Getting Started #1

Your online Business.
What It Takes To Run An Online Store

We will discus here what you need to set up your on-line retail sales business.

You will be running a business and someone will need to work at the business every day. Once you get past the organizational set up, you will be concentrating on finding suppliers (venders). Locating ggod venders who will let you sell their products on line is a slow process (more on finding suppliers later). Once the vendors start sending you product information, the site-building can began. Followed by site launch, site promotion and then sales.

What It Takes To Run An Online Store.

There are some things needed by a brick & mortar retail store that you will not need, such as a storefront and maybe inventory. There are also things you need that are specific to an online store such as e-commerce software.

All Stores Need

1. A Business trade name

6. A phone system

2. An accounting system

7. A federal tax I.D. or S.S. number

3. A sales tax permit

8. A fax machine and fax number

4. A bank account

9. Some office supplies

5. A credit card merchant account

10.A [D.B.A.] (doing business as)

An Internet Store Needs

1. Internet access (high speed)

4. A flat bed scanner

2. An online credit card processor

5. A computer and modem

3. An ISP to host your web site

6. Web page design software

4. An 800 number

7. E-commerce software

Location

You can locate your business anywhere as long as you have access to the Internet. You do need to consider if your location allows you to work without interruption. And allows you to carry on a phone conversation without background noises.

E-commerce Software & Web Page Design Software

You will need the following software: A good e-commerce software (we use OS commerce and open source software http://www.oscommerce.com). OS commerce software takes some coding to get it where it looks good. You could start with Yahoo stores or one of the many E-commerce software programs available on the web. You might start your search by seeing who pay pal recommends.

An FTP program, (file transfer protocol) is used to transfer the web pages and files made by the non data base web-building program (such as front page) to the web-hosting server.

A graphics software package is used to change the size of and to add text to the images of the products you sell before you use them on your web pages (we use dream weaver).

Use might consider using service provider stores as an addition to your main stores web site. More, about this in the Web Site Basics section.

Trade Name

If you already have a business name that you are using ask the following questions about it. If you do not have a name yet use these questions as guidelines in choosing one.

1. Is it simple? Short?

5. Does it indicate what you do?

2. Is it easy to pronounce?

6. Does it have a negative connotation?

3. Is it easy to remember?

7. Is the name available on line as a ".com"?

4. Is it easy to spell?

A well-chosen name can help a business through word of mouth advertising. A customer has to be able to remember the name in order to find you again or to refer you site to another potential customer. We have two names that we use daily. Our online stores and Patiostore.com as our web site name. Both of the names answer the questions given above.

Key Point: Do not choose a name until you have chosen a product line to sell. You will want to pick a name appropriate to the products offered.

* We have out grown the patiostore.com name and operate under a dozen different web site URLs. We answer the phones "our on line stores".

Accounting System.

You will need a bookkeeping system. Any accounting system will do. For our main business we use a software package called Quick Books Available at most office supply stores. For one of our new businesses we use a software that we found on line for $19. If you are new to business accounting you could start with a book keeping service, as your time is better spent working on the web site. They are easily found in the yellow pages. You give them you expense receipts and check book once a month, along with your sales and cost of goods numbers they return your profit and loss statement along with any paper work need by the government entities. Cost is from $50 to $150 per month. You can wait until you get your first sale before hiring a book keeping service.

A D.B.A. (doing business as) & Federal Tax I.D. #

Your county court house will issue you a D.B.A. this is done in person and cost about $20. Take a picture I.D. with you. You need this to open a bank account and to fill out the IRS application for your federal tax ID number. Get these early on as you will be asked for them a lot. The IRS issues Federal tax ID numbers for free, simply fill out the form and send it in. See the IRS.gov web site.

A Phone & Fax Machine

You will need a two-line phone system at a minimum plus a fax line. You can wait until you launch your site to put a two line phone in. You can start with your home phone, but you will need a fax machine as most businesses fax information.

A Business Phone Number & 800 Number
& Fax Number

You can start with your home phone number and add a fax line; this is in addition to any computer lines. You will be giving out these numbers a lot so get them early on. They will nned to be on your business cards, E-mails, credit applications and the 800 number will be on the web site and customer E-mails. Use call notes, not an answering machine. If you are not in, you want to leave the caller with the impression of having reached your voice mail, not an answering machine. These are the basics if you wish to be considered professional and taken seriously.

A Bank Account & Credit Card Merchant Account

Your bank account needs to be in your company's name. Set this up early on as your credit card processor will want the bank account information and all business expenses should be paid by check or credit card. The bank will need a copy of your D.B.A and your federal tax I.D. Number (free from the IRS) in order to open your account. Get the lowest cost account the bank offers as it will be a while before you have much activity.

Choose a bank that can set you up to take credit card and electronic check payments.
Get all the information and approvals now so you are ready to take credit card payments when the time comes. The banks sales person will walk you through the process. You will need a credit card machine, rent it do not lease it. Be sure the sales person understands you do online sales. Start with your bank, then after you have been in business a while and have a track record shop around for better discount rates.

Internet Access (high speed)

You will be using the web a lot, so get a fast Internet connection, ISDN, DSL or Cable. Cost is around $39 per month and worth the money as a time saver. This is different from your web site server, which will reside at your ISP.

A Computer & Modem & A Flat Bed Scanner

You want a fast computer with a large hard drive (80 gigs min.), a lot of ram memory, 1000 gigs of ram, a graphics card, and a 17" monitor. You can start with less but it is slow and hard on the eyes after many hours of working on the computer. You modem needs to be compatible with your Internet connection. You need a good flat bed scanner, as you will be scanning the pictures of the merchandise from the brochures that the manufactures sends you. You will also need a graphics software package to use to manipulate the scanned pictures. You will need a printer to print the customer's invoices with.

Online Credit Card Security

You will need credit card security. Available from Verisign.com or godaddy, Cost is $150 to $350 per year. These service companies use encryption to protect your customer's credit card information so that it is secure. Your customers expect it and your credit card service provider will require it.

An ISP To Host Your Web Site

Your ISP is an important part of your business. Be sure you understand the rate charged per month to host your web site. To start with you want a basic package, you can add services if and when you need them. Your goal is to keep your cost down until sales warrant more expense. Ask your ISP to park your domain name until you are ready to began paying for full service.

You need to own your web site. I will go into more about why later, but for now suffice it to say that you need to own the site and the software. Services were you log on and build a site are fine as an addition to the site you own. Here is one reason, say you spend two months building a site and the sites hoster raises the rates, or changes the policies. Do you start over? Lose profits while you redo everything somewhere else? Hosting cost first year about $60 to $90 per month, cost to park the domain is minimal

A Sales Tax Permit

You will need a sales tax permit for your state. Available form the state comptroller of public accounts. Try looking on the state web site. Most manufactures will ask for your re-sale tax number. Expect to have to put up a deposit. Tell the tax department that you are an online store and most of your sales ship out of state but that you will make a few instate sales. The tax office can provide you with information on collecting taxes for your state.

Now lets look at why people buy on line?

Getting shoppers that buy #2

Getting Started with E-commerce

Why People Buy Online & Getting shoppers that buy

Why people shop on line?

Creating an online store that gets orders at a price that allows for a profit, requires an understanding of why people shop online, how they shop online, how they search the web and what motivates them to buy. The success of your on line venture depends on how well your web site addresses the motivating factors that convert site visitors into buyers. Unless your site sells advertising space, your goal should be to attract buyers to your web site, not just the most visitors.

This page along with the pages that follow on choosing what products to sell and the section on product questions, will hopefully get you to thinking of how a customer who has decided what they want to buy will locate your web site and place an order with you.

In Search of Product Information

Customers go online to gather information about the products they are thinking of buying. Most web sites get hundreds of hits for each order that comes in. In addition to looking for product information people will visit your site, to help them solve a problem, when they are looking for parts, and to get help with warranty issues on the products they already own. You can expect to answer lots of E-mails and assist customers with information request as well as assisting with warranty information. All of these are part of the service you will be expected to provide. Think of this as cheap advertising and low cost market research. The customer feed back you gain from providing this free service to the public will allow you to grow and improve your web site. The customers, with their questions and problems present the seeds of opportunity.

To Save Money

The most often sited reason to shop on line is to save money. This is the primary motivating factor and the one, which will have the biggest effect on what you do with your site and how you conduct your web-based business. Online stores often have less to operating overhead cost then brick and mortar stores. This fact allows you to sell for less while making a respectable profit the customer will expect to save 20% or more. If the customer feels they are saving enough, they will wait for delivery. If the total dollar of savings is large enough they will even wait until you are available to take the order by phone. Think about it this way, a savings of 20% on a $20 item is fine if the customer can easily place the order on line without delay. If the savings is 20% on a $200 item, you will motivate a customer to call and deal with you over the phone, if they can reach you. If no one answers the phone you just might loose the customer to another web site with better customer service availability. If the savings is 20% of a $2,000 item, you will motivate the customer to call you during normal business hours. If the customer is trying to solve a problem that is frustrating them they will call you regardless of any savings.

Key Idea: The lower the price of the product, the more complete the on line product information has to be and the more streamlined and automated the order process has to be. The higher the dollar savings is, the more likely the customer will call the order in instead of ordering on line and the better informed about product features and benefits you and your staff have to be.

