Online Checklist Part 2

By James Maguire , April 18, 2006


Yesterday, we gave you seven top tips for getting your e-commerce venture started. Today, we conclude with the final eight items on your startup checklist.
8) Knowledge of Search Engine Optimization (SEO)
If you don't know how to set up your site to get high rankings in Google and Yahoo, you'll never get the traffic necessary to build a thriving business. Some of your competitors are experts in this area. They even hire SEO gurus to fine-tune their site to attain its greatest ranking.
To educate yourself, read some of the copious online guidance about SEO. A good place to start is Search Engine Watch. While you're there, look at the tips for submitting your site to the leading engines — that's essential.
By the way, many Web designers claim to be adept at SEO. Not all of them are. The best practices for SEO change constantly, so if your designer last studied SEO in 2004, they're not up on the latest tactics.
The point: you may need to hire a Web designer and an SEO expert. Wow, this is getting expensive!
9) An Accounting Package
Okay, so accounting software isn't sexy — but you'll quickly drown without it. Even before your first dollar of profit, you'll need to track a long list of expenses. Once you start making sales, your accounting program allows you to answer the most important question: am I making money?
A small business favorite is Intuit's QuickBooks, and Sage's Peachtree is also popular. Not surprisingly, Microsoft is vying for market share with its relatively new SBA 2006 small business accounting package.
10) A Web Analytics Package (and Knowledge of Conversion Rates)
A Web analytics program tells you how shoppers are using your site. It reveals where users come from, what pages they visit and what keyword searches brought them to the site. An analytics package enables merchants to calculate their conversion rate. (Your "conversion rate" is the percentage of your visitors who make a purchase — a critical fact to know and track over time.)
Over the last couple years, having a good Web analytics program has become a major dividing line. E-commerce sites that effectively use their analytics programs tend to be winners; those sites that don't mine data from an analytics package tend to fall behind.
Fortunately, there's a package for every budget. Although you can spend a whole lot of money, you don't need to buy a Rolls Royce analytics program to start.
Among the favorites are NetIQ's Webtrends (they have a small business edition), Clicktracks and WebSideStory. (WebSideStory's program starts at $27 a month.) There are many more good ones out there.
Google offers a free analytics program (based on the former Urchin analytics program), though in classic Google style they're mysterious about how to get it. Merchant must "request an invitation." It's not clear on what basis Google awards invitation, and the search firm says it may take "several weeks" to get one.
(Editor's Note: Our invitation took nearly three months to arrive.)
11) Awareness of Competitive Sites
Just as your Web analytics tool tells you what's going on at your own site, you must be highly knowledgeable about your competitors' site. How does their inventory stack up with yours? Their navigation? Some merchants even sign up for their competitors' newsletters to know every sale they offer.
To find out how much traffic your competitor is getting, you can use the Alexa service (http://www.alexa.com). This tool doesn't give absolute numbers of visitors, but it provides a relative ranking number. Another tool that shows your competitor's page rank (among other things) is the Google Tool Bar.
12) A Shipping Rate Structure
Before you get your first order, you'll need to decide what you'll charge for rush and standard delivery.
If you're willing to lose some money on shipping, offering inexpensive shipping is an aggressive move to attract customers. Shoppers love cheap shipping, and free shipping over certain purchase levels is also a popular technique.
On the other hand, many sites make a tidy profit by tacking a few extra bucks onto shipping fees (even beyond labor costs to cover packing).
Your decision about shipping charges should be partially guided by what your competitors are doing. Your rates should be in line (or hopefully lower) than theirs.
If your product can be sold internationally, look at this guide to reaching customers beyond U.S. borders.
13) A Security System and Data Backup
The Internet is a veritable den of thieves, with new forms of data theft, phishing and scamming invented everyday.
You'll need software to protect your site. Of the several good programs available, a favorite of small online business owners is the McAfee Internet Security Suite 2006, which stiff-arms all manner of viruses and hackers.
No matter how secure your site, though, you want your business data backed up. (In fact you need to have your business data backed up.) Both Symantec and Maxtor make well-respected back-up systems.
14) A Marketing Plan
This is the big one. An effective, multi-prong marketing campaign is an online business's best friend - the more you can spend on advertising, the better. Go here to learn about creating an online marketing plan.
The best marketing plan evolves and grows over a business's life — it's certainly not a "set it and leave it" kind of thing. So you can start small if need be, yet during your site's early days you'll need these basics:

• Many types of free marketing Listing your site on Google's comparison shopping engine, Froogle, is free. Also free — and good for driving traffic — are joining a Web Ring; offering a free service to users; writing articles or blogs to attract traffic; and sending out an online press release using PR Web.
• An e-mail newsletter You can use your e-mail newsletter to inform shoppers of your special deals and to offer previous buyers a special discount - a great sales technique. You'll need e-mail software, like the low-cost version of Constant Contact or the Gammadyne Mailer. Group Mail offers free version here.
• A link-building campaign You can trade links with non-competitive sites for free, but some sites hire professional link building services. The reason: search engines boost your ranking if your site has many inbound links. Whether you do it yourself or hire some help, an active link building campaign is essential.
• A pay-per-click campaign It gets expensive to buy sponsored links from the Google's Adwords or Yahoo's Search Marketing services. But your competitors are undoubtedly doing it. So if you're not, it's unlikely you'll be competitive (unless you have a very compelling product or price). As online competition has increased, a PPC campaign has become essential.

With time, you might consider using an affiliate marketing program, in which other sites get paid a percentage of each sale they send you. But it's questionable whether a brand new site will benefit from an affiliate program. Although some new sites have profited, many new sites has yet to build the name recognition that makes using affiliates profitable.
Be aware that creating an affiliate program through such portals as Commission Junction can cost several thousand dollars up front. You may want to investigate whether or not your e-commerce hosting provider allows you to create your own program.
15) Plenty of Gumption
It's a familiar scenario: a business owner invests a substantial amount in site design and advertising, launches a new site, and…it gets about 137 page views a week. Then, a good bit of time later, that number rises to about 300 page views a week — and almost no sales.
Merchants in this case often complain: "I thought there were 200 million Internet users. So where are they?"
Well, just like in the brick and mortar world, it takes time and continued investment to build a business. Gumption is required. If creating a business was as easy as building a Web site, we'd all be raking in the cash.
But keep at it. E-commerce is still new — there's time to take your lumps, learn from your mistakes, and find out how to turn a profit. Good luck!

