E-Commerce

E-Commerce and
and
Entrepreneurship
Entrepreneurship

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 The Internet: Changing the Face
of Business
 The most successful companies embrace the
Internet as a mechanism for transforming their
companies and for changing everything about
the way they do business.
 In the world of e-commerce, size matters less
than speed and flexibility.
 High-volume, low-margin, commodity products
are best suited for selling on the Web.

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 Internet Users by World Region

Latin Am erica Africa

4.9% 0.8%
Asia/Pacific Rim
28.0%
Canada/United States
35.2%

Middle East Europe

0.9% 30.1%
 Benefits of Selling on the Web

 Opportunity to increase revenues

 Ability to expand into global markets
 Ability to remain open 24 hours a day,
seven days a week
 Capacity to use the Web’s interactive
nature to enhance customer service

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 Benefits of Selling on the Web

 Power to educate and inform

 Ability to lower the cost of doing business
 Ability to spot new business opportunities
and capitalize on them
 Power to track sales results

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 E-Commerce
 Survey: Only 27% of U.S. companies
with fewer than 50 employees have Web
sites.
 Small companies account for more than
50% of all retail sales in the U.S., but
they generate only 6% of online retail
sales.
 Why?

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 Factors to Consider Before
Launching into E-Commerce
 How a company exploits the Web’s
interconnectivity and the opportunities it
creates to transform relationships with
suppliers, customers, and others is crucial to its
success.
 Web success requires a company to develop a
plan for integrating the Web into its overall
strategy.

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 Factors to Consider Before
Launching into E-Commerce
 Developing a deep, lasting relationship with
customers takes on even greater importance on
the Web.
 Creating a meaningful presence on the Web
requires an ongoing investment of resources –
time, money, energy, and talent.
 Measuring the success of a Web-based sales
effort is essential to remaining relevant to
customers whose tastes, needs, and preferences
constantly change.

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 12 Myths of E-Commerce

Myth 1: Setting up a business on the Web is

easy and inexpensive.

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 Time Required to Develop an E-Commerce Site

35%

30%

25%

20%

15%

10%

5%

0%
4 to 8 9 to 12 13 to 24 25 to 52 More than 52

Number of Weeks
 12 Myths of E-Commerce

Myth 1: Setting up a business on the Web is

easy and inexpensive.
Myth 2: If I launch a site, customers will
flock to it.
Myth 3: Making money on the Web is easy.
Myth 4: Privacy is not an important issue
on the Web.

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 Privacy and the Web

 Privacy on the Web does matter!

 Jupiter Communications survey: 64% of
Web customers distrust Web sites.
 Post a privacy policy and stick to it.
 Safeguard information your company
collects from customers.

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 12 Myths of E-Commerce

Myth 5: The most important part of any

e-commerce effort is technology.
Myth 6: Strategy? I don’t need a strategy
to sell on the Web! Just give me a Web
site and the rest will take care of itself.
Myth 7: On the Web, customer service is
not as important as it is in a traditional
retail store.

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 The Importance of Service
on the Web
 Jupiter Research Study: 72% of online
buyers cite service as a critical factor in
their online shopping satisfaction.
 Unfortunately…
 Only 41% said they were satisfied with
the service they receive from online
merchants.

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 The Importance of Service
on the Web
 Study: 75% of Web shoppers who fill their on-
line shopping carts become frustrated and leave
the site before checking out.
 Reasons:
 Could not find items they wanted
 Shopping cart too hard to find
 Checkout took too long
 Site did not look trustworthy
 Shipping charges too high

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 12 Myths of E-Commerce

Myth 8: Flash makes a Web site better.

Myth 9: It’s what’s up front that counts.
Myth 10: E-commerce will cause brick-
and-mortar retail stores to disappear.
Myth 11: The greatest opportunity for e-
commerce lies in the retail sector.

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 B2B E-Commerce Sales

$9,000 $8,530

$8,000
$7,000
$5,950
$6,000
Millions of $

$5,000
$3,632
$4,000
$3,000
$1,929
$2,000
$919
$1,000 $150
$433
$50
$-
1998 1999 2000 2001 2002 2003 2004 2005
 12 Myths of E-Commerce

Myth 8: Flash makes a Web site better.

