Handout version e_commerce_courseDocument Transcript
Practical Internet Strategies to Sell Your
Products and Yourself
Presented by Dan Bond
Sponsored jointly by Downtown Delaware,
the Delaware Emerging Technology Center,
Delaware Technical Community College (Terry Campus)
and USDA Rural Development
Dan Bond began working in the field of eCommerce and retail sales in
2003 when he and his wife started the LadyBug Shop in Milford, Delaware.
From the first this business was designed as a “brick & mortar” Main Street
shop with a parallel eCommerce sales effort at www.LadyBug-Shop.com.
This retail gift shop focused on products of all types which had a ladybug
design element. The business has grown rapidly and made a major
contribution to downtown Milford’s economic revitalization.
Dan received his doctorate in planning and economics from the University
of North Carolina at Chapel Hill in 1979. He has worked for thirty in the
fields of economic development and finance and has traveled to over sixty
countries during his career.
Terry Campus Map
The cafeteria in the Terry Building is not open in the evenings. However,
there are food vending machines in the Terry Building that are accessible
Overview of eCommerce
Photography for Your Website
SEM & SEO
Shopping Sites & Affiliates
Legal & Tax Issues
Sources of Information
The Most Important Parts:
Choosing your niche
SEM & SEO
market with Social
Networking and other
What is eCommerce?
The definition given in Wikipedia is:
Electronic commerce, commonly known as
e-commerce or eCommerce, consists of the
buying and selling
of products or services over the Internet.
To get information on almost any topic, a great place to start is at http://en.
According to Wikipedia, the world's first recorded online home shopper was
Mrs. Jane Snowball, age 72, of Gateshead, England in May 1984.
Selling products over the Internet is often called "eTail".
What is eMarketing?
The definition given in Wikipedia is:
Internet marketing, also referred to as
i-marketing, web-marketing, online-
marketing, or eMarketing, is
the marketing of products or services over
I will be covering in this course both eCommerce (specifically eTail) and
Internet & the Web
The Internet is a The World Wide Web is
global system of a system of
interconnected interlinked hypertext
computer networks that documents contained on
use the standard Internet the Internet.
The Internet was developed in the U.S. in the 1960s by the Advanced
Research Projects Agency. It was developed for the U.S. military to
provide robust, fault-tolerant and distributed computer networks that could
survive a nuclear attack.
Tim Berners-Lee invented the World Wide Web server and browser in
In 1992 Charles Stack opened the world’s first online bookstore and in
1994 Jeff Bezos started Amazon. In the same year NETSCAPE introduced
SSL encryption which made online data transfer secure. Online banking
also began in 1994 and Pizza Hut opened an online pizza shop. In 1996,
eBay opened and Tesco started a full online shopping service.
Business to Business eCommerce
Business to Consumer eCommerce
While the bulk of eCommerce (about 90%) is B2B, we will be focusing on
B2C eCommerce in this course. Most successful B2B business are
developed by individuals who have considerable experience within the
particular industry sector to which they are marketing.
"Click & Mortar" Business Model
Both Global &
"Click & Mortar" Business Model
I will be using my experience with the LadyBug Shop to provide concrete
examples of what it takes to set up a retail eCommerce business. We
opened our shop in the fall of 2003 and launched the website in early 2004.
The LadyBug Shop is located at 23 NW Front Street in downtown Milford,
DE. (www.ladybug-shop.com, 302-422-5470) It is open Wednesdays-
Friday from 10 to 6 and Saturday from 10 to 2.
Total Retail eCommerce Sales
were $134 billion in 2008
U.S. government statistics on retail trade, including reports on eCommerce,
can be found at
During the first quarter of 2010 U.S. retail eCommerce sales increased
14.3% over the first quarter of 2009. Overall retail sales increased only
Unique Benefits of eCommerce
Low startup cost
Unlimited market size
Much greater freedom of location
Portability of business
You can download the latest edition of Anderson's The Long Tail for free
Finding Your Niche
Identify an interest -- ideally one related
to yourself, your experiences, your
talents, your location, etc.