Online Checklist Part 1

By James Maguire
April 17, 2006


Here's an inspiring fact for anyone starting an online business: If you gather everything you need before you launch, you'll be far ahead of most people who start online stores.
Believe it or not, thousands of people launch e-commerce sites only to realize they lack an essential element. Six months in, after spending their nest egg, they ask: "You mean I need a pay-per-click campaign? But I didn't budget for that." Or, "I need Web analytics software? I had no idea."
Assembling everything you need prior to launch will save you numerous headaches. And it will better prepare you to compete with established businesses, which are operating with full toolboxes.
The list below contains everything you'll need to get your online store off the ground. Read it, assemble the items, and prepare to work long hours.
One more thing. This list assumes you already know what you'll be selling. Of all the things you need to figure out ahead of time, deciding what to sell is the most important. It must be an item or service that few businesses already sell, one you can get for a low wholesale price or one you have a special knowledge of.
Something about what you sell has to allow you to stand out from the herd - at least a little bit - otherwise you'll be trying to sell snow to Eskimos. And that's discouraging.
So now you have something truly great to sell. Gather or create the following 15 items, and you'll have a reasonable chance at making some money online:
1) A Business Plan
Writing a business plan seems daunting. You might say, "I'm starting a business, I don't want to sit down and write a paper, like I'm in school." But think of it this way: it's free, and it will help you immeasurably.
Real businesses have business plans. For guidance on how to write a plan for an e-commerce site, go here.
Your business plan lays it all out. It details what you sell and where your profit comes from; how much inventory you'll have on hand and where you'll store it. It lays out your return policy — and you'll need one of those. Most important, your business plan details your total start-up cost, from your ad campaign to Web designer to monthly server fees.
Are you sure you believe in your business enough to risk this amount?
2) A Reliable Source for Your Product
If you're selling hand-sewn Korean quilts, are you confident the price of yarn isn't going to skyrocket three months from now? Do you have more than one wholesale source? Hopefully yes, otherwise you could be in trouble.
The best problem of all: if you make your product in your basement, can you handle success if you suddenly get 125 orders? Make sure your supply line is steady before you plunk down your money.
3) A Good Domain Name
When you try to register your business's domain name, you'll probably find that the name you want is already taken.
In response, some people choose terribly cumbersome names. They find out that "Tshirt.com" is taken and then learn that "HockeyTshirt.com" is also taken. So they create an unworkable domain name like VeryCool-HockeyTshirt.com. Not only is it too long, it contains a hyphen, which should be avoided (some users forget to put them in, sending them to your competitor's site.)
A good domain name is short and memorable and — most important — easily typed. Ideally, a user can simply hear it and know how it's spelled. So GoodShoe.com is much better than GoodeShoe.com. In fact any word that's hard to spell should be avoided.
The ".com" version is typically far better than ".net," because browsers default to ".com."
Be aware that your URL affects your search engine ranking, so if you want to be found for "shoe," it's a good idea to fit "shoe" into your domain name. One way to do this is to use your brand name along with a keyword term. So MillerShoe tends to work better than FantasticShoe.com. (Which is why MillerShoe is taken, but FantasticShoe is still available.)
4) A Reliable Web Host
Your Web hosting service is the technical backbone of your site: its service and support options will play a big role in your business's operation. Hosting companies usually charge monthly, and the cheapest company isn't always best.
Choose carefully the first time. Once you pick your Web host and install your files there, moving to a new host is, at best, a major headache. Ideally you'll choose a good one and stay there.
To see a couple popular choices, take a look at Small Business Computing's 2005 Product Picks.
5) A Web Designer
Many Web design software packages are so easy to use that business owners think they can design their own site. That's a mistake.
Homemade Web sites aren't like homemade cookies. No one likes the way they look. Worse, an ugly site makes shoppers wonder: should I enter my credit card number in this funky looking site?
Select a Web design firm with great care, and be prepared to pay for quality work - you'll get nowhere without it.
On a related note, can your Web designer handle your photo needs? Because you'll need a steady flow of product shots.
6) E-Commerce Software
This is the software that will run your store, from product display to inventory management to checkout.
Selecting your e-commerce software is one tough choice. You can try it out ahead of time, but you won't fully know how you're going to like it until you're up and running for a while. At that point, changing your e-commerce platform is like changing boats in the middle of the ocean.
Consequently, you want to do a lot of research before you choose. For more information and a list of well-known e-commerce programs, go here.
Realize a couple of key facts: A) the prices for e-commerce software have fallen, so you don't need to spend a fortune unless your needs are complicated, and B) many of today's e-commerce packages include a full range of tools in one package, from an inventory management system to marketing tools. Many of today's merchants prefer this "all-in-one" approach because it makes life simpler.
7) A Credit Card Merchant Account
To accept credit cards online, you'll need a merchant account, which is an account with a bank or other financial institution that allows you to accept your shoppers' credit card numbers.
Setting up a merchant account gets pricey. Banks typically charge a set-up fee, a monthly fee, and a percentage of each transaction. (So even if you have just a few customers, you pay the set-up fee and the monthly fee. Ouch!)
To learn more about setting up a merchant account, go here.
Many first-time small merchants get a merchant account through PayPal. The company is moving aggressively to gain clients, so it offers a no set-up fee method of accepting major credit cards.
Next: Top Tips 8-15.

Furniture Business (Story)

SexyFurnishings.com

Sexy still sells. Just ask brothers and business partners Michael and Ronald Lipka, who launched SexyFurnishings.com in April 2001 - and kissed their decidedly un-sexy backgrounds in accounting and engineering goodbye. The secret, they found, was being able to sell sexy at an affordable price. It all started in 2000 when Michael Lipka happened upon a crowd gathered outside a Boston furniture store. "It was this great big chair shaped just like a high-heeled shoe, and it was sitting out in front of the store for people to look at and sit in," recalls Lipka. "It was a typical dark and dreary Boston day with not that many people walking around, but there were still dozens of people standing around this chair." But Michael also noticed that all of the potential customers were making themselves scarce after reading the chair's price tag, which was over $1,000. "This clearly was a great piece of furniture, but the main problem people had with it was the price," he says. Business Model: Drop Shipping
A few months and many hours of market research later, which included a handful of trips to furniture factories, the brothers Lipka (Ronald is 29, Michael 28) knew they were on to a viable business model: Internet-only furniture retailing using drop-shipping direct from manufacturers, which would keep overhead down and prices low. Oh - and make sure that furniture had some sex appeal, too. "We knew the demand was there," says Michael Lipka, but "it was a risk we were taking that people would be willing to buy these products online."

Sole Brothers: Ronald and Michael Lipka founded SexyFurnishings.com, which thrives on a drop-shipping business model. (Click for larger image.)

The risk has clearly paid off. Sales of their 500+ home products, which include everything from sofas and tables to ottomans and clocks, have increased 16-fold in four years. And with the expertise of their aunt, Ronda Prokop, an interior design veteran who joined as business partner 18 months in, SexyFurnishings.com doesn't just sell to homeowners — they sell to design-minded corporate clients like the MGM Grand, Pennsylvania State University, the Subway sandwich franchise, and even the federal government (the last of which is somehow even un-sexier than accounting and engineering). The company drop-ships from factories in five geographically diverse states — California, New York, Illinois, Georgia and North Carolina — for 90 percent of their sales, with the remaining products shipped directly from their own California warehouse. "Having a factory that is willing to work and grow with you is important," says Michael Lipka, who relied on trade shows, industry reputation and word-of-mouth to pick his suppliers. "A lot of our customers are looking for answers to their questions immediately, and if we can't answer them right away, we need to be able to get any requested information from our factories as soon as possible." The company also uses Live Chat from Live Person to handle customer inquiries.

Everthing's A-OK: Top selling seat. (Click for larger image.)

Stylish chairs are most of their current top-sellers, such as their Jacobsen-style Egg and Swan Chairs, the Collage Chair, and the A-OK Chair. Their customers skew female, ages 30 to 50, and over 10,000 people are on the company's e-mail list. Unique site visitor numbers hover at around 20,000 per month. Pay-Per-Click Not Paying Off
Attracting customers certainly hasn't been owed to pay-per-click marketing. "We used to spend several thousand dollars a month" on such programs, says Lipka, "but found those to be a total waste of money." Instead, they hand-coded the website themselves for optimal search engine appearances, and say the vast majority of their site visits comes from "organic, unpaid listings." Nearly all payments are handled via credit card, with Authorize.net; PayPal, personal checks and wire transfers account for a scant few. The family company uses Jumpline as their hosting provider. "We liked the pricing structure they had and the amount of storage space they provided at the time," says Michael Lipka, though he admits that newer companies "probably provide just as good a service as they do." That said, Jumpline's new Web-based e-mail functions are keeping the Lipkas as customers. Switching Storefronts: More Flexibility
But Lipka is "not happy at all" with his bCentral storefront software, and says fixing that is their biggest challenge. "The software doesn't allow the customer to choose the product options (color, size, etc.) prior to adding it to the [shopping] cart," he says candidly. And "the cart doesn't allow you to show the customer any related product info after they have added the product." SexyFurnishings.com is planning a transition to Yahoo!'s storefront software early this year, though they're less than pleased at the associated per-transaction fees. They also want to automate more of their Web design, to spend less time on page coding and "focus more on expanding our product offering." Even with those challenges ahead, the founders haven't forgotten where their inspiration came from — remember that high-heel shoe chair in Boston that cost over $1,000? Not only can you customize it by choosing from 14 different colors for the trim, insole and overall shoe hue, it sells on their Web site for $199.

