How to Start an Ecommerce Business

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Cool on eCommerce Websites

In the prior two editions of this book, I was hot on ecommerce websites. Today I am not for three reasons. eBay has taken away the direct link from an auction ad to one's ecommerce website. Indeed, it appears from a current reading of the eBay rules that even publishing your ecommerce website URL in your auction ad (not as a link) is a violation of the rules. Although you can still link to your About Me webpage from your auction ad and from there to your ecommerce website, it's not the same. It's too indirect and much less effective. Operating an ecommerce website is the easy part of Web retailing. Getting significant traffic to your website, however, will take at least half your time and resources. Yes, half. With the weakening of the website-eBay link, as discussed above, the idea of an ecommerce website doesn't seem quite as compelling and is likely to be much less profitable. The great feature of eBay is that the marketing is built in. You can have an eBay retail business without...

ECommerce Website Database

In order to stock your ecommerce website catalog efficiently, keep your inventory in a desktop database such as Access. Make your daily inventory adjustments change your prices delete sold inventory and do it all offline with an interface that's easy, quick, and convenient to use. (Online interfaces for Web ecommerce software are notoriously slow to use.) Then in one quick gesture, upload the data you need to your website commerce catalog. The result is an entire new catalog with up-to-date information, that is, up-to-date inventory and prices. Some corporate ecommerce websites have catalogs connected directly to database servers, but you have to have tens of thousands of unique items in your inventory before you need such a system or can justify the cost of it.

ECommerce

So, ecommerce websites are no longer difficult to create or expensive. What does this mean to eBay retailers who run auctions on eBay It means that auctions on eBay and an ecommerce website can work together to increase business. For instance, Dutch auctions are a good way to sell inventory in quantity on eBay. It's almost like selling inventory out of a catalog. Likewise, the Buy It Now feature of eBay enables you to turn eBay into an online fixed-price catalog, in effect. Turbo Lister enables you to upload auctions in bulk quickly and efficiently. And, of course, eBay Stores are ecommerce websites themselves. If you do conduct a retail operation on eBay, you might ask yourself, How can I get customers from my auction ads to my ecommerce website without violating eBay rules As you will recall from Chapters 4 and 20, eBay does permit a link to your About Me webpage from your auction ad and a link from your About Me webpage to your ecommerce website. However, eBay policies state that...

ECommerce Software

If you operate an independent website, you will need ecommerce software to sell anything on the website. eCommerce software consists of a product catalog, a shopping cart, and a checkout procedure. Also important is the capability to be able to use a credit-card charging service that dovetails with the checkout procedure. eCommerce software varies in quality but is readily available from most host ISPs. In fact, host ISPs usually provide such software for a small fee or free as part of your website hosting service. Third-party software is also available. One of the leading vendors is Miva, which provides Miva Merchant, an ecommerce software package. What's interesting and unique about Miva Merchant is that it accepts plug-in modules created by third-parties. The plug-in modules are simply additional software that extends what Miva Merchant can do. There a number of third-party vendors that create and sell Miva Merchant modules. Miva Merchant by itself is a pretty capable ecommerce...

Get the Hardware and Software You Need

Before you can step up to the auction block, you need to connect to the Internet, and in order to do that, you need some basic computer hardware and software. Buying and selling through auctions, like other types of electronic commerce, don't require a super-fast connection to the Internet. Nor do you have to spend thousands for a computer with the latest multimedia bells and whistles. A detailed description of hardware and software you do need is presented in Chapter 2, but here is an overview of the kinds of things you need to get started.

Cost Effectiveness Review

I suppose if you have a large ecommerce website and your operations on eBay and eBay Stores are minor by comparison, that ecommerce software is important to make your business work efficiently. That's your most cost-effective approach. Be sure that you're using ecommerce software that provides the capability to handle eBay auctions, Stores, and datafeeds to other marketplaces. If you are not already operating an online retailing business, I recommend that you use an eBay Store as a substitute for an independent website. An auction management service, whether provided by eBay or a third-party vendor, will provide all of the ecommerce functionality you will need to conduct your business professionally anywhere on the Web. Therefore, the message of this chapter is to use robust software to operate your business. But if you're an established eBay business thinking of expanding sales, don't worry about ecommerce software. You will be able to do almost everything just fine with an auction...

