Expanding your distributorship's boundaries via the Internet means learning a brand new kind of construction. Here are some tips for building your Web storefront.
You listened, with one eyebrow raised and that grain of salt at hand, to all the hype about how e-commerce would radically change the way the world does business. Okay. So some of it wasn't hype. It is changing the way the world does business. E-commerce is here to stay, and anyone who wants a piece of that multi-billion-dollar pie better start going after it.
If there are billions of dollars in sales to be made over the Internet, why isn't the Web just exploding with e-commerce sites? One possible reason is that integrating all the necessary elements of a Web storefront is tough and time-consuming. Don't count on being able to use that neighborhood computer-whiz kid who created your business' home page during commercial breaks in "The Simpsons" for this one. Tying all the components of an e-commerce site together to create an efficient, effective, secure and pleasant shopping medium is not even remotely similar to throwing up a simple informational Web page.
Think of the countless things you had to consider and incorporate into your physical distributorship before you opened your doors to customers. It really should be no different when setting up your virtual store. Your Web storefront should be a representative for your company and its mission, plus it should promote sales. It should also facilitate an easy, enjoyable shopping experience, or your customers won't be back.
So, go get a cold drink (because this storefront-building stuff is thirsty work), then sit down with this copy of EW and find out just what's involved in becoming an e-wholesaler.
First, let's look at some of the main pieces and parts of a Web storefront:
The Web server. A Web storefront program (or e-commerce server) sits on top of an existing Web server. It awaits and fulfills requests from client programs, as opposed to a Web browser, which requests HTML files from Web servers. The Web server consists of the software that will serve your application to site visitors and the hardware that will host your server and application. Hardware should have 128MB of RAM and anywhere from 250MB to 1GB of free hard-disk space. Server software options vary depending on which storefront application you choose, but Microsoft Internet Information Server, Netscape Enterprise Server and Apache are frequently mentioned as good choices.
The database server. At the heart of most client/server systems, Web-based or other, are database servers that provide secure access to shared data for client applications. Whether relational or non-relational, database servers provide functions that include serving up data, providing locking and multi-user access to prevent concurrent access to the same information, securing data, optimizing queries, providing caching and furnishing a location for a data dictionary. Other server functions include the use of stored procedures, triggers and rules.
The store administrator. The store administrator determines such things as how the store is opened and closed. It allows you to manage your product information and site appearance, customize your pages, configure your shipping options, add and edit product information, make pricing changes, give discounts and create product promotions. It also allows you to retrieve your orders online using your Web browser.
The catalog builder. For most distributors, this feature will be of the utmost importance. The catalog builder is what you use to present the product information you want your customers to see. Web storefront creation packages allow you to generate HTML-based product catalogs using information from a product database. The more powerful packages can import product data from an Excel spreadsheet or database file; entry-level packages typically require you to enter this information manually.
The shopping cart. As in a physical shopping cart, this function allows a customer to "gather up" items he is interested in and holds them in one spot until he's decided exactly what he will actually purchase. He can add or remove items at will as he browses through a product catalog or database.
The order-processing system. Just as its name implies, this function handles all the tasks involved in completing the purchase order, including totaling the order, calculating taxes and shipping costs and any shipping information. The payment and billing system.
Often integrated as a part of the order-processing system, this features determines the method of payment, such as credit cards or digital cash. The site-analysis/reporting system.
This feature gathers and stores information about activity at the storefront. It can be as basic as reporting the number of times the page is visited, or, preferably, able to produce detailed sales and customer reports. Now that you have the basic building blocks identified, it's time to do a little design work.
Identify your needs. Spend some time thinking about what you want the storefront to do. Identify your needs and the features you want, then choose your solution accordingly.
A reporting tool should be high on your list of priorities, or you'll lose valuable customer and sales analysis data. It keeps track of who's coming to your site and how they found it (via a banner ad or a search engine, for example). It also helps you know how your site marketing efforts are doing and tells you whether you're signed up with enough search engines and directories. There are tools available for this, such as WebTrends, that will give you analysis reports on your site's traffic.
Decide which and how many of your products you want to sell through your Web storefront and whether that number is likely to expand greatly. This will determine in large part which route you can take to build your site. Decide how you will build. After deciding that you do want an online storefront, your next biggest decision will probably be how to build it. That's not an easy question, especially for small businesses that don't have a lot of resources to throw at the task. Costs for designing and setting up an e-commerce site can range from hundreds of dollars to literally millions. It all depends on what you're after or what you need to do.
