband internet connection, but such systems are costly and have limited capacities. Your other option: Use a web-hosting company. Many entrepreneurs swear by some of the bigger names in web hosting, such as Affinity Internet, Go Daddy Software, Hostway, Interland, iPower, Network Solutions, 1&1 Internet, Verioand Yahoo!. But some entrepreneurs prefer small, local hosting providers since they offer a direct contact--especially important if your site has an outage. Whether you use a large or small provider, basic hosting services--as well as domain-name registration and e-mail accounts--cost about $10 per month.

There's also a free option: Microsoft plans to launch a beta version of Microsoft Office Live early this year, providing small businesses with their own domain name, a website with 30MB storage, and five e-mail accounts, each with 2GB storage. Visit www.microsoft.com/office/officeliveto check for availability.

SBC: 2005 best choices

Storefront
Yahoo's Small Business arm had much to be proud of in 2005. Primarily, the company revealed tremendous growth numbers in terms of e-commerce Yahoo! Merchant Solutions Web hosting subscribers. As of August, Yahoo had more than 35,000 e-commerce customers — 5,000 more than they had four months earlier. So it should come as no surprise that our readers overwhelmingly voted Yahoo! Merchant Solutions hosting as the top e-commerce storefront for 2005.
Yahoo's e-commerce solution isn't necessarily the easiest solution to use, and there are still issues with slow customer support response time and its confusing monthly financial statements. However, the company upgraded its outdated shopping cart in August with a new, highly configurable checkout manager. Despite some of the blemishes, it's clear Yahoo Merchant Solutions has plenty of happy customers.

E-Commerce

Storefront

Yahoo's Small Business Runner-up: GoDaddy Quick Shopping Cart

Web Hosting

GoDaddy Register.com Build-It-for-Me

Customer Service

Register.com Runner-up: Interland

Web Analytics

Webtrends 7.1 Runner-up: NetSuite NetCommerce

Search Engine Marketing

Google AdWords Runner-up: Yahoo Search Marketing

Affiliate Program

Google AdSense Runner-up: Amazon Associates

Runner-up in our voting is relative newcomer GoDaddy and its Quick Shopping Cart solution. GoDaddy has gained popularity in the e-commerce world due in part to its low pricing plans — which range from $9.95 to $49.95 per month.
Web Hosting
In the category of non-e-commerce Web-site hosting for 2005, we had a tie between GoDaddy and Register.com's Build-It-for-Me.
Starting at $499 per year, Register.com offers the Build-It-for-Me package that includes a domain name, e-mail and a professionally designed five-page Web site. It also includes a Monthly Web Site Fitness Program, which gives customers free monthly edits and updates, search engine optimization services, online form development and competitive analysis reports.
GoDaddy, again, is gaining fans thanks to its $1.99 domains and low-cost hosting plans starting at — get this — $3.19 per month! Backed by catchy and aggressive marketing, GoDaddy has made great strides in the crowded hosting field.
Customer Service
Once again, Register.com scores a victory in the customer service arena. Customer service is king — regardless of the business you're in. Judging by the number of votes received, it appears Register.com gets it.
Interland (soon to be Web.com) earned the runner-up honors in the customer service category.
Web Analytics
It's no longer enough to have a well-designed site and good products. Competition in the e-commerce field is so intense, business owners need to exploit every advantage they can find. One way to really find out what's going wrong (or right) with a site is to employ a Web analytics package. Find out where potential customers are bailing. Find out where your customers are coming from and why. Understanding this data can make or break a business.
Analytics veterans NetIQ takes the prize for Best Analytics Package with its latest product Webtrends 7.1. The latest version hit the streets in early 2005 with three notable improvements aimed squarely at helping businesses reach paying customers. It helps drive higher sales by letting you you tweak online marketing efforts including improved campaign performance, better search engine marketing and detailed audience segmentation.
The three features — integration with ExactTarget, which measures e-mail campaign performance; the WebPosition Gold 3 module, which optimizes search engine page results, rankings and keywords; and audience segmentation, which can easily identify profitable visitor segments and visually compare their behavior and conversion rates — appear to be hits with customers.
The popular NetSuite NetCommerce analytics and CRM package is this year's runner-up.
Search Engine Marketing
The other battle among e-commerce businesses is taking place on the search engines such as Google and Yahoo. A site's placement in a search engine can be the difference between a couple of sales per day or hundreds of sales. In the "good 'ole days," optimal search engine placement could be had by stuffing a site's pages with popular, random keywords. However, search engines have become a lot smarter and employ secret, complicated formulas to determine where a site comes up in a given search.
One way to beat the "organic" search game is to pay for sponsored ads on a search engine (also known as Pay-Per-Click campaigns). With PPC campaigns, you can pay to have your ad come up on a search results page based on the keywords typed in by an online shopper. Effective PPC campaigns can drive tremendous traffic to your e-commerce site.
It should come as little surprise to our readers that the two most popular search engines — Google and Yahoo — battled it out for having the most popular search engine marketing tools. Well, "battled it out" might be an overstatement. Google's AdWords service outran Yahoo Search Marketing (formerly known as Overture) by a 3-to-1 margin.
We're not terribly surprised since Google done a great job in winning mindshare and keeping its name in the news on an almost daily basis (and, no, the $400-plus stock price hasn't hurt, either). We're also fans of the ease with which you can create a PPC campaign in Adwords, as opposed to the complicated process you have to trudge through with Yahoo's Search Marketing.
Note to Yahoo: improve your Search Marketing interface and you just might make it to the top next year.
Affiliate Program
Another way to cash in on the Web without opening your own store is to place ads on your site and get paid by bringing in sales leads or clicks to other vendors. Affiliate programs have become extremely popular the past few years — earning savvy Web site owners plenty of extra cash.
While effective use of any affiliate program can reap rewards, our readers picked Google's AdSense as the Best Affiliate Program for 2005. A snippet of code placed on your site is all you need to have targeted text-based ads that bring in a few cents to a few dollars per click (those ads, by the way, come from Google's AdWords program). That's the main advantage AdSense has over the other popular affiliate programs that mostly pay out based on actual sales.
Another long-running program —Amazon.com's Associates — came in second place this year. Amazon Associates gives Web masters innumerable options to advertise Amazon's millions of products — from banners to creating your own virtual storefront. Generous commissions normally begin at four percent of sales. A tiered structure gives successful Associates the opportunity to bump that percentage over 7.5 percent.