Auction Management Services

If you use an auction management service for your eBay auctions, you may be able to use the checkout mechanism on your ecommerce website too. For instance, Andale enables this. Your auction management service may even provide a catalog you can use on your website. Check out the features of your auction management service, if you use one, to see what's available that you can use on your website as well as for auctions. ecommerce software from an auction management service might be easier to install on your website but perhaps not as flexible as the ecommerce software provided by your ISP One compelling reason to use the catalog and checkout from your auction management service on your website is that you don't have to learn more than one ecommerce program. Finally, let's mention that it's a two-way street. There is a plug-in for Miva Merchant that handles eBay auctions. Eureka If you use Merchant, you can use your ecommerce software to manage your eBay auctions too. Check out Veeo...

Profiting from eBay in creative ways

EBay is becoming the Microsoft of online commerce and is poised to easily dominate the world of ecommerce for the next decade. You can profit from this fact in many ways. As of this writing over 40,000 people are signing up every day on eBay. Just as Microsoft established its Windows platform as the operating system of choice for 95 of all personal computers, eBay is establishing itself as the gateway of ecommerce for the next century.

Quality of Protection

A verification merely helps ascertain that a person is who he says he is. But John Larkspur (a name I made up) can be who he says he is and still be a Web ecommerce criminal. Therefore, all a verification does is identify a person. I suppose if you start chasing a Web ecommerce criminal for recovery of stolen funds, it's best to know who he is. Presumably without the verification it might be difficult to know the true identity of the person you want to chase. But knowing the true identity of someone is no guarantee that you will catch him or recover stolen funds. In the final analysis, you have to rely on other indices of trust to do business with a person on the Web.

Data the Key to Business Success

Skills but it's not necessary for success in ecommerce. What is essential is that you understand a few database concepts. I have using computers for business since 1981, and I found a database important in the first year. In 1994, I put up my first ecommerce website. I did the catalog portion with a database. In 1995, I wrote a book entitled Creating Cool Web Databases (still in print) in which I explored how to create dynamic webpages with databases. (And I'm not a programmer.) In 1999, I wrote my first eBay book and devoted a considerable portion to using a database for eBay ecommerce management. Good software for managing eBay businesses had not yet emerged. Fortunately, the auction management services eventually relieved me of the necessity for that task and relieved you of wrestling with database programming too. Yet understanding databases is a recurring theme in the application of digital technology to business including retail business.

Two System Marketplace

Search engine by a substantial margin, a huge number of people find their way to merchandise via Google, and many more via Google than through the other search engines. Indeed, the number one Web marketing technique is to get your website found by Google. Many ecommerce business owners spend a lot of money to do so. As this book goes to press, Froogle is still in beta, and you can try it at http froogle.com. It works amazingly well. What does it do It simply filters out all the non-commercial websites of a Google search. With Froogle, you get only the vendors. It's a powerful purchasing mechanism, a new ecommerce phenomenon. If you operate an independent website and use ecommerce software for a catalog, shopping cart, and checkout, your software vendor should include a feature in the future to make a Froogle data feed. For instance, FASTFEED is a Miva Merchant plug-in for Froogle. For more information on this exciting new breakthrough in ecommerce, try some of the following resources

Sure Beats the Alternative

If you do link to your current specific auctions from your ecommerce website, it's almost the same as running auctions on your website. The eBay auctions will be much more effective you won't have to buy and operate any special expensive website auctioning software you won't have to run a marketing campaign to get traffic to your auctions and you won't have any of the headaches of running your own auction marketplace. Indeed, keeping your eBay auctions current on your website (via links) sure beats the alternative of running your own auctions.

Creating Ads for Other Marketplaces

There are dozens of other datafeed marketplaces on the Web other than Froogle and Yahoo Shopping. On one hand, you can expect a big consolidation among the existing datafeed marketplaces. On the other hand, you can expect new datafeed marketplaces to pop up all over the place. Datafeed marketplaces are the latest killer ap in ecommerce.

