Trading online

With a website you have the potential to reach a worldwide audience and show them how great your business is.

Once you are confident that your web pages are a valuable asset, you could take the next step and begin trading online.

By trading online you could sell more products, expand your company's geographical reach and gather a huge amount of valuable information on existing and potential customers.

Important to consider is the fact that buyers in both the business-to-business and consumer markets increasingly expect to research and buy products online.

So if you don't have an internet trading facility, you risk losing out to your competitors.

Online trading isn't difficult, but it does require an investment of both money and management time. And while the benefits are potentially great, it's important to be aware of the pitfalls as well as the rewards.

In brief

• Making a business case
• Designing and building a website
• Payment and security
• Customer service
• Marketing your website
• Email marketing
• What to do next

The first thing to consider is whether or not e-commerce is right for your business. The range of goods sold via the web is vast, but that doesn't mean every product or service will lend itself to online trade.

There are a couple of rules of thumb here. If a product is well defined and has clear price points, then chances are, it can be successfully sold online. This applies not only to, for example, CDs and books, but also to more complex products such as insurance policies.

On the other hand, if a product is tailored for very specific purposes and sold on the basis of case-by-case price negotiations, then selling online becomes more or less impossible. For instance, you could sell conservatories built to standard sizes on the web, but not bespoke, architect-designed home extensions. In the latter case, the process of agreeing specifications and negotiating price would be too difficult. It could still, however, be beneficial for your business to have a website as an online window in order to show what you do.

Look to your competitors. If they have a transactional website up and running, the chances are it will work for you as well.

It is sensible to conduct some kind of cost/benefit analysis. The major online players, the likes of Amazon and eBay, invest millions in their sites. If, however, you have a very small catalogue the cost could be as low as a few hundred pounds. Define your requirements and get quotes from some design agencies.

The next question is whether the outlay will be justified in terms of the following:

• Sales
• Improved competitiveness and ability to retain business
• Improved profile.

Remember to factor in the consequences of failing to embrace the internet, especially if your competitors are already doing so.

Unless you, or a member of your team, are exceptionally skilled, then it is best to hire professional designers to build your website. A successful site must:

• Reflect your brand
• Allow customers to find what they want and make purchases quickly
• The back office system should also allow you and your team to update products and prices quickly and easily. There's nothing worse than an out-of-date site.

Creating a website from first principles can seem like a daunting task, but while there are no hard and fast design rules, most commercial sites conform to a tried- and-trusted format that uses a two- or three-column layout.

In a typical site, the left-hand column is devoted to a navigation bar that enables visitors to find sections within the site with a single click. The centre of the page often contains key information about products, perhaps a selection of top sellers. In a three-column site the right-hand side of the page tends to be the position for interactive features such as search facilities or links to special offers.

Many sites have additional navigation bars running horizontally along the top of the page carrying clickable headings including ”About Us”, ”Contact Us”, ”Latest News” and/or ”How to Find Us”.

Even if you're hiring a design agency to build your site, it's worth looking at as many websites as possible to get a feel for how they're laid out and how customers are channelled through the various pages.

When hiring a design agency, don't be tempted by the cheapest option. Decide what you want the site to achieve in terms of the size of your catalogue and customer information, and be prepared to spend accordingly.

If you decide to build your own site, there are essentially two alternatives. If you have both the time and the design flair, the most flexible option is to use a design tool that will enable you to create your own design from scratch and add the necessary critical links. Suppliers of design tools include Adobe.com (Dreamweaver and Quark), Microsoft.com (Expressions, Front Page) and Serif.com (Webplus).

A faster but less flexible approach is to use pre-prepared design templates into which you drop text and pictures.

Hosting and URLs
Before your website goes live you will need an unique internet address, for example, www.mybrandnewcompany.co.uk and a server on which the site will be hosted. Each internet address ends with a suffix such as .com and the price you pay will depend to some extent on the popularity of this “high level domain”.

The most popular for business are .co.uk and .com, though you could also consider .biz, .net, or .info.

A design agency will generally buy the domain name on your behalf and provide hosting services. Hosting companies usually provide the means to buy an address and may also provide web design tools or templates.

A credit card facility is not always necessary. For instance, if you work on the basis of supplying a product or service and invoicing later, this process can be replicated online. All you need to do is provide customers with a user name and secure password to give access to a part of the site where orders can be keyed in. You can then invoice in the usual way.

If, however, you require payment at the point of sale, credit and debit card processing facilities are essential. Prerequisites include:

• A merchant account with your bank
• A gateway between your site and the bank, this includes using a safe online payment facility such as Worldpay
• The technology to handle the processing of card data.

Security is all-important and you'll need to comply with the standards established by the Payment Card Industry. This is a difficult technical challenge and most small firms outsource their card processing to specialist providers who handle the data in return for a fee based on a percentage of transactions. Card providers - Amex, Visa, Mastercard, and so on, will also charge a fee.

There is one major pitfall of which you must be aware. Payments made by credit card via the internet are refutable. To put it another way, the customer may deny making the purchase. This may result in chargebacks, meaning your credit card services provider debits money from your account. Some credit card process providers delay the payment of money into your bank account to hedge against the risk of customers denying a purchase was made. You should ask your bank about chargeback patterns in your sector and budget accordingly.

On the face of it, trading online is far more cost-effective than, for example, selling via a call centre or shopfront, simply because the process is automated. This is especially true if your order processing system is linked to back office accounts software.

Do bear in mind, however, that customers like a human point of contact and many people are reluctant to buy online unless there is a helpline with a human being at the other end. Providing support by phone shouldn't be regarded as a negative, as it provides an opportunity to upsell.

Make sure that you put a trading address on your site as this is an important reassurance for customers.

Ultimately, the success of a website will be dependent on the effort you make to ensure customers are aware of its presence.

Many customers will find you (or your competitors) through search engines such as Googleand Yahoo.

Before commissioning a design company, ask them about optimizing the site to make it search engine efficient.

This is usually done through the inclusion of both visible and invisible key words that define the nature of the site.

For instance, if you sell a certain type of computer component, the wording on the site should make that clear.

Comprehensive product specifications and reviews also improve your chances of showing up on search engines.

You can also pay to appear on the first page of a search engine as a ”sponsored link”.

These paid for positions on search engines are driven by key words.

For instance, if you sell musical instruments, you might pay to have your site taking pole position at the top of page when a web user keys in the words “acoustic guitar”.

On Google, you bid for the key word and in popular sectors this can be expensive.

However, if you operate in a niche, securing a good paid search position can be relatively cheap.

The same bid/keyword system is applied to Google Ads.

These appear on the right of the page when a web user runs a search.

For further details visit Google Business Solutions

Other marketing techniques include:

• Links to (and partnerships with) other sites
• Banner advertisements on relevant sites
• The URL printed prominently on all company literature and advertising material.

Finally, remember that when customers place orders you should always ask for email contact details. These can be used to send marketing material/product information. In the business-to-consumer market, however, the customer must agree to receive these messages before you send them and have an easy way to opt out. This will require specialist software, although email marketing can be easily outsourced to third party providers. All information that you store will have to be registered with the Information Commissioner's Office, formerly known as the Data Protection Agency