Developing an Online Store

By Joel Pape and Sally CohenExpand Omaha 2010 Winter Edition

An e-commerce or online store is not that different from a traditional retail store. The same basic rules apply but on a slightly different scale. The online retail business is something similar to a mall. Every competitor is a Google-search away. This causes a small problem. It is far too easy for someone to click to your competitor to purchase based on price. So what do you do?

Qualities needed for successful online store:

• Superior marketing/branding
• Competitive pricing
• Service and support
• Unique product/service niche only your website has
• Easy to manage shopping cart software.

Superior Marketing and Branding
As with mall rent or building foot traffic to a brick and mortar location, be prepared to allocate a very large budget for building website traffic. Why? On the Internet, you have the opportunity to appear as a larger business than you actually are. But you have to build traffic and trust to your website just as you would with a traditional retail store model.

Low Pricing
Competing against billion dollar companies online with price is tough. You need to maintain your margins so you can stay in business. Small retailers may choose to work only on lowest price and not worry about sweetening the deal with free shipping or other additional offers. When your product appears on sites such as Pricegrabber.com or Nextag.com, worry only about price and quantity of listings.

Service and Support
If you really want to set yourself apart on the Web, then service is the answer. Providing superior services and support for your products will speak volumes to prospective customers. Surprisingly, people will pay more money for the same item if the company answers the phone. Have you ever bought something local from one store over the national chain because you knew the service would be worth it?

Unique Niche
Finding a unique niche is by far the best way to compete on the Internet. Why? Because you don’t have to compete with many on just price! It’s best if your store has the exclusive. The downside is you have to build awareness solo. A decent size marketing budget or a wild fire social media campaign will be required.

Social Media Niche
Provide a resource on your site that no one else is providing. A great example of this is bodybuilding.com. This site sell supplements to make money. However, a significant portion of the marketing strategy has been focused on creating a community online of people losing weight, transformations, and a experts sharing their knowledge.

Fatal Efforts
If this is your first e-commerce website then please DO NOT make these mistakes!

Avoid buying excessive inventory. Buy the absolute bare minimum or don’t have anything in stock if it only takes a day to get it. Drop ship if possible. Do not use only affiliate links. Google will not index your site.

Communication is Key
Until your website has substantial credibly, make it easy for customers to contact you. Phone, chat and email should all be supported.

Do select a niche where you are already an expert or hobbyist. Have a marketing “hook” to bring traffic: a unique social media offer, or a well-developed video to promote or a unique free sampling of your product. Do not start an e-commerce store without a business plan. Use a quality check-out vendor with verification links and logos for your website. Authorize.net and Paypal are good examples.

Trust Factors
Consumers already have trust issues with the Internet. Some of the lack of trust is education that the Web is safe. Some is due to the impersonal nature of the Internet. Only 50% of consumers feel confortable shopping online. If your e-commerce site looks cheap or not professionally built with nice graphics and design, the chances of being successful are reduced. In addition, buy extra reassurance with the BBB, SSL certificate, industry associations and Chambers of Commerce to help your customers feel safe on your site.

Build It and Customers Will Buy
This happened in the late '90s for a brief moment. People are not begging for new places to spend their money. Products require lots of marketing – and marketing requires money and/or time. Social media, while still free to use does require the other half of the equation, which is time.

Online Store Options
There are several options available for creating on online store. They all have pros and cons to them. A fully customized solution will be the most expensive but will do what you need it to do. In addition, your customers will have the best possible experience.

Another option is to create a basic website and use “Buy Now” buttons from PayPal or Google Checkout. This is a cheap way to get started. People trust the PayPal and Google brands. Don’t stay with just these solutions too long. Their fee rate for every sale is expensive. Talk to your bank and web developer about other options.

The draw back is you will not have ultimate control of the customer’s online experience.

The Bottom Line
Should you create an online store? It really depends on what you have to offer your customers. If you have the right combination of services, products, and marketing then YES! You can make money at it. The appeal is there that the store works for you 24/7/365 – whether you are there or not.

Do your research, write your business plan and think it out. The Internet is here to stay and is ever evolving with new opportunities.