Are you a real do-it-yourselfer, or would you prefer to hire a contractor to handle construction? You can build your own site from scratch using a common gateway interface (CGI) programming language (used for passing data back and forth between the server and the application) such as Perl, PHP, or C. Or you can choose from a wide array of template-based e-commerce packages with price tags ranging from absolutely free to thousands of dollars.
The easiest option, especially for businesses that don't have a Web presence, is a hosted, prepackaged e-commerce system. The system vendor provides software to construct the storefront using pre-designed templates and hosts it on the vendor's server for a monthly fee. Yahoo! Store is one such package, with a price tag of about $100 per month for a 50-item site, up to $300 per month for 1,000 items. However, being "canned" solutions, these packages have fairly limited capabilities. Customization features, such as those that will make your site keep track of customers' buying histories and preferences, are rare in do-it-yourself packages.
If you or a member of your organization has some programming experience, you may want to consider a mid-range product, especially if you need more flexibility. These products can range in price from cut-rate cheap to exorbitantly expensive. But they may be what you need to invest in if you expect your site to grow rapidly or you want such things as database integration and workflow management.
Distributors who must integrate their online store with an older legacy system are pretty well stuck with assembling the components of the store from scratch using CGI programming. If you fall into this category, brace yourself. This approach will require considerable IT resources (including wise and experienced computer gurus) and a healthy budget.
During the design phase, a stand-alone package is faster than an online-only solution, because you aren't doing everything over an Internet connection. But when you've finished creating your store offline, you have to upload everything-usually to a third party that provides hosting-which certainly leaves more room for error than with a single online solution that provides both tools and hosting.
Turnkey solutions offer several advantages. First, you can forget about hiring a Webmaster or design consultant. No knowledge of HTML is required because all the site design is done using templates or (in a few cases) WYSIWYG (What You See Is What You Get) authoring tools. Second, the little miscellaneous details-such as domain name and search site registration, credit card authorization, payment processing, and shipping and taxes-are all taken care of for you. Perhaps the biggest advantage is that you don't need to purchase and configure a Web server; that will be done for you, too.
Online services and ISPs, such as America Online and Compuserve, usually offer the most robust hosting services. The included third-party tools tend to be more flexible and are more powerful than the strictly template-based authoring tools; but because they rely on third-party tools, these packages are not as well integrated as other solutions and so are often more difficult to use. If you already have an ISP, check first to see if it offers a small-business solution for e-commerce, then go from there.
Although online-only solutions don't offer the same flexibility, they are probably the fastest and easiest path to opening your doors online. First, there's no software to install. To get started, all you need is an Internet connection and browser.
Second, all the pieces of the store- site design, order processing, administration, reporting-are integrated into a single package accessible from any browser interface. Finally, the authoring tools are template-driven, so all you need to do is fill in the blanks. The drawback to this approach is that you are locked into the company's store design, although a few products let you customize some features of the templates. For a quick list of Web-hosting service providers, visit the Web Host Directory at www.webhostdir.com.
Somewhere in between buying a solution in a box and programming it all yourself are the mid-range software-based solutions. These offer some of the flexibility of the third-party tools provided by hosting services but tend to be a little easier to use. Internet Creator, for instance, is a full WYSIWYG authoring package similar to Microsoft FrontPage. These mid-range packages, such as Microsoft Site Server, also allow for integration with other software being used to manage your business, such as inventory databases or accounting programs.
You will find there are major disparities in application features. For example, many products require you to enter product information manually, rather than by importing it from an existing database. This can be an arduous task if you have a large database. Finding a solution that lets you import existing product data directly into your catalog is a necessity for businesses with larger inventories.
Also, before making your decision on which solution to buy, get some answers to these questions: Would paying more for an expensive, high-end solution help reduce your work load or generate more sales? Will you be paying for features that you won't use or need? How much growth will the application handle? What kind of vendor support will you get if something goes wrong? How are maintenance and updates to the site handled?
No matter which type of solution you choose, make sure you have taken all the costs of getting the package up and running into consideration. The cost of the package itself is just the beginning. Depending on which solution you choose, you might need to consider setup costs; the myriad fees for establishing a merchant bank account; purchasing credit-card verification services and software; monthly site-hosting fees; peripheral per-transaction fees that accompany online transaction processing; fees for a site designer, consultant or programmer; and possibly support personnel, including someone to process the online store's orders.
Visit the banker. If you decide to use a solution with payment processing, you'll need to get an Internet merchant account from an Internet-friendly merchant bank, along with credit card verification and payment-processing services. Many e-commerce packages support online credit card transactions that take place either in real time or in batches at intervals.
