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+++ S P E C I A L R E P O R T +++
"How do I start an e-tail store? Part two"
Robin Bassett, Publisher
Absolutely Victorian Greetings
January 31, 2001
(Click here to get an autoresponder of this report and the part one)

NOTHING is more important to your online success - or failure - than the way that you deal with financial transactions. Many Internet users, in particular female Internet users, are very reluctant to divulge their credit card information online anyway and very cautious about how and when they do so. Large, well financed sites have the wherewithal to deal with this adequately, but for small businesses this can be highly problematic.

Do you need a shopping cart? If you are going to be selling more than one or two products or if you are going to be selling products for off-line delivery, then the answer to that is yes. With a shopping cart you of course need the ability to accept funds transfer by some online means - which means some kind of merchant account. 

The simplest choice - and often the most secure - is to simply go to your own bank and add that capability to your business account. My bank charges a $45 a month fee plus a percentage of the transaction.

Security of financial transactions is a huge issue online - and rightly so. We've all read reports of hackers managing to acquire credit card numbers from even large, well known, supposedly "secure" sites. I've personally consulted with one small site whose "designer" had convinced the brand-new-to-the-Internet owner that it was perfectly acceptable to write her own digital certificate - definitely NOT OK and very apparent using Netscape. Luckily we managed to get her site both moved and changed before she was accused of credit card fraud - but it cost her her domain name and her original business name! 

Nowhere online will the new site owner get ripped off faster and more furiously than in merchant account scams and schemes, so this is one area where it is strictly "buyer beware." If the offer for a merchant account arrives in your Inbox unasked for - RUN. 

If you choose to go with an online third-party processor such as PayPal, do your homework. Some of these organizations are perfectly honest and wonderful to deal with. Digibuy, for example, is part of the Digital River Network, and they provide merchant services for even very large, well-known software publishers.

Others, PayPal in particular, have acquired atrocious reputations for changing the Terms and Conditions at the drop of a hat without notice or recourse, failing to fulfill obligations, allowing charge backs many months after a transaction occurred (thereby freezing the merchant's entire registered bank account) and so on. Former PayPal users in particular are considering class action against the company. 

Bottom line: exercise as much care as you would when choosing a husband or wife, research any online organization you are considering using to the nines and ask at least a few site owners that you know and trust who they use - and who they don't!
I realized in reading over the report yesterday while getting it ready for the autoresponder that you had posed a couple of important questions that I failed to address originally - so I'd like to add a bit more "two cents" here.

You asked:

How long should it take to get some business?
How long should it take to become profitable?

As we all know, "profitability" is a new term in the Internet environment, so I'm not sure that anyone can viably answer that question. Its only in the last 18 months or so that the word has even begun to enter our online vocabulary - and that only after the Crash of the Giants began. As pets.com, garden.com, this.com and that.com have all learned - if you aren't making a profit, you cannot stay in business forever, particularly if you're employing hundreds of people, no matter how much traffic, how many page views and how much venture capital funding you have.

On the Internet, like anywhere else, profitability depends on your income model, your expenses and your income. As Internet marketers, though, we have the additional factor of existing in the world's largest mall - each and every one of us has intense competition for each and every sale, so the first question really should be "How long does it take to make a sale?"

Well - that depends. It depends on the structure & usability of your website. It depends on the product that you chose to sell. It depends on the time of year - and a host of other factors. 

A few months back I answered a post in the LinkExchange Digest by a new site owner so discouraged by her lack of sales after only 530 views of her main page that she was considering taking her site off-line. Now her site had a number of problems, but additionally no one had bothered to explain to her that the numbers that showed on her hit counter represented every single time that the page had been loaded into a browser window, including the times that she looked at it herself and the times her designer loaded the page while building the site. Page views do not represent "unique users" - and "unique users" are the important statistic.

Depending on the structure of your website, the skill of your "sales pitch," the product that you sell, the marketing that you do, the reputation that you have or haven't yet acquired, and the strength of your competition, you can expect to make a sale to anywhere between 1 out of every 10 unique users and 1 out of every 10,000 or more unique users. If you're selling 1 out of every 10 unique people that visit your site, you're doing very well no matter what you're selling. If your numbers are closer to 1 out of 10,000 users, then you probably need to do some restructuring of your site and take a close look at other factors that come into play.

First, keep in mind that Rome was not built in a day. You will not achieve profitability your first week or month online. Many site owners can confirm that you might not achieve profitability your first year - or two - or even more online. Patience and perseverance are required virtues in this business!

Just like in off-line sales, particular products have their slow times. They go out of fashion. Somebody comes up with bigger/better/cheaper or a different, cooler color. Don't expect to have one limited set of products that will sell like hotcakes every single day for the rest of eternity because that doesn't happen for anyone. If you absolutely must have a certain dollar amount every single month as personal income, then a paying job is a better bet.

Remember that, despite the folks who would have you believe otherwise, Netizens are NOT online just to shop. People are online to get email, have fun, play games, make friends, get information, conduct business - and if they happen to come across something that they need or want to buy along the way then you might make a sale. 

Marketing statistics tell us that the "average" Internet user will visit a given site 4 or 5 or more times before ever making a purchase from that site, just as they will come into your real world store to window shop and get to know you. If your site is unattractive, impossible to use, user-unfriendly, then they probably won't finish loading the first page and certainly won't be back a second time. If your links send the user off to someone else's site for more information about a product, guess who is going to make the sale .... it isn't going to be you.

