IS E-COMMERCE RIGHT FOR YOUR BUSINESS?

By David Lohr, Board of Trustees, www.myownbusiness.org.

E-Commerce, the sale of products and services over the Internet, is the fastest growing segment of economy. It allows even the smallest business to reach a global audience with its product or message with minimal cost. Currently there are more than 300 million people using the Internet internationally. Sixty-nine percent of the online population has made at least one purchase in the last 90 days and analysts project online sales of $3.2 trillion by the end of this year. The Internet user's average household income is $59,000, making this a very attractive demographic for most businesses to target.

So is e-commerce right for you? The answer is: probably, depending on the nature of your business. If you own a small bookstore is there a good chance you can sell your books online? Probably not. Amazon and Barnes & Noble have established their hold over this market and their sheer size, name recognition and the relationship of trust they have with their customers allows them to dominate this market with good pricing (due to economies of scale) and remarkable customer loyalty. However, there are several ways a website will enable a local bookstore to reach new customers, get them to know the store better and keep them coming back. You might offer notices of special promotions or reading by authors. So a website doesn't need to exist solely to sell your product online.

A website can also supplement sales of your already established retail store. If you sell a unique product such as gourmet chocolates, you can reach customers around the country or the world who do not have access to your product. Also, your local customers will have information about your business 24 hours a day. How many times have you wanted information about a store, looked them up in the Yellow Pages, and found they were closed? It is much better to not only have information about your store hours available 24 hours a day, 7 days a week, but also about your entire product line. You can add pictures and maybe even a video. So your website should be promoted everywhere including your stationery, sales forms and advertisements.

Trust will become the cornerstone of building money transactions online. As Warren Buffett has said: "If you don't know jewelry, know your jeweler." Many electronic payment companies can be found on the popular search engine Google. Issues such as taxes, security, cost and reliability will need to be considered. A basic tutorial of the alternative methods for online payments can be found at our website for entrepreneurs, www.myownbusiness.org.

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