FAQ eStore

eBiz FAQ
Everything you need to know to start your own successful e-business.
You have the great idea, you have the enthusiasm, you even have the money to get started, but you still have more questions than answers when it comes to starting and sustaining your e-commerce site. To help address the issues all e-businesses face, we've compiled this list of frequently asked questions. We'll continue to add to the listing, so keep FAQ checking.
Search Engine Marketing
How do I profit from affiliate marketing?
How do I get started using search engine marketing?
How can I find a reliable e-commerce hosting provider?
How do I sell on eBay?
I want to sell internationally. What do I do?
How do I keep track of my e-biz finances?
How can I accept online payments?
I'm getting visitors but no sales. What do I do?
How can I optimize my search engine results?
Where can I get help designing my e-commerce site?
How do I provide excellent customer service?
What is drop-shipping?
What do I need to know about online taxes?

Hosting Plan Primer

By Matt Jackson
January 16, 2007

All Web sites require hosting, and if you own a Web shop, it is especially important to find a company that offers plans for e-commerce. These days, more companies cater to e-tailers, providing packages that serve their specific needs, so it's wise to capitalize on the trend. The basic needs of any online store include back-end functionality that lets you manage a product catalog, exceptional site security, secure certificates and the integration of a payment gateway. We explain these functions and offer some tips on what to consider when shopping for a host. Product Catalog And Shopping Cart Software
The product catalog is arguably the most important part of any e-commerce venture. Not only will site visitors need to intuitively access and navigate the catalog, but the site administrator also needs to quickly and efficiently maintain product listings, prices, promotions, shipping costs and much more. For a small e-commerce site with only a few items, this isn't as big a consideration as it is for a store offering hundreds or even thousands of products. Still, care should always be taken when looking for hosts, to ensure that they offer appropriate applications. Site Security
Site security is also paramount. Many customers will be unwilling to make any purchase from a site that does not offer the appropriate level of security. SSL (Secure Socket Layer) certificates can be purchased from certificate registrars, but some hosting plans, albeit a relatively select number, offer them as part of the package. The use of a secure server means exceptional security and is depicted in users' browsers by a padlock symbol and through the addition of an s in the URL (https instead of http). This promotes a sense of trust and reliability that will offer shoppers peace of mind, which in turn, will boost the bottom line. Payment Gateway Software And Merchant Accounts
In order to sell products online and accept credit card and debit card payments it is necessary to use a payment gateway and merchant account. Although some services effectively combine the two, the most popular service being PayPal, these can prove more costly in the long run. It is prudent to offer customers flexibility when it comes to payment options to maximize your sales. Disk Space And Bandwidth
In addition to these features, you should also consider the amount of disk space and bandwidth that your online store requires. Hosting accounts vary wildly in terms of the limits they set for both of these.

• Disk space is the amount of space that a Web site is allowed on a server. Typically, e-commerce sites contain a large number of pages and generally also include images and occasionally videos. All of this adds up to a high disk space demand.
  
• Literally speaking bandwidth is the capacity that a network connection can carry at any time. In the case of hosting accounts, bandwidth is determined by the amount of data served to all visitors in the space of a month, and again, varies greatly from one hosting plan to the next.

Hosting And Your Budget
Finally, cost implications will obviously play a factor. No business, including an online store, can survive without maintaining a realistic budget. Budget e-commerce hosting accounts are out there if you know where to look. Just remember to consider all the features you need and to budget for the addition of these extra options. If you're looking for a hosting provider, or thinking of switching, we'll help you get started by outlining three that offer excellent e-commerce plans. Website Source — All Round Performer
Website Source offers a range of e-commerce plans that are arguably the best available for the money. They are feature rich and should fit within any Webmaster's or business budget. The least expensive package is $6.85 per month and offers 50GB of bandwidth and 5,000MB of storage, which should be ample for even medium-sized online stores. This package also lets you host an unlimited number of Web sites, too, making it perfect for the small network owner. Also included is an OsCommerce shopping cart that provides the intuitive product catalog we discussed earlier. More advanced packages range in price from $14.55 per month for 90GB bandwidth and 7,000MB of disk space to $129 per month for dedicated server plans that provide use of an entire server. All of these advanced packages provide Miva Merchant 5 shopping cart software, which is more advanced than OsCommerce software, and designed for larger e commerce stores. All Website Source plans also include a free setup of the Authorize.net payment gateway software and the use of shared SSL certificates. Dedicated server customers also receive impressive discounts for Web site specific SSL certificates. LunarPages — Most Powerful
The LunarPages e-commerce hosting plan is more expensive than the Website Source plan, however, it offers a lot more for the money and is more closely suited to the needs of larger online stores. All LunarPages plans offer the software you need to get your store up and running. They also provide a shared SSL certificate making them a good value. The basic plan costs $6.95 per month and provides an impressive 800GB per month of bandwidth and 35,000MB of storage. It also includes use of the shared SSL certificate, directory encryption and a choice of OsCommerce, Zen or Cube shopping cart software. In contrast, the e-commerce specific package costs $21.95 per month, meaning it isn't for the faint hearted. However, in exchange, customers receive 1,000GB per month of bandwidth and a staggering 50GB of storage. The same e-commerce software and features are also included. The stand out feature of this account is the sheer amount of disk space you receive, making it perfect for larger stores with many products. SiteGround — The Best Budget Plan
SiteGround is virtually unbeatable when it comes to price for an e-commerce plan. For $5.95 per month, you get 40,000MB of Web space and 900GB of monthly bandwidth. They will also install (free of charge) OsCommerce, Cube or Zen shopping cart software for you, making it very easy to get up and running. A free, shared SSL certificate is included along with a huge range of other features. If budget plays a big part in the final decision, then SiteGround is probably the best choice for you. It is also a good choice if you have little or no knowledge of how to install shopping cart software or how to integrate payment systems into your site. The Bottom Line: E-commerce Hosting
E-commerce hosting does not need to be expensive but it does need to offer the appropriate features. OsCommerce is an open source shopping cart so can be installed on any compatible server, however, using an e-commerce hosting plan can mean that the software is installed for you at no extra cost. Some hosts even provide payment gateway software for no extra fee. Your exact requirements as well as those of your online store will determine the best choice for you. Matt Jackson, making his debut on ECommerce-Guide.com, is a new media copywriter specializing in crafting Web site content.