Saving money an important reason people choose to shop on line but not the only motivating factor. There will always be someone cheaper then you are. It is your job to put all the factors together in a concise package that gets the order. These motivating factors are, savings, product selection,, product quality, warranty, ease of use, convenience and trust. The customer is just as concerned about being cheated as they are about saving money. You must be believable, appear creditable and fare. You should ask yourself, if what you are doing is fair to you, to your company and to the customer? If you answer this question with a yes every time you make a decision, your credibility or seemingly lack there of will not hamper your success. Keep in mind that your offer must be perceived as fair, as well as being fair. For example, a savings of 75% is not very believable, your customer will be thinking, what's the catch? Having artificially high-suggested retail prices in order to offer a huge savings is not conducive to instilling consumer confidence. We will cover pricing and how to use it to get the consumer to buy in the pricing section. The more motivating factors, besides price that your products and web site convey, the higher your prices and profits can be.

Convenience

People shop on line for convenience. The Internet allows people to shop 24 hours a day from anywhere they can get connected. For some products, convenience may be more important then saving money. 1-800 Flowers is a good example of this. The Internet makes it convenient for a grand mother to order a gift and have it sent across country for a grand child's birthday. Convenience for some people means easy. The word easy is an important KEY to your online success. What does easy means as it relates to your online store? The next time you are on a web site and leave frustrated, chances are the web site owner violated the idea of user friendly. User friendly (easier) to the consumer means how many clicks does it take them to get to what they want to know, how intuitive is the site to navigate, and how easy is it to place an order. Web sites that violate the fundamental rules lose visitors and they do not in most cases even know it. After six clicks you began to loose the shopper.

I Can Not Find IT

Customers shop online because they cannot find what they want locally. You as an online merchant have a big advantage in that you can offer a companies complete product line. You are not hampered by the cost of carrying inventory. A couple of things can happen, a customer comes to your web site and finds that the item they are looking for is available in three models and four colors that they did not know about. Or they find a similar item for less on your web site then what the local store had available. Either way you have a chance of making the sale.

Companies will come to your web site looking for products that they cannot find locally. For example, customers living in small towns do not have a large selection of stores to shop at. People will come to the web looking for products to solve specific problems. None of these shoppers will have price as their primary motivation. The more your products fit these needs, the higher your profit margins can be.

To Solve A Problem

Some users of the Internet come looking to solve a problem. For example, if you sell pool supplies and a customer came to your site in search of pool care and maintenance information, you could possible sell that customer some supplies. If your product lines lend themselves to this type of selling you have another way to attract buyers. In the case of the pool store example, an online pool store should have a section on pool care and pool problem solving.

KEY IDEA: Information pages should be flat HTML coded pages, with a link back to your e-commerce pages. The flat HTML information or help pages should be promoted to search engines separately from the web site. That will make them doorway pages in to your web site. The more doorways into your web store the better your chances of attracting shoppers.

Next?Â

With this information in mind it is time to consider what to sell.
Choosing What To Sell

"It is the invincible spirit that wins success" Jim Glasgow

Choosing What To Sell #3

Getting Started with E-commerce

Choosing What To Sell
& Locating The Manufactures

The success of you online venture begins when you decide what you are going to sell. If you already have a product in mind, use this section to refine your Internet marketing plan. If you are looking for a product line to sell, use this section to walk yourself through the selection process.

Almost any item sold in brick and mortar stores can be sold using a web-based store. Some items or product lines lend themselves more easily to remote sales then others. Items that are traditionally sold as installed items are a little more difficult to market online. Some of these items are, wood burning stoves, fencing supplies and billiard tables, as the customer usually request installation. There will be fewer buyers for this type of item on line, but there will also be fewer sellers. Some items such as computer products, which people buy based on price and performance, are naturals for online sales.

We are going to review what to consider when choosing a product line or category for inclusion on your web site. Your choice of product lines to sell will greatly affect the ease of running your business, the profit margins that you will be able to get, the amount of inventory you will need to carry and the types of promotion that will be needed to attract customers. As you read through this section you should began to get a clearer understanding of how the products you choose to offer, will effect the way your e-commerce store will need to operate.

Changing Your ThinkingÂ

Many on line ventures fail because the owners choose a product to sell, put it online and expect the customers to beat a path to their door. I am going to assume that you want to build a viable, growing, online retail store that can make some real money. And that may well require you to alter your way of thinking about on line shopping.

You must first decide that you want to be an online merchant and that you will provide all the service and meet the requirements that the customers and manufactures will demand. You will then need to choose products that can improve your chances for success.

Each product category will have entrenched players who have methods of doing business set up to protect the existing distribution system. Some of these obstacles will be, exclusive dealerships, minimum purchases, large opening orders, display requirements, protected territory, multiple pricing tiers and more. All of these are designed to protect the manufactures, the existing retail stores and the price levels at which products are offered. Your job will be to turn as many negative barriers to entry, into pluses for your new venture.

So as you can see, selecting a product category can effect the success of your venture. We will discuss some of the obstacles and how to possibly turn them into advantages. Most importantly we want you to start thinking of the barriers to entry as positives, when you over come the barriers they will also help protect your venture from new competitors, and help the consumers find you.

80/20 Rule!Â

One of the best ways to get customers to buy from you is by offering the largest selection of products. Once you are set up to sell a manufactures' product line you can offer the complete product line, as you are not actually buying the products until the items are sold. Approximately 80% of your sales will come from 20% of the manufactures product offerings. If you show the manufactures complete catalog you do not need to guess as to which is the correct 20%.

When I was in the fireworks sales business I had a 32-foot long road side sales stand that was well stocked. My competitor across the street had a 64' long stand with less product selection then we offered. He had simply duplicated the products on displayed, every 8' along the 64' length of his stand. He always had more customers then we did, even though he was higher priced with fewer offerings. People drove to the competitors stand instead of ours because it looked larger and appeared to offer more selection. Solution: We built two more 32' stands, making our stand a total of 96' in length, making us the larger store. Within two selling seasons our competitor moved away.

When your customer goes to your web site looking for a product and finds a large selection of sizes, colors, and styles you have a better chance of getting the order. A local store will be limited by the high cost of carrying the inventory and will try to pick the best sellers in a product line. You can make a fine living on the 20% of the people the local guy missed.

What do you like?

It helps to sell something you like or at least are knowledgeable about. For example an avid golfer might open an online pro-shop or a fisherman, a tackle shop. A biologist might sell lab equipment and lab supplies. The person's knowledge in their respected area of experience will give them the edge over the competition. If you do not have a field that you are already familiar with, at least choose something you like. You are more likely to spend the time learning about the products you offer if they are in your area of interest.

What Price Products?Â

Higher priced products have several advantages over lower priced products when selling on line.

1. The higher priced items allow for more flexibility when making pricing decisions. This is because you have more dollars to work with. For example, when offering free shipping higher prices means the cost of the shipping will be a smaller percentage of the selling price. If a $299. item cost $25 to ship your shipping cost is 9% of the sales price. If a $29.00 item cost $8 to ship, your shipping cost is 28% of the selling price.

2. The customer's savings from discounts you offer on higher priced items will be of a larger dollar amount and is more likely to encourage the customer to buy from you.

For example: If you offer 20% off an $800 item, the savings is $160 and most customers will consider that a nice savings. For that amount of savings they just might call you during your normal business hours and wait for delivery. If you offer 20% off of a $29 item, the dollar savings is $5.80 and the customer may take it if they can order easily, any time of the day or night and get the product shipped without delay.

3. Higher priced products tend to be of higher quality and that means less returns. Less returns means less customer service. Less customer service means less operating expense.

4. Customers seeking higher priced products tend to know what they want. They come to the web for a better selection from which to choose and to get more for their money, not necessarily to spend less money. They are just apt to take the savings and buy additional items or accessories. Or they might trade up to a higher priced item with more features.

5. The number of customers you need to attract to reach your sales goals is less with a larger average sales ticket.

6. Customers who buy higher priced items tend to have higher credit limits on their credit cards and the money is of less important to them. By that I mean, if you sell a customer who is financially fairly well off a product, and you need to correct an issue with the product, they will more then likely be willing to work with you. The reason for this is that well off people do not worry as much about the money. They expect quality and demand service, but they will allow you time to correct the problem. Someone who lives from pay check to pay check can not afford to loose any amount of money and will worry about getting taken advantage of, they tend to get upset quicker and make unreasonable demands. This is not always the case, but as a general rule, over the past 35 years I have found this to be the case more often then not.

Brand Names

Brand name products have several advantages that benefit you as a web based merchant. By brand names I mean, names that are well known in an industry, not necessarily well known names in general. For example, Kettler manufacturing makes very high quality tricycles, a shopper looking for a high quality tricycle will come across the name as they look around at the better toy stores. The shopper may not have known the brand name when they started looking, but learn of it as they shopped. You can learn the brand names in any industry by asking the manufactures reps, reading the trade magazines, going to the trade shows and asking store owners. Here are the advantages to offering name brand items.

1. Key Idea! Customers search by brand names. Shoppers, who have decided what they want to buy, search the web by typing in the brand name of the product they have chosen. Shoppers who are just beginning their search or are undecided will type in a generic name. For example, a shopper could type in tricycle in a search engine, or they could type in Kettler tricycles. The results of the two searches will be very different. You can use this to your advantage.

2. Name brand manufactures are experienced shippers. They will get lower shipping rates and have less freight damages. Both of which save you time and money.

