NOW’S THE TIME to consider launching a commerce site
on the Internet. You can bet that many of your
competitors—at least the smart ones—are either on the Net
already or are rushing to get aboard, because that’s where
the business is.
WEB SITES COME IN multiple styles—from a simple billboard-like design to a flashy interactive, customer-friendly store. Your job is to find the style that meets your unique business needs. The basic styles:
IF YOU’RE WAITING for the Internet to “develop” before you join this fast-moving trend, you may be waiting a long time. The Net will continue to grow and change, so get a move on.
|STANLEY ZAROWIN is a senior editor on the Journal . Mr. Zarowin is an employee of the American Institute of CPAs and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation. The Journal acknowledges assistance from WAYNE E. HARDING, CPA, a vice-president of Great Plains Software, Fargo, North Dakota, and a member of the American Institute of CPAs information technology research subcommittee.|
I f your business hasn't launched a commerce site on the Internet or, worse yet, hasn't even considered one, it may be on the path to obsolescence. You can bet many of your competitors—at least the smart ones—are either on the Net already or are rushing to get aboard, because that's where the business is.
Forecasts of Internet business—variously called e-commerce or e-business—are so astronomical that, frankly, they strain credibility. For example, Internet sales between Thanksgiving and Christmas this past year were four times that of the comparable 1997 period and double the forecast for the season.
Whether last year's sales totaled $2 billion or $22 billion or whether next year's sales will be triple or sextuple that volume isn't the point. The point is Internet commerce is growing, the growth is exponential, and it's creating new ways to sell, to advertise and to communicate with customers, suppliers, employees and shareholders. In short, the Net is not only creating new business, it's creating new ways to do business and to be in business.
For those who aren't plugged into the Net and are chary about the move, the following may provide incentive to suspend skepticism and hang out a new shingle: www.yourbusiness.com.
Exhibit 1: Amazon's Home Page
Amazon.com greets customers by name—it also has your number.
CLICK UNTIL YOU DROP
One of the Net's success stories is amazon.com (see exhibit 1), which has become an icon of e-commerce innovation. In just a few years, this David of retail booksellers has made the publishing Goliaths tremble and then, wisely, clone their fast-growing competitor's e-commerce methods.
The Amazon site is more than a virtual store that sells books: It tracks customers' buying habits; greets each log-on by name; offers a custom menu of titles based on past purchases; and, finally, when customers have made their selections, processes each order with a few mouse clicks. In fact, once you become a customer, all your essential data (reading interests, shipping address and credit card information) are stored in Amazon's computer, and a sale can be consummated with just a single mouse click.
But don't assume e-commerce is merely a virtual mall for selling goods and services. It's also where a business can post its financial statements for investors (see exhibit 2) and product catalogs for prospects. It's also a place to access password-protected inventory information and messages for out-of-the-office salespeople and staff, and purchase orders and invoices for suppliers. In short, it's a bulletin board for business intelligence, an advertising billboard trolling for prospects, a virtual store for customers and a message board and back office for staff.
SPINNING WEB DIVERSITY
Not all commercial Web sites have to be as technically sophisticated as amazon.com . Web sites come in many styles—from a simple billboard-like design to a flashy interactive, customer-friendly neighborhood store with hyperlinks to an extended information base and related products. As you read this article choose a Web page style from the selections below that meet your unique business needs.
Static billboards: Most Web sites are display ads, like billboards, that describe an enterprise's products and services and list prices, hours of operation, and phone, fax or e-mail information. While such a site is not usually very exciting or technically innovative, it provides basic information about a business.
Many Internet service providers (companies such as America Online, for example, which rents access to the Net to individuals and organizations) also will host—Web jargon for operating a commercial Web site for a customer—for as little as $25 a month. Since such a site is static (the information hardly ever changes), it needs almost no maintenance and the Web page creation is so easy, in fact, that with little or no training Internet novices can do it themselves using any up-to-date word processor such as Word or WordPerfect. Those who want to get fancy might use Microsoft's FrontPage or a half-dozen other applications designed specifically to create Web pages.
Such Web pages also can include mouse-activated buttons that, when clicked, take the viewer deeper into the site for other information, or they can include hyperlinks that transport the visitor to related sites.
Dynamic billboards: A step up from the static billboard is the dynamic billboard—a page that needs frequent updating because an enterprise's prices, services or products change often. Again, you can construct it yourself, or if the changes are frequent and extensive, you may want to hire an Internet consultant. Some economy-minded enterprises even engage a Web-savvy student at a local college (or even a high school) for the task.