If you offer absolutely nothing other than a shopping cart, then don't expect to make many sales. You aren't giving folks a chance to get to know you, a reason to visit more than once - and since there are millions of shopping carts online, trying to remember where they saw that one perfect must have item out of the dozens/hundreds of sites that they visited last month is an impossibility for the average user. You MUST give potential customers some reason, a unique reason that they won't find anywhere else, to visit you repeatedly. Those reasons to visit can take literally dozens of forms, so this is a good area to hash over with your consultant - and if you try something that doesn't work, try something else.

You must have traffic to your website in order to make sales! The number 530 or even 53000 on your hit counter is NOT "traffic." Traffic doesn't come quickly or easily unless you have several million dollars available for advertising. This is exactly the reason that I stated in my previous post that you should allow for an entire year's worth of webhosting in your start-up budget. My business, Absolutely Victorian Greetings, has been online as a business for three years without outside financing - and I have yet to take the first paycheck. Every single dime that the site brings in goes to pay for server space and bandwidth. And that is not unusual in the least - eighty percent or more of all websites have never shown the first dime of profit.

How do you get traffic? Well, you can waste thousands of hours and hundreds of dollars trying to get to the Top 10 in the search engines - or you can do something effective.

Keyword: viral marketing. 
Meaning: getting people to tell other people about your site.

I went over several strategies that work very well in the last post. Here are a few more that are particularly effective for new sites:

have all of the various brochures and stationery that you use reprinted to prominently display your URL 
contact your friends, neighbors, old school chums and off-line customers to tell them about your website 
if your state allows it, get a custom license plate with your URL on it - or have it painted onto your automobile
Keep trying! It just doesn't happen overnight, so you need to be patient, keep at it and wait.

So, you have "traffic." Even then, "profitability" can be elusive, as I and many others large and small can clearly verify. And remember, what is profitable today online will be "old hat" tomorrow. This is definitely a keep up, get there first, stay one step ahead of the pack, constantly changing environment. There is no such thing as just one approach, the perfect product, the ultimate delivery methodology - or even a "finished" website. The day your first website build is done is the day to start planning the rebuild.

As you know, George, I've been actively chasing profitability - or even just break even - for nearly two years, ever since it became apparent to me that the income model my bandwidth hog site was based on was not only faulty, but dying. We've had a couple of discussions about that. The good news is - I think (read hope & pray) that maybe - just maybe - "profitability" might finally, for Absolutely Victorian, be right around the corner.

Remember that I said it was a GREAT day? Well let me tell you, I've worked harder this week than ever before and I have about 10 more days of 22 hour days to go before I'm done. But I do have some news - 

After most of a week of negotiation, I spent yesterday signing contracts that will make Absolutely Victorian a major content provider for another large website, make it possible to have any of our cards printed out as a postcard and mailed for you instantly for a ridiculously reasonable price and make all of our graphics available for use on custom, design your own T-shirts. (I'm told that we will be the largest T-shirt store online!)

As you know, though, I am a firm believer in multiple strategies, so I'm going to be including a couple of business to business offerings along with the business to consumer that Absolutely Victorian has always concentrated on. 

Lots of small site owners have written to me to tell me that they send Thank You cards to customers that order from them online by regular mail and that they've found this to be a highly effective marketing strategy. I certainly agree - and used to do that myself until it simply became too time consuming to even print them off on my own computer. 

So, one of the new services that we will offer is the production of a custom "Thanks" (Sale announcement? what have you?) postcard that our business users can send out regular mail from right online, utilizing their own website (or anything else graphic they can imagine) for the illustration. The cost will be comparable to or less than buying the cards and doing them by hand, and delivery will be much less labor intensive.

And, since all of our graphics will be able to also be used as custom T-shirts, our business users will be able to quickly and easily produce T-shirts for themselves, their family, prizes and so on using pictures of their own website and adding their own text messages and URL. (Talk about walking advertising! I can't wait to have some done for my site!)

As you can imagine I am both excited by the possibilities and scared to death. I'll let you know in a year about that "profitability," assuming I don't crash and burn the server before I have the cash for an upgrade.

Duty calls and I have more work waiting for me this morning that I can even make a list of, but let me give you my list of "must haves" if you want to start an Internet business before I close:

A DREAM - and a good, well thought out, well researched business plan: "Those who fail to plan plan to fail." 
Patience, perseverance and the willingness to work long hours with no financial compensation 
Enough start up capital to cover your initial web design, a complete redesign, an entire year's worth of server space and bandwidth, at least a minimal amount of advertising and enough money to live on for a year. 
The services of a good consultant to guide you through the maze at least initially 
A good webhost 
A little luck to go with the hard work 
An orange and purple muu-muu :)

Now, George, I need some of your expertise: How do I do a press release - and where do I send it on a budget of $0?

Have a great day!

Robin Bassett, Publisher
Absolutely Victorian Greetings

+++++ [Moderator's Comments] +++++
Another great report, Robin. Thanks.

For writing a press release, visit our Automated Press Releases at http://www.automatedpr.com It gives you some samples, "Pet Peeves of The Press" to avoid the pitfalls, and look at the publications list to see where you would like to send the release. Then create your release, complete the form and attach a note that says to see me. Because of the work you have done for us, we will send it out for free.


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