This published material was prepared by CARAT under award number
06-43-B10589-3285485 from National Telecommunications and Information Administration (NTIA) U.S. Dept.
of Commerce. The statements, findings, conclusions, and recommendations are those of the
author(s) and do not necessarily reflect the views of the NTIA or the U.S. Dept. of Commerce.
Understanding
eCommerce
Innovators in
Course Overview
Goal
•
Expose small business owners to the
fundamental concepts of ecommerce as well
as how to use ecommerce technology, tools
and strategies to improve their marketing and
sales activities and enhance their bottom line.
Course Overview
This course will cover:
•
How businesses use ecommerce tools to increase sales,
lower operating costs, and attract and retain customers
•
How ecommerce solutions can be used to support
marketing and sales
•
How to select and implement an ecommerce solution
appropriate for your business including a survey of popular
ecommerce products and services
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Course Outline
Part 1 – Making the Case for eCommerce
• The Business Case for eCommerce
• Keys to a Successful Project
• Fundamentals of eCommerce
Part 2 – Selecting an eCommerce Solution
• Building a Decision Matrix
Course Outline
Part 3 – eCommerce Solutions
• eCommerce Product Comparisons
• eCommerce Product Demonstrations
• Payment Processors
Part 4 – Discussion
• Best Practices
• Practical Applications for Your Business
• Q&A
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Poll … A Little About YOU
•
Does your company have a web site today?
•
Do you use or 3rd party service to sell your
products? (e.g. Etsy.com)
•
Do you have an online store or catalog?
Remember the
Four P’s of Marketing?
•
Product
• What you offer is what they need
•
Pricing
• Aligned with sense of value and competition
•
Place
• Make it easy to buy!
•
Promotion
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Web browsing
(e.g. search)
Shop online
Download music
Watch videos
Read the news
Enter a checkmark in
the blank square next
to any of the ways that
you most commonly
use the Internet.
Keys to a Successful
eCommerce Project
1.
Define Your Goals
2.
Establish a Budget
3.
Set a Timeframe
4.
Set Your ROI* Expectation
5.
Define Key Performance Indicators (KPIs)
6.
Select a Solution that Matches Your Needs
7.
Offer a Compelling Value Proposition
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Manufacturing
Shipping
Storage
Production
Transaction
Processing
Fulfillment
Delivery
Fulfillment
Marketing
Placement
Advertising & Promotion
Opportunity
(Customer)
Decision
Sales
Purchase
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Offline commerce is …
Retail Stores (“brick & mortar”)
Catalog & Mail Order Sales
Open Markets (e.g. farmers markets)
Door-to-Door Sales
eCommerce is …
Electronic commerce or
eCommerce consists of buying
and selling products or services via
Internet and computer networks
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Products!
Photos
Descriptions
Prices
Supporting Information
Shipping Details
Warranties & Guarantees
Return Policy
Upsell Recommendations
Basic Product Display
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Basic Purchase Transaction
Customer
Online
Store
Shopping
Cart
Payment
Processor
Gateway
Merchant
Bank
Credit Card
Institution
Issuing
Bank
Basic Purchase Fulfillment
Shipping
Order
Delivery
Service
Customer
Fulfillment
Service
Your
Warehouse
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Part 2 – Selecting a Solution
•
Building a Decision Matrix
1. Define Your Business Goals
•
What are your business goals?
For example:
• Increase sales
• Increase the number of customers in a key category
• Increase the sale of specific products
• Leverage existing infrastructure
• Extend and expand your business reach
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2. Establish a Budget
•
Costs to consider:
• Cost of acquisition (e.g. price or monthly fees)
• Installation
• Configuration
• Training
• Inventory Management
• Fulfillment
• Tech support
3. Set a Timeframe
•
DO plan ahead!
•
DO allow time for installation, configuration,
testing, staff training
•
DO budget time for employees to
“play” with the system
•
DON’T schedule the project
launch for a busy time of year
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4. Set Your ROI Expectation
•
eCommerce must have a positive impact on
your bottom line or it’s not worth it!
• Total project cost: XX
• Expected annual increase: % and $
• Expected annual savings: % and $
• Total annual ROI on CRM: [months/years]
• Total project cost / annual ROI
ROI = [months/years] to recover total project cost
5. Define Your KPIs
•
KPIs = Key Performance Indicators
• Aligned with mission & goals
• Quantifiable
• Data is cost-effective
to collect and analyze
• Used by management
to measure progress
and effectiveness
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Poll: Which of these have you completed?
•
Defined your business goals?
•
Established a budget?
•
Set a timeframe?
•
Defined your ROI expectations?
Considerations: Business
•
Business needs vs. feature set
•
Scalability
•
Productivity tools (e.g. inventory mgmt)
•
Single source solution or multi-vendor?
