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Successful e-commerce calls for substantial investment

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by Patrick Nolan

SBJ Contributing Writer

Business is increasing every month for Stephen Marsden via the web site for his company, Herbal Advantage. Since going online more than a year ago, Marsden said he has seen a gradual yet continuous growth in online business.

"This month is about 300 to 400 percent over last year," Marsden said. The Internet has brought the firm worldwide clients, with international business representing about 10 to 15 percent of his web-generated sales. "I think it's good business," Marsden said. "I think it's growing."

Electronic commerce or e-commerce is growing, said Skip Greene, of Atlas Communications. And at this point, "e-commerce is in its infancy."

The Herbal Advantage site began as a traditional tool, Marsden said. "I hired a kid who was just starting his junior year in high school. He just graduated. The site is paying its way now, but we are not exclusive (to the Internet). As far as I am concerned, it's just a tool."

Conducting business online requires the businessperson to know exactly what he or she wants to do with the web site, said Greg Hardt, web server administrator at Dialnet. Prior to establishing a site, Hardt recommends that businesspeople talk to several Internet service providers to get a feel for the costs involved. Log on and see what your competitors are doing, he said.

"This should be a major decision," Hardt said. An e-commerce solution should be treated as an almost separate business entity, and it will require maintenance.

"The more you put on your site, the more it will take to maintain it," he added.

While your e-commerce solution may be as simple as posting a picture of what you have to sell and a printable order form, Rex Arney, Internet services manager at ProTel, said, "It's all about marketing. Your web site is like the package of a product on a shelf. Would you buy a product that had a photocopy of a photo taped to the box?"

Web designers and computer professionals are being forced to become more aware of marketing and promotional factors when working with commercial clients, Arney said. In fact, there are several companies throughout the nation that do just that, bringing together teams of professionals from advertising, computers, marketing and graphics design to build sites for businesses.

Once you set up your site, you need to advertise to bring in business, Hardt said. A serious e-commerce solution will include adding the web site to all traditional advertising. It will also include advertising online through purchased ad spots on related pages or through a link exchange, Hardt said. "I go to a site not because of a search engine, but because of a link from another page or a URL in a magazine."

Marsden agreed. He said his company added its web address to all advertising, as well as adding its regular postal address and phone numbers to the web site. "People are just beginning to realize that they need print ads and magazines," Marsden said.

Setting up for online business requires five basic steps, Hardt said.

?Target your audience. This is very important with the potential for more than a million people a day to see your site.

?Define your approach. Do you really want, or do you really need, to put your entire catalog online in a full-service e-store, or will a few items and an order form be enough for your e-commerce solution?

?You need a tracking mechanism built into your site. This will allow for your server to follow your customers and track their purchases.

?You will need some kind of payment verification. Are you going to fully automate and accept credit cards online, or will you process those manually by phone or mail later?

?You need to have inventory tracking. If you did have 1 million people hit your site and they all bought widget No. 1, would you have enough widgets to serve your customers? Customers hate delays.

Of the above five items, only the first two are basic requirements, Hardt said. The final three are targeted to the business that is making a serious effort in e-commerce. A business that is serious about maximizing the benefits of the Internet, as opposed to just having a web presence, should treat its "e-commerce solution as a total computerized version of your business placed online," he said.

The cost of designing a site varies with what you really want to do with it.

"Most people seem to want to do things the least expensive way," Arney said. "Cost and quality go hand in hand. Typically the initial outlay will be higher than the re-occurring costs, and about 10 to 15 percent of a person's time will be taken up with maintenance."

A company wishing to conduct business online will want to dedicate time, Hardt said. There will be maintenance time, and "The percent of the business you want to generate by online commerce is the same percent of your budget and resources that you are willing to dedicate to your e-commerce solution."

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