E-Commerce FAQ

Thursday January 29th, 2004

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What are the business benefits of being on the Internet?

There are a number of potential benefits which you may realize from being on the Web:

Increased sales
Increased market exposure
Reduced overhead cost
Shorter time to market for new products
Quicker response to customers
More effective fiscal management , and
A business which is open to receive orders 24 hr/day, seven days a week (24/7).

Is anybody making money selling products on the Web?

Just as in any marketplace, some stores struggle and others thrive, the same is true on the Internet. These things relate to business plan, capital to invest, advertising and marketing strategies, look and feel and ambience, pricing, customer service policies, convenience, brand recognition, trust in the storeowner, etc. To succeed in retail sales in any marketplace you need to get a number of things right.

What is the expected future volume of electronic commerce?

There are a number of firms projecting the growth of Internet commerce. Thus far all of them have revised their figures upwards on a regular basis. Current estimates of annual e-commerce volume in five years range from hundreds of billions to trillions of dollars per year. Everyone agrees that electronic commerce will be a major factor in 21st century economics. They also agree that online retail trade is becoming part of the mainstream of American shopping.

What are my options for selling products and services online?

There are a number of ways you can start selling products and services. You can place an order form online which customers would have to print and mail or fax back, you can accept direct credit card or open account orders online, or you can become part of a supply chain where a business and a group of its vendors are linked together for direct execution of business transactions and transfer of payments. You will have to research your options carefully and determine your ultimate goals.

What does it cost to start out?

Start-up costs range from virtually free to millions of dollars. It costs virtually nothing to develop a web page promoting your products and place it online if you have the requisite skills and access to an inexpensive host. According to Internet.com , a major source of e-commerce news and information, medium to large size corporations spend an average of one million dollars to develop and implement their corporate e-commerce sites. Somewhere between these two numbers is where you will find yourself. That is why business planning for electronic commerce is so important.

Can I track sales so I know what percentage of my visitors are buying products and how they break down demographically?

Yes, you can, depending on what your business host offers. It is an item that you will need to look at when choosing your host.

How can I effectively market my online business?

You can market in a variety of ways, including both traditional and online marketing techniques. Look at your competitors' ads in magazines, on television, and direct mail. Do they promote a web site? You may need assistance in developing your online strategy, but the channels are there.

Can I ensure that online transactions are secure?

There are a number of well-tested security systems that have been operating long enough to prove their worth. The Secure Sockets Layer (SSL) is one of the more common environments for online transactions. Consult with your business host service on security issues, including warranties.

What is SSL?

SSL uses encryption along with a Digital ID to provide the ability to transfer data securely over the Internet. Below is the definition of what a Digital ID is found off of VeriSign's web page:

Digital IDs are the electronic counterparts to driver licenses, passports, and membership cards. You can present a Digital ID electronically to prove your identity or your right to access information or services online. Digital IDs, also known as digital certificates, bind an identity to a pair of electronic keys that can be used to encrypt and sign digital information. A Digital ID makes it possible to verify someone's claim that they have the right to use a given key, helping to prevent people from using phony keys to impersonate other users. Used in conjunction with encryption, Digital IDs provide a more complete security solution, assuring the identity of all parties involved in a transaction.

For more information please visit their homepage at http://www.verisign.com/.

Will SSL allow me to accept credit cards?

SSL will provide you with the secure environment to transfer the actual credit card information from the browser to the server, you will then be responsible for getting the credit card information from the server to you, and then processing the credit card information. You will also be required to obtain a Merchant Account from an accredited financial institution which you will use to process the credit card information. There are several options available to you for processing the credit card information once it is on the server. You can use a company like CyberCash which enables you to securely process credit card transactions 24 hours a day, seven days a week. You can also use PGP(encrypted email) to transfer the credit card information from the server to your computer, and then run it through credit card processing software yourself. You should be able to find more information about this type of software from your financial institution.

How do I make my customers comfortable with online transactions?

This has become less of an issue after the 1998 holiday season, where millions of consumers purchased over $625 million online. New technologies are being developed which will eventually reduce the need for consumers to enter credit card information online, but the widespread acceptance of online credit card transactions has already taken place.

What is a "Shopping Cart Program" and where can I get one?

A shopping cart program allows you to offer products to your clients with an easy to use interface that generally allows them to go to different pages within your site and select items to put in their virtual "Shopping Cart". When they are done, they check out and the shopping cart program calculates the total. There are several shopping cart programs for you to choose from, here's the list of currently available ones from the CGI Resource Index:

The CGI Resource Index: Programs and Scripts: Perl: Shopping Carts

Is technical assistance available?

There are many electronic commerce consultants available. You best bet is to find one with references you can check. Also, many business hosts offer free or low-cost assistance as part of their package for online vendors. Do your homework and check everything carefully before signing any contract.