Success with Online Retailing: For Small Businesses

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Overview

E-commerce is bouncing back! Get ready to catch the next wave! You can build a profitable small business online by adopting cost-effective e-business strategies. This ...
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SUCCESS WITH ONLINE RETAILING: FOR SMALL BUSINESSES

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Overview

E-commerce is bouncing back! Get ready to catch the next wave! You can build a profitable small business online by adopting cost-effective e-business strategies. This is the book that shows you . . .
  • How to develop appropriate strategies to cope with changes in the marketplace.
  • How to create a "position" for your business in the minds of your target consumers.
  • How to differentiate your product with benefits, pricing and value-added services.
  • How to find the right e-commerce solution to put your business online cost-effectively.
  • How to use a proprietary risk management process to screen out online fraud effectively.
  • How to fulfill your orders promptly and cost-effectively.
  • How to make your site sells with bargains, effective sales writing and testimonials.
  • How to build a vibrant online community to enhance the "stickiness" of your Web site.
  • How to build a highly responsive mailing list to improve your sales conversion rate.
  • How to use free publicity in the media to drive millions of visitors to your site.
  • How to acquire new customers cost-effectively.
  • How to manage your e-business efficiently.
  • How to adopt multichannel business strategy to improve profitability.

 

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Editorial Reviews

Marcia Yudkin
This one-volume, easy-to-read introduction to selling your wares online ranges from strategy -- keep average order size high and costs low -- to practicalities -- how to efficiently orchestrate the fulfillment of orders.

The book includes several interesting topics I did not expect in a book of this type, including the pros and cons of drop shipping and how to minimize credit card fraud.

If you want a solid guide to setting up an online store, this covers everything you need to know to get started and make money at it. Well done!
an author of eleven books and hundreds of magazine articles, syndicated columnist, public radio commentator and writing coach

Mike Tarrani
This book takes a no nonsense, straightforward, practical approach to developing and managing an online retail business. Given the plethora of books about this subject that are little more than gushing testaments to achieving success, with more fluff than meat, it's refreshing to find one that is sober and factual.

The author sets the tone in the beginning of the book by citing a few short, compelling success stories, then leading you through steps designed to determine if you are ready to sell online, the realities of an online business and how to approach creating a successful business model. He then leads you through all of the critical success factors, ranging from positioning your business to sourcing to credit risk management. These important topics are treated in surprising depth considering that the entire book is less than 225 pages. More importantly, statistics, tables and supporting information are provided to reinforce concepts and back up statements made.

Chapters 10 through 15 cover the actual development and marketing of your web site. This material is presented in the same factual, straightforward fashion that characterizes the first nine chapters and is filled with excellent advice and information.

In Chapter 17, E-Business Management, the author provides realistic advice about what it takes to effectively manage your online retail business. This advice is based on his extensive experience as an operator and consultant, and is on the mark. The final chapter wraps up with advanced tips on multi channel strategies, profit assurance and operations.

If you read one book on online retailing I recommend that it is this one. The writing is crisp, the information is practical, and the approach is viable.
Practical, realistic and valuable, February 17, 2004

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Product Details

  • ISBN-13: 9780595280544
  • Publisher: iUniverse, Incorporated
  • Publication date: 6/24/2003
  • Edition number: 0
  • Pages: 228
  • Sales rank: 1,440,217
  • Product dimensions: 6.14 (w) x 9.08 (h) x 0.60 (d)

Read an Excerpt

INTRODUCTION: DOTCOM REVISITED

You have read many reports that the Internet boom is over. The amount of venture capitals going to online retailing businesses has almost dried up since late 2000. In the last few years, many online retailers had shut down because venture capitalists pulled the plug on financing such ventures. They were questioning whether costly promotions and building Web traffic were worth the hit to profits.

If that is the case, why should you bother about taking your small business online? It is just not worth it, right? Wrong! In a report published on MSNBC.com on March 15, 2001, journalist Teri Goldberg reported that many mom-and-pop cybershops were enjoying increasing sales, an expanded customer base or a profit.