Some merchant banks now handle digital cash, which is nothing more than a string of digits or tokens issued by a bank. The bank provides "purse" software for managing and transferring the e-cash. Users convert money from their regular bank accounts into e-cash, which is then transferred to the purse software, where it's stored until spent by transmitting it to a merchant who, in turn, transfers it to a bank for redemption.
eCHARGE allows users to "charge" purchases to their local phone bill. It's an alternative for customers who won't use their credit card online, don't want another PIN (personal ID number) to keep up with or aren't set up to use cybercash.
Electronic checks are another option you may want to consider for your customers. RediCheck, Intercheq, and Intell-A-Check are a few of those available. Visit the Electronic Check Council's home page for more information at www.nacha.org/ecc/default.htm.
Get prepared to ship. One differentiating factor between many e-commerce packages is order processing. There are basically three choices, each with its pros and cons. You can take and process your own orders online, take orders online and process them offline, or pay someone else to do your order processing and fulfillment for you. Consider the needs of your company and make the choice that's right for you.
Some applications support only off-line transactions, so when you are notified of a new order, you must process it manually as you would any order. Also, some products make no provisions for taxes. This is something you should consider if you have a retail lighting showroom or conduct other retail business through your distributorship.
You'll more than likely need to submit secure credit card transactions to a transaction-processing service such as PaymentNet or CyberCash. These services will, in turn, send transactions to a payment-processing network with your merchant account information for authorization. Through these services, credit cards are authorized but not submitted for payment until the product ships. Once the product ships, the transaction is submitted for settlement. The payment-processing network then charges the customer's credit card and submits payment to your bank account.
You also may want to link your system to FedEx or UPS so that customers can get up-to-the-minute shipping estimates when placing their orders and can use your site to check on the shipping status of their orders.
Begin construction. Remember that the intention of your storefront is to make sales, not entertain with flashy graphics. You want your site to load quickly and be simple to navigate. Avoid bulky graphics and technical bells and whistles. Many Web designers recommend using thumbnails of products with a link to a more detailed color graphic that can be downloaded or viewed if desired. Another method is to offer a text-only version of your site. Visit the Bandwidth Conservation Society's site at www.infohiway.com/way/faster/ for more information on creating an efficient site.
Establish credibility on your site by providing lots of information on your real-world business. Include your physical address, phone and fax numbers on your virtual storefront. Register your site with VeriSign's Secure Site program or TRUSTe, an independent, non-profit privacy organization with a third-party oversight program.
Another thing you might want to think about is that those first two Ws of your new Internet address stand for World Wide. By establishing a storefront on the Web, your business instantly becomes international. Consider things such as linking your site to the Universal Currency Converter (www.xe.net/ucc/) and showing measurements in both English and metric (or provide a link to metricUSA at www.metricusa.com/Conversion_Frameset2.htm for English-to-metric conversion). A good place to begin gathering information on internationalizing your storefront is the International Trade Links site located at www.ita.doc.gov/uscs/mi/aa/linkstxt.html.
Finally, hold a grand opening and start taking orders! For your site to be successful, people need to visit it. Aside from registering with numerous search engines and Internet directories such as Alta Vista or Lycos, you can generate traffic to your site in a number of other ways.
Check into online newsgroups or newsletters to announce your new online store. Magazines or books that have Web sites listed, such as the New Riders Official World Wide Web Yellow Pages, also can help your site become known. Banner exchange services are a low-cost way to generate site traffic and make your site look more professional. In exchange for displaying other companies' banners on your site via the exchange service, your banner will be displayed on other participating company sites.
Another way to market is through an affiliate program or channel whereby you recruit other companies in a similar or related field to advertise or sell your products through their Web site, then pay them for each visitor or sale. You pay only for performance, and you end up reaching far more customers than you could reach by yourself. A couple of sites to get more information on affiliate/associate programs or affiliate program management are located at www.befree.com or www.palis.com/new/yoap16/index.htm. It's also possible to purchase links to other sites reaching the same people you want to reach.
Although setting up an effective Web storefront will likely require a huge investment in time and resources, the payoff can be substantial. Cambridge, Mass.-based Forrester Research reported that Internet-based business-to-business transactions totaled $7.5 billion in 1997 and that figure is expected to grow to $327 billion by 2001-a whopping 4,360% increase over just four years.
GartnerGroup and other research firms say that Internet sales aren't the only storefront figures that will rise over the next few years. Costs for launching an e-commerce site are predicted to rise as much as 25% per year over the next two years, with almost 80% of costs being labor-related--another good reason to get started now on building your e-commerce site. This is one situation where not only will the early bird get the worm, he'll pay less for it.
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