3. Name brand manufactures will be experienced in handling customer service issues, spare parts issues and they will have good sales literature for you to work with.

4. Because name brand products tend to be of higher quality you will have fewer customer returns.

5. Name brand products allow the customer to more easily determine the savings they get when doing business with you. The customer will be able to get a price quote locally and know that the name brand items quality will be the same from your on line store.

6. With name brands you need not offer money back guarantees and there is less chance of the customer requesting one.

7. Name brand products are often sold through authorized dealers. This will make it more difficult in getting the manufactures to sell to you, but it is worth the effort. The harder it is for you to get a product line to sell, the fewer the number of competitors and the higher the profit margins. You will have to be persistent and it can take several years to accumulate the better name brand products. The manufactures will more then likely put restrictions on you such as, no prices shown on your web site, or minimum advertised prices.

With this many benefits to selling brand name products it is worth the effort.

Low Priced ItemsÂ

Low priced items require you to sell more units and handle more transactions to reach profitability. There is nothing wrong with this, but you will want to make the order process as automated as possible and you will want to be sure that you have a way to handle the shipment of lots of smaller orders. It is common for manufactures to have a drop ship fee for smaller orders. Be sure you know what the fees are and how the fees will effect your pricing, competitiveness and your profit margins.

Customers who buy small items expect quick delivery. Be sure the shipment of items will occur quickly. It is not unusual for customers to order one day and expect shipment confirmation and tracking numbers the next day.

Try to group lower priced items together so that the customer's average sales ticket is higher. For example, if you sell doll-houses, price the house higher if purchased alone and make a packaged price deal if they buy furniture with the house. That will lower the shipping cost and the drop ship fee cost as a percentage of the sale price.

What Product Lines?Â

By now you are beginning to get an idea of how the product lines you choose will effect your daily business operations. Still not sure of what to sell?

Get out the yellow pages and start down the list of categories in the index. Choose items that will appeal to consumer's rather then industrial items. Industrial products require a slightly different operation as the products are normally sold on open account terms. That will require access to more money to finance the accounts receivable. We have tried this yellow page exercise several times and have not gotten past "G" yet with out finding a line of products to sell. The last one we choose was greenhouses and that site will do very well this, it's third year. Try it; it will help focus your thinking.

Add On SalesÂ

Add on sales of related items can add greatly to your profitability. For example, if you sold a person a baby bed they would also need a mobile, bed sheets, pillow cases, pillows, bumper pads etc. Add on items can be sold at higher profit margins then the main item as the customer has already made the buying decision. Look for companies that offer complete product lines so that all the items can be shipped together. This will reduce your cost of handling an order and reduce shipping expenses.

Locating Products To SellÂ

Your search for products should be an on going process. Once you decide what product categories or product lines you want to offer, you will need to contact the manufactures or their representatives. The following methods will help you track down the manufactures.

Each industry has methods of distributing their products that have been in use for years. You will need to work with in the system that is in place. You will find this to be a slow process that at times will be frustrating. One of the most common scenarios you will run across is this. You will contact the manufacture, they will then forward your request to their manufactures representative that is assigned to your area of the country, and they will contact you at their convenience. What usually happens is, nothing. This is because, reps (manufactures representatives) are paid on commission, and they spend most of their time taking care of the existing accounts that pay their living. Taking care of new e-stores is not the best use of their time. On the other hand you represent the new market of the future and they know it. You need to keep contacting the manufacture until you get the desired response, this will take time, stay at it, and it does work. We have found that reps have been a big help to our company by bringing us new lines to sell and convincing the manufactures that e-commerce can be good for everyone. I have had manufactures say no to selling to us and the reps got the deal approved, and I have had the reverse happen. The main point is that you have to be the squeaky wheel that gets the grease. Ask them, and then ask them again, until you get that yes. Remember the harder it is to get a product line to sell, the less competition there will be.

1. Most industries have trade magazines published monthly. You can locate them by search the web, checking the research department of your local library, and by asking for old trade magazines from companies that sell the items you are interested in. Most trade mag. subscriptions are free. The manufactures that service that industry will advertise in the trade magazines.

Diamond Publications puts out some trade magazines, they can be reached at 818-400-6920, and they are but one source, keep looking.

2. Visit real world stores that sell the types of items you are interested in and pick up the product brochures. You can get the manufactures address, phone or web site information from the brochures and product information tags.

3. Search the web for trade associations. Write or call them for a list of manufactures or their trade magazine. They may also publish a buyers guide or trade show guide.
See helpful links for a Good place to locate trade magazines; the magazines are essential to helping you locate products to offer.

4. Key Idea: Find out by asking the magazine or association if they hold an industry trade show. These are usually held annually and are the best method of finding manufactures and products to sell. Sumner Communications, publishes a trade show directory they can be reached at 203-748-2050 they are but one source, keep looking.

5. Visit the merchandise trade marts located in major cities like, Atlanta, Dallas, Chicago, New York, Miami, LA and San Francisco. There are others such as the furniture market of High Point, NC. and Las Vegas. Manufactures reps have show rooms at the merchandise marts in these cities. Just barge right in and tell them you are looking for items for your web sites.

6. Ask everyone you talk to for any ideas on locating good product lines. People love to help.

7. Once you are talking to the manufactures reps, ask them to recommend any other product lines that they have.

Next?

After you have located the products you are interested in, you will need to determine if the items will offer high enough returns to allow you to reach your sales and profit goals.

"Once you get past your inner fear of failing, it becomes exciting"
Jim Glasgow

Product Consideration Questions. #4

Product Questions.Â

After you have chosen a product category you are interested in, you need to determine if the items you are considering will allow you a high enough profit margin and sales volume to reach your sales and profit goals. The following questions will help you decide what items to include in your product offerings.

Keep in mind that the product category(s) that you choose to offer for sale and the items you choose to offer will have a large effect on how you will operate your businesses. Some of the areas of your business that will be affected by these decisions are.

1. The level of customer service you will need to provide
2. The amount of individual sales help each customer will need
3. The level of returns
4. The number of customers needed to reach a certain sales level
5. Installation arrangements needed if any
6. Warranty claims
7. Terms of the sales
8. Ease or difficulty in getting good search engine placement
5. Inventory levels needed
9. Capital requirements

Diversification.Â

In our business we offer products from several product categories. We do this to diversify our sales income and to allow for the seasonal sales fluctuation of some of our product lines. If one of our web site's sales are down or one of the web sites takes longer then projected to become profitable, we can still have sales and cover our operating expenses.

How Is The Product Sold In The Real World?Â

If the products you want to sell are sold by authorized dealers it will be harder to get the manufactures to allow you to sell their products as an on line. On the other hand the product lines you do get an authorized dealership on will offer higher profit margins with fewer competitors.

If the products are normally sold in discount stores you will need to look closely at the wholesale cost to see if the profit margins are large enough to allow you to make a profit. The pricing section of this web site will help you with the math.

If the items are readily available to lots of stores and the wholesalers make it easy to get into the business of selling their products, your chances of success are very limited. The reason for this is that you will not have a competitive advantage. For example, I knew a lady selling ceramic novelties (nick knacks) she was in and out of business in six months. This was because, the same thing was offered by thousands of online stores, she had no competitive advantage. Another retailer I know sells ceramic figurines that his company designs and has them made exclusively for him. He does very well because he has an exclusive product line.

What Is The Typical Selling Price?Â

After you have selected a product category. Compare the price the merchandise sells for in your local stores against your wholesale cost. The difference between the two has to allow you enough dollars spread to offer the buyer a discount (savings) and still make a reasonable profit. Here are two examples to illustrate the point. The pricing section will go into detail on pricing products.

Item:
9' Market Umbrella
Price $330.00
Cost -$165.00
Gross Profit $165.00
Less 15% Discount -$ 49.00
Subtotal $116.00
Shipping-$ 26.00
Profit $ 90.00
Margin 27%

Item:
Chop Saw
Price 159.00
Cost -$103.00
Gross Profit $ 56.00
Less 15% Discount -$Â 24.00
Subtotal $ 32.00
Shipping--$ 12.00
Profit $ 20.00
Margin  12%

The market umbrella in our example, allows a high enough margin to let you offer the customer a discount and free shipping to induce them to buy from you. Where as the saws margin is too low if free shipping is included and only marginally acceptable with the customer paying for shipping.

KEY IDEA: What you pay for the product is not as important as the spread between a normal real world selling price and your cost. In most cases you will not be buying the product until it has been sold, so you are not tying up any money in inventory. What you are looking for is enough spread between the retail price and the cost to you, so that you can offer a discount (savings) to the customer and be able to offer low cost or free shipping and still make a minimum 25% or more return.

Is The Item Drop Shippable?Â

In an idea world, all the items you sell would be drop shipped by the manufacture to your customers and you would never have any inventory. Reality is that some manufactures will not drop ship and you will need to receive and reship the orders. Some manufactures will not break their case quantities and you will need to buy more then you need. Some manufactures will have a minimum order size. All of these types of requirements can be overcome or worked around. Just make sure you know what the supplier will and will not do, what effect that has on your cost, and weather the items cost/retail spread will accomplish your goal. The less inventory you have to warehouse the better for your bottom line profit.

