With all these dot com failures so rampant, you may be wondering, is it still viable to consider an online business? The truth is, while the spectacular rise and fall of many dot-com companies has been overhyped, online sales continue to grow 20-25% each year. Even the economic recession of recent years has not hampered this growth.
Consider this:
According to an annual study of Internet trends by the market research firm Ipsos, almost two-thirds of Internet users in the United States have already purchased a product or service online. That’s a dramatic increase from just 36 percent of those surveyed in 2000. Studies show that more than 35.5 million US Internet users took shopping trips to web stores during the week ending 3 November 2002, which is about 14 million more than almost the same time period. in 2001.
While the hype about the new economy may be over, one thing is for sure: the Internet has revolutionized the way we do business and has established itself as one of the largest and most exclusive sales channels. Many companies have finally begun to realize that their very existence may be compromised if they are slow to integrate the Internet into their business model.
But the question remains: are there any effective methods of doing business online?
Below I have outlined some crucial components for any online business. While these may not be the only vital components of web-based business, understanding them correctly will significantly improve your chances of doing business effectively online.
Business plan
Business plans are like road maps. Imagine, you ended up in an unknown city and you have to find an address without a map! How would you feel? You would definitely have been much better off with a map of the town! The same goes for the business plan. Although many successful businesses may have been started without the benefit of a formal business plan, a good business plan improves your chances of success and helps you avoid many mistakes.
A recent AT&T study of successful entrepreneurs shows that businesses are more successful if they have a written business plan than those without. With a written business plan, you get a better picture of your planned business. So before you start your online adventure, take some time and write down what you plan to do.
product or service
If you are a brick and mortar company that is simply trying to expand the sales of your products or services on the Internet, your task is easier! At least you don’t have to ponder what to sell. But, what should an entrepreneur who decides to start a new venture sell on the Internet?
Actually, you can sell just about any product or service over the Internet. You can say, “Wait a second, you can’t sell expensive items online, right?” Wrong! The auto and parts industries alone are forecast to generate $274 billion in revenue from online commerce in 2004. Incidents of consumers buying corporate jets online!
If you really want to start an online business, finding a product or service that suits your needs shouldn’t be too difficult.
Knowledge base products such as e-books, how-to reports, and hard-to-find data and information sell quite well on the Internet.
Drop shipping items are plentiful on the Internet.
Thanks to the global reach of the Internet, finding manufacturers for any item you plan to import into your country or export from your country just became a lot easier.
If you have experience, online services similar to web design, travel organization, etc. are also good sales.
Internet users are easily paying for various types of online content. The global market for online content will add up to 50 billion US dollars in 2003. You can also consider this!
Website / webshop
Since your customers make decisions about whether or not to do business with you based on what they see on your site, having a professional-looking website with good related content is essential.
You can choose your website according to your needs from a wide range of options. Starting with a completely free website, you can shell out thousands of dollars for a decent eCommerce website. The choice is yours!
There are several quality portals that allow you to display products and services on a single page website for free. Many business-to-business portals offer this type of service. However, for real-time transactions, you’ll still need eCommerce web stores.
If you’re not good at design or don’t want to spend a fortune on your web store, you should think about getting ecommerce stores from web enablers like Yahoo, Bigstep, etc.
For a nominal monthly fee, you can have the facilities to run a complete e-store and build it yourself from easy-to-use templates.
If you opt for these types of services, shop around and see who has the most features for a lower price. Some business-to-business portals in conjunction with your e-commerce web store will provide you with the necessary functionality to carry out many important parts of the buying and selling process over the Internet.
shopping carts
The integral part of e-commerce sites, which allows you to accept product purchase orders for multiple products or services, is called a shopping cart.
The term “shopping cart” is taken from real-life shopping terminology to help users understand the actions available to them. Just like in a supermarket, a user can add products to the shopping cart, remove products from the cart, or adjust the quantity of products as per the requirements before checking out and paying.
As you look for shopping carts for your eCommerce store, you should consider the following aspects of a powerful and functional shopping cart:
Access to the shopping cart must be clearly visible. There should be multiple entry points to the cart.
Adding, removing and adjusting the number of product features should be highlighted on the cart page.
The item name must have a link to the product description.
There should be a way to save items for future purchases.
Shipping and other costs must be clearly stated before the checkout process begins.
Order forms should be simple and clear.
All payment options must be clearly explained.
The order process must be done through a secure server. You know you are on a secure server when your browser’s URL indicates “https:”. The s at the end of http means “secure”.
business account
90 percent of all online retail sales are made through credit card transactions. According to industry statistics, the average credit card sale is $40 versus just $9 for the average cash sale. To offer the option of paying by credit card to your online customers, you must set up a merchant account, an authorized bank account established by your company to receive income from credit card purchases.
Even if you already accept credit cards for your offline transactions, that may not be enough. Although you can take many precautions to reduce online credit card fraud, credit card companies still consider Internet transactions to be riskier than offline transactions. That’s why finding a suitable merchant account provider might be a little more complicated than you think. Things could be even more complicated if your business is located outside of the United States.
There are many merchant account intermediary providers on the Internet. Do some comparison shopping before signing up with any of them, as the terms they offer vary significantly.
While it’s definitely nice to have a merchant account, that doesn’t mean you can’t sell products or services without one! There are many other payment options available on the Internet. The most popular are paypal, e-gold, e-bullion, etc.
If you want to have an effective online business, remember that old values still count. Proper planning, uncompromising customer service, integrity, hard work, and persistence will eventually make your business successful.