Is it difficult to establish a Net presence?

Like everything else, establishing a Net presence is not too difficult, providing you know what you are doing. The most important aspect of a Net presence is your BUDGET! Too often folks decide to start a business on a shoestring, and find that approach doesn't work! Would you open a warehouse without fixtures? Or without an advertising budget? So why try to establish a Net presence with nothing?

First decide what you want to accomplish with a site:

1. A presence and awareness site to drive customers to your retail channel.

2. An e-commerce site.

Commit to a site for at least a year and be prepared to spend some money. Don't expect to see any results in the first six months. Start with fifteen products in three price points and monitor what happens. If the higher priced items don't move, replace them with lower-priced ones, or change them. This is no different than you would do in your present operation.

Test your promotion campaigns and modify them accordingly. One thing nice about the Net is you can see the results of a campaign quite easily. Direct folks to a special page in your site, and see how many visit. This is similar to direct marketing, however, here you can see where they go after they visit you. And you can also see where they came from.

Site Contents.

If you had to sum it up in one word, the message that you need to get across to visitors to your site is...

COMFORT
 

They have to be comfortable with your company. There are certain elements of a site that are critical:

• Company profile and history
• "What's new" - updated as events occur
• Products - start with 15 in 3 price points
• Services and policies
• Order forms including payment options
• Survey/feedback form
• Auto responder to acknowledge the visitor and to send additional information.

To properly prepare you need to have ready information that will allow the site to be developed easily. You need not have this information formalized, rather have some thoughts and ideas on paper. 

1. Company information, history and description. Try to emphasize your financial strength, or the length of time in business or the uniqueness of your business.
    

2. Objectives. Do you want to sell on your site? Is it an awareness site for folks to learn about your company, products and services?

3. Differentiation strategy. What makes you so different than all of your competitors? And don't say your people or products, because everybody says that.
    

4. "Elevator Speech" You are about to enter the elevator in the Sears Tower, going to the 62nd floor. You are pleasantly surprised to find a prospect whom you have been trying to meet for months gets on with you. You now have approximately 90 seconds to tell the prospect about you and your business, and why he should do business with you. What are you going to say? (start with a 25 word or less statement)
   
   What are the benefits of doing business with you?
    

5. Who is your competition and what makes you better?
    

6. To whom do you target your business, and where do you sell? Are you looking for college educated, 37 year old Caucasians in the U.S.? Or Latinos in the major markets? Or working moms? Or small retailers and SOHOs? And you need to address whether you can sell internationally.
    

7. What products and services do you want to start with?
    

8. How would you like your site organized? If you have some ideas, express them Otherwise, leave it to the experts.
    

9. If you have a site, what promotion efforts have you done to date?

Promoting Your Business

As you would do with your offline business, you need to promote your virtual store. Start off-line by placing your site address (URL) on your business cards, stationery, literature and ads. Also don't forget to hang a sign in your office or store that says "Visit us online at ...." 

Online you have many vehicles for promoting your business – classified ads and paid banner ads. Press releases are also a great way to let the media know of your progress and new plans. They are not a place to do an ad (pay for that in their publication). 

Search engines are unique to the Net. They are like gigantic yellow page directories of every address in the world. Building your site is not like the "Field of Dreams" movie – "Build it and they shall come." You have to direct them.

Discussion lists (over 90,000) are also unique to the Net. Folks with common interests meet online to discuss issues pertinent to them or their business. Our E-Tailer's Digest is one where 1,600 retailers in 47 countries meet every Monday-Wednesday-Friday to discuss all issues related to retailing -- both on- and off-line. And many of these lists accept paid sponsors to help offset the cost of maintaining the forum. A great targeted audience for you.

Relationship building is common on the Net, and works very well. Companies with like interests promote each other via links to each other's sites. 

Too many "newbies" to the Net think they can buy a list of e-mail addresses and send out notices to the world. WRONG! That is spam, and could get you barred from the Net, as well as annoying many potential customers. Instead there are legitimate "opt-in" mailing lists where folks subscribed to receive information. But, you need to be careful and know who you rent the list from. Netcreations is good. Sanford Wallace is not.