Identify a niche with sufficient
Discard niches where there is already too
Make sure that the niche can become a
Niches have many advantages, but a single niche may not have sufficient
sales potential to meet your goals.
At the LadyBug Shop we have recently added a new line of turtle gift
products and launched a new website www.Turtle-Treasures.com. We
cross sell between our two product lines whenever possible.
Some merchants have even more ambitious business plans and develop
many niche markets. A good example of this is SpotLightRetail.
com. Read an interview with its owner at
Location of supplier
Information value added
Weight to value ratio
Tools for Researching Niches
Google Search Results
Google Product Search
Information Management System
Accounting System Delivery Services
Website Shopping Cart
More on how to source products can be found at
You don't invest in inventory.
You have no buying power.
Competition will drive down your margins.
Drop ship wholesales do not provide products for
You can work a lot, sell a lot and make no money.
More on drop shipping pros and cons can be found at
If you decide you want to try drop shipping, you might want to consider
using doba as a sourcing and order fulfilment service.
New York International Gift Fair
The website for the New York International Gift Show is
Philadelphia Gift Show
The website for the Philadelphia Gift show is
Before you purchase software, see if you can get it free. If you are willing
to go with cloud computing, then Google Documents is a great place to get
good free software. This presentation was prepared using free Google
Documents rather than Adobe PowerPoint, which costs over $100. To
start using this software go to:
Don't know what "cloud computing" is? Check it out on Wikipedia!
Microsoft has recently released free web office software. You can find it at:
You will see that I am a big fan of Google products. As the following
articles show, many small eCommerce businesses find that there are a lot
of valuable Google services:
If you want to find out information about an existing domain name (who
ownes it, where it is located, when ownership expires, etc.) use the webiste
Domain Name Selection
Easy to spell
Discribes your business or product
Contains key words
Has best name extension possible
For our name we settled on LadyBug-Shop because it was an easy to read
version of our shop’s name. (Some experts advise against using a hyphen
in URLs, but we think it makes the name easier to read.) And we chose
the “.com” domain because it is by far the most popular domain for
commercial websites. (Other possible extensions for business sites are .biz
or .net. Government websites use the .gov extension, non-commercial
organizations such as non-profits use the .org extension, and educational
institutions use the .edu extension.)
Top Level Domain Names
Some good tips on selecting a domain name can be found at:
Domain Name Selection Aids
Registering a .com domain name currently costs about $10 to $35 per
year, depending on which company you use. Check around and you can
usually get a big discount, especially for the first year. Also, registering .biz
and .net domain names is somewhat less expensive. The registration
process can easily be completed on the Internet using any of a number of
registration services such as www.name.com or www.godayddy.com.
But registering your desired domain is just the beginning; unless you've
reserved it for multiple years, you'll get charged a fee each year to renew
the domain. Most companies charge between $5 and $15 for renewal, with
discounts for renewing for several years at a time.
But saving a few dollars isn't the only reason to renew for multiple years.
Securing your domain name for the foreseeable future will save you the
headache and expense of having your domain expire and having to
Domain Name Registration
• Rent it
• Build it yourself
• Have it built for you
A good source of information on building a website is
Rent Your Website
I don't view selling via ebay or other shopping sites as a good substitute for
having your own eCommerce website. But it may be a useful way for you
to find your niche and get started in eCommerce. Read this article:
Build Your Website Yourself
Unless you are already an experienced website developer, it is best not to
try to build your website by yourself.
You may want to hire someone to help you. If so, read this:
Website Development Companies
There are lots of companies that can build your website for you. Read this
and then shop around!
Usually best to have your website built
and hosted by the same company.