Is The Item Of High Quality?Â

Your customers will be all over the United States and the world. The last thing you need is quality problems. Ask your venders what their procedures are concerning warranty claims and customer service. Reassure your suppliers that you are customer service oriented and that you will handle any problems that may arise. Do not sell items unless the quality is very good. Poor quality equals, bad customer relations, returns, extra shipping cost, and credit card charge backs.

How Does The Item Fit Into Your Product Line?Â

Not all items you offer have to be in the same category or family. Keep in mind if you offer dissimilar items that it will require another department and another group of customers to deal with. The more easily a product fits into your web sites main product category the easier it will be to administer the web site, the sales process and the web sites promotion.

What Is The Demand?Â

This question is less important online then in a brick and mortar store serving a local limited market. Yet the demand question does give some measure of how the item will sell. If the item has a high demand and lack of distribution you may not have to discount it much. If the product has low demand on a local basis, but you feel by servicing a national market you can sell enough to make it worth the effort you may have a winner. If the item is readily available everywhere, the only reason anyone will buy from your online is a low price.

Is The Product Custom Or Stock?Â

Some products lend themselves to special orders. These products tend to be more expensive, drop shippable, and more profitable. These will be products were the customer gets to choose colosr, fabrics, finishes and or options. The buyers tend to be more willing to wait for delivery as long as they can get what they want. Seek out this type of item as they have many benefits to the online retailer. Some of these benefits are, no inventory, higher profit margins, fewer returns, wealthier buyers, less competition etc. You will want to deal only with experienced manufactures and known lead times. Manufactures who miss their ship-by dates will cause you a lot of grief with customers.

Who Are The Buyers?Â

When considering a product line, you want to know who the buyers are. Most products are sold to the general public and are no problem. Some customer groups can be more defined and the potential opportunities and problems can be more easily anticipated.

Here are a few examples to get your thinking started.

1. Cue sticks are sold mostly to young males. Young males tend to have less money to spend. This product line will have more of the following problems then other product lines. Instances of stolen credit cards, more product returns, and lower profit margins.

2. Office furniture items are sold mostly to businesses and that will require you to offer open account terms and run credit checks on the buyers. Your ability to carry the resulting accounts receivables will greatly affect your sales volume.

3. Toy sales are for the most part seasonal, with most of the sales in the fourth quarter of the year. This means that you will need to deal with a rush of orders over a short time frame and deal with upset customers if you miss the ship dates.

What Are The Barrier To Selling This Product?Â

With some products you will have a hard time getting the manufactures to sell to you if you sell online. They may have concerns such as customer service, warranty claims, price erosion, and loss of their local dealer network. From their point of view they have a factory to run and an existing distribution channel to protect. You may have to convince them that you are not going to butcher the current pricing structure, that you will and can offer customer service and that you will handle any customer problems that may arise. You will need to convince them that you are an asset that will bring extra sales volume to their business.

How Will The Customer Buy This Item, Call or Online?Â

If you sell items that you make only 25% on, and the customers by on line, and you have it drop shipped, it just might be a good product for you. If on the other hand, the customers calls the orders in, you will need a margin of 33% to cover the cost of handling the phone calls.

Here's a general rule to follow, items selling for under $100 use a 40% minimum mark up (total cost to you x 1.67 = 40% margin).

Higher priced items can be profitable at margins in the 25% to 35% range, as you will have fewer customers to deal with and less cost per sale. This may not seem to important at the moment but payroll cost and shipping cost will become your biggest issues.

Questions To Ask Manufactures.Â

After you have contacted the manufacture and received their literature, you will need answers to the following questions.

1. Will they drop ship direct to your customers?
2. Is there a drop ship fee?
3. How do they ship, truck, UPS etc.?
4. What is the lead time?
5. What are the terms?
6. What are their pricing policies?
7. What are their shipping policies and cost?
8. How are warranties handled?
9. Do they have suggested or minimum advertised retail prices?
10. How do they prefer the customer service to be handled?
11. Do they have any suggestions or recommendations?
12. Are images and product information available on disc.

The Competition?Â

" Know thy competition". This has been a saying in business for as long as I can remember. BUT! I do not worry about the competition.

I look at it this way, you can worry about the competition, or you can be the competition.

The web is new; being only ten years young and the shake out of the early is underway. So, for the next few years the competitors, the ones who make it, are still being determined by the market place. You, if you run your business well, study, learn, and grow your business, can become the competition.

Each morning I look in the mirror and say.

" I am the competition and everyone is trying to catch me".

At the beginning of each year I formulate a vague plan of where we need to be twelve months from now. At the end of each year I ask myself.

"Are we better prepared for the coming year then we were the year before"?

If I have done my job, the answer will be yes, at that point, we are the competition. Your job is to become the competition, you begin when you choose the product categories that you will offer.

Next?Â

Your next step after choosing what products lines you will sell, is to set the retail pricing strategies.

"Take a firm resolution, that barriers will be surmounted" Jim Glasgow

Pricing Your Products Offerings #5

Pricing Your Products Offerings

PricingÂ

The Internet has had a profound effect on the pricing of merchandise. Early on, the Internet attracted in-experienced people who simply did not know how to price the items they were offering. They lost money because of prices being too low to cover cost. Others were hopeful that the sales volume would be high enough to allow them to profit with low prices. Still others thought that if they got large enough, fast enough, they would own the market place and then could raise prices. Most of these companies are now gone and reality has began to prevail.

A merchant must sell their products at a high enough price to allow them to cover the operating expenses and still make a reasonable profit. Your online store will have fewer expenses then a storefront operation. You will, none-the-less, have some overhead expense and if you plan on growing the business, the overhead will increase. If you base your pricing on the fact that in the beginning there is no rent or employees to pay, what will you do when employees are needed? I shall propose math formulas that will allow you to make a profit with relatively low sales volumes. Then as you grow your sales you will be able to afford the increasing overhead cost.

We touched on pricing elsewhere in this book. However, we will be covering the basic concepts here, because pricing is vital to your success. You will have to make a choice, offer the lowest prices, or offer fair prices and great service. You cannot do both for very long. If you plan on staying in business for a long time, quality goods, fair prices and great service will serve you and your customers much better then low prices.

You are not setting the prices! The industry you are in and the Internet is setting the prices. Here is the reason this is true. Your customer is buying from you to save money or to get more for their money (This is not always true as some times they can not find the item locally). If they order from you it is most likely because you are at a lower price then their local retail store. Your job is to find out what the local stores are selling the products for and buy the products cheap enough so that you can sell the item at a price that will allow the customer a savings and still allow you to make your needed profit margin. How do you do that?

You check with the manufacture to get your cost, you estimate the freight cost to the customer (I average the shipping cost to three cities, NY, Chicago and LA). You then check the local stores pricing. Then you set your prices at a level that will allow for the profit margins you need.

The question is will the product sell at that price? In most industries pricing practices are similar all across the country, the prices at your local store will be similar to other stores selling the same brand or item. The way you learn what price (mark-up) is common in your chosen industry is to visit stores to check prices and by asking the manufactures and representitive what markups are traditionally used in your industry group. Additionally, you search the web, but only for a general feeling of what the competition is doing. Do not assume the competition is correct, or that there is too much competition. Look to see what their selection is, what brands they are offering, what can you do better? Can you offer more selection? more customer help?, different brand names? A more user friendly and informative web site? and so on.

Retail TerminologyÂ

For our purposes here we will use markup from the selling price down. Thus a 50% markup is two times our cost. When we say mark up, we mean of the selling price.

Mark up: The difference between the selling price and your cost. For our purposes here we will determine mark up or margin from retail price down. For example; an item selling for $1.00 and costing $0.60 will have a profit margin or mark up of 40% ($1.00 - $0.60 divided by $1.00 = 40%)

Keystone: A mark up of 100% or double the cost of goods.

COG: Cost of goods, for our purposes here is. The cost of the item from the manufacture plus, freight to you, plus any drop ship fees, import duties, and other direct cost of the item such as crating. Note: Freight to the customer is included in the cost of goods if the customer is not paying the cost directly.

Expenses: Everything else is expenses.
Items such as general overhead, shipping pallet, packaging tape, shipping labels, etc.

Gross profit: Profit before expense are deducted.

Net Profit: Profit after expenses are deducted but before income tax.

Discount: The dollar amount or % that is deducted from the selling price.

Retail Math example:

The math is as follow: Cost + Freight + Cost of Goods Sold (COG).
Mark up % is figured as follows: The selling price less (-) COG, divided by the selling price, = mark up percentage (%).

Examples:

Cost Of Goods
Item Cost $100
Plus Freight In + $7 =
Total Cost $107 (COG)

Gross mark up percent (% Profit Margin)
Selling Price $200
Less Discount - $40 (20% customer savings) =
Sale Price $160
Less COG -$107 =
Gross profit dollars $53
Divided by sales price $160 =
Profit Margin 33%

Examples:Â

Price formula, for specialty products sold in specialty stores (for example a baby goods store, or hobby shop). This formula will give you a place to start.
COG Times 2 = Retail Selling Price

Example: An item with a COG of $130.00
Retail 2 X cost $130.00 = $260.00
Less discount 15% - $ 39.00 =
Sell for $221.00
Less COG - $130.00 =
Gross margin $ 91.00
Less shipping cost - $ 35.00
Profit $ 56.00 (25.3%Â margin)

If the item is light weight and compact so that shipping cost is only $12 then your profit margin would increase to 35.7%. As you can see shipping cost can have a huge impact on your margins.