eBiz 3: Critical Components

By James Maguire
October 10, 2005


As noted in Parts I (here) and II (and here) of this series, setting up an online business requires gathering a number of tools — in essence, building the technical infrastructure required to serve your customers (and maintain your sanity).
Three of the truly critical tools you'll need are a merchant account, a Web hosting provider, and an accounting package. Along with your core e-commerce platform, these three key elements form your e-business's basic foundation.
Be aware that these three elements are often sold as part of an integrated package. Several e-commerce platforms offer their own hosting service, a built-in accounting package, and an alliance with a company that offers merchant accounts.
Many online business owners prefer these integrated packages because they know the elements work together — and they don't have to shop for each one. However, if you're assembling your items a la carte, below are tips for selecting each of these three essential e-business tools.
Setting up a Merchant Account
To accept online credit card payments from your customers, you must have an Internet merchant account. You set up a merchant account with what's called an acquiring institution, in other words a bank, or a middleman company that works with a bank. This bank authorizes the transaction — or declines it, if there's a problem with the shopper's credit card — and deposits the money into the merchant's bank account.
Setting up a merchant account is far from hassle-free — in fact, it requires serious shopping around at the many businesses that offer this service, and at no small expense.
First, some jargon. As you shop around, realize that there's more than one type of merchant account. Brick and mortar businesses use merchant accounts that accept point of sale (POS) transactions, because the customer is standing right there. In contrast, online businesses need a merchant account that accepts transactions in which the customer isn't present, or CNP (cardholder not present) transactions. This type of merchant account is sometimes called a MOTO (mail order/telephone order) merchant account.
Because there's a higher rate of fraud over the Internet than at brick and mortar stores, the fees tend to be higher for an Internet merchant account. Because of the higher fraud rates, banks tend to be leery of Internet merchant accounts. Many banks won't offer an Internet merchant account to a first time online entrepreneur. Instead, plenty of new e-business owners get their merchant accounts through an ISO, or Independent Service Organization.
These ISO's are middlemen who work with banks. The ISO's are more tolerant of risk, and are geared for working with the transient population of Internet business owners. However, since the ISO's are taking more risk, their fees are also higher.
You can tell a bank from an ISO by its URL. Banks have URLs like WellKnownBank.com. But ISO's have URLs like Rock-Bottom-Rate-A1-MakeAFastBuck.com. (Actually, that's not fair to ISO's — there are plenty of reputable ones.)
Whether you get your merchant account from a bank or an ISO, you'll face an array of fees. As you consider the offers from various ISOs and banks, it's a good idea to write down each provider's fees, so you can easily compare between them - the fees are numerous, and present a blizzard of variables.
Setup fee This can range anywhere from $50 to $300, in some cases more.
Monthly fee Most providers charge a minimum monthly fee, regardless of whether a merchant makes any sales.
Discount rate All providers charge a percentage of each transaction, known as the discount rate. This varies widely, though usually fits somewhere in the range of 1.8 percent to 4 percent per transaction.
Per-transaction fee Most providers charge a fixed fee per transaction (in addition to the percentage charge). This might range from .10 to .40 per transaction, regardless of how much the item costs.
Termination fee It's not uncommon that a provider charges an account cancellation fee, usually if you close your account within a given time period. Read the fine print on this one - watch out for those providers that require a 2-year commitment.
Extra fees When you give a shopper a refund, your provider will charge you a fee, and this can be a hefty, in some cases $10 to $20.
How to Chose Among Them
As you compare the prices of various providers of Internet merchant accounts, consider the needs of your business - a deal that's good for one type of business won't be so good for another type of business.
Low or high volume? If you sell lower cost items in high volume, you need to find a provider with low fixed fees per transaction; you'd be willing to accept a higher percentage per transaction charge to get this lower fixed fee.
Batch or manual transactions? If you chose manual (the cheaper option) you'll be processing transactions one by one. You'll manually be routing the credit card information from your online order form to the card processing company.
If you expect a lot of transactions, you're better off choosing batch processing. Although you'll pay more, in many cases you'll be able to provide faster service, and spend far less time doing it.
How turnkey is it? Some merchant account providers take care of many of the technical and data flow issues that confront online business owners. For example, as part of setting up an Internet merchant account you'll need a payment gateway, which is a data-routing bridge from your e-business to the credit card processor. Some of the big firms that provide this service include Verisign and Authorize.Net. A number of Internet merchant account providers offer turnkey solutions, so chores like setting up a payment gateway are handled for you.
Can you trust them? In response to the many new Internet merchants that have sprung up, many new ISO's have sprung up to service them. Not all ISO's are created equal. Some of them hide big fees in the fine print. It's a good idea to find out what other e-businesses the ISO services, and how happy those merchants are.
Be careful of rock bottom rates, and those "everyone's approved" vendors. A good ISO will have a customer service department that takes calls — and then actually handles issues.
A Possible First Step
One highly popular and well-respected provider of Internet merchant accounts is Paymentech. If you're brand new to the idea of merchant accounts, it's worth your while to browse their site and find out the terms, conditions, and services they offer before venturing off to try and find a cheaper price. Yahoo Merchant Solutions is one of many popular e-commerce solutions that partners with Paymentech.
Or, PayPal?
PayPal this year launched an aggressive program to build up its Internet merchant account business. In the old days, a seller who used PayPal to accept credit card payments needed to route a shopper to the PayPal site to accept payment. Now, with PayPal's Website Payment Pro option, buyers can make credit card payments directly on the merchant's site, and PayPal processes them in background. During this program's introductory period, the fee structure is highly competitive.
CHOOSING A WEB HOST
Unless you've got a hefty computer server in your house (along with a fat pipe to the Internet) you're not going to host your online store yourself. Some other business needs to do this for you. And there are a zillion choices.
As you compare Web hosting companies, be wary of the rock-bottom price hosting companies. There are some good, cheap ones. But if they're that cheap, will they really provide customer service?
Reliability This is the big one. Your entire business is sitting on the host company's servers - they must guarantee virtually 100 percent uptime. And they must stand behind that in writing. A reputable host will offer some kind of refund if it falls beneath its uptime guarantee.
Bandwidth As shoppers browse at your site (and make purchases!) they transfer bytes of data from your site. This is referred to as "bandwidth." The more bandwidth a host company offers you, the better. Hopefully, you'll need a lot of it.
But be careful: Web hosts give you a set bandwidth allotment, and then charge you based on how much you go over. Sometimes these extra charges are buried in the fine print, but make sure you know what they are - a sudden spike in traffic could result in a huge bill.
Tech Support This is another big one. You want phone access, 24 hours a day, seven days a week. Run, don't walk, from hosting companies that offer "free e-mail support." The phone support should be included. Also, before you buy, you should actually call them at 9:30 Sunday night and see if A) they pick up the phone, and B) they can really answer technical questions. In the middle of a busy season you'll need a live human to handle a problem, and 24/7, high quality phone support will make a huge difference.
Software Tools: PHP, Perl, CGI Bin Directory, etc. Some hosting companies include a full range of these software tools (which are necessary for a site's full functionality). But some hosts offer a few of these tools, while charging extra for others. Because Web hosting has gotten so competitive, you should expect a full range of these tools included as part of a reasonably priced package. It's also important to know: what are the host's database options? Do they include support for your database software as part of the monthly hosting fee, or is this extra?
E-mail options At this point, most decent packages offer a plethora of e-mail options. All of them, of course, enable you to have own e-mail address at yourname@yoursite.com, with enough e-mail boxes for you and many employees. The host should also offer virus and spam protection, and options like AutoResponder, which lets you send automated messages to your customers. You should also be able to forward your e-mail to any of your other e-mail in-boxes (those not hosted by the host company.)
A really good host will offer an important e-mail extra: a basic e-mail marketing package, to help you reach your customers.
ACCOUNTING PACKAGES
Ah, the poor accounting package — no one gets excited thinking about accounting software (and if you do, well, I'm sorry but you're a little odd). But your accounting program is vitally important. As one e-tailer so aptly stated, "this business is all about numbers." You can't track that ever-important profit and loss statement with pen and paper (although some small merchants try to, to their great detriment.)
Again, there are integrated e-commerce platforms that come with their own accounting package; the advantage is that the accounting software is integrated with the inventory tracking software — a huge plus.
However, if you're looking for a stand-alone program, the key is "simplicity," notes Jeff Binder, CEO of Saffron Rouge and an expert in e-business setup. "You want to buy software that gives you what you need to grow, but is not incredibly cumbersome to operate."
Specifically, it's important that your accounting package be upgradeable; as you take on more employees, or more business functions, your number crunching software must grow with you. What does it cost to upgrade?
It's worth your while to find out what package your accountant or tax person uses. If you can simply send them data in the format they already use, that can lower your tax prep bill.
Be aware that some accounting software companies offer phone support, for an added fee. This option can be worth its weight in gold if you're in crunch time and you need information from an expert.
Perhaps the default small business accounting package is QuickBooks, made by Intuit. "QuickBooks is relatively easy to use — it's a very nice basic package," Binder notes. Intuit claims that QuickBooks 2006 is a big step forward from its previous QuickBooks releases.
Microsoft hopes to take a large chunk of Intuit's small business accounting market share with its new Microsoft Office Small Business Accounting package. Microsoft's obvious advantage is its accounting software's interoperability with the existing Office suite. Industry observers expect the Microsoft accounting app to offer stiff competition to QuickBooks.
Binder is a big proponent of NetSuite's accounting software, which is sold on an ASP basis. "I've used it for three years, and I've never used anything that can compare with it."
But don't stop your shopping with QuickBooks or NetSuite. The list of well-known packages includes Peachtree, Simply Accounting (both Peachtree and Simply Accounting are owned by Sage Software, and MYOB.