“Like non-virtual mom and pops around the country, these small cyber shops often started out at home or in a small retail space — and they chose to stay put even as their sales increased,” noted Teri Goldberg. “In addition, these mom-and-pop shop owners have kept overhead costs low and operated with few, if any, salaried staff. Often their Web sites are designed and/or maintained by the founder. And they expanded — slowly — only when funds were available.”

Teri Goldberg revealed that many rags-to-riches stories abound among these mom-and-pop online shops:

  • Julie Clark of Littleton, Colo., developed a 30-minute video for babies called Baby Einstein. She began selling it in June 1997 and within six months she had sales of $100,000. This past quarter, with an expanded line of products and six employees working out of her home, sales online came to $1.6 million, out of $11.6 million in total sales.

  • Inga Bowyer and Gina Green, who are sisters, opened a small cyber German Deli in 1998 selling food baskets filled with European delicatessen. Revenues grew about fourfold to almost $500,000 in 2000. They expected to become profitable in early 2002.

  • Barry Cohen and his wife set up Absolute Air Cleaners & Purifiers online and got their distributors to ship the goods directly to customers. In its first year, the Durango, Colorado-based shop reported $800,000 in sales.

  • Sharon Mitzman, owner of Forget Me Knot, took her gift-basket catalog company online in September 1997. She followed a careful budget, spent her funds wisely and practiced good, old-fashioned customer service. She must be doing something right. The online business had doubled every year since the launch and she made "well over" six figures in 2000.
Why are we seeing different fortunes between the big online retailers and the mom-and-pop online shops? Obviously, the answers lie in the business strategies adopted by the small players. In Teri Goldberg’s report on thriving small businesses in cyberspace, most of the small shop owners attributed their successes to the following factors:

  • Keep operating costs and overheads low. Spend wisely within a budget and never run a business on borrowed funds.
  • Forgo advertising or advertise online to target seasoned cybershoppers.
  • Stay focus in your business, selling a narrow range of products to a narrow, but deep, market segment. This concept is commonly known as niche marketing.
  • Use old-fashioned customer service to win over customers and attend to their needs.
There is nothing wrong with the e-commerce concept, which was often unfairly cited as the cause for the failure of dot.com ventures in the past few years. If implemented with the right e-business strategies, the e-commerce concept is fundamentally sound and viable as a mainstream business activity. Recent statistics have supported this observation.

A look at Amazon.com, a good proxy for B2C e-commerce, revealed a healthy growth in sales turnovers despite the bursting of the dot.com bubble over the last two years. A turnaround in the e-commerce industry may be imminent.

Net sales for the financial year ending Dec 31, 2002 increased 26 percent over the previous year to $3,933 millions. Of particular interest is the 100-percent jump in year-to-year growth from 13 percent in 2001 to 26 percent in 2002. This growth is more manageable and if the upward trend is maintained, it signifies that B2C e-commerce is moving from the erratic introductory phase to a period of steady growth.

The above figures correlate well with an eSpending report released on January 6, 2003 by Goldman Sachs, Harris Interactive and Nielsen/NetRatings. According to the report, online holiday shopping during the eight weeks in November and December of 2002 jumped more than 24 percent year-on-year to $13.7 billion. Including travel, online spending grew nearly 22 percent to $15.7 billion. Shoppers surveyed in the eSpending report also noted that 16 percent of their holiday shopping budget was spent online, up from 14 percent during the 2001 holiday season.

“With each holiday season, e-commerce becomes more of a mainstream activity, attracting a greater mass audience,” said Lori Iventosch-James, director of e-commerce research, Harris Interactive. “This season shoppers allotted more of their holiday budget to online spending. And this, combined with an increase in the total e-commerce population helped drive year-over-year growth.”