Example:
Here is the same example but with a charge to the customer of 5% for freight.

An item with a COG of $130.00
Retail 2 x $130.00 cost = $260.00
Less discount 15% - $ 39.00
Sold for $221.00
Add 5% shipping + $Â 11.00
Customer Pays $232.00
Less COG - $130.00
Gross margin $102.00 (41%)
Less shipping cost - $ 35.00 (actual freight cost)Â
Profit $ 67.00 (29.% margin )Â ($67 divided by $232)

There is no easy answer of how to price products, I recommend you start with a doubling of your cost and then use discounts to adjust the price based on how much the customer spends. If they spend less then $400 dollars use a lower discount then if they spend $1500 dollars or more. Some items are large and expensive to ship and you will need to quote the price plus shipping. Start with the suggestions here and adjust as your experience dictates.

Another method is to start with the prices the competition on line is using and figure your profit margins. If the margin after shipping is 30% or more, start there and adjust the sales price after a few sales are made and the actual cost can be determined.

Mark-Ups, Rules Of Thumb.Â

After all is said and done your goal is to reach a selling price and sales level that allows you to offer good service and still make a reasonable profit while growing your business.

Here are some rules of thumb to give you a starting place. Freight will affect your prices.
Expect freight to average 10% plus or minus a little over a month (this assumes you have some sales volume) keep within the #4 & #5 minimums shown below after shipping cost.

1. Name Brand Products Cost times two (keystone)

2. Non Name Brands 40% M.U. or more (cost X 1.67)

3. Services Three X cost

4. Minimum Gross Margin 33% of the selling price after Discounts
plus all shipping cost. (COG X 1.5 = 33%)

5. Large Ticket Items or large total sale 25% of the selling price after discounts

About Lowering Prices?Â

If you sell $1,000,000 at a 25% margin, you will have $250,000 from which to pay the bills and build your business, that is a reasonable number. If you sell forty product lines, each doing $25,000 per year, that is one million dollars. If you divide $1,000.000 buy 365 days, you need to sell $2,740 per day to reach one million in sales
.
What happens if you then lower your prices 10%? If you lower prices by 10% your $1,000,000 becomes $900,000 in sales. Your profit is now only $150,000 from which to pay the bills and build your business. You will need to increase your business by $600,000 just to get back to that $250,000 you had before you cut the prices by 10%. In other words you would need to increase your sales by 67% just to keep the same dollars of gross margin coming in. Any time you are considering lowering your prices remember this little exercise and consider the impact it will have on your bottom line. Below a 25% margin of profit you are you are taking big risk.

When Sales are Slow?Â

So what do you do when sales are slow? There is no easy answer. We recommend that you have a large selection of merchandise so as not to be dependent on one product or line. At least 70% of what you will offer online will not sell and some items will not take off for months. Your price and your profit margins should be the last thing you are willing to reduce. Try everything else first, before you lower that price. Here are some questions to ask and some examples to help illustrate that point.

Questions when sales are slow? "it" means item or category of items

1.Would a limited time special help?

7. Can you advertise or promote it?

2. Should you offer a free gift with it?

8. Should you lower the price?

3. Should you package it with another item?

9. Should we change brands?

4. Should the item be dropped?

10. What is the competition doing?

5. Is this a one time deal?

11. Is the Information i have accurate?

6. Is this a leader item that gets other sales?

12. What if I do nothing?

We offered a table tennis table on our web site selling at $640 with a 10% discount and free shipping. It was selling slowly and one of the national chains was offering a similar table at 40% less. We changed our pricing to $640 with a 20% Discount, plus 5 % shipping. The perceived value to the customer was 20% off the $640 or $128 saved, plus no sales tax. We knew the local stores do not stay in stock year round and we now had a slightly better table at very little additional cost.

Another example: A manufacture had stopped drop shipping his products at a very busy time of the year. This caused us extra shipping and handling expenses, as we had to ship first to us, then to the customer. We raised our prices 10% to protect our profit margins until we could re-calculate that companies entire product line. We then looked for a freight handling company who could reship from a closer location. In the mean time the new 10% increase protected are margins while we made new shipping arrangements.

In another case, we sell umbrella stands that are heavy and therefore expensive to ship. Our prices were too high due to the shipping cost. We solved the problem by having two prices, when the customer orders the umbrella stand with an umbrella and they get a 30% lower price on the stand then when they order the stand separately. We include a notice on the web site to explain the shipping cost problem and we always advice the umbrella customers to get the stand with the umbrella. We tripled our stand sales. The customers now understand why our prices are high and the phone sales people tell the potential customers to try locally first and if they cannot find what they need to please come back to us for the stand.

Remember every time you think or worry about the competition, go look in the mirror, someone else out there thinks you are the competition.

Disadvantages To Offering DiscountsÂ

Some customers do not like discounts off a regular price. Some customers do not like or will not do the math. And some customers will totally miss the discounts and think you are higher priced. Over all I think the advantages out weigh the disadvantages. We show discounts on our web site and always try to quote both the regular or list price and the sale price to a customer. We do this to give the customer a reference point.I might say "The price for your new patio set is regularly $1,985. Our Sale price is $1,747 .

Next?

Now that you have your items and a pricing plan it is time to begin that web site.
"Web Site Basics"

"Set your own path, and be a leader, let the others follow your way" Jim Glasgow

Before You Begin #6

Before You Begain To Build Your Site

Before you can begin building your web site you need to have the following. Actually you could build the web site and go back and add some of this information before you launch the site. I am going to repeat here a statement I made earlier. If you are serious about this business you need to own and host your own store. I know it is not the easiest way nor the cheapest but it is the best way and essential to your Long term success.

1. A name for your store
2. A URL, same as the store name if possible
3. A credit card processor
4. Your E-mail address
5. A web site hosting company.
6. Web Site Software (OS Commerce or similar)
7. Your Company Phone Numbers

This information will be needed when setting up your web site. If you have not made arrangement for these, get the process started. As we go through these I will cover some thoughts on why one method might be better then another.

Your On Line Name or URL

Your URL (Universal Resource Locator) should be the same name as your stores name if at all possible. Having them both the same avoids confusion, reduces marketing cost and makes it easier for customers to find you.

Your name should be short, easy to spell and say what you do. For example, patiostore.com forms an immediate image in the customer's mind of a store that sells patio items. A green house web site that is very successful uses, fourseasonsgreenhouses.com that name says what they do. A dot COM name is still the best choice over the other suffixes available. A good well-chosen name will reduce your need for advertising. You can get a URL at networksolutions, godaddy or from many other sources on the web.

What Type Web Site and Software?Â

How you operate your web site will determine the type of software you will need. Most retail sites will use E-commerce type software. Others need only a flat non E-commerce enabled web site. Most retail web sites should use a combination of methods.

Flat page web sites. Flat (non-interactive), do not have shopping carts or databases derived web pages. With flat pages the customers will call their orders in or they will fill out an order page from notes they make as they shop. This type of site gives you maximum flexibility in the site's design and layout. Search engines can easily find and categories flat pages. This type of web site works well for service businesses, and stores that want, or expect the customer to talk to a sales person to place an order. Flat pages are often used as doorway pages linked to an E-commerce web site (more on doorway pages at the site promotion section). Flat pages can be made with software like Front Page, Adobe Page Mill or Dream Weaver to name a few.

E-Commerce web sites software: This type of software allows the customer to order on line using a shopping cart linked to a item data base and to a check out form. Other features of E-commerce web software are search ability, registration, customer account tracking, order tracking, sales tax calculations, pre-formatted design and store layouts and many other features designed to make store set up easier. This type of software allows your company to appear large and professional no matter your company's size.

ISP provided E-commerce sites. This method of building a web site is accomplished over the Internet (using a web browser); the actual software resides at, is owned by and operated by the ISP or service provider (yahoo stores is this type of software). You pay a fee and or a percentage of your monthly sales. This makes setting up a store easy and at least in the beginning less costly. If you start this type of store or a similar set up I suggest as soon as you can that you move to a web site platform that you own.

If you rely on non-owned web sites as you only store front you leave yourself open to, increasing fees and changes in polices that might negatively effect your business. As well as the possibility that you will need to start over if your choice of service providers does not work out as expected. I prefer more control to my destiny.

Your ISP

Your selection of an ISP to host your web site is important because in the beginning you will need a company that will help you through the set up process. Review the following list with each company you are considering to host your site. I will use ISP (Internet service provider to also include ASP (application service provider) as the same type of service.

Fee schedule. You want to start with a lowest cost per month, that increases as you use more storage space and transfer more data. The goal is low monthly bills until you get some sales. Luckily you can search the web for Internet service providers or hosting companies and make rate comparisons. It does not mater where they are located.Â

Help. Talk to the person in charge of customer set up. Explain that you will need help during the set up to get the site configured correctly and to activate form functions such as your order form. If they charge by the hour for these services try a local ISP, you are looking for free help.Â

Secure Server. Check that the ISP offers a secure server for encryption of sensitive information.Your credit card company will require this.Â

Up time and backups. Ask about their up time, most companies today have resolved these issues and run 99% up time. Back ups of the files in case of hard drive failure is critical to avoid loosing days of work. You want a back up of everything on your web site at your office and weekly on disk as well as the copy at the ISP, if they back up also, so much the better.

Other services. Each ISP has a list of services they offer and you need to proceed with caution.

Two questions to ask your self.

