ECommerce and Entrepreneur

1. E-Commerce and the
Entrepreneur

2. Copyright 2008 Prentice Hall Publishing
The Internet: Changing the
Face of Business
The most successful companies embrace the Internet as
a mechanism for transforming their companies and for
changing everything about the way they do business.
Business basics still apply online just as much as they do
in brick-and-mortar businesses.
In the world of e-commerce, size matters less than
speed and flexibility.
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3. Copyright 2008 Prentice Hall Publishing
The Internet: Changing the
Face of Business
Nearly 10 percent of the world’s population – 627
million people – has shopped online at least once.
Items purchased most often online: books, music, DVDs,
travel services, clothing, tickets for entertainment
events, electronics, and toys.
In the U.S., 12 percent of total retail sales will occur
online in 2010.
Study: by 2010, the Internet will influence one-half of all
retail sales.
3

4. 14%
16%
46%
56%
56%
62%
67%
0% 10% 20% 30% 40% 50% 60% 70%
Percent of Small Businesses
Increased sales outside the U.S.
Reduced unit costs
Increased profits
Increased total sales
New types of customers
Improved competitive condition
Brought new customers
Benefits to Small Businesses of a Web Site
Source: National Federation of Independent Businesses.

5. Copyright 2008 Prentice Hall Publishing
Benefits of Selling on the Web
Opportunity to increase revenues and profits
◦ Study: 72 percent of small online companies report
increased sales, and 65 percent report higher profits.
Ability to expand into global markets
Ability to remain open 24 hours a day, seven days a
week
Capacity to use the Web’s interactive nature to
enhance customer service
Power to educate and inform
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6. Copyright 2008 Prentice Hall Publishing
Benefits of Selling on the Web
Ability to lower the cost of doing business
◦ Study: 73 percent of online small companies experienced savings because of
lower administrative costs.
Ability to spot new business opportunities and capitalize on them
Ability to grow faster
Power to track sales results
◦ Conversion rate – the percentage of customers to a Web site who actually
make a purchase.
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7. Copyright 2008 Prentice Hall Publishing
E-Commerce
70 percent of small businesses in the U.S. have a
Web presence.
Of those small business owners who do not have
Web sites:
◦ 77 percent say their products and services are not suitable
for selling online.
◦ 37 percent say they do not see any benefits of selling
online.
Barriers:
◦ Not knowing how or where to start
◦ Cost and time concerns
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8. Copyright 2008 Prentice Hall Publishing
Factors to Consider Before
Launching into E-Commerce
How a company exploits the Web’s interconnectivity
and the opportunities it creates to transform
relationships with suppliers, customers, and others is
crucial to its success.
Web success requires a company to develop a plan for
integrating the Web into its overall strategy.
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9. Copyright 2008 Prentice Hall Publishing
Factors to Consider Before
Launching into E-Commerce
Developing a deep, lasting relationship with customers
takes on even greater importance on the Web.
Creating a meaningful presence on the Web requires an
ongoing investment of resources – time, money, energy,
and talent.
Measuring the success of a Web-based sales effort is
essential to remaining relevant to customers whose
tastes, needs, and preferences constantly change.
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10. Copyright 2008 Prentice Hall Publishing
Assessing Your Company’s Online
Potential
1. Does your product have broad appeal to customers
everywhere?
2. Do you want to sell your product to customers outside of
your immediate geographic area?
3. Can the product you sell be delivered conveniently and
economically?
4. Can your company realize significant cost advantages by
going online?
5. Can you draw customers to your company’s Web site
with a reasonable investment?
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11. Copyright 2008 Prentice Hall Publishing
12 Myths of E-Commerce
Myth 1: Setting up a business on the Web is easy and inexpensive.
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12. Copyright 2008 Prentice Hall Publishing
Follow-up Investments
Setting up a Web site is only the first investment:
Redesign Web site
Buy more computer hardware
Automate or expand warehouse to meet customer
demand
Integrate Web site into inventory control system
Increase customer call-center capacity
Lesson: Focus on your company’s core competencies and
outsource all other aspects of doing business online.
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13. Copyright 2008 Prentice Hall Publishing
12 Myths of E-Commerce
Myth 1: Setting up a business on the Web is easy and inexpensive.
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Myth 2: If I launch a site, customers will
flock to it.

14. Copyright 2008 Prentice Hall Publishing
Promotion Is the Key!
Print URL on everything related to your business
Web-based newsletters
Write articles that link to your company’s Web site
Host a customer chat room
Sponsor online contests
Establish a blog
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15. Copyright 2008 Prentice Hall Publishing
12 Myths of E-Commerce
Myth 1: Setting up a business on the Web is easy and inexpensive.
Myth 2: If I launch a site, customers will flock to it.
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Myth 3: Making money on the Web is easy.
Study: Web retailers invest 65 percent of revenue in
marketing and advertising, compared to just 4 percent for
their off-line counterparts.
Myth 4: Privacy is not an important issue on
the Web.