An eBay Store as Your Website

Be a cost-effective way of doing business on the Web. At least, not as long as they can have an eBay Store instead. An eBay Store gives you most of the good characteristics of a viable ecommerce storefront. It gives you a place, and more importantly, a place where there's traffic. It gives you a storefront look. It gives you a catalog of products. And it gives you a checkout mechanism. The checkout mechanism, of course, includes payment choices. You've got it all on with an eBay Store. Or do you

The Occasional Seller

Perhaps the best, but most common, customer service you can provide is accepting credit cards. There are dozens more ways to get merchant accounts for Web ecommerce in 2004 than there were a few years ago. Get yourself a merchant account, and start accepting credit cards.

Computer

Buying and selling on eBay, like other types of electronic commerce, doesn't require a machine with the latest super-fast processor and multimedia bells and whistles. Nevertheless, the speed and quality of your computer, monitor, and other hardware can affect your auction experience. If your machine is slow and your modem a crawler, it could take an inordinate amount of time to get multiple sales items online. If you can't inspect a detailed screen image of your image as it appears on eBay, you might not be able to correct or retake it if you need to. Make sure you have, at the very least

The Checkout

A reason to have had your own website in the past was to provide a checkout procedure for your eBay customers. There was a time when the eBay checkout procedure was weak. Ineffective really. Nonetheless, most ecommerce websites had capable checkout procedures. If you could steer your eBay auction winners to your ecommerce website checkout, you could handle them more efficiently, and they would see your website too. Today eBay offers a much improved checkout procedure, although it's only capable if the seller sets it up properly. The auction management service checkouts work well, and you can even use some of them on your ecommerce website in place of traditional ecommerce software. Consequently, today it's not important to have a website just to provide a capable checkout procedure.

With a Website

If you sell at retail full-time on eBay as a business or if you are a retailer who sells a fair amount on eBay but who has a physical location too, you might seriously consider operating an ecommerce website. The question is, What is an ecommerce website The following are some characteristics Perhaps the best ecommerce website of all is Amazon.com. The story of Amazon is one of pure customer service. The Amazon website may not win any awards for aesthetics or for technical flamboyance. But it sure creates an easy, interesting, and convenient experience to buy a book online (or other consumer items). If you do have an ecommerce website that functions intelligently, you can weave it into your eBay business. Here are some things you can do Include a link to your About Me webpage in your eBay auction ads. In About Me you can include a link to your ecommerce website to generate extra business. Link to your eBay auctions from your ecommerce website to generate extra business. Extend your...

Building a Website

An ecommerce website can be a profitable operation in conjunction with running multiple auctions on eBay. What is an ecommerce website Typically, it's a website that sells products. It has a catalog a shopping basket for customers to accumulate products a checkout procedure including automated shipping and sales tax calculations, credit card processing, and warehouse shipping notification and order accounting. Not too long ago, a system as just described was a major Web construction project and was expensive to create and operate. Today such capabilities are offered by dozens of Web commerce soft- ware packages for websites, and operating expenses can be quite low. Indeed, almost every host ISP offers free Web ecommerce software to its customers.

Accounting

Many Web ecommerce programs provide a record of all the orders. If you do not have a separate accounting system to handle orders, this can be very handy. Even if you have a separate accounting system to handle orders, you can use the accounting capabilities of your Web ecommerce software for interim accounting. Some ecommerce programs will plug nicely into popular accounting software, and you will be able to handle orders seamlessly. For instance, modStop (http modstop.com) sells a module for Miva Merchant that enables it to pass order information to QuickBooks (http www.quicken.com).

Database Overview

Put all the data you need for everything in the ecommerce catalog into one database table by creating as many columns as you need. 4. Export the data to your ecommerce software catalog database. 5. The data will add to or revise the catalog entries in your ecommerce webpage catalog.

The Magic Link

It used to be that eBay allowed a link from your auction description to your ecommerce website. This enabled you to promote (advertise) your website on eBay. In the spring of 2002 eBay disallowed this useful link, severely restricting your capability of promoting your ecommerce website on eBay. Today eBay still allows a link to your ecommerce website from your About Me webpage. But it's not the same. It's too indirect. Apparently, if I read the rule correctly, eBay doesn't even allow the URL for your ecommerce website to be published in your auction description. eBay characterizes it as a static link, whatever that is You will do well to review the rules about this if you have questions about it. Go Services, eBay Policies, Rules for Sellers, Listing Policies for Sellers, Link Policy.

