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11 Essential Considerations When Starting an E-Commerce Website
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While the cost of starting an e-commerce website is considerably less than starting your own brick and mortar store, it isn’t an agreement you should enter into haphazardly. The success rate for most e-commerce businesses is slim, but not impossible. If you have a good product to sell and an interesting way of selling it, you may be sitting on a gold mine. Here are a series of considerations you should take into account before starting an e-commerce website.
1. A great domain name – The selection of a domain name has given birth to an entire cottage industry of people who buy and sell domain names to prospective buyers in hopes of turning them into successful businesses. In short, you are going to need a domain that is descriptive, easy to remember, catchy and brief. Don’t sell this selection process short, it will affect everything you do from here on out.
2. Quality Web Hosting – In the 2006 mid-term elections, Sen. Joe Lieberman was roundly criticized for choosing bargain basement hosting for his official website. Half way though his campaign, his website began crashing on a regular basis. Even if you don’t expect your website to be an overnight success, you need to budget for first class hosting. Otherwise, your business won’t be able to do any business at all.
3. Business Plan - A startling number of e-commerce business owners believe that since they are starting an online business, they don’t need a business plan. Even if you don’t need a bank loan to get your business started, you should have a rock solid business plan to help lay out your goals, your budget and your marketing and advertising decisions. Otherwise, you really aren’t serious about starting an e-commerce website.
4. Marketable Product(s) - Many people would put this step at #1, but in reality, if you don’t take care of the above steps first, having a marketable product won’t really matter. One of the great things about the Internet is the fact that you can sell just about anything and have a following, assuming that your product is reliable. You don’t even have to sell a tangible product. You can offer ideas, planning or any other sellable commodity. It just needs to be presented in an original way.
5. Advertising - You’ve not officially cut the ribbon on your website until you’ve come up with an advertising plan. Thankfully, the online world offers dozens of different, low cost ways to advertise, from banner ads to Google Adwords, you can find an advertising structure to fit your budget.
6. Shopping Cart - One of the things that has helped to propel Amazon to the top of the online retail world is their easy to use checkout system. Short of stealing theirs, possibly the single best investment you can make when starting an e-commerce website is to pick an intuitive checkout system that people actually enjoy using. This can’t be emphasized enough: don’t cut corners with this step.
7. Security – Another area you don’t want to skimp on is security. Many small business owners look at the sheer number of websites out there and think the chances of them getting attacked by hackers is small. In reality, most attacks happen because someone, somewhere in bored and looking for something to do. If you plan on storing billing information such as credit cards on your site, you had better consider doubling your security budget right now.
8. Expansion - You likely have a single product, or maybe even a series of products in mind to open your website with, but no matter how great that one product is, you are going to need to expand your inventory over time to stay in business. Even if you have to partner with other websites to offer more choices, people will not continue to check back to your site forever. You have to give them a reason to keep coming back.
9. Credit – The history of e-commerce is littered with stories of credit card companies not paying out on time to retailers, causing a monetary log jam that ends with said website going out of business. Make sure you read your credit card agreements clearly, and if you choose to take PayPal, make sure you understand exactly how it works before you sign on the dotted line.
10. Shipping - You may also want to consider the possibility of doing business outside of your home country. Recent changes by the US Postal Service has made shipping to places like Canada much more expensive than it was before. Make sure you explore all of your shipping, insurance and customs options before you begin, otherwise, you may end up losing money on every transaction.
11. Capital - Starting an e-commerce website means that, at least for a short period of time, you are going to be losing money. Don’t begin the process of starting an e-commerce website unless you have the ability to go into the red for at least a few months, if not longer. Get a small business loan if you have to, otherwise, your new business venture will be over before it starts.
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