E-commerce tips for 2001

Small businesses have to be very careful in selecting the e-store that they put up. They should consider four criteria that are essential for a satisfactory evaluation.

Although some of us whispered "I told you so" as dot-com after dot-com curled up and died last year, the demise of so many e-commerce companies has put a damper on our own small business electronic efforts.

That seems to be the evidence, anyway, according to a Gallup survey sponsored by Verizon, the big-league telecommunications company. In 2000, the poll shows, just 27 percent of small businesses with 50 or fewer employees had a Web site, an increase of only three percent over the year before. More telling, though, were the reasons given why small businesses built a site. More businesses said that they established a Web site to advertise and promote their firms, and not primarily to sell products. That attitude's a complete turn-about from 1999.

I don't expect to reverse this trend all on my own, but I am a big believer in the power of the Net when it comes to sales. One way to get into the action: use a do-it-yourself, template-based e-store builder. Store-makers help you avoid the high cost of hiring a Web designer or developer, presenting small- and micro-businesses a relatively low threshold to conducting e-business.

To decide if a template-made e-store is right for your biz, use my four criteria for evaluating Web store-builders. Costs of online stores vary widely, from nothing to a nut bigger than your small business can swallow. Unless your biz is flush with dollars, you need to scrutinize the price.

Cash-starved companies should steer for the free online e-commerce hosts, like Bigstep, eCongo, and FreeMerchant. These sites provide store-building tools and then host the store at no charge, although some services, such as online credit card processing, come with a price tag.

Free e-commerce hosting sites come with certain problems, which can range from lame reporting tools to lousy uptime performance numbers. But the most- overlooked risk is entrusting your e-commerce effort to a company which that, because it depends primarily on Web ads for revenue, may not have the legs to go the distance. Last month, for instance, Bigstep slashed its workforce by 20 percent in an attempt to get costs under control.

Any hosting service can go out of business, of course, but these free store hosts come with special baggage: because you build your store using their tools (not an HTML-code cutter like FrontPage), there's no way to back up the store locally and FTP its content to another service. If Bigstep goes down, your Bigstep-built e-biz also dies.

Pay to play

For-pay store costs run the gamut from piddly to pricey, but between $50 and $100 a month is typical for a small-to-medium shop. (Most hosts define size by traffic, storage space, number of products in the online catalog, or a combination of two or more of those characteristics.) Yahoo Store, for example, costs $100 per month for a store with 50 or fewer items, while an e-store at Earthlink, with 1.5GB of monthly data transfer rights and room for 100 products, runs $80 a month.

Even with their inherent risks, I like the free stores -- you can't beat the price. Cost isn't the sole factor, however, in choosing a template-based store for your small biz -- another determiner is design. I'll tell you what to look for in the next section. Don't kid yourself: even the best template-based e-store has about as much individuality as a batch of store-bought cookies.

Even site builders that are well stocked with designs, layouts, and templates - Bigstep gets my nod here - produce stores that look amazingly alike.

The only way to create a store that is less an online database of products and more an experience that draws customers, is to hire a Web designer. That costs money.

I believe template stores, with their design drawbacks, are best suited for brick- and- mortar companies which that already have an established clientele. Template stores simply don't look sharp enough to compete with pure-play Web shops, nor do they have the visual appeal to draw in substantial numbers of new customers.

Willing to settle for a stock design for your store? Your next step is to decide whether the isolated location of a template-based store makes sense, and if not, what choices you have. Creating a store is only the first step toward online sales, of course. The hard part is driving customers to its e-doors.

Most template-based e-stores work best if you're building an online shop as simply another way for existing customers to buy from your business - you can tell customers to visit your site through the usual marketing methods, like promoting your URL on business cards, handouts, and shop signs. That's because few of the template-based stores are designed to drive new traffic to your store. Some, such as Bigstep, include promotional tools like search engine submitters, but for the most part, you're on your own.

There is one exception: Yahoo Stores. The mega-portal's Yahoo Shopping network, which hosts thousands of shops, draws big numbers from Yahoo's own traffic. You pay for this higher visibility, however, since Yahoo takes a two percent cut of all sales over $5,000 per month.

One final template-based builder feature to consider is a link to your back office, particularly accounting. This is one area where stock stores have an edge; since unlike custom-made storefronts, some stock e-stores offer integration with accounting. It's a smart way to save time, but is it smart enough to sway your decision? Click on and I'll give you my two cents. Big-league businesses can integrate their online operations with back-office infrastructure, including accounting systems. Small companies often don't have the resources, especially money, for such luxuries.

Store-to-accounting synergy isn't out of the question, however. Some stores link with small business accounting software to automatically process sales orders, and automatically debit the purchased items from inventory. The advantage is obvious: less time spent manually entering e-store sales into their books.

Some small biz e-stores, including NetLedger and Yahoo Store, now connect commerce with accounting. NetLedger's current version 5.1 lets you build a crude store, then link it to the rest of this Web-delivered accounting system. Yahoo Store also links with NetLedger, although you build the store and host it at Yahoo.

Should this be the prime factor in deciding which store you build? It will help you save time, if your store's doing serious volume or your inventory is deep, but you'll probably have to abandon your preferred accounting package to take advantage of this integration. For many small firms, which have lots invested, including expertise, in their current software, that's a dicey choice.

I think the advantage of integrated accounting is not yet enough to swing your vote. There's just no way I can ignore the power of QuickBooks in the small business accounting market; if Intuit gets its act together and provides such store-to-software connections, I'll be one of the first to change my tune.

Building a store from a bin of parts isn't the right solution for all small businesses, but if you carefully consider my four points, you'll be able to decide whether it's smart for your business. And that, after all, is