1. If you use the recommended service and decide to move to another ISP, is the service movable or do you lose any functions?

2. Is there a better way of doing the same thing were you control the service? For example your ISP offers a shopping cart, if you leave to another service provider what effect will loosing that shopping cart have on your operation?

Credit Card Possessing

Most Internet sales are paid by credit card. You will need to contract for this service with your local bank or one of the Internet based companies. They charge a fee based on the sales price of each transaction. I started with my local bank and shopped for lower rates after the first year. By then I have some history of sales and can look for lower rates. You will also need a credit card encryption service such as the one offered by Verisign or similar companies. You will need a credit card machine or computer. The credit card machine can be a terminal in your office or a software program that uses the Internet. I prefer the terminal in my office and I prefer to rent the terminal (about $30 per month) rather then get stuck with a lease (in my opinion the leases are a waste of money).

You have three choices in handling credit card payments. You can let the software automatically charge the customer when the order is placed and issue credits when mistake are made or orders can not be filled, or you could hand key the numbers in to a terminal after you verify the orders. Or you could do both. I prefer to hand key all orders because most of the items we sell we do not stock and I want to be sure I charge only those customers orders that I can get filled. Also I can correct any orders before charging the customers. That way we have fewer customer misunderstandings when they get their charge card bills.

Example, of the work flow for a typical transaction.

Here is how an order is processed at our stores. A customer places the order on line and receives a reply that their order has been received and that confirmation will occur via E-mail the next business day. We verify that the item can be secured and that the information is complete. We then enter the customer's credit card information manually into our terminal. We send a copy of the invoice, a copy of instructions on how to receive shipments and information on what to expect if a shipping problem occurs, along with a thank you note to the customer. These are sent via E-mail or ground mail as instructed by the customer.

This procedure is a little labor intensive, but it allows for fewer errors and better customer service. This procedure has resulted in a very low charge back rate, fewer shipping problems; less customer returns, fewer upset customers and that means lower credit card transaction fees. For phone in orders we write the information down and enter the order for the customer.

Shopping CartsÂ

If you are using an E-commerce software package the shopping cart is normally included. If your web site is made up of flat pages you will have several choices. First you can use an order form that the customer fills out manually and have it E-mailed to you. This will require some CGI scripting to tell the form were to go and what to send back to the user. Your ISP should provide CGI service for you. Choice two if you do not have a lot of items, you can enter the java code manually on to your flat web pages that link the purchase information to the order form. This can automate the shopping cart using cookies. If your web site has a lot of items this method becomes labor intensive. You other choice is to look at some of the shopping cart programs that are available and see how they would work for you.

If you deal in custom order items a shopping cart is not absolutely necessary. On our web sites we have both types of site's, those with shopping carts and some with out. If you plan to use affiliated marketing you will need an E-commerce enabled web site. (See web site promotion section)

Page HeaderÂ

The word, "TowardsWealth.com" at the top of this is in the page's header. You will need one for your web site. Our header was created using a graphics program and saved in the web site folder along with the web pages. I like to keep the design simple and my employees like to be creative.
Examples or OS commerce software and the customized headers and layouts are, www.fourseasonsgreenhouses.com or www.patiostore.com

NextÂ

Once you have your basics taken care of you can begin to build pages. The next section is basic page design and covers what goes on a page and the underlying concepts behind them.

Basic Page Design #7

Basic Page Design.

Your web site pages should be designed to get orders, everything else is secondary. If you will be using one of the E-commerce web software packages (OS Commerce) a lot of the layout and operational parts of the web site will be pre-formatted. If you plan to build your site from scratch, you will be doing the design, layout and adding the order form functions yourself.

We will be using www.patiostore.com as an example, it is a combination of Data Base generated web pages and flat html coded web site built originally using Adobe Page Mill and we know use Dream Weaver software and OS Commerce. We will first cover some basic concepts that will be incorporated into each web page and review the information and procedures you will use to build the pages.

What Is Missing From Patiostore.com

Patiostore.com does not have sound, action graphics, video, or other fancy attention getters. It does have a shopping cart (we added one in the fall 2002/spring 2003). We decided to spend our time adding new products, giving good service, keeping the site current, promoting the site and looking for new products. Every time we think of adding the bells and whistles to the site we ask. Will adding this get more orders?

Patiostore.com started out as a patio furniture store and has evolved in to a department store. Because the site has been out there for ten years we have to live with a situation were the web site out grew the name. Patiostore.com is still the name of our patio furniture store, but the URAL "patiostore.com" is more of a department store or mall. To fix this we created other stores
with their own URALs, there are links to the other sex stores from the patiostore.com main page.

What The Customer Wants?

The customer wants to get the information they are interested in, as quickly as possible with the least amount of frustration. Buyers will be looking for a specific product or category of products and they will want to see a picture, get the details about the item and the cost. You will need to get this information to the customer in as few clicks as possible. After six clicks you begin to loose the customer.

How many times have you left a web site frustrated because it was hard to figure out what to do or were to go next? Or the site forced you to go through a lot of information when what you wanted was the price and terms.

A word about the size of picture files on your web site. It is web conventional wisdom that photos should be small and fast loading. At our web sites last revision we enlarged the photos or added larger pop up photos to the smaller pictures. Customers told us they wanted better, larger pictures.

They did not mind waiting for the photo to down load as long as the photos and related information was complete. Here is what our survey of customers told us they wanted,
Large photos showing the product in use if possible, crisp picture details, price information and complete product information.

Address and Phone Numbers.

Gather up you phone numbers, fax number, your company 800 number and your mailing addresses. On an E-commerce web site be sure the how to contact you is very clear, easy to find and complete. On Flat pages add this information on the bottom of every page. Make it easy for the user to contact you any way they choose.

Page Header Logo.

Using your web site's name, create a logo (graphic) for use on the top of every page. Patiostore.com's logo was created using firefox. Spend some time on your header and logo, as it will appear on every web page. If you do not wish to create your own, consider hiring a graphics design person to design the header. A Well-done header adds a sense of professionalism and that is worth a few dollars.

Colors.

Decide what background color to use. With an E-commerce software package you will choose from pre-selected color schemes options or alter the underlying code.. With a site of your own design you will choose the sites colors. White is the easy choice and that would make the other colors easier to choose, as you will have less clashing of colors to deal with. You are always save using pastel background colors. Stay away from backgrounds that include images (wallpaper) as they distract from the product pictures and can make a web site hard to read. Color consistency is important as it reassures the user that they are still on the same web site.

When you visit a web site that has a good color scheme and is easy to read, you should not notice the back ground colors, because the colors are not distracting. When you visit a web site that is harsh or were the text is difficult to read you tend feel ill at ease and tend to leave quickly.

File Naming System.

To make maintaining your web site easier you will need a logical file naming system. Your goal is to have names that you can quickly recognize when you look at a long list of files or images. You also want a system that is easy to explain to others. We keep our files on our hard drive in a folder labeled "patiostore". Our web pages are named by product category or by number. For example, a pool page would be called pool/html or pool 2.html. Another method that we use is to use the manufactures name. For example, a manufacture named Kettler would have product pages ket1.html or ket 2.html. This allows you to easily find things when your web site gets large.

Our images (photos) are saved as jpeg files and the files names are determined by using the first three letters of the manufacture's name followed by an underscore ( _ ), followed by the first three letters of the common name for the product, followed by number if more then one picture is used. For example a Kettler Tricycle called the Jumbo would have the photo of the item saved with this file name. ket_jum1. A photo of a basket accessory for that tricycle would have a file name of ket_bas1. Kettler logo image would be called ket_log. As you can see it is easy to know what the image is without looking at the actual image.

Scanning Pictures

A retail web site uses lots of pictures. You will be scanning most of these from the manufactures brochures or coping them from the manufactures web site. Scan your images at 150 DPI (dots per inch) that is all the computer monitors require. Save the images as Jpeg files. When the software program ask for compression settings use 6 to 1 and check for quality of the image. You might consider the file-naming format described above and save these in the same file on your computers as the web site pages.

Shopping Carts.

If you are using an E-commerce software package a shopping cart is normally included. In our example here a shopping cart is not used. You can get information on shopping carts from your ISP and from the web. If you buy a program for use on a web site that you designed check that it is compatible and easy to implement. There are open source shopping cart programs written in Java that can be found on the web. Test the cart after adding a few items for sale to the data base.

Text, Design and Layout.

Use a simple text or font style. Check the font style for ease of reading. Check that any color used, does not blend into the background making reading difficult. Use capitals letters and bold text sparingly. Stay consistent page to page. Check quality of scanned images for clarity. Test all links, Spell check all pages, have the pages proof read for clarity and grammar. Check that the page layout follows a smooth visual path and is not confusing.

Sales & Promotion.

Patiostore.com uses two methods of letting the customer know what their savings will be. A discount method and sale prices listed with regular price comparisons. I prefer the discount method. When using discounts you can quickly respond to price changes with out re-pricing your web site. For example, if freight cost increase you can decrease the discounts percentage you offer or change the percentage you add for shipping. If prices increase you can lower the discount until you have time to re-price the web site. And when sales are slow you can run specials by offering a percentage off on orders over a certain dollar amount. At homeimprovement kits.com a data base OS commerce web site the prices are set by using a discount off a regular price. I can adjust prices by increasing shipping charges or by changing the discount in the admin. sections sale byproduct category, in ten few minutes all prices can be updated.