Make sure that they have on-site
Make sure they have good telephone
technical support service
Explore their up-grade potential
Once you have your website built, you will need to have it "hosted". If you
want to learn more about hosting, a good place to start are the Wikipedia
article on hosting at http://en.wikipedia.org/wiki/Web_hosting and the
articles on hosting found at http://www.hosting-review.com/hosting-
Hosting should not be a big expense for a small Internet retailer (several
hundred dollars a year)—but you definitely need reliability. There will be
service interruptions occasionally—and these are costly since you can not
sell anything if customers can not access your website. And it is a hassle
to change a host if the company you are using provides poor service or
goes out of business. So you should consider both cost and reliability
when you select your host. (Company size, length of time in business,
existing client base, reputation, etc. are things to consider.) And you
should insist that you are notified immediately any time there is an
interruptions in service—either planned (for maintenance) or due to
unexpected problems with the computer server.
There are over 350 shopping cart services now available.
PracticaleCommerce.com has a regular, weekly review of shopping carts
that provides detailed information about their features and limitations.
I assume that most eCommerce retailers do their own order
fulfillment. However, you may choose to outsource this service. This is a
major decision that will affect almost all aspects of your business. The
issues are covered in this article http://www.practicalecommerce.
An well-established company that offers order fulfillment services to small
eCommerce companies is
Choosing a Shopping Cart
Affiliate program links
Discounting & customer loyalty programs
Payment Processing Options
The LadyBug Shop’s shopping cart is provided by a local software
development company, Delaware.net. It is call Store-Logic. Their shopping
cart allows us to easily add product photos, descriptions and sales
information whenever we have new products. And it takes care of putting
together orders as customers select items from the catalog. It provides a
number of other useful services such as handling credit card and shipping
information and allowing customers to use discount codes that we have
promotions or special sales.
For more tips on choosing a shopping cart read
Most people are now comfortable using their credit cards when making
purchases on the Internet. Thus special payment services such as PayPal
are no longer as useful as they once were. At the LadyBug Shop we have
decided to use only Visa and MasterCard payments, and this has caused
no problems for us.
Credit Card Processing
Credit card processing fees can cost the merchant from 2% to 4% of their
sales. The fee structures are complex, usually combining fees that are a
percent of sales plus a per transaction fee with pricing varying by sales
Essential Photo Euipment
Good article and video on taking photos of products:
The total cost for the photogratphic equipment needed for good product
photos is around $500 to $1000.
For the LadyBug Shop I use a Canon PowerShot Pro 1 eight mega pixel
digital camera. This camera has a large digital viewer that can fold out and
swiveled into almost a position—a helpful feature when using a tripod. The
camera also has macro and super macro features that are essential in
taking photos of very small objects. I usually work with the camera
mounted on a BOGEN 3021BPRO tripod with a Manfrotto 3275/410
Compact Geared Head with Quick Release. Using a tripod helps in setting
up your shots and improves the quality of the resulting images. I have
learned that it is very important to use a light box for most products so that
you have good diffused lighting (provided by two daylight balanced
photographic floodlights mounted on stands). I use an EZ Cube studio
lighting system which I purchased online at www.tabletopstudio.com.
Each of the carriers offers cost and services advantages depending on
where you are sending a package, its size and weight, and how fast you
need it delivered. A good introduction of these issues is available at
Issues connected with calculating shipping charges are covered by this
At the LadyBug Shop we primarily use USPS Priority Mail. (For the
occasional heavy, large boxes we use UPS.) However, we save money by
using the USPS flat rate envelops and boxes when it is cheaper to do
so. For details see http://www.practicalecommerce.com/articles/1257-
And if you want to consider offereing free shipping, read this article:
Search Engine Marketing
Search Engine Optimization
Comparison of SEM & SEO
Meet my best friend!
Pay Per Click (PPC) is an internet advertising model used on websites, in
which advertisers pay their host only when their ad is clicked. With search
engines, advertisers typically bid on keyword phrases relevant to their
target market. Content sites commonly charge a fixed price per click rather
than use a bidding system.