The dot.com crash may be a blessing in disguise. It has resulted in a healthy consolidation of the e-commerce industry and weeded out unhealthy practices and weak business models of the past. The failures of many online retailers over the last few years could be caused by the following man-made factors.

  • The industry has grossly overestimated the rate of growth in demand for online shopping. Any change in shopping habit involves an attitudinal shift and this takes time to materialize. It is a case of introducing a new service too fast ahead of consumer’s adoption.

  • Industry players operated in a scale designed to support a market that was many times larger than the actual demand. This led to high operating costs and break-even point. It may take many years to turn in a profit.

  • The situation of over-supply was exacerbated by the easy availability of venture capitals. As online retailers continued to suffer deeper losses with little hope of turning a profit soon, venture capitalists began to doubt the long-term viability of the businesses and decided to pull the plug. It could be a case of premature death.

  • The industry has wrongly expected that e-commerce would become the domineering force in retailing. Its rightful position should be to provide an alternative channel of distribution to complement the traditional brick-and-mortar retailers and mail order companies.

  • The gain in productivity derived from embracing e-commerce was negated by the higher costs of hiring IT professionals to handle the jobs vacated by the manual workers. Even today, there is a shortage of business executives who are IT-savvy enough to build and manage the e-business operations cost-effectively.
In other words, the bursting of the dot.com bubble was the result of excessive investment, high operating costs and excessive supply made worse by opportunists who disregard the doctrine of good business practices.

Most importantly, the rate of growth in operating costs must be kept far behind the rate of growth in revenues to ensure a business’ long-term viability. Whenever possible, we should minimize our investment in fixed costs and convert as many of our expenditures to variable costs as possible. This will lower our break-even point considerably. The reverse is equally true. A corporate structure with low operational leverage invests heavily in fixed overheads and infrastructures. While its variable costs are lower, it will require a higher sales volume to break even and generate profits.

If we observe good business practices to keep our operating costs down, there is no reason why e-commerce cannot become a viable concept for small businesses. It is possible that the Internet would eventually become an essential channel for businesses in the same way that we cannot conduct our businesses without the telephone and fax. The rapid growth in home PC ownership, computer literacy, wider acceptance of online shopping and advances in technology as well as our increasingly hectic lifestyle will fuel its development.

I write this book to share my experience in building and managing an online retailing business cost-effectively. If done correctly, an e-business can be a very cost-effective alternative channel of distribution to traditional retailing and mail order businesses. You will learn how to build a successful online business using the following methodologies and e-business strategies:

  • How to identify a business that allows you to capitalize most on your passion, skills, knowledge, contacts and experience.

  • How to use the business plan continuously to develop appropriate strategies to take advantage of the changes in the marketplace. You can use the business plan to chart your course so that you can navigate your “ship” safely through the uncharted waters.

  • How to use a consumer-focused approach to create a “position” for your business or product in the minds of your target consumers.

  • How to differentiate your product with tangible benefits, value-added services and pricing by seeking alternative sources of supplies both locally and overseas.

  • How to find the right e-commerce solution to put your business online cost-effectively. I will give you an overview of all the important features required to build and manage your online business effectively.

  • How to use the e-payment system’s fraud screening feature and address verification system as well as a proprietary risk management process to screen out online fraud effectively.

  • How to build an order fulfillment system to ensure that the right products are delivered to the right consumers promptly and cost-effectively.

  • How to make your site sells with real bargains, effective sales writing and testimonials.

  • How to build a vibrant online community to improve the online shopping experience, influence buyer’s behaviors, build lasting customer relationships, attract new customers and cut down on advertising expenses.

  • How to build a highly responsive mailing list and publish a newsletter regularly to improve your sales conversion rate and get more mileage with every advertising dollar spent.

  • How to use free publicity in the media to drive millions of visitors to your site and generate credibility and public awareness for your online business.

  • How to acquire new customers and drive up sales cost-effectively by forming strategic alliances with other small businesses, advertising in major online media and recruiting thousands of webmasters and individual marketers as affiliated sales partners.