Offline Advertising

Advertising offline works fine for ecommerce on the Web, if you can find an advertising medium that fits your products. It costs money and is usually expensive, but that doesn't mean it can't be cost-effective. What many ecommerce businesses have found when advertising offline is that many orders come in by telephone. Yes, there are still people who aren't connected to the Internet or who don't find shopping online convenient. If you advertise offline, you'd better have some order-takers ready by your phones.

Your Website

You can't include a link to your ecommerce website in your auction ad. But can you include your website URL not as a link It's unclear. eBay seems to consider a URL as a static link, whatever that is Thus publishing the URL of your ecommerce website is apparently not permitted. Perhaps it will become more clear in the future. If permitted, you should include the URL of your website in every ad. If you have an ecommerce website, it's your chance to market your other merchandise. A person may not bid on your item being auctioned but If you're more than an occasional seller, link to your About Me page on eBay. Your About Me page needs to present full information about you and your eBay business. It will enhance your credibility as a seller. And eBay permits you to put a link to your ecommerce website from your About Me page.

Without a Website

Having said all that, the fault in the plan to operate an ecommerce website is that you will have to market extensively to draw any traffic to the website. If you're thinking of starting an ecommerce website, however, you might consider a more cost-effective alternative. You are better off, in my opinion, to forego establishing an ecommerce website and focus your attention on other eBay-related sales mechanisms such as eBay Stores which do not require a huge amount of marketing. If you do not operate an ecommerce website, you have to ask yourself how you can provide comparable services. The first reaction you might have is that you can communicate by telephone, snail mail, and email. Another way to provide customer services without a website is to use auction management services (see Chapter 17 for more details). Not only do these relatively new services provide you with enhanced customer communications and other services, but they also provide you with many of the ecommerce services...

Marketing

Your ecommerce website will not sell anything without an aggressive Web marketing campaign. People have to know about you, be motivated to visit you, and find you. Marketing is just as difficult and expensive on the Web as it is in real life. The difference is that offline, virtually everything costs money. Time magazine is not going to do a tradeout with you (e.g., a half-page ad for sweeping out the Chicago bureau for three months). On the Web, however, you can substitute time for money. You can carry out an aggressive Web marketing campaign if you want to spend the time to learn to do it and then the time to do it. It's clear that without a serious marketing effort no one will come to your ecommerce website.

The Website

Why have an ecommerce website in the first place It gives you a chance to put up an online catalog with fixed prices. It gives you If you already have a profitable website, great Don't give it up as long as it's worthwhile for you to operate it. But many eBay businesses discover that having an ecommerce website is more trouble than it's worth. Before jumping into creating your own website, you need to give careful consideration to the alternative eBay Stores.

Use the Stores

What the eBay Stores do today is present to you a grand opportunity to run an ecommerce website, in effect, without all the headaches, hard work, and expense. For most eBay businesses, an eBay Store will bring them more business immediately than an ecommerce website. And the best is yet to come.

EBay Stores

In the prior editions of this book I advocated creating an ecommerce website and using it in conjunction with your eBay auctions. I no longer recommend such a strategy. Three factors have changed the First, eBay no longer permits a link from your auction ad to your ecommerce website. Second, eBay now provides you with a storefront (eBay Store) and does your marketing for you. Three, auction management sevices now provide you with a checkout device for your eBay customers, and the eBay checkout is much improved.

Different Catalogs

EBay Stores will require a certain subset of your data. Froogle will require a different subset of your data. Yahoo Shopping will require yet another subset of your data. And if you're operating an ecommerce website, the catalog program or service you use on your website will require still another subset of data.

Transaction Services

One of the most important elements of good Web ecommerce software is the transaction services it provides. A customer goes to the checkout where the shopping basket shows up with the products that have been ordered. The prices of the products are totaled, sales tax (if applicable) is calculated and added to the total, shipping is calculated and added to the total, and a choice of payment methods is provided. Then the information for a particular payment method is received. All this information passes back and forth in a secure digital environment. This is all done by the Web ecommerce software. It provides an easy-to-use and convenient way for a website visitor to make purchases. If it works for website visitors, why not for eBay bidders If you have an ecommerce website, you can direct the high bidders at your eBay auctions to your website to make payments. It's convenient for the bidders, and it's convenient for you. Auction management services also provide checkout mechanisms...