eBiz 1: The Plan

By James Maguire September 19, 2005

Congratulations — you're thinking of starting an online business. You certainly know how to spot a growth area when you see one. The rest of the economy might be shaky, but e-commerce enjoys rosy predictions for years to come. More and more people are spending more and more money online every year.
Of course, if it were that easy, everyone would start on online business. Well, actually, it seems like everyone is starting an e-business. Hordes of new online stores spring up every week. Retired grade school teachers start them, and people who use to sell shoes for a living start them. Experienced, well-financed business types launch them, and people who have no idea what they're doing launch them.
And why not? The barriers to entry are low, a lot of online businesses can be run from home, and there's gold in them hills.
But, in truth, it's not simple to succeed as an online merchant (which is different from just setting up a site). As one e-commerce expert noted, there are more dollars being spent online all the time, but the amount of competition for those dollars is growing even faster. At this point, it's tough out there.
But don't lose heart. There are a lot of people making money online who don't have degrees from the Wharton School of Business (Trump's alma mater). Plenty of cyber-merchants are flying by the seat of their pants, and doing pretty well in the process.
You can be one of them, if you've got some dollars to invest, are ready to work hard, and — this part gets tricky — are willing to put some serious thought into it. Let's start with the serious thought required before you open for business.
The Two Parts
Roughly speaking, starting an online business is divided into two parts: the hard part and the easy part.
The easy part is assembling your basic business structure. You'll need to choose your software platform, set up a credit card account, develop a marketing plan, and figure out a few more nuts and bolts things. Oh sure, there's a lot of homework involved here — and plenty of cash outlay — but all told, this part's not rocket science.
The hard part is developing your e-business plan. That requires awareness and understanding of what it means to do business online, and an inventive strategy. Developing a sound business plan is not only critical; it's the do-or-die step in starting your online store.
'But wait,' you say, 'I already have my business plan — I'm just looking for a little help in building my site, and I'm rarin' to go.'
Well, hang on. You may think you have your online merchant plan — and you might. But before you assemble your basic business structure, you have one precious opportunity to really think things through — now.
More e-businesses have failed because of a faulty underlying concept than because of problems with software or hosting issues. Remember the Internet boom of the late '90s? Those businesses had full tech staffs and fat marketing budgets, but a lot of them went belly up because their business plan was no better than the Titanic's plans for dealing with icebergs.
"The biggest favor you do yourself in the beginning is to take time to really think about what your doing — make deliberate decisions," says Jeff Binder, CEO of Saffron Rouge and an expert in starting online businesses.
"Am I going to be niche retailer? Am I going to be a mass market retailer?" In short, "how am I going to make money?"
"Your business model could be such that you don't make anything on the products you sell — but you make money by selling ads on your site. Or, you can practically give away your product, but make all your money on your grotesquely expensive shipping fees. Or, your shipping is free all the time, but your product costs are higher," says Binder.
Whatever the case, before you launch YourBusiness.com, make sure you've considered the following:
What's really different?
Is there anything that really distinguishes your site from similar online merchants? If you're merely going to sell widgets like the 14 other well-established widget sites do, your 'me-too' approach will limit your success. Find some way to set yourself apart so people come to you rather than your competition.
Case in point: GatorPack sells packing supplies — nothing unique there. But two things keep customers coming back: the site's design is as simple and efficient as possible — customers order right from the front page (no digging). And, the site focuses like a laser beam on filling orders the same day they get them. GatorPack sets itself apart by being incredibly easy and fast to buy from.
Here's the reason originality is so important in your e-business plan: You can set up a dry-cleaning business in your neighborhood, and it doesn't have to be any different from the dry-cleaning business across town. No imagination, but no problem - because nobody's going to drive across town to get their clothes dry-cleaned.
But online, all businesses are right next to each other. Click your mouse and you're there. So simply setting up the exact same online business that someone set up in 2002 is going to be an uphill climb. They're established in the search engines and you're not.
So setting up an online business takes a little more originality, some kind of twist, that setting up a real-world store doesn't.
What's the competition?
Scope out potential competitors' sites - now is the time to spot the chinks in their armor. What are they missing? What customer need do they fail to serve, that you can cater to and gain advantage? Pretend you're a customer. What do you wish was different about their online store?
Case in point: Before she launched PaperMojo, which sells decorative handmade paper, Shelley Gardner-Alley checked out similar sites. She learned two things: most do not have a broad selection, and many do not have attractive sites. So she incorporated both these features into her business plan - she was ready to one-up her competitors before her first day of business.
To find out how much traffic your competitor is getting, you can use the Alexa service. This tool doesn't give absolute numbers of visitors, but it provides a relative ranking number.
Who are your customers?
The people who spend money at your site are the most beautiful people in the world — you want to know everything about them. (In fact you better share their interests, otherwise you'll never bond with them enough to be successful.) With all your customers' desires in mind, make your site the center of their world. Beginning with the front page, make it clear that you exist for their special needs.
Case in point: AnglersVice is a fly-fishing site started by an ex-stockbroker who's following his lifelong passion with fly-fishing. He not only sells the gear, he offers scads of information about fly-fishing, including "The Angler," an online magazine about the sport. He posts photos of happy fisherman near the top of his front page. He knows his customers and he uses that knowledge to sell to them.
What Sells Online
As e-commerce enters its second decade, certain patterns have emerged about what sells well on the Internet. The product you sell might not be in this mold, but if not, you'll need a good rationale for going outside the norm.
Hot online sellers:

• It's Niche If you're Wal-Mart, you don't have to be niche, because you have the deep pockets to carry everything. But if you're mom and pop, you better pick one product and sell it better/faster/cheaper/more interestingly than anyone else. Selling women's clothing isn't a niche, but "women's vintage clothing" is a niche (although it's a crowded niche). Even more niche, sell only vintage evening gowns — sell nothing but vintage evening gowns, and have a better selection and more product tips than anyone else.
  Along this same line, personalized items are good - something you customize for each customer, or anything that is rare and difficult to find. Or, something that isn't available in your customers' local areas (like fine French perfumes or hand-painted porcelain dolls) that you have easy access to.
• It's Convenient Busy shoppers are willing to pay more if you simplify their lives (and online shoppers are still more affluent than their offline brethren). It's a hassle to drive to the store to buy it - but if you sell it hassle-free online, you've got yourself a customer. For example, the owner of CoffeeCakes sells her coffee cakes and gift baskets at above grocery store prices. Owner Sherry Comes knows that her customers are people who don't care about saving three bucks - but they want a gift basket sent quickly and reliably. CoffeeCakes, using a highly efficient fulfillment system, does a brisk business.
• It's a good deal Okay, this contradicts the "it's convenient" point above, but there are many types of online shoppers. In short, people want it cheap - and the Internet makes comparing prices as easy as click-click-click. With the help of comparison shopping sites like Shopzilla and Nextag, and other tools like Dealio's shopping comparison toolbar, people compare prices day and night. This hunger for a cheaper price could benefit a mom and pop operation: in some cases, a small merchant who operates with a skinnier margin can undercut a big player with a fat infrastructure to maintain. (But there's always someone who's willing to undercut that small merchant!) How low are you willing to go?
• It's small, and easily shipped There's a reason that books and CDs were the first big sellers on the Net - you can mail them easily. (That's also the reason it's hard to open a new book or CD site - it's a saturated market.) People get very excited by low shipping charges.