For both static and dynamic billboards, consider adding a site on the Web page where customers or prospects can respond to your display with e-mail questions or comments. In addition, you probably want a way to acknowledge those messages immediately with an automatic but personal-looking e-mail thank you note. Most Internet providers can provide such a feature with what's called an autoresponder service, for about $10 a month.
Exhibit 2: Microsoft's Financial Page
Microsoft posts its financial results on the Web.
Database site: If you have huge amounts of information on your site or it's complex or changes frequently (real-time inventory status, say), you probably want to link it to your organization's database. SoftSearch, a software database (see exhibit 3) invites customers to search its massive index of 110,000 programs.
With a database link, anyone—from a salesperson on a sales call to a major industrial customer—can tap into your Web site with a password, link to the database and immediately discern whether the needed product is available. If you have the right accounting software, when the Internet sale is consummated, the transaction information automatically can plug into the accounting system.
However, not all databases or accounting software applications are Internet compliant, so if you decide to offer this feature, check with the vendor of your current applications. You may have to switch programs.
Virtual stores: This is a more complex design. Like amazon.com, a virtual store is a place where pictures of products can be displayed, and detailed information about them may be only a click away. If customers want to place an order, all they do is provide either a password (if they have an account with the business) or credit card and shipping information, and— click— the order is processed.
FIND IT ON THE NET
Unless you're particularly Internet savvy, setting up and running a virtual store is not a do-it-yourself project. Nor is it a project you want to farm out to a college student. For this kind of service, turn to an organization that specializes in setting up and maintaining virtual stores. There are many such services and you can easily find them on the Internet.
Two popular ones are MerchandiZer ( www.merchandizer.com ) or the Yahoo Store ( http://store.yahoo.com ). For an idea of what's generally available from contractors that build and maintain sites for customers, go to Yahoo's shopping site at http://shopping.yahoo.com (see exhibit 4). Yahoo provides all the necessary tools and there is no software to install. Since the entire site is maintained on the Yahoo computer you don't have to upgrade your own hardware. The site can have your own URL (address)—such as " www.yourname.com "—or you can use " www.stores.yahoo.com/yourname ."
Using the latter URL has a major advantage: The www.stores.yahoo.com address is, in fact, a virtual shopping mall, with nearly 381,000 products (see exhibit 4, page 69). You might worry that your product or service would get lost because the site draws so much traffic and contains so much potential competition. Yahoo solves that problem by including an easy-to-use and speedy search engine so prospects can locate you or your product with a few mouse clicks.
Exhibit 3: Searching Via a Database
Tap into this Web site to search a 110,000-name database.
Yahoo doesn't charge a start-up fee for the service. Instead, it has a monthly maintenance fee. If your site contains up to 50 items, the fee is $100 a month; a site containing 1,000 items costs $300 a month. A great advantage for those who are just starting out and feeling their way with e-commerce is that they can cancel whenever they want, either to find a new vendor or to upgrade their marketing plans.
With the Yahoo software you actually create the virtual store yourself, entering such information as the names, prices and descriptions of the items you want to sell. It takes less than a minute to add a new item, and an image can be plugged onto a page with a single click.
Credit-card orders are accepted securely, using an industry-standard encryption program that relieves most shoppers' security concerns. You can retrieve orders over the Web via Yahoo's server or, if you wish, they can be faxed to you. In addition, you may want to have your site carry the WebTrust imprimatur to alleviate any customer concern about its legitimacy.
If you want to see how other companies use the Yahoo Store, check out the following enterprises at www.store.yahoo.com : Ben & Jerry's, Egghead and FAO Schwarz.
If you enter a phrase such as "design a web page" in Yahoo's search engine or another search engine on the Net, you will get a list of vendors, consultants, books and magazine articles that will help you develop a site. Such sources are especially helpful if you want a Web design that's more sophisticated than Yahoo offers.
Following is a general pricing guide for setting up an e-commerce site and then hosting it. Competition for Web design and maintenance services is very keen, so it's worth shopping around to get the best combination of price and service:
When you're ready to get into e-commerce, one of your immediate decisions is to determine how much disk storage space your site will need or data-transfer volume it will generate. These two variables will determine the cost of anything but the most simple site and, in fact, are the two variables almost impossible to forecast. You need flexibility: room to grow and change your plans. For that reason, resist signing a long-term contract with a host and insist on a flexible arrangement. That shouldn't be too difficult because it's a buyer's market. Shop around to get a deal you're comfortable with.