Independent Websites

ECommerce software is only important to you if you run an independent website where you sell products. Since this book does not advocate that you do that, I will not dwell upon the use of ecommerce software. However, what you should know is that the auction management services can provide many of the same features for independent websites. For instance, many auction management services provide catalogs, shopping carts, and checkout procedures that are essential to conducting business on the Web, and they are not necessarily confined just to handling eBay auctions and eBay Stores. They may also be used for independent websites. agement services and the ecommerce programs are each coming from a different direction and meeting in a middle point somewhere where they start to look like one another.

EBay Link Policy

Regardless of what this book says, you need to occasionally consult the eBay link policies in the Sellers Guide on eBay. eBay used to allow you to link to your website from your auction ad. That's no longer permitted. And the link rules are getting so complicated that you almost need a lawyer to decipher them. eBay evolves, and as it does, so does its policies. The thrust of the link policies is that eBay doesn't want you to link to your ecommerce website if it sells the same merchandise that you sell on eBay at the same or lower prices than you sell on eBay.

Pay Pal Shops

Join PayPal Shops where 27 million PayPal members might stop in. Don't believe it. Nonetheless, if you have an ecommerce website, it can't hurt. To join PayPal Shops you have to sign up for PayPal's money market arrangement (another financial function), which pays a return on any funds in your account. Then your shop and checkout are free. Or, if you have an eBay Store, your PayPal Shop is free. Don't get me wrong. I don't think PayPal Shops are a major retail force on the Internet today, but you never know what tomorrow might bring.

Affitliate Programs

For many products, affiliate marketing works well. For many years it was an inviting means of marketing on the Web. Today with the advent of eBay, eBay Stores, Google, and Froogle, and their capture of a large market share in ecommerce, affiliate programs are not as important to most online retailers as they once were. That will get you started. Affiliate software is commonly available. For instance, a third-party makes an affiliate plug-in program for Miva Merchant, thus converting that very capable ecommerce program into an affiliate manager.

Marketing Realities

The reality of operating your own ecommerce website is facing the great marketing problem. Marketing your website will take at least half the time, effort, and money you put into your business. Without being able to piggyback on eBay, you have the same marketing problem as any ecommerce website on the Web. The piggyback was the direct link from your eBay auction ads that eBay no longer allows.

The Ups Api

UPS has several tools available for integration. TheUPS OnLine Tools available at ups.ec.com are for use by an end user. An end user incorporates the tools into their business's e-commerce-enabled applications that are not available for commercial sale. Third-party developers such as web developers, system integrators, or IT consultants that integrate UPS OnLine Tools for end users must register as a third party. The same holds true for an independent software vendor or application service provider that integrates the tools into their software application(s) for direct or indirect sale to the public. UPS requires a separate third party developer license agreement and product certification by an outside test lab for those applications for sale to the public. If you are interested in licensing UPS OnLine(r) Tools as an Third Party, you need to submit your request to UPS using the Third Party Product Provider License Request

Details

Yahoo also provides storefronts (websites) for ecommerce, Yahoo Merchant Solutions This is a popular hosting service. If you use a Yahoo storefront, you get a modest discount on Yahoo Shopping click-through fees. Although Yahoo Merchant is a significant marketplace, it doesn't seem to me to be a strong competitor to eBay. You are most likely better off with an eBay Store, particularly if you use eBay auctions to promote your eBay Store. It's certainly possible to have both an eBay Store and a Yahoo

Epilogue

I hope that you have found plenty of information in this book that will help you generate greater sales in your eBay retail business. If you are aware of some important idea that I haven't covered in this book, I would be happy to hear from you at the following email address jt sinclair.com. I also operate a website, Bayside Business for eBay retail sellers, at http baysidebusiness.com. You can visit that website for additional information on operating your eBay and ecommerce retail business. In addition, you can sign up for

Databases

You use ecommerce software (with a database core) for your ecommerce website, and you want to integrate that data with your auction management. Comment This is a good strategy. However, you might want to consider the auction management services. You can use some of them on your website in place of your current ecommerce software thus serving a dual purpose.