Of course there are now plenty of exceptions to this - Overstock sells queen-sized bed frames. You might find a less-crowded market by selling larger items.
Speaking of Overstock... (and the difficulty of online business)
By the way, Overstock's shipping charge for that full-sized wood bed frame, which it sells for $330, is $2.95. So that's essentially free shipping for an item that is already competitively priced.
No, this is not an ad for Overstock, but a warning before you start your online business: You'll be competing with merchants who have huge marketing budgets - Overstock runs TV ads, for goodness sakes - and have rock bottom prices.
In short, there's no way to compete in this environment without a cogent and inventive business plan. It's rough out there.
Two More Key Points Before You Begin
Talk to people This one's a freebie but it's all-important: get as much advice as you can. Call business owners. Pester people. Look under rocks. Find out why people failed doing the same thing you plan to do. Don't go into this blind: good information can save you tens of thousands of dollars.
(This is the big one:) Do the math! Before making your final decisions about your e-business strategy, sit down with a calculator. Make a list of all your upfront one-time start-up costs, and all your fixed, monthly ongoing costs. Make sure you include a hefty line item for your marketing budget, and another hefty line for unexpected expenses, which will occur every month.
With these numbers in mind, how many widgets do you need to sell at what price every month to turn a profit? Is it realistic that you can sell that many?
And, given that you're not going to sell that many in your first month, how many months can you operate on a money-losing basis before you need to fold your tent?
Do all these calculations and you'll have a single number. This is the dollar figure you'll need to start your online business. Of course, if the thing goes belly up, this is also the dollar figure you've flushed down the tubes.
It's important to do this math ahead of time, because it allows you to look at the number in the cold light of day, before you take the plunge.
Some people don't figure out the math beforehand, and they get a few thousand dollars in, and they realize, "Hey, I'll need x-amount of thousands of dollars more to do this!?" It's only then that they realize they can't afford it, and by then they're in the middle of a deep river.
So take a good look at the initial investment amount. Are you willing to risk it?
Boldly Going Forth
Okay, so you've got your plan. It's an e-business that fills a very real need, and it's at least a little bit different from the other 14 major players in the space.
You know what it will cost, and you're willing to spend it. Let's start the building process.

eBiz 2: Choosing a Platform

From Ecommerce Guide:
Selecting which software you'll use to build your online store is a critical decision. It's like laying the foundation: all the other tools, from your credit card account to your marketing plan, will be influenced by this one decision. So choose carefully. Very carefully.
'But wait,' you say, 'I already have Web design software — can't I just use that, and then simply add a secure method for accepting credit cards?'
You can, but it's a limited solution. Because an online store has so many special requirements, like inventory management and product display, merely building a Web site and calling it an "online store" won't get you very far. You're best served by buying or licensing software specifically intended to handle the heavy lifting of e-commerce.
As you shop for an e-commerce platform, you'll encounter a blizzard of choices, each of which has a blizzard of sub-options. Before you choose one, browse through them until the jargon starts to make sense. The market for e-commerce platforms is far more confusing and lingo-heavy than, say, the market for cars. It's worth educating yourself before you buy.
Even the most established vendors have only been around a few years, so the market is still evolving quarter by quarter. This means that prices and product offers can vary wildly by vendor. You can spend $10,000 a month and get a Rolls Royce, or you can spend a few hundred bucks a month (or less) and get an almost new Toyota. Either one might be right for you, based on your needs.
Test Drive and Get References
To help you sort through the many options, you can "test drive" the software before you buy it. Most vendors will allow you to demo their software (if not, that's a red flag). They either have a model store set up that you can access, or some other way for you to poke around the controls.
Don't plunk down your money until you've really opened up the hood and gotten a feel for the software. You'll be spending a lot of time with it.
While you're investigating, get references. The only way to find out the truth about a platform is to ask people who use it - and not the people the company recommends. Find a user who isn't on the official list, and ask them how they feel about the platform.
The All-In-One / ASP Trend
One key concept to be aware of: some e-commerce platforms are "all-in-one" solutions that provide everything: hosting, accounting tools, Web analytics, even marketing tools like e-mail management. In contrast, some platforms are just the core e-commerce platform itself, and you buy the other tools from separate vendors. Adding confusion, some platforms are in-between; they include, say, hosting and the basic e-commerce software, but you shop elsewhere for the rest.
The all-in-one solution has become ever more popular with online merchants in recent years. The advantage is that A) someone else has done the homework of gathering all the needed tools into one handy package, and B) all the tools are integrated, so they work well together.
As a related concept, some vendors of e-commerce platforms license their software on an "ASP" basis. ASP stands for "application service provider." This means the software seller hosts the software on their own servers, and the online store owner accesses it remotely. This way the store owner doesn't have to worry about servers going down (hopefully). Also, ASP vendors tend to offer a lot of hand holding in terms of maintaining the store owner's software.
The e-commerce industry is moving toward platforms that are all-in-one solutions offered on an ASP basis. This frees the store owner from technical concerns as much as possible. It allows e-tailers to concentrate on selling and leave the technical snafus to someone else. An online merchant who licenses an all-in-one solution on an ASP basis doesn't need to hire tech people — a huge savings. The salary of a tech person can buy a lot of pay-per-click advertising.
But don't let the trend toward all-in-one be your deciding factor. You might buy an inexpensive stand-alone platform, find a cheap place to host it, and you'll be off and running. If you're truly a small fry who's tech savvy, you might not need a tech person very much.
One more thing: you might be successful. If that happens, your software platform must be able to grow with you. In industry lingo, it must "scale," as in "scale larger." Don't be seduced by a platform whose initial price is low, but that won't scale. When your business grows you'll be stuck with a platform that's too basic. And it's really a hassle to change your software platform once its in place.
The general rule: buy as much platform as you can reasonably afford upfront. Get a platform that can grow with you.
Questions to Ask Before Buying E-Commerce Software
Before you buy your platform, look back at your business plan (you did make one, didn't you?) and find out what specific tools you'll need. Based on your needs, ask the vendor's salesperson the following:
Some Really Key Questions:
Do you provide tech support, by telephone, 24/7?
What other important tools are included? Web analytics? Hosting? Accounting package?
Does the platform help with cross-selling and up-selling?
Does the platform have built-in site search? Is so, what kind of tools will I have to enable me to influence search results?
From the page the shopper chooses an item on, what is the total amount of pages they must click through to complete the purchase?
(A higher number of page results in a higher percentage of abandoned shopping carts.)
Site Building Questions:
How many products will your software allow me display? Dozens? Thousands?
Is there a wide array of templates that come with the software, so I can avoid a cookie-cutter look?
If I hire a HTML expert to jazz up the site, will custom-written HTML pages interface with your software?
Does your solution generate both static and dynamic Web pages? (Static pages are written in HTML and are more likely to get recognized by search engines; dynamic pages are created as a shopper requests them, and allow you to more easily present a large catalog of items.)
How much do upgrades cost?
What sort of flexibility does the product shipping section allow me to offer? Will it be easy for me to offer a shipping discount based on total customer purchase?
Marketing and CRM (customer relationship management) Questions: Does the platform help with gathering shoppers' e-mails, and administering an e-mail marketing campaign?
Does your system include a method for tracking coupons or special offers?
Can shoppers keep their own lists of favorite items, or previously bought items, on the site? (Shoppers really like this, and it boosts sales.)
Merchant Administration Tool Questions:
What notification system will tell me I've got an order? (Some systems send the merchant an e-mail; others require you to check a Web interface.)
Will the software send the shopper an automatic confirmation e-mail? To what extent can I customize this e-mail?
Database/Inventory Questions:
What databases will run with your platform? Does the software allow my site to be connected to a real time database that reflects constant changes in inventory and prices?
What features does the software have to allow me to update inventory level based on my bricks and mortar in-store inventory?
What file formats does it work with to import and export inventory reports?
E-Commerce Platforms
The list of e-commerce software providers gets longer all the time, but here's a good start:
Yahoo - If there's a default platform for small business e-commerce, it's Yahoo's Small Business platform. Mom and pops flock to Yahoo's e-commerce software because it includes most everything for one low price — it's the no-brainer solution. Some merchants complain, however, that Yahoo doesn't allow them to scale as they grow and the learning curve for its management console can be difficult.
Affinity Internet is a popular provider of web hosting solutions for small to medium-sized businesses. Its ValueWeb e-commerce package allows you to create a comprehensive Web site and on-line store capable of marketing and selling up to 100,000 products. ValueWeb incorporates tools like Miva Merchant and Macromedia's Contribute site building software.
NetSuite - Well respected in the e-commerce industry as an affordable, scalable package. The company gets a lot of buzz.
iCode - Considered easy to use, the company specializes in the small-to-medium e-business all-in-one solution, although there has been rumbling in our forums about poor customer service from them.
MarketLive - A robust solution that has garnered an impressive client list, including Encyclopedia Britannica and Keds shoes.
Venda For a monthly fee of $10,000, Venda handles everything, from deployment to hosting to maintenance.
Actinic - Used by a lot of small-to-medium sized merchants, the Artinic software interfaces with the UPS shipping system and the popular QuickBooks accounting software.
MainStreet Commerce - MainStreet's base cost is $15,000, with an additional ten percent license fee. MainStreet provides a complete e-commerce infrastructure, and its software is known to be highly configurable.
ProStores - an eBay Company (formerly Kurant StoreSense) - Geared for the smaller merchant, eBay's ProStores has solutions ranging from $30 to $250 a month.
LaGarde StoreFront - Along the lines of ProStores, LaGarde caters to the small merchant, with an array of low cost pricing options.
Miva Merchant - A popular solution aimed at the small business market, the basic Miva Merchant store building program retails for $1,000.
Websphere - Made by venerable IBM, Websphere is too pricey for a shoestring start-up, but if you have the finances it's a full-service platform will scale as large as you can imagine.
Microsoft Small Business - A similar all-in-one platform to Yahoo's, although a bit more expensive. One advantage: it's good to choose a vendor that's going to be around for a while, and it's safe to assume that Microsoft will be (won't it?).
Again, don't limit your shopping to this list alone. As you shop, you might also look at 1ShoppingCart, Shopsite, Mal's E-commerce, osCommerce, AbleCommerce, MonsterCommerce and many more...