•
Can the project be phased?
•
Does the project provide
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Considerations: Financial
•
Price of acquisition
•
Recurring costs
(e.g. monthly fees, transaction fees)
•
Maintenance costs
(e.g. support costs)
•
Installation and configuration costs
Considerations: Users
•
Ease of use
•
Technical abilities of team members
•
Accessibility
(e.g. via the Web, via smartphone)
•
Ability to be customized
•
Specific needs
(e.g. ability to generate
specialized reports)
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Considerations: Technical
•
Ability to export data
•
Update/upgrade process
•
Flexibility, scalability
•
Need/ability to integrate with
other systems and databases
•
Stability of vendor/source
•
Ability to accept bulk uploads
of products, text and images
Technical Support Needs
•
In-house/on-site technical resources?
•
What does your team need?
•
What can you afford?
•
What does the vendor offer?
• On-call: 24/7 or restricted
• Email support
• Online or web help
• Built-in help
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Build vs Buy vs Customize
•
Options:
• Buy a product, adapt your business processes
• Build a custom solution to conform to your
business processes
• Hybrid: buy and customize
•
Risks:
• Custom development is very expensive!
Rarely on time and under-budget.
• Who will support your custom solution?
• If you over-customize a commercial product,
Part 3 – eCommerce Solutions
•
Types of eCommerce Solution
•
eCommerce Examples & Comparisons
•
Payment Processors
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Components
of an Online Store
Website
Shopping Cart
Payment Processor
Policy Statements
Business Information
Types of eCommerce Solution
•
Locally installed & hosted
• Server, Website & Software
• Vendor-hosted
•
Web-based
• Online Marketplaces
• Online Store Builders
• Online Stores
Innovators in
Online Store Solutions
Online Marketplace
Online Auction
Online Merchant Service
Online Retail Store
Online Marketplace
A web site that you sells your
products as well as many others
Examples:
Amazon (everything!)
Iron Planet (heavy equipment)
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Amazon Marketplace
Sell directly on the product detail page where
Amazon.com sells the same item new.
Listing is free - you only pay a fee if you sell.
Product categories include:
Books
Music
Video
DVD
Video Games
Electronics
Office Products
Tools & Hardware
Kitchen & Housewares Outdoor Living
Sports & Outdoors
Musical Instruments
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Amazon Marketplace
Online Merchant Service
An online service that allows you
to set up an online store to sell
your products
Examples:
Shopify.com
Yahoo Stores
Volusion
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Innovators in
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Issues with “Stores”
Benefits:
All in one solution
Wide array of design templates
Drawbacks:
May limit customizing & branding
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Online Auctions: eBay
http://pages.ebay.com/storefronts/start.html
Online Retail Store
A branded web site that is “owned”
by a company and sells only its lines
of selected products
Examples:
Target.com
Macys.com
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Design Counts!
Selling Customized Merchandise
Examples:
Zazzle
Blurb
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Example: Zazzle
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Payment Processors
Companies that process credit card
transactions.
Systems that accept credit card
information from the customer and
Typical Services
Shopping Cart
Online Credit Card Processing
Virtual Terminal
Merchant Account
Gateway
Innovators in Technology Training
Typical Fees
Service Fee (e.g $30/month)
Gateway Fee (e.g. $20/month)
Transaction Fee - % (2.5% to 5.5+%)
Transaction Fee – Flat (e.g. 15 cents)
Return Fees
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Innovators in
2Checkout – Cost
5.5%! Very pricey!
plus 45 cents!
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Back Office Services
Systems dedicated to running
the business such as:
Accounting
Distribution
Inventory Management
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Innovators in
Innovators in
Part 4 – Discussion
•
Best Practices
•
Practical Applications for YOUR business
Description:
Web Address:
2Checkout.com
http://www.2checkout.com
Amazon
http://www.amazon.com
Alpine Exposures
http://www.alpineexposures.com
Authorize.Net
http://www.authorize.net
Blurb
http://www.blurb.com
Fedex
http://www.fedex.com
Google Checkout
http://checkout.google.com
Intuit
http://www.intuit.com
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Description:
Web Address:
Iron Planet
http://www.ironplanet.com
Nochex
http://www.nochex.com/
PayPal
Http://www.paypal.com
Printfection
http://www.printfection.com
ProStores
http://www.prostores.com
Shopify
http://www.shopify.com
Stamps.com
http://www.stamps.com
Stubhub
http://www.stubhub.com
References – 2 of 3
Description:
Web Address:
UPS
http://www.ups.com
Volusion
http://www.volusion.com
Yahoo
http://www.yahoo.com
Zappos
http://www.zappos.com
Zazzle
http://www.zazzle.com
References – 3 of 3
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