There are hundreds of Pay Per Click Search Engines you can buy traffic
from. As this number increases, it becomes more difficult to determine
which ones are worth your time using. However, Google dominates the
field and you should start with Google AdWords and expand as you have
time and budget. (Yahoo! and Bing would be good choices for your next
tier of pay per click advertising.)
Paid & Organic Search Results
Organic search results are listings on search engine results pages that
appear because of their relevance to the search terms, as opposed to their
Uniform Resource Locator
It points to a specific "page" on a website.
http://www.ladybug-shop.com LadyBug Shop Home Page
Fuzzy Ladybug Slippers for Children page
When you pay to send a searcher to your website, it is critical that you
send them to that part of the site which is most likely to be of interest to
To learn more about how to use
Google AdWords for Search Engine
Marketing go to:
Search Engine Optimization
Search engine optimization (SEO) is the process of improving the
volume or quality of traffic to a web site or a web page page (such as a
blog) from search engines via "natural" or un-paid ("organic" or
"algorithmic") search results as opposed to other forms of search engine
marketing ("SEM") which may deal with paid inclusion. The theory is that
the earlier (or higher) a site appears in the search results list, the more
visitors it will receive from the search engine.
SEO You Can Do Yourself
Use your keywords as much as possible.
Have good, well written content.
Establish back links from popular websites.
Maintain a blog.
Use Social Media to promote your site.
Before you outsource your SEO work read this
The LadyBug Shop website
was awarded a grade of 97 by
SEO techniques are classified by some into two broad categories:
techniques that search engines recommend as part of good design, and
those techniques that search engines do not approve of and attempt to
minimize the effect of. Some industry commentators classify these
methods, and the practitioners who employ them, as either white hat SEO,
or black hat SEO. White hats tend to produce results that last a long time,
whereas black hats anticipate that their sites will eventually be banned
once the search engines discover what they are doing.
In SEM specify the geographic areas that contain most of
your potential customers or select only those areas to
which you are willing to ship your products.
For example, with Google AdWords you can:
Search or browse for countries, territories, regions, and
Select a preset bundle of locations.
Choose a point on the map and specify a radius around
it where your ads will appear.
Target a custom shape on the map.
Exclude areas within your selected locations.
Additional information on local searches see:
Google is not the only way to advertise locally. You can learn about other
Google Maps - Local Business Listing
To put your business on Google Maps, go to http://local.google.com/
Then click on "Put your business on Google Maps" in the left hand column
of the page.
Google is constantly improving its small business services as the following
NOTE: You don't have to pay anyone $250 to set up your Google Local
listing. It is easy to do yourself and you will get better results.
For detailed guides to and support with your local Google listing go to:
Other Market Expansion Tools
Post Card Marketing
Since the fields of internet marketing and social media are changing so
rapidly, you need to stay informed by regularly using online advisory
sources (and/or subscribing to their email alerts and articles). Some of the
ones I use are:
Social Media Starfish
A fun way to be introduced to Social Media is to view this slideshow:
This will also introduce you to a great website SlideShare. Here you can
find (and share) slide shows, videos, webinars and documents and a wide
range of topics.
This article argues that "an integrated social media marketing strategy
can help you and your eCommerce site increase brand visibility, improve
customer loyalty, and gain important insights about the markets you serve.
And with the dramatic growth in social media traffic, ecommerce merchants
would be smart to invest at least a portion of their advertising and
marketing efforts on it."
Make it simpler with ShareThis
Find & development your niche
Build your Web presence
Build traffic flow
Monitize your web traffic
It's a long road!
Monetizing Your Web Traffic
from sales advertising
of goods & on your
AdSense has become a popular method of placing
advertising on a website because the advertisements are
less intrusive than most banners, and the content of the
advertisements is often relevant to the website.