One method we use is to offer different discount levels based on the amount of the sale. For example, we add 10 % shipping charge on orders under $150 and give a 5% discount on orders from $151 to $800 and 10% off orders over $801 and 15% off orders over $1500. Customers will add items to get the total purchase up to the next discount level.

Before you decide to use discounts or sale prices as pricing strategies, consider that discounts will work best for higher priced items and special order items. Discounts work best when your customer is more inclined to call in their orders and you get a chance to talk with them. Sale prices work best for lower priced items; costumers like to compare prices and will buy from the lowest priced vender that offers quick delivery. all else being equal the store that makes ordering the easiest will then get the order.

Shipping & Handling.

If possible offer free shipping, customers like it and it helps to get orders. If you cannot absorb the shipping cost in the price structure check the competition and stay in the same price ranges. At patiostore.com we use two methods. First we charge 10% shipping on orders under $150 and we charge 5% on orders over $150. Our actual shipping charges were 12.5%. We started to charge for shipping when the cost went over 9% of total sales. Shipping is such a large expense that we have a section in this book to cover some of the issues that will arise and some possible solutions that might help you save money or avoid problems. Be sure you read that section of this web site and also the pricing section.

Pre-Packaged Products.

Some items are sold as pre-packaged products. These are items were you have grouped items together because customers prefer to buy them that way. Some examples are patio furniture sets, swimming pools and house hold furniture. For example, a swimming pool dealer buys a pool from one vender, a ladder, filter systems, liner and accessories from different suppliers. He offers the pool as a single priced package purchase to the consumer. If you choose to offer pre-package products check out the competition. Your customer will look first at price and you do not want to offer more then the competition and end up with to high of a price.

The Web Pages Your Site Will Need.

The follow is a list of web pages your web site will need. We will cover what information the pages should contain in the building web pages section.Pro

* A home Page

* Policy pages including shipping and receiving polices

* Department and or product category pages

* Sub Category or product pages

* Q & A pages

* Contact us page

* Order form page

* Helpful information pages

Next.

Well, you are still reading so you must still be interested in this business. By now you have decided what to sell, acquired some suppliers to by from, designed your store header, thought through the pricing and freight issues and you are ready to get started. Next is building the web pages.

"Results are achieved by an energy that acknowledges no defeat" Jim Glasgow

Building Web Pages #8

Building Web Pages

We will cover each part of the web page, it's importance and why we designed it the way we did. Again we will be using Patiostore.com as our example. If you have chosen to use E-commerce package, a lot of the areas discussed here will be pre-formatted for you. The points made here will still apply when you construct your doorway pages for use when promoting your web site to the Internet's search engines. Doorway pages are one of the keys to your success. At patiostore.com all pages are designed to be doorway pages.

Keep in mind that there is no right or wrong way to build a web site. There is only what works and what does not. Please experiment with new ideas, but do it from a basis of what works, the web site patiostore.com that we use as our example works, it gets orders and makes a profit. Start with the ideas and thoughts presented here or on other successful web sites and change things only when what ever you want to do can answer the following questions with a firm yes. Will what I want to do help me to get the customer to buy when they come to my web site?

Your E-commerce software will automatically create link tables and navigation for your site based on the product categories you set up. Keep in mind we have purchased some add ons software scripts and modified the layout to get the look we wanted from the os commerce platform that we use.

Your Home Page

The home page is your customer's first impression of your web store. This page is were the customer will learn to navigate your web site, the simpler and the more intuitive it is to use, the better. You want the customer to be thinking about what they came to buy, not how to use your site. You do not want the customer distracted from the main purpose of spend money with you.

When you save your home page (the first page of your web site) name it (save as) index in the same folder as all your web site's pages, graphics and images. An Internet search engine's spider visits your web site it will assume that "index" is the first page of your web site.

The Page Header

At the the top of each page we use patiostore.com's name header (logo graphic). This name header lets the visitor know where they are and reinforces the name in the mind. You can visit http://www.patiostore.com/store1.html to view the examples, keep in mind that you are visiting a real store and orders will be processed

Save your header as a .jpeg or .gif file in your web sites main file folder. We called our file "site logo". So that the web pages will have a consistent appearance we used the same background color for the header and for the web page. The header on this page is the same.

Page Name

Next comes the page name. It should be simple and state what page the customer is on. We placed the page name inside a two column table, "Patio Store" with a sub title of "your on line patio furniture store" Below that is a brief statement. "Quality patio furniture by name brand manufactures. Great prices, exceptional customer service". This is added for those search engines that read text as part of their procedures in selecting which pages to rank. To the right of the page name is a place for specials. Specials consist of a .gif file, it is a banner ad linked to a specials page. This is changed monthly. Our customers tell us they like this simple, direct method of naming a page so that they know what page they have landed on without waiting for everything to load. It also helps when you are walking a customer through your web site over the phone.

Information pages

Information pages are grouped together and are most often located at the bottom of pages.
Review the pages patiostore.com use for ideas on what to include on your site.

Ordering

Note that the customer can tell the site offers a shopping cart, there are two links on the pages for shopping cart. The stores phone numbers is easy to find and the contact us gives them another method. Make it easy for your customer to buy.

Navigation

The sites users can shop the site by searching, left side links, top links, product category links, and a drop down list by manufactures name. The goal is six clicks or less to a relevant product.

Product Categories Links and Photos.

Next come the product Categories. We use small pictures (thumb nails) with word captions (links) below the picture. These are placed into tables to control the page's layout and appearance when viewed in a web browser. (Your software may use other methods of page layout control).

People (shoppers) are visually stimulated and they will quickly scan the pictures first, and then read the text. In school we all learned to read left to right, top to bottom. We use this learned behavior to our advantage by laying out the categories in a checkerboard pattern. The customer can quickly scan the rows to find what they came looking for. This works well to feature seasonal items or specials, as you can move the pictures and links to different parts of the page based on what you want the viewer to see first at different times of the year.

We saved the pictures as .jpeg files at 100 pixels wide so that three or four would fit across the page. Remember that the KEY to success is to make it easy for the customer to get were they want to be quickly. When the customer clicks on a link they go to a product page or to a product category that breaks the category down to individual items or groups of items.

On our patiostore home page the categories are by brand name or major product groups. The next page the customer goes to breaks those groups or brand names down to smaller groups or to individual items.

Most customers will head straight for the category pictures and links, finding what they want; they click off to a product page, ignoring everything else on the page. All of our product category pages are done this way.

Site Links

Below the category links and thumbnails are the links to the rest of the web site. (We are changing to style sheets and the links may now be on the left side of each page) These links are also duplicated on the web site's index page. Think of the index page (home) like an index in the front of a book, this is a page showing all the pages on the web site and links to them.

With E-commerce software packages the links are created automatically.

Because we have several web sites we also include have links to our other stores, your web site might have links to other web sites you are swapping links with. We link only to our own web sites as that fits in with our goal of getting customers to order from us.

Copyright and Addresses

I do not like looking for information on how to "contact us" on most web sites. That information should be readily available on every page. Why spend hours building pages and promoting a web site to make contacting the owners difficult? Yet web site, after web site does just that. Drop to the bottom of this web page or any of patiostore.com's web pages, how to contact us information is at the bottom of every page.

The following is an example of our copyright information. By putting this information into a table or saved as a graphic include, so that updating it and duplicating it on every page is easy.

Copyright 1999, 2000, 2001, Horizon Building Systems Inc. PO Box 14454 San Antonio, TX 78214 All Trade marks, dress and styles used here are the property of the respective manufactures and are used only to represent their products. All rights and copyrights are retained by the respective manufacture. We cannot be responsible for typographical errors or incorrect information.

Specials

Specials or banners offering special purchase deals are included on patiostore.com web site pages. We never have more then two special offers on a page at a time. Ads tend to distract from the main purpose of the page and you want the customer to stay focused on what hey came to buy.

META tags

META tags are the words and phrases by which a person finds your web site. It is a little more complicated then that, but that is the general idea. The software that you use to build web pages should have a place to enter the META tags or it may create them automaticaly. If you cannot find the information on entering META tags in your software's manual, call the company for help. You can also look at the other web sites (in source mode) to see how they entered their META tags. More about this at web site promotion.

Return Merchandise policy

Return Merchandise policy can be on the policy page or at the bottom of the main page. Most web sites place this on a shipping information page or policy pages. http://www.Patiostore.com does both. Go to our web sites and look at our policy and shipping policy pages for complete text.

Return merchandise policy:

We let customers return merchandise in un opened and in re saleable condition. each item is decided on based on the manufactures return policy. We do not mind breaking even on a customer but they should be responsible for shipping cost. and any re stocking fee that e are charged by our suppliers. Be clear on what you will do and at what cost to avoid problems.
The more information you provide customers the fewer returns. Our returns are less then one half of one percent.

Sample text; Items in new, original unopened packaging, may be returned at your expense with prior written approval. Subject to a 20% re-stocking fee plus the actual cost of shipping the item to you. You must request returns within 10 days of receipt.

Review Your Work & Copy

Your Home Page will need all of the following.

