The wild west of the internet has been largely tamed and lots of people are succeeding online. Sadly, there have been numerous casualties, but the good news is that you don't have to follow in their footsteps. Here are some of the good practices that have been extracted from the last few years of turmoil.
Internet technology has enabled the whole ecommerce revolution to happen. But if we focus on technology, we will never succeed commercially. The rules of ecommerce are like those for any other business. You have to have something that customers want, at a price that they can afford and where you can make money. Then you have to let your prospects know about it. It's as simple as that.
If your great idea is ever to be profitable, people have to know about it. You need to find out how people search on the internet. What are the key words that they use for your type of product? What other ways do they look online? Talk to lots of people and try to understand a bit more about it all. Here are some sites that can help: www.searchenginewatch.com, www.overture.com, and www.webmasterworld.com (look under 'Ecommerce' and 'The Marketing World').
It's true that all of your prospects are online, but it also true that they are all offline more of the time. Some very successful internet companies built initial awareness almost exclusively offline. You need to ask whether traditional marketing like advertising, PR or direct mail can help.
Once you are up and running, remember that existing customers are your best customers. Make sure that you encourage them to return by making special offers and letting them know what you are doing at your store.
Use technology that works, not stuff that’s a masterpiece in progress. Why bother debugging software from some start-up or paying thousands for a bespoke solution that leaves you reliant on the designer ever after, when you could be using stuff that is already working on thousands of online stores.
Once someone arrives at your site, marketing is over and selling begins. So leave the smooth talk out, and make it easy to find your products. Have a clear link like "Shop Here". And don't ask them to register before they can look at your catalogue. There will be plenty of time to get their name and address once they have decided to buy.
Don’t let a fantastic design spoil your business because, for instance, the design stuff takes so long to load that everyone just clicks away. Make everything the servant of the business objective, which is to make sales.
You need to be able to take payments online, and it makes sense to team up with a good one. A list of the leading UK payment providers can be found at www.actinic.co.uk/services/online-payment.htm.
Your online store needs to be hosted somewhere, and there are plenty of great deals around for good, low cost web hosting. Look for a company that is a hosting specialist, rather than one trying to be a jack of all trades.
Arranging for shipping is not so daunting as you might think, because there are many specialist firms to help. Many ecommerce merchants ship abroad without any problems. The big boys are UPS, Fedex, DHL and ParcelForce, but there are many others. Ask for advice from other local businesses that already ship their goodse.
Surprisingly, it's fairly straightforward. If you're eating out in France and you pay by credit card then the restaurant will be paid in euros. The opposite is also true, so when foreign buyers visit your site you can be paid in pounds and they will be charged in their local currency.
Like every area of business these days, ecommerce is surrounded by a maze of red tape, rules and regulations. In fact, selling online tends to be worse because of the international dimension. And any slip-ups you make are there for the world to see, so it's doubly important to be legal and decent. The following five tips try to pull together some of the areas that you need to think about and understand. They shouldn't be taken as definitive – it's your job to comply with the law – but they are a good place to start.
Under the EU Distance Selling Directive, you must make clear who you are by providing full contact details including an address and phone number. This is also good practice for building trust.
Under the same Directive, you must accept goods for return within 7 working days. Why not make this a selling point?
As of 1 April 2006, you must be VAT registered if your annual sales exceed £61,000. If you're not VAT registered, you don't have to worry about charging VAT and it would actually be against the law to do so.
Selling to the EU, you should charge VAT at your usual rate. But there are some exceptions. If you exceed the individual VAT threshold for Germany, France, etc. then you should charge VAT at the appropriate country VAT rate when selling into that country, not the usual UK 17.5% rate. Also, if your customer is a non-UK business in the EU and is registered for VAT in its own country, the buyer is allowed to quote their VAT registration number to you in order to be exempted from tax.
Finally, you don’t have to charge VAT when selling outside the EU, such as to the US.
Make sure that you comply with the disability law which is effective from late 2004. The key requirement is that you have to take "reasonable" steps to provide access to people with disabilities, and this includes your online store. One way of doing that is to make sure that all images have alternate text tags so visually impaired people can still navigate your site.
You will probably need to register with the Information Commissioner's Office at www.ico.gov.uk. Registering takes just a few hours of careful thought and work.
You are only allowed to send direct email marketing to individuals who have agreed to receive it from you by directly opting in. It is not sufficient simply to provide an opt out.
However, if you obtained their details in the course of making a sale, or in the course of a sales enquiry, the rules are different. You are allowed to continue communicating with them provided there is a free method of opting out each time you send them an email. This can be by email.
Assuming that you are legal and decent, let the world know. Anything that adds to your credibility will help online. So why not list all of the things that you have done under the heading "We comply with the following legal and tax regulations"?
One potential problem when selling online is fraud. Don’t get things out of proportion, there are problems with any business and no one has managed to entirely eliminate shoplifting yet. Unfortunately it's true that foreign orders from some countries seem to be much more likely to be fraudulent than others. If in doubt, stick to ones from Western Europe and North America.
To help avoid fraudulent orders look out for these indicators:
In addition you can check whether an order is fraudulent by asking for a fax of a copy of the back strip of the credit card; asking for proof of name and address to be faxed; or you can telephone to make sure that the number is genuine. Most fraudsters give up at the first hurdle and you don't hear from them again.
Finally, you may have been wondering for a while whether ecommerce would be worth it. Well the results are now firmly in, and it’s very clear. Ecommerce is really on the rise, while conventional retail is relatively static. In the UK, around 6% of all retail sales are made across the web. What’s stopping you getting your share of this growing pie?
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