  • How to manage your e-business efficiently by organizing the diverse tasks into four distinctive functions: Merchandising, Customer Service, Community Development and Marketing.

  • How to adopt a multichannel business strategy to improve profitability. You can complement your online business by establishing a strong presence in catalog or brick-and-mortar retailing.
This book serves a practical purpose of helping aspiring online retailers build and manage a successful business online. You will learn how to set up an online business on a small budget in the first nine chapters. From chapter 10 onwards, you will learn how to use various e-business strategies to improve the online shopping experience and build lasting customer relationships. You will also learn how to integrate online and offline operations and provide seamless cross-channel marketing, promotion and customer services.

To get the most out of this book, you should visualize yourself as an entrepreneur who is going to start a new business online. There is no need to memorize what is written in the book. As you go through each chapter, you should ask yourself how you can apply what you have just learned to your own business. At the end of the process, you would have developed your own version of e-business strategies to build a successful business online.

That is the essence of active learning. You have essentially absorbed my experience and knowledge into your own knowledge base. In business, there is no such thing as “one size fits all”. You must develop your own magic formula for success by tapping into your experience and knowledge base. The book can only initiate the learning process; the rest will be up to you.

Are you ready? Let’s begin the learning process!

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Table of Contents

INTRODUCTION: DOTCOM REVISITED
Shoppers are allotting more of their budget to online shopping. Get ready to catch the next wave! You will learn how to build a profitable business online by adopting good business practices and cost-effective e-business strategies.

CHAPTER 1: SUCCESS OR FAILURE, THE CHOICE IS YOURS.
There is no single magic formula for success. You are your own best teacher and your worst enemy. Your attitude, not aptitude, determines your altitude. Everything is possible if you set your mind to do it. You will soon find yourself on the road to success by training your mind to think like a winner.

CHAPTER 2: WHAT SHOULD I SELL?
You will have a higher chance of success when you are passionate, committed and motivated to create a career you love. Believe in your idea and make it works!

CHAPTER 3: PLAN YOUR WAY TO SUCCESS
You can use the business plan to chart your course so that you can navigate your “ship” safely through the uncharted waters of running your own business. The planning process can be used continuously to develop appropriate strategies to take advantage of the changes in the marketplace.

CHAPTER 4: POSITIONING YOUR BUSINESS
To be seen and heard in the overcrowded marketplace, you must use a consumer-focused approach to create a “position” for your business or product in the minds of your target consumers. It is not enough just being the second or third best. You must be the leader in your defined position in order to win the marketing warfare.

CHAPTER 5: THE PRODUCT CONCEPT
What is a product? Developing the product concept goes beyond just creating the tangible product. You have to add value to the product with services that help to improve the online shopping experience and build lasting customer relationships.

CHAPTER 6: WHERE TO SOURCE FOR PRODUCTS?
Online shoppers are very price sensitive. To compete with established players who enjoy better margins through bulk purchases, you may wish to explore alternative sources of supplies both locally and overseas.

CHAPTER 7: E-COMMERCE SOLUTION
You must find an e-commerce solution that lets you build a complete online replica of the entire business operations. This chapter will give you an overview of all the important features required to build and manage your online business effectively.

CHAPTER 8: CREDIT RISK MANAGEMENT
E-merchant, beware of online crooks! Credit card fraud risk, like any business risk, can be controlled. You will learn how to use the e-payment system’s fraud screening feature and address verification system as well as my proprietary risk management process to screen out online fraud effectively.

CHAPTER 9: ORDER FULFILLMENT
The real test for an online business begins when a customer places an order through the Internet. An order fulfillment system must be put in place to ensure that the right products are delivered to the right consumers promptly and in good condition.

CHAPTER 10: MADE YOUR SITE SELLS . . .
Online selling is different! If you want to close more sales, you must use real bargains to attract customers, benefit-driven words to trigger emotion and unbiased customers’ testimonials to persuade customers to buy.