The Net also has affiliate programs whereby folks partner with you to sell your products or services for a commission. Amazon.com was the first to start an affiliate program, which helped build them to where they are today. Companies like eToys are offering affiliates programs and paying higher commissions. If it is a win-win situation for you, use them. 

Pitfalls to avoid.

Gartner Group Identifies Five Pitfalls for eBusiness 
Seventy-five percent of ecommerce projects are bound to fail because of a lack of good business planning and unreal expectations of what new technologies can do for their business. 

The latest research from Gartner Group finds that businesses tend to get confused by new technologies and do not draw up sound business plans as a consequence. The company noted five pitfalls which new online businesses should avoid. 

eBusiness should never be taken as an end in itself, rather it should be seen as a tool for the wider business, the report warned. Secondly, online trading demands good project management and project managers should be fully trained in the intricacies of new technologies. 

Thirdly, the report advised companies to assign specific teams to implement technologies for eBusiness and update outmoded systems. This team should fully understand the scope of the new technologies being implemented and have good reason for implementing them. The group said that many ebusinesses bought new technologies with little knowledge of how they could improve business. 

Companies should include overviews of emerging technologies in their business plans. They should plan ahead and be aware of what technologies are set to be released on the market, and they should encompass this information in their forward planning. 

Lastly, the report warned business to monitor the behavior of competitors closely, and to be prepared to embrace change when it happens.

http://www.nua.ie/surveys/?f=VS&art_id=905355314&rel=true
http://www.gartner.com/public/static/home/ggebiz.html

What does it cost to have a Net presence? 

That's like asking what does it cost to live. 

$80 Million. That's what Toys R Us just spent.

It all depends on where you are and what you want to do. 
• GartnerGroup Reports That an E-Commerce Web Site Costs $1 Million to Build 
• Average Cost Is Expected to Rise 25 Percent Annually Through the Second Quarter of 2001 
• Labor Accounts for 79 Percent of Total Cost 
• Software - 10%
• Hardware - 11%
• Some spent less than $350,000 on their Web sites
• Others spent more than $2 million
• The average time to complete an E-commerce site was five months
• Some took up to a year to launch
• The goal for some enterprises was to create a Web E-commerce presence quickly and inexpensively, while others built Web sites that create market differentiation. 

Perhaps the biggest surprise to survey participants was that they did not get "almost everything they needed" from their E-commerce application vendor. On average, most corporations used two or more external firms, usually including a nationally recognized media firm as well as local systems integrators to help control costs. According to the report, "a great deal of effort was needed to build the front and back ends of the E-commerce sites," which resulted in various delays and additional costs. 

"Building an E-commerce site is a definite requirement for any midsize to large enterprise that intends to remain competitive during the next two to five years," said Roy Satterthwaite, GartnerGroup research director. "One of the challenges, however, is that today's state-of-the-art E-commerce site will become outdated in just a few months if the back-end connections and interactive applications do not keep pace with the new technologies that are being developed." 

The report also identifies three cost categories that will emerge based on function. These include: 

1. $300,000 to $1 million to "Get on the Map." This site is adequate but it is functionally behind most industry participants. 

2. $1 million to $5 million to "Run with the Pack." This site is functionally equivalent to most industry participants. 

3. $5 million to $20 million to achieve "Market Differentiator." This site raises the industry competitive bar and changes the nature of online competition. 

http://www.gartner.com/public/static/aboutgg/pressrel/052799site_costs.html

Costs of a site are divided into one-time charges and on-going charges. The initial one time charge is the registration of your name (URL) and being allowed to use that URL. It is paid to the Internic and costs $70 for first two years. Then there are hosting charges to pay for where your site is physically located. That can be $50 and up per month. Site development can be as little as $1,500 and go into the millions (Toys R Us budgeted $80 million for their site). Marketing is another item that can range from $500 to hundreds of thousands. And finally you have on-going site maintenance which is usually a percentage of the original site development costs- $50 and up per month

In your first year plan on spending (as a minimum) $25,000 - $50,000, which is not bad when you consider the cost to open a new outlet. Of course, it can be unlimited for larger sites (like Toys R Us – $80 million)

Summary:

The Internet will affect your business and the industry over the next couple of years. 

Be prepared to join the new revolution.

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