Other Marketplaces

They each take different subsets of data and charge different fees. Most are comparison websites. Some may be affiliates of others that is, a datafeed to one may result in a presence on others. This is a fast changing ecommerce environment, and you will want to ivestigate each possibility to determine what it can do for you. Google remains an important online shopping gateway and will probably outperform (in retail sales) its new invention Froogle for a few years. However, Google has to find your website it doesn't take a datafeed requiring a serious commitment of your time,

Compensation

For keyword advertising on eBay, Google, Froogle, or other major ecommerce gateways, you pay for click-throughs. This is know as pay per click or PPC advertising. You can buy as many or as few click-throughs as you want. Each portal has its own payment scheme. But advertising is not limited to only affluent businesses. Any business can buy some advertising, that is, some number of click-throughs. Moreover, you can buy advertising in small enough quantities to experiment before you commit yourself to larger expenditures. Keyword advertising (PPC advertising) works well, and the payment schemes for keyword advertising make its use flexible.

The Plan

People must be able to see your entire collection. That's the way to sell art. You need to have a website gallery. Setting up and operating a website is easier and less expensive than operating a real art gallery. It's also perhaps easier than running 120 auctions four times a month on eBay. If you already have a website, I don't have to sell you on this idea. Unfortunately, eBay no longer permits a link from your auction ad to your ecommerce website. One alternative is to have a link to About Me where you can have a link to your ecommerce website. But that extra step is a killer that defeats an effective marketing program. Another alternative is to have Once you have talked bidders into going to your eBay Store, you have to make it easy for them. A link in your auction ad in the appropriate place accomplishes this nicely. For an ecommerce website, this is necessary (i.e., link to About Me and then to your website). For an eBay Store, you can argue that the link already exists....

Information

Once, while I looked for a camcorder to purchase, I ran across an ecommerce website (video retailer) that had a complete tutorial on shooting video with a consumer camcorder. It was quite valuable (and free), and I gave that particular website a more thorough visit than other video retail websites I visited. But, most interesting, I found that particular video retailer by searching (using a search engine) to see what information was available on the Web about shooting video. (Note that I eventually bought the camcorder at an eBay auction.)

Naming Case Study

I needed to build a website that supported eBay retailers so as to promote my six books about eBay. I didn't want to brand it The Smart Way, like the books, because I wanted it to be about more than just the books. Still, the website needed to be eBay-centric rather than about something generic such as ecommerce. But I couldn't use the eBay name, because it's a trademark. Also, the name to be picked would be central to the branding effort. It had to be short, make sense, and relate to eBay.

Retailers

A new breed of retailers has appeared that sells only on eBay. These retailers don't necessarily even have the expense of an ecommerce website and certainly not the expense of a store or warehouse. These people seek inventory at wholesale, distress, closeout, or otherwise low prices and then sell it on eBay at discount prices. In some cases, their overhead is so low that they can afford to sell at deep discounts even while purchasing their inventory through normal wholesale channels. Don't look at these sales efforts as fly-by-night retail operations. Many are serious businesses making big profits in this new marketplace. What is a fly-by-night retail operation Is it one where a one-person retailer purchases a huge inventory of a closeout item for a low price, spends two months selling it on eBay, goes on vacation for a month in Bermuda, and then returns to start the cycle over again If so, I want to be a fly-by-night retailer. Indeed, eBay makes such special retail sales projects...

Individuals

You can put anything you want to in your auction ad. There's no limitation. Naturally, you will want to describe the item you offer for auction. But you can also advertise your business (in effect), include a picture of the item for sale, and even include a link to your About Me webpage on eBay, which can include a link to your ecommerce website. Chapter 12 will show you how to use HTML templates for attractive ads without having to learn HTML.

EBay Plus

Today, however, there is another transformation going on. eBay is becoming the cornerstone of ecommerce. Rather than just another market locale in a vast metropolis of online commerce, eBay has become the gateway to consumer ecommerce itself. Probably 70 percent of the retail online consumer commerce is initiated on either eBay, Google, or Froogle. Tomorrow maybe 80 percent. Because you can use the same product data for eBay auctions, eBay Stores, Froogle, and other online marketplaces, I call this new phenomenon the datafeed marketplace.