Most Web hosts provide detailed reports on who and how many visitors came to your site. Some hosts tell you only the number of "hits"—that is, how many individuals viewed the page. Such information is interesting but not particularly useful. However, if you like your host's major services and its prices and still want more detailed information—such as what visitors look at once they arrive at your site—you can get that information yourself by installing a $300 software program called WebTrends ( www.webtrends.com ).
If you're going to accept credit-card orders, you must add software to process the transaction; in addition, you need an arrangement with a bank to clear those orders. Most hosts will install the processing software for a fee and help you arrange a bank relationship to clear the orders. Bank charges vary widely, but typically it's between 2% and 3% of the sale; in addition, processing fees are between 25 to 30 cents per order, plus a monthly fee of about $10.
Exhibit 4: Yahoo's Shopping Mall
Shop at the Yahoo Mall byclicking your mouse.
Timing: A typical simple site should take no more than a week to develop. A storefront site where visitors select products and place orders may take a few months—so plan ahead. Also, insist that the final product be both readable and identical in appearance when browsed with either Netscape Navigator or Internet Explorer, the two leading browser products. A developer may try to cut corners by constructing a site to work well with only one browser. Don't accept that—many of your graphics could be lost when visitors view the site with an alternate browser.
Promotion: Just because your site is on the Web, don't assume that the world will now beat a path to your door. You've got to do something to let prospects know you exist and where you are. The most effective way, aside from advertising in newspapers, magazines and company literature, is to be sure the leading search sites have you listed. If your host can't or won't undertake the effort to ensure your business is listed on these search sites, contact the search sites yourself and ask to be listed. The leading ones are AltaVista, Excite, HotBot, Infoseek, Lycos, Magellan, WebCrawler and Yahoo. You will have to negotiate the listing order—that is, what priority you are given when the search results are flashed on the screen—otherwise your site may end up at the bottom of a large search-result list.
The main weakness of many of the commercially hosted e-commerce solutions is lack of integration with accounting systems. To complete the business transaction once an order is placed, an accounting entry to record the sale must be made. To address this concern, some accounting software vendors are developing e-commerce systems that tie into e-commerce management systems such as Microsoft's Site Server for Commerce ( www.microsoft.com/siteserver/commerce ), IBM HomePage Creator for E-business ( www.ibm.com/hpc ), Netscape's CommerceXpert ( www.netscape.com ) and Pandesic Web Business ( www.pandesic.com ).
With properly integrated accounting software, all of the accounting transactions flow into the books as soon as an order is posted. In addition, accounting clerks can update prices, inventory information or other details, and the information will be accommodated automatically. One example of an application using Microsoft's technologies to integrate an electronic storefront with an accounting system is Dynamics Commerce from Great Plains.
Large organizations may want to do all the site development work themselves. There's a wide selection of software available to do that. Vendors can be searched on the Internet, and here's a list of the more popular ones:
n Cat@log ( www.catalogint.com )
n iCat Electronic Commerce Suite ( www.icatcorp.com )
n Intershop 3 Merchant Edition ( www.intershop.com )
n estro Commerce Suite ( www.bitsoftware.com )
n Net.Commerce Start ( www.ibm.com )
|For More Information|
|Places on the Internet to get more general information on e-commerce:|
THE FIRST STEP
If you're not familiar with the Internet, the thought of getting into-commerce may seem daunting. Many businesses are afraid to take he plunge, holding back until they investigate the subject in detail. That may be a wise move for other ventures, but the Web is a moving target—new technologies and new marketing methods appear almost daily. If you wait to get all the facts, you may feel stymied. Instead, take a bold step—but make it a simple step, such as creating a static billboard. Advance slowly from there. You will learn more by testing than by sitting back and studying the subject. You'll probably make mistakes, but they aren't likely to be very costly if you begin small; the experience will serve you well.
Once you browse around the Net, you'll find that many of your fears will ease. Just looking at the variety of sites will stimulate you to create ways to apply e-commerce to your organization.
If you're waiting for the Internet to "develop" before you join this fast-moving trend, you'll wait a long time. The Net is ever changing—and unpredictable. The longer you linger, the harder it will be to get started. So get going now—if only to experiment.