Myth 9: It’s what’s up front that counts.
Myth 10: E-commerce will cause brick-
and-mortar retail stores to disappear.
Myth 11: The greatest opportunity for e-
commerce lies in the retail sector.
Myth 12: It’s too late to get on the Web.

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 Approaches to E-Commerce

 On-line shopping malls

 Storefront building services
 Internet service providers (ISPs)
 Hiring professionals to design a custom
site
 Building a site in-house

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 Online Shopping Malls

 Advantages:
 Simplicity
 Low cost
 Disadvantages:
 Lack of prominence
 Lack of control over site

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 Storefront-Building Services

 Advantages:
 Simplicity
 Low cost – as little as $100 to $500 per
month
 Disadvantages
 Cookie-cutter approach
 Handle only a limited number of products

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 Internet Service Providers

 Provide many of the same features as store-

front design services but offer more flexibility
and customized designs.
 Can grow with a company as its online sales
volume grows.
 What to consider when choosing:
 Cost
 Downtime
 Quality of backup systems
 Capacity for hosting sites

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 Hiring Professionals

 Key advantage: Ability to customize a

site, making it anything an entrepreneur
wants.
 Major disadvantage: Cost
 A custom-designed site can cost between
$10,000 and $30,000
 A site with complete front-office and back-
office integration can cost more than
$500,000!

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 Building a Site in-House

 Key advantage: Complete control over

the site and its design, operation, and
maintenance.
 Major disadvantage: Cost of hiring staff.
 Cost can reach $250,000 to $500,000

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 Strategies for E-Success

 Focus on a market niche

 Develop a community
 Attract visitors by giving away “freebies”
 Make creative use of e-mail, but avoid
becoming a “spammer”

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 Strategies for E-Success

 Make sure your Web site says

“credibility”
 Consider forming strategic alliances
 Make the most of the Web’s global reach
 Promote your site online and offline

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 Designing a Killer Web Site

 Start with your target customer.

 Select a domain name that is consistent
with the image you want to create for
your company and register it.
 Short
 Memorable
 Indicative of a company’s business
 Easy to spell

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 Designing a Killer Web Site

 Be easy to find.
 Give customers what they want.
 Establish hyperlinks with other
businesses, preferably those
selling complementary products.
 Include an e-mail option and a
telephone number in your site.

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 Designing a Killer Web Site

 Give shoppers the ability to track

their orders online.
 Offer Web shoppers a special all
their own.
 Follow a simple design.

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 Web Site Design Tips

 Avoid clutter
 Avoid huge graphics
 Include a menu bar at top of page
 Include navigation buttons
 Incorporate meaningful content into
the site
 Include a “FAQ” section

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 Web Site Design Tips

 Include privacy and return policies

 Avoid fancy typefaces and small fonts
 Watch for “typos” and misspelled
words
 Avoid small fonts on “busy”
backgrounds
 Use contrasting colors for text and
graphics

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 Web Site Design Tips

 Be careful with frames

 Test the site on different browsers
and different size monitors
 Collect information from visitors, but
don’t put them through a tedious
registration process
 Make sure the page looks appealing
 Remember: Simpler is better

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 Designing a Killer Web Site

 Assure customers that their

online transactions are secure.
 Keep your site updated.
 Consider hiring a professional to
design your site.

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 Tracking Web Results

 Counter
 Log-analysis software
 Clustering
 Collaborative filtering
 Profiling systems
 Artificial intelligence

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 Ensuring Web Privacy

 Take an inventory of the customer data

collected.
 Develop a company policy for the
information you collect.
 Post your company’s privacy policy
prominently on your Web site and follow
it.

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 Ensuring Web Security

 Virus detection software

 Intrusion detection software
 Firewall

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 Web Sites

 All-Outdoors Whitewater Rafting

http://www.aorafting.com
 Earth Treks Inc.
http://www.earthtreksclimbing.com
 Just Balls
http://www.justballs.com

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