The Details of E-tail:
Pros and Cons of E-commerce

By Staff Writer

By now you probably know the benefits of having a Web site for your small business. The Internet is the quickest and easiest way to increase your reach to an ever-expanding audience. Customers can find what they’re looking for and learn more about you with just a click, at any hour of the day. Now, the question is: Do you offer them the ability to purchase or do you offer them information and redirect them to your brick-and-mortar store? 

The Benefits of Selling Online

Where the Money Is
It may be a daunting task, but many companies are deciding that the financial rewards of e-commerce are worth the investment of time and energy. After all, the money is certainly out there: According to a 2003

According to a 2003 Jupiter study, annual online spending is projected to reach an incredible $105 billion by 2007.

Jupiter study, annual online spending is projected to reach an incredible $105 billion by 2007. Web hosting companies, too, are making it easier to get started by offering a variety of e-commerce packages specifically geared toward the small business owner. For example, rather than the confusion of researching and shopping for multiple products, like security and shopping cart software, you can get a single, bundled ecommerce plan from one source. 

Grabbing the Sale When It Counts
With your online store, customers can get quick product overviews, find exactly what they need and then purchase. By eliminating a step before checkout—either calling or visiting your store—you’re less likely to lose sales. You take advantage of purchasing intent immediately.
 
Cheaper in the Long Run
Think for a moment of how much it would cost to operate your current store if it never closed. The electric bill alone would be through the roof, not to mention all the over-time pay for employees! But such is the luxury of operating online. Your doors are always open to customers, 24 hours a day, 7 days a week. You can sleep while sales are made.

Perhaps even more valuable when making the move to ecommerce is your ability to track site visitors. Web analytics offer small business owners a powerful tool at the tips of their fingers. With ease, you’ll be able to see where your customers are coming from, what they’re looking at and where they go. It’s like surveying every customer that enters your store. You learn more about your target market and can improve your site and product to increase sales. Just imagine what collecting that data would cost at a brick-and-mortar store!

Meeting Customer Expectations
Of course, all the benefits of having a Web site multiply when you start an e-tail site: Your potential customer base expands exponentially (with only a nominal increase in costs). And don’t forget: with nearly

A Gallup Organization poll found that 55% of small business Web sites covered Web costs or were profitable in 2002.

new 400,000 businesses online each year, the World Wide Web is full of customers that have come to expect the option to purchase online. Maintaining your competitive edge online—as in-store—is key. 
 
Still nervous about the expenses of operating online? Consider this: A Gallup Organization poll found that 55% of small business Web sites covered Web costs or were profitable in 2002.  

What to Weigh When Considering

Playing It Safe
E-commerce may be easier than it was five years ago, but it’s not just plain “easy” yet. An information-only and promotional site has a number of benefits, the most obvious of which is that it’s still the easiest option to set up.
 
Like Launching a Second Store
Much like opening a second brick-and-mortar store across town, moving part of your business online poses some start-up challenges. You’ll need to consider how

E-commerce may be easier than it was five years ago, but it's not just plain "easy" yet.

you’ll drive traffic to the site and how you’ll make sure that customers don’t just browse, but buy. Additionally, you’ll need to track inventory flowing from two separate places. For example, your most popular item in-store may not move from your Web site and vice versa. To avoid selling out of a particular product, you will have to keep a close eye on how things sell. An extra expense may come from providing twice the customer support in two distinct forms, which may require employee training. Your site design will also demand particular attention for ease of use and checkout. To avoid shopping cart abandonment, you’ll need more than just a counter with a register near an exit. You’ll need a very clear path from product photo to purchase. 

The “Pick It Up and Try It On” Factor
When you showcase your products and redirect customers to your store, they’re less likely to make returns because the shirt didn’t fit or the lamp wasn’t quite what they pictured. In-store purchases come from more qualified customers because they know exactly what they’re getting. 

What’s a Business to Do?
Successful companies should have a Web presence, but whether or not they sell directly from their site depends on the individual business and its specific goals. If you determine that it’s right for you, begin your planning by mapping out a strategy with clearly defined objectives and steps to meet them. How much are you willing to spend on start-up? Will you register your domain with search engines to maximize your potential customer base? How will you handle the increased inventory needs?

Most importantly though, don’t let the scope of the task overwhelm you; if you operate a small business, you’ve already shown that you have both the creativity and the organizational skills necessary to launch an ecommerce site—with all the potential risks and rewards.