Many websites use AdSense to monetize their content.
AdSense has been particularly important for delivering
advertising revenue to small websites that do not have
the resources for developing advertising sales programs
and sales people.
Details on this service can be found at
The benefits of affiliate marketing are described in
We have tried some affiliate marketing at the LadyBug Shop, but the
impact has been small. It takes a lot of time to do this type of marketing
and the results depends on how well suited your niche is to it.
Cost per sales (80%)
Cost per action (19%)
Cost per click & cost per "mile" (1%)
More on compensation models can be found at:
Advice on using affiliate marketing can be found at:
The best affiliate networks are designed for businesses with relatively high
sales volumes--and there are some initial costs to be considered. Read
more about the Google Affiliate program at:
At the LadyBug Shop we tried using two shopping sites-thefind.com and
Google Shopping. To get the information on our products to these sites we
used a data feed service godatafeed.com (which costs $50 per
month). However, we found that the increase in sales did not warrant
continuing this effort.
A good list of comparison shopping sites can be found at:
Social Shopping Sites
"Websites that combine social
elements such as a social
networking community or the
ability to set social bookmarks
with aspects of shopping such as
product reviews and deal
"A site that only sells one item a
day as a "daily woot" and
provides community feedback on
Other Social Shopping Sites
Legal & Tax Issues
Protection of credit card information
Affiliate contact violations
A good source of information on various legal issues for an eCommerce
business (or any business) is the website NoLo.com. Start at:
Payment Card Industry Data Security Standard
Be informed. Got to:
Failure to understand the PCI compliance
standards could result in higher merchant
account fees and fines from the credit card
Three types of ownership protection:
A copyright protects original works gives the owner
exclusive rights to reproduce his or her work in any
A trademark is used to protect a word, symbol, device, or
name that is used for the purpose of trading goods.
The trademark indicates the source of goods and
distinguishes them from the goods of others.
A patent for an invention grants a property right to the
inventor that will prevent anyone else from making, using,
or selling an invention.
Potential Penalties for Copyright
1. Actual damages (the amount you would have to
pay to license the material from the copyright
2. Statutory damages of $750-$30,000 per work.
3. If the violation was willful—up to $150,000 per
4. At the court’s discretion, attorney fees.
Many people believe that if they find something on the Internet, they have a
right to use it for free. There is no distinction as to whether the website is a
commercial or non-commercial website, the content on the website still
enjoys copyright protection and permission may be needed to use the
In the 1990s, Congress passed the Digital Millennium
Copyright Act (DMCA). It included a very powerful
tool to quickly attack the theft of unregistered
copyright-protected materials so victims of theft of
creative works can reach out into cyberspace and
aggressively pursue an infringer. This tool, known as
the “takedown notice,” requires a website host to
pull down an allegedly infringing website or page
merely upon receipt of a specified notice from the
owner or its lawyer. No lawsuit is necessary. The
implications to the host are significant: the failure to
pull it down exposes the hosting company to liability
for copyright infringement under traditional
doctrines of law, and it also loses immunity created
by the DMCA. The law giveth, and the law taketh
Internet sales are not always tax free.
There are over 11,000 sales tax
jurisdictions in the United States.
Ecommerce merchants located in a state
without a sales tax do not have to collect
sales tax unless they have taken some
action to create a physical presence in
For more information on taxation of eCommerce sales read:
Sales tax vulnerability
In April 2008 the State of New York inserted an item in the state
budget asserting sales tax jurisdiction over Amazon.com sales to
residents of New York, based on the existence of affiliate links
from New York–based websites to Amazon. The state asserts that
even one such affiliate constitutes Amazon having a business
presence in the state, and is sufficient to allow New York to tax all
Amazon sales to state residents. Amazon challenged the
amendment and lost at the trial level in January, 2009.
The case is currently in appeal process.
You have probably noticed that this is one of my favorite sources of
information on eCommerce.