CHAPTER 11: BUILD A COMMUNITY FIRST
Developing a vibrant online community holds the key to your online business success. Besides serving as a captive market for your business, it helps to improve the online shopping experience, influence buyer’s behaviors, build lasting customer relationships, attract new customers and cut down on advertising expenses.

CHAPTER 12: PUBLISH A NEWSLETTER
You will learn how to use various tactics to build a highly responsive mailing list and publish a newsletter regularly to keep your prospects posted on the latest promotions and happenings at your e-store. The strategy helps you improve your sales conversion rate and get more mileage with every advertising dollar spent.

CHAPTER 13: FREE PUBLICITY
When the media pick up your story, the resulting editorial coverage could be worth millions of dollars in equivalent advertising. There is no other more cost-effective way to generate public awareness and credibility for your business. To increase the chance of having your story published, you must come up with newsworthy stories that appeal to the readers of your target media and present your news release in a format that appeals to the editors.

CHAPTER 14: MARKETING ALLIANCE
It is very costly to acquire new customers online. To extend your reach to new markets cost-effectively, you can form strategic alliances with other small businesses, advertise in major online media and recruit thousands of affiliated sales partners.

CHAPTER 15: AFFILIATE MARKETING
Affiliate marketing will set the wave for e-commerce. No other marketing programs can reach out to as many affiliated partners as cost-effectively. Many merchants have used affiliate marketing to increase revenues and minimize the costs of acquiring new customers successfully.

CHAPTER 16: FREE TRAFFIC
Almost half of all online buyers locate a Web site through the search engines. You can direct this traffic to your site if you manage to secure top placements from the search engines. I will show you how to build a top-notch Web site to improve your ranking while using the latest cloaking technology to jumpstart your Web position immediately.

CHAPTER 17: E-BUSINESS MANAGEMENT
Managing an e-business involves a lot of hard work. You can manage the diverse tasks in-house by employing three to four persons. Alternatively, you can retain the merchandising function and hand over the customer service, community development and marketing functions to an e-business partnership set up together with other small businesses.

CHAPTER 18: MULTICHANNEL STRATEGY
To improve your profitability, you may have to complement your e-business with a strong presence in either catalog or brick-and-mortar retailing. You will be able to derive operational economies of scale and improve the shopping experience with seamless cross-channel services and marketing activities.

EPILOGUE

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Customer Reviews

Average Rating 3.5
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Sort by: Showing all of 3 Customer Reviews
  • Anonymous

    Posted March 11, 2007

    Waste of Time and Money

    This book is truly worthless. First, it's written in broken English. I know the author is not a native English speaker, but that's what editors are for! Reading all of the misspellings, grammatical mistakes and incorrect idiomatic expressions was like fingernails on a chalkboard. Additionally, the book is full of platitudes and generalizations - very little in the way of actionable, how-to advice. Lastly, I put the book down when I got to the chapter on E-Commerce Solution, where the author blatantly tries to sell you his home-made software. Effectively, you're paying for a thinly-veiled sales pitch. Don't fall for it! I'm sorry I wasted my time and money.

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  • Anonymous

    Posted September 13, 2005

    Very helpful

    Yes, this was a very helpful book indeed. A great reference during the whole process of creating a website for the purpose of selling retail products. I highly recomment it to anyone who is starting a business online.

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  • Anonymous

    Posted August 17, 2003

    Success with Online Retailing for small Businesses

    They say that 'time flies when you are having fun', and if that is the case, then finally, there is an easy-to-use e-commerce guide available that gives you a lot of fun simply by reading it. For those who is going to start a new business online or already in it and has every intention to build it successfully, this is the book you must not miss! The book's author shares his hands-on knowledge and experience in both the business and e-commerce developments, presents you with practical tips and skills so as to prepare you for a cost-effective start right through the managing of your e-business operations strategically and efficiently. Unique, inspiring, well paced and neatly concluded in a language that all can understand and enjoy. Most importantly, the book is everything you need.

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