16. Copyright 2008 Prentice Hall Publishing
Privacy Online
Study: 80 percent of Internet users say that privacy of their personal
information is either important or very important.
Estimate: If online companies were able to alleviate customers’ online
privacy and security issues, online retail sales would be 24 percent higher!
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17. Copyright 2008 Prentice Hall Publishing
12 Myths of E-Commerce
Myth 5: The most important part of any e-commerce effort is technology.
Myth 6: Strategy? I don’t need a strategy to sell on the Web! Just give me a
Web site and the rest will take care of itself.
Myth 7: On the Web, customer service is not as important as it is in a
traditional retail store.
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18. Copyright 2008 Prentice Hall Publishing
The Importance of Service
on the Web
Study: 57 percent of Web shoppers who fill their
online shopping carts become frustrated and leave
the site before checking out.
Result: For every $1 they spend online, customers
leave behind $4.51 in abandoned shopping carts.
Reasons:
◦ Shipping and handling charges too high
◦ Delivery times too long
◦ Checkout process too lengthy
◦ Insufficient product information available
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19. Copyright 2008 Prentice Hall Publishing
12 Myths of E-Commerce
Myth 8: Flash makes a Web site better.
Lesson: Simplicity rules!
Myth 9: It’s what’s up front that counts.
Myth 10: E-commerce will cause brick-and-mortar retail stores to
disappear.
Myth 11: The greatest opportunity for e-commerce lies in the retail
sector.
Myth 12: It’s too late to get on the Web.
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20. Copyright 2008 Prentice Hall Publishing
Strategies for E-Success
Focus on a market niche.
Develop a community.
Attract visitors by giving away “freebies.”
Make creative use of e-mail, but avoid becoming a “spammer.”
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21. 14.7%
3.5%
14.3%
2.7%
20.8%
3.7%
19.5%
3.6%
20.0%
3.7%
21.0%
4.0%
13.0%
2.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Rate
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
Day
E-Mail Read and Click-Through Rates by Day of the Week
% Opened
% Read
For businesses,
Friday is the best
day to send e-mails.

22. Copyright 2008 Prentice Hall Publishing
Strategies for E-Success
Make sure your Web site says “credibility.”
Consider forming strategic alliances.
Make the most of the Web’s global reach.
Promote your site online and offline.
Develop an effective search engine optimization strategy.
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23. Copyright 2008 Prentice Hall Publishing
Search Engine Strategies
Natural (organic) listings – arise as a result of “spiders,” powerful programs
search engines use to crawl around the Web.
Paid (sponsored) listings – short text ads with links to the sponsoring
company’s Web site.
Paid inclusion – when a company pays a search engine for the right to submit
either selected pages or its entire Web site content for listing.
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24. Copyright 2008 Prentice Hall Publishing
Designing a Killer Web Site
Understand your target customer.
Give customers what they want.
Select a domain name that is consistent with the image you want to
create for your company and register it.
◦ Short
◦ Memorable
◦ Indicative of a company’s business
◦ Easy to spell
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25. Copyright 2008 Prentice Hall Publishing
Designing a Killer Web Site
Make your Web site easy to navigate.
Create a gift idea center.
Build loyalty by giving online customers a reason to return
to your Web site.
Establish hyperlinks with other businesses, preferably
those selling complementary products.
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26. Copyright 2008 Prentice Hall Publishing
Designing a Killer Web Site
Include an e-mail option an a telephone number in your
site.
Give shoppers the ability to track their orders online.
Offer Web shoppers a special all their own.
Follow a simple design.
Create a fast, simple checkout process.
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27. Copyright 2008 Prentice Hall Publishing
Designing a Killer Web Site
Assure customers that their online transactions are secure.
Post shipping and handling charges up front.
Confirm transactions.
Keep your site updated.
Test your site often.
Consider hiring a professional to design your site.
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28. Copyright 2008 Prentice Hall Publishing
Tracking Web Results
Web analytics – tools that measure a Web site’s ability to attract customers,
generate sales, and keep customers coming back.
Only 40 percent of e-businesses use Web analytics strategically to refashion
their Web sites.
◦ Commerce metrics
◦ Visitor segmentation measurements
◦ Content reports
◦ Process measurements
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29. Copyright 2008 Prentice Hall Publishing
Tracking Web Results
Counter
Log-analysis software
Click-stream analysis
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 Clustering
 Collaborative
filtering
 Profiling systems
 Artificial intelligence
Performance Indicators:

30. Copyright 2008 Prentice Hall Publishing
Measuring Online
Performance
Recency – the length of time between customers’
visits to a Web site.
Click-through rate (CTR) – the proportion of people
who see a company’s ad online and actually click
on it.
Cost per acquisition (CPA) – the amount it costs to
generate a purchase (or a customer registration).
Conversion (browse-to-buy) ratio – the proportion
of visitors to a site who actually make a purchase.
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31. Copyright 2008 Prentice Hall Publishing
Ensuring Web Privacy
Take an inventory of the customer data collected.
Develop a company policy for the information you collect.
Post your company’s privacy policy prominently on your Web site and
follow it.
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32. Copyright 2008 Prentice Hall Publishing
Ensuring Web Security
Virus detection software
Intrusion detection software
Firewall
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