Tips and Trends 2006

With a look back at 2006, and an eye on the New Year, we provide tips for successful online commerce gleaned from the experts we've interviewed on 10 topics and trends, as well as from research done in the fourth-quarter. Here's wishing everyone a prosperous 2007.

1. Drop Shipping: This aspect of e-commerce still takes some know-how, it's not as easy as it sounds to carry and sell virtual inventory. Fortunately, the technology for doing so has improved since the early days of e-tail, though the dos and don'ts of drop shipping remain the same. You want to be sure you've picked a reputable company by checking their history and credentials, make certain they can cater to your individual business needs, and, finally, don't forget you still have to market what you're selling by adding value to the experience. James Maguire covers this in detail here.
2. EBay International: Why not expand to those untapped markets abroad? Frank Fortunato shows you in this story that it's not as difficult and daunting as it seems. You need to know the rules, be prepared to fill out custom forms accurately, decide the best way to do payment transactions, badda-bing, you're in the big leagues.
3. SEO: The basics of maintaining your organic search results include picking specific search terms, keeping your site void of Flash and graphics that aren't recognized by indexing spiders, writing copy that uses relevant and specific terms and trying to get as many links to your site as you can. Jennifer Schiff outlines how here.
4. SEM: Search-engine marketing must-know logistics are outlined here where we provide a checklist for picking relevant keywords, writing targeted titles and descriptions, preparing an effective bid strategy and selecting effective landing pages.
5. Site Design and Specialty Store Trends: This topic is evergreen in that you can never just design a site and leave it be. Design is more of a continuous process that takes constant nurturing, tweaking and adjusting as your business grows. We provide a primer in a story here by Jennifer Schiff. For those in the service industry, you need to be sure your site reflects your personal touch, and expertise, by including things such as detailed biographies of staff and the journey from idea to URL. More information is available in a feature here. If you're considering capitalizing on the trend of luxury e-tail, you can find suggestions for that in a story about the huge popularity of wine Web shops and in an article on the trend here.
6. Holiday Rush Recommendations: While these nuggets of advice are framed around the fourth-quarter flurry of activity, they can be employed year-round for successful business operations, or if your busy season is, say, in summer instead of winter. Make sure your site is designed for a clickable-ka-ching experience by ensuring shoppers can find you, and once there, can easily buy what they want, which is covered in the above-mentioned design story. Also, studies show shoppers abandon ship if your homepage takes longer than four seconds to load, so keep that in mind. Be prepared for traffic surges by making sure your host provider will automatically bump you up to the next plan. More information on what to ask from your hosting provider is covered by Lena West here. Free shipping is now considered standard, so to stay competitive, try to incorporate that into your offerings. If possible, heavily promote your site in catalogs, as studies show they dominated multi-channel marketing pay-offs.
7. PPC Pay Off: How do you know if your pay-per-click is actually earning you money? You have to calculate a few things to determine the answer, but it's something every business owner should either know how to do, or be savvy enough to hire someone to do it for them. First, you have to determine your gross profit and compare that to your PPC cost/conversion. If you're not in the black, Steve DiPietro outlines five steps for addressing the issue in our comprehensive story here.
8. Snagging Big Spenders: Make it a resolution to not only know what your average order value is, but to increase it as well. You can do this by offering limited-time discounts, re-designing your site to showcase the appropriate products, reassessing your product selection and offering discounts with related-item purchases, among other simple initiatives. Steve DiPietro provides a case-study with all the details here.
9. Consider Alternative Marketing Approaches: Paid search is the staple of many promotional campaigns, but there's other ways to lure shoppers to your site. You might want to research placing ads out of context through a firm such as Blue Lithium, covered in detail here, or trying a mash-up that will extend your brand. Likewise, so-called social shopping networks such as MySpace and Buddy Shopping are playing an increasing role in influencing online shopping, so it's prudent to keep an eye on what these emerging players are doing. Finally, local search is another trend to stay abreast of, as shoppers continue to research purchases that can be made nearby.
10. Turn The Page: Every online seller should have a copy of "Starting an Online Business All-In-One Desk Reference for Dummies" handy. It's an excellent reference that you can turn to again and again for the basics of marketing, design, shipping and many other topics from niche and non-profit sites to creating an effective business plan to setting up an AdWord campaign.

How to Set Up, Part 3

The eBay Way

Before starting an e-commerce site, many test the waters by selling on eBay. They have good reason: Today, the eBay community includes 168 million registered users worldwide. "The most obvious reason a new business chooses eBay is the access to our enormous customer base," says Jim "Griff" Griffith, dean of eBay Education.

To sell on eBay, you need to register and create a seller's account. Listing an item is an easy five-step process, but Griff suggests you do your homework first: Research eBay to learn what the market value is for your items and what eBay sellers of similar items are doing on the site.

When you list an item on eBay, you're charged an Insertion Fee ranging from 25 cents to $4.90, depending on the item's selling price. You're also charged a Final Value Fee if your item is sold. Final Value Fees start at 5.25 percent of the item's closing value.

You may also consider opening an eBay Store, which costs from $15.95 per month to $500 per month. eBay Stores let you sell your fixed-price and auction items from a unique destination on eBay. You can create customized categories, add your own logo or choose one of eBay's on-line images, and list item descriptions and selling policies.

Your eBay Store is promoted in several ways: Your listings and user ID include a "red door" icon inviting buyers to visit your eBay Store. The eBay Store Directory can also guide buyers to your Store. And you receive your own personalized web address to distribute and promote.

One company that has made the most of its eBay Store is Jeff Atchison Enterprises Inc., dba Dad's Toys. The Dardenne Prairie, Missouri-based company, which started in 1999, sells high-end gadgets such as flat-screen TVs--many of them on eBay. Founder and president Jeff Atchison set up a basic eBay Store in 2002. Why? "To add credibility to my listings," says Atchison, 41. "It shows people you are more of a permanent presence on eBay." It also allows Atchison to keep all his listings organized on one website that can easily be viewed by customers. Tactics like this have helped Atchison grow his company to an estimated revenue of $2.1 million last year.

Ready, Set, Sell!
10 tips to optimize your website for online sales

Once you've got your website up and running, you, an in-house IT staffer or an IT consultant should optimize it for best results. Lisa Schneegans, executive vice president of Praxis Software Solutions, a Minneapolis provider of internet solutions for small and midsize companies, suggests 10 ways to optimize your website:

1. Test your site early and often. Plan ahead to ensure your site can handle heavy shopping traffic.
2. Test your content for misspelled words, broken links, busted pictures, etc.
3. Make sure images load quickly. A slow-loading page may drive customers away.
4. Install, verify and test all patches and upgrades.
5. "Load test" your site to see how much traffic it can support. A web maintenance service can tell you how you do.
6. Create sample transactions. These can simulate expected customer traffic and web transactions. By running "synthetic" transactions periodically--say, every five to 15 minutes--you'll know if there is a problem before your customers do.
7. Check the performance of your network provider. You can do this by looking at a site that is simi-lar to yours in your area but connected to another network.
8. Add cross-sell and upsell opportunities throughout your site. This means, for example, suggesting table linens on the dinnerware, silverware and glassware pages. Offer "Top Gift Suggestions" or "Bestsellers" to improve sales and drive impulse purchase opportunities.
9. Make it easy to find and contact live customer service. Providing an easy-to-find phone number on the site helps online shoppers feel more secure. Clearly state your company's return policy.
10. Make your search function more effective. Your search function should accommodate common misspellings by returning similarly spelled items or your site's most popular search terms.

Taking Shortcuts
If you don't want or need a full-blown e-commerce site, check out the following quick, low-maintenance ways to sell merchandise and services.

Craigslist.org: Craigslist.org allows you to post items for sale for free. More than 10 million people use Craigslist each month, and there are more than 6 million classified ads and 1 million forum postings each month.

Gorage.com: Want to avoid paying auction commissions? Then try Gorage.com, an online garage sale, classified ads section and storefront shopping alternative that offers flat-rate pricing for listing items online, allowing sellers to avoid paying auction commissions. The pricing structure is based on the number of "selling spaces" a user chooses, which together make up the seller's "gorage." Gorage.com pricing plans start at $5, which gets you up to 10 selling spaces for 30 days, and they run all the way to $600, which buys over 2,000 selling spaces for 30 days. Gorage.com charges no auction commissions, which can help you save money and pass on savings to customers.

SwapThing.com: Have a limited amount of cash? Tired of being outbid in auctions? Then try SwapThing.com, a site that lets you swap or sell everything from music, art, trading cards, old schoolbooks--even personal services. You can list items for free; the site charges each party $1 for every item swapped or sold.

How to Set Up, Part 2

The Host with the Most

If you'd rather not build your site yourself, there are many hosted web or e-commerce solutions that can help. Web-hosting companies generally offer a combination of site-building tools; product catalog tools; shopping-cart technology; payment, shipping and marketing strategies; tracking and reporting capabilities; domain registration; and hosting.

eBay offers a storefront solution called ProStores. ProStores--which is available to everyone, not just eBay sellers--offers a full-featured, customizable web store. Unlike eBay Stores, ProStores sites are accessed through a URL unique to the seller and have no eBay branding. ProStores sellers are responsible for driving their own traffic, and items on ProStores sites sell only at fixed prices. The cost of a ProStore ranges from about $7 per month with a 1.5 percent transaction fee to about $250 per month with a 0.5 percent transaction fee.

Hosted solutions generally start at about $30 to $40 per month, plus setup fees of up to $50 per month. Some companies also charge transaction fees. Keep in mind, $40 will only get you basic functionality--bells and whistles cost a few hundred dollars per month.

Jacquelyn Tran, founder and president of Perfume Bay Inc., a Huntington Beach, California, company that sells cosmetics, skin-care products, perfume and home fragrances on its website, uses a full-featured e-commerce service from Yahoo!. Tran started Perfume Bay in 1999 and now offers more than 30,000 types of products, with 2005 sales of $8 million. During startup, Tran hired a web designer to build her site. Her total startup cost was high, coming out to $50,000. "This included advertising, a custom-built shopping cart--everything," she says.

A few years later, Tran decided to sign on with Yahoo! Merchant Solutions (then called Yahoo! Stores). "The pro-gram was easy to use, fairly customizable with a lot of great features, and fully integrated," says Tran, 28. "This was very important because we depend on having a really easy-to-navigate site." She also found a web designer through Yahoo! to help set up the new site. Tran saw a difference almost immediately: "We got more orders," she explains.

Tran chose Yahoo! Merchant Solutions' most expensive offering: Yahoo! Merchant Professional, which costs $300 per month, plus a one-time setup fee of $50 and a fee of 75 cents per transaction. Hiring a web designer costs an additional $2,000 to $10,000. Still, that's a lot less than it cost Tran to set up her customized site. "Looking back," she says, "I wish I had gone to Yahoo! first."

Sebastian Moser, U.S. director of technical development at Chesterbrook, Pennsylvania-based 1&1 Internet, says that before you sign on, make sure your hosted e-solution offers:

• A full wizard-driven setup: Most merchants need a proper wizard-driven system that takes you from start to a fully operational, production-ready e-commerce storefront.
• Many templates: An e-commerce solution provider should have many different templates to meet the needs of its varied customers and their products.
• SSL encryption: The system should include the option of SSL encryption-a protocol for transmitting private docu-ments via the internet. This means your customers' credit card information and address is transmitted securely.
• A database-driven system: This allows a system to be inte-grated with your customer database, so you can send out promotional e-mails.
• Payment beyond paypal: PayPal serves the needs of a lot of e-tailers, but not all of them. The best hosted e-commerce vendors offer several payment gateways.

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.