1. Header (logo).

7. Links to special pages.

2. Title area and Sale information.

8. Special banner ads if any.

3. Main site navigation.

9. Discounts offered if any.

4. Text area (welcome & instructions) optional.

10. Copyright & how to contact you.

5. Category Photos that represent what is on the pages to follow.

11. Links to order form to shopping cart.

6. Category page names and links under photos.

12. META tags entered.

Next

Struggling through the home page will teach you what you need for everything that follows. It really does get easier after this first page is done. Ignore all the other pages until you get the products on the pages. Policies, shipping, order form etc. all can be done later. If the information on what you sell is out there, the customers can call their orders in until you get everything finished. The main thing to do is get the products pages built and out there on the web then promote the pages. It will take time for the search engines to get to indexing your pages and adding them to their database and you can use that time to finish up the details. Your next page is a Product Pages

"Get started, work at it each day, you will soon be done, procrastinate and you will get none"
Jim Glasgow

Building Product Pages #9

Building Product Item Web Pages

Product(Item) PagesÂ

The layout of item or product pages should present the product to the customer and give them the information needed to buy the item. Look at some of www.patiostore.com item pages to see the different layouts that were used. Remember your web site pages are your salesman.

Your software will dictate how you modify your page layouts
or it may create the category pages automatically.

The information needs to be presented in a logical manner. For example, on our patio furniture category pages, we have separated the furniture by types, such as cushion sets or sling sets.

Related Items It is advisable to put the accessory items in first then the main products so that you can link to your accessory items. For example: for umbrellas you would put the umbrella stands and covers in the data base first, then the umbrellas so that a stand and cover appears on the umbrella pageas suggested additional items.

Item Picture and Product Information; We scanned the pictures of the products in two sizes so that a small picture appears on the product page and a pop up large picture is available to show more detail.

You need to provide enough information for the customer to decide to buy your product from you. Start by making a list of all the possible questions the customers might ask. Now answer the questions in your copy about the item or use a bullet list of product features and benifits. Some features or options have obvious benefits such as colors, size, selection, warranties, etc. Some features have benefits to the buyer that are not obvious and you list them in a feature benefit format. This is not as hard as it might at first appear, as you can start with the manufactures brochures and follow their lead.Â

For Example: Your new Summer Sun pool is a huge 6.5' W x 10' L x 2.5' Deep, (large enough for the kids and mommy too). You new pool sets up in under fifteen minutes, no tools required, a truly portable pool for many years of summer enjoyment. The strong painted steel and resign frame, supports a heavy nylon reinforced liner that will stand up to the most rambunctious children. Your new Summer Sun Pool holds 1100 gallons (less then a dollars worth) of water, a convenient drain plug is provided. Ships by UPS, it will be at your home in a matter of days.Â

We use many different layouts for presenting the products to the buyer. Review some of our web pages to see how we handled the different items.

META tags

Add META tags; words a customer might use to search for a web page containing the information on your products. Search engines use meta tags and the pages copy (text) to classify your offerings.

Page Review

Your Product Category Pages will need all of the following. Some of the information is generated by your software from information you specified earlier. As customers can enter your web site from any page all the needed information needs to be accessible from every page.

1. Header (logo).

7. Stock Number & Price.

2. Title area and Sale information.

8. Discounts if any or sale price information.

3. Site navigation .

9. Related items or links to them

4. Links for that product line or it's accessories.

10. Copyright & how to contact you.

5. Item Photos (larger is better).

11. Links to order form or shopping cart link

6. Descriptive information about the products features, benefits.

12. META tags entered.

13 Related links, shipping info, instalation instructions
etc.

Well crafted page example: Go to www.homeimprovementkits.com
Note the clean layout and what the designer included on the page. Three different navagation methods are used to get to any one page, top links, side links and product category picture links. Now click on patio covers; you are now on a product category page, complete with a brief sales pitch and three choices of product categories. Choose one, you are now on a selection page that gives the customer size choices. Note the graphic picture of a patio set used to visually indicate the patio covers size in relationship to it's intended use, as well as the vover's size notations in numbers. The regular price is shown and a sale price so the customer has a savings bases for comparison. Now click on any one of the covers. You have arrived in just three clicks at the work horse of web pages, the product detail and purchase page. The item information is presented in detail along with a brief sales pitch. Study this page as a lot of what we have been talking about has been included. Note the drop down list for add ons and color choices. Note also the help section taking the customer to pages that will help them decide to buy from you.

I talked to the designer of the pages and he has more he will add time permitting, such as installation videos, related Items for suggestive add on sales to name just two.

NextÂ

After you have completed the item pages you will add the pages such as, order form, site index, help pages etc. Next is other pages.

"Good luck comes to the man who earns it" Unknown

Other Web Pages #10

Other Web Pages

You need not re-create the wheel. Look at other web sites selling similar items and copy what they are doing until you gain some experience. We will cover the following other web pages and you can start by looking at actual examples from the patiostore.com web site.

Policy Page

Order Forms

Shipping Polices

Helpful Pages

Special Offers

Registration

Policy Page

Your company policy pages advise and reassure your customers. Few customers will bother to visit this page, but when they do they expect you to have it. Polices that you can refer the customers to when you have a disagreement with them will come in handy. This page may also help you should you have a disputed credit card charge back.

The following is our recommendations of what to include on a policy page. You might want to visit a few web sites and see what they are doing also. Duplicate one of your web pages so that the look is the same and the top and bottom sections of the page will be done. Your software may have a method to handle this type of non interactive web page.

1. Include a main navigation area that lets the customer link back to your web sites main pages. Home page, order form, etc.

6. Sales Tax liability Statement.

2. Terms of sale section.

7. Warranty statements & procedures.

3. Freight and or shipping policies.

8. Trade mark statement.

4. Damaged goods policy & instructions.

9. Privacy statement.

5. Return goods policy and procedures.

10.Copyright statement.

When you write policies that effect your customers follow the rule of fairness to all parties. Ask yourself, if a reasonable person would agree with this policy? Ask yourself, if you would shop at a store with this policy? No mater what your policy states, it is best to bend over backwards to assist a customer. When you get that unreasonable customer, refer them to the policy page and ask them to call back in an hour or two. The time delay is to let them calm down, you will be more successful in dealing with them after they calm down and you have a chance to reflect on the problem.

Order FormsÂ

Your order form will need to be E-mailed back to you when the customer hits the submit button. E-mail confirmation will need to be automatically be sent to the customer advising them that the order was received. Contact your ISP for help with the necessary CGI scripting that will send the completed forms to you and an acknowledgment to the customer.

Some software programs hold the orders in the data base until you down load them. Other programs allow you to process the orders in real time and charge the customer right away.

In order for your customer's credit card number to be sent securely over the Internet, you will need your web site hosted on a secure server. Your ISP will handle this for you. You will also need an encryption service such as Verisign to handle the transaction. Your credit card company will insist on this also. There are several companies offering the service, see the appendix for a list. If you plan on offering, on line, real time, credit card processing, your credit card company will instruct you on what to do.

For an order form layout to follow look at patiostore.com's order form or check the layouts used by other companies on the web. Your order form should contain the following information and fields. Fields are places for a customer to enter information onto a web page; your web site construction software will have a way to add fields to web form pages.

1. The normal header for your web pages.
2. The page name. "ORDER FORM"
3. Discount information or sale dates if any.
4. Instructions if needed.
5. Customer name & address fields.
6. Credit Card information fields.
7. Product order information fields.
8. Price Information fields.
9. Instruction to you fields.
10. The normal footer for your web pages.

Shipping PolicesÂ

You can include shipping policies on your policy pages, or have a separate page for them. I prefer a separate page. I find that shoppers will visit this page more often then a policy page and I see no reason to make them wade through the other information. The policy used at patiostore.com is rather complete and long, if you follow our layout you could eliminate anything that does not apply to your business model. We also send an abbreviated hard copy of this policy to the customers when their order is confirmed. It advises the customer on how to receive a shipment and what to expect if something goes wrong.

Helpful Pages

Some pages on web sites are designed to be helpful to the public with the hopes that people who get the free information will shop at their store. The more people you can get to view your site and bookmark your pages the better. Below are a few of the helpful pages we offer. Make some of these free-information pages that pertain to the products you offer. You can add this type of pages after you have launched your web site.

Examples:

http://www.patiostore.com/deck6.html

Free Deck Plan For Above Ground Pools

http://www.patiostore.com/poolmath.html

How Much Water Is In My Pool

http://www.patiostore.com/pool9.htm

Pool Maintenance Problem Solver

RegistrationÂ

We have a contest registration form on our web site to capture those people who wish to be on our mailing list. We send out special offers every month. A very few of our web site's visitors actually register. If you choose to use a registration page on your retail web site, make it voluntary. If you use your customer list for a mail out, make it easy for the customer to opt out and get off the mailing list.

Special Offers

Monthly, weekly or special purchase sales are great ways to increasing your sales volume. At patiostore.com we use a monthly special that can be found at the top of most every web page. We also do a monthly mail outs (e-mail) to our customer list. This is normally a special offer on selected items. Our third special consist of an on going clearance department, used to clear out returns off-season goods and over stocks. And lastly we do special buys and offer an item at a lower price then normal. We usually feature this in banner ads on the related web pages.
Our goal is to make the customer feel we are a high quality business that provides good service and offers good deals for our customers.

Next

Get started! The main focus is to get some pages built that contain products that you sell and get them out on the web. Then start the promotion process, it takes time and you can work on all the non-product pages while you wait. Site promotion is next.

Other Web Pages

You need not re-create the wheel. Look at other web sites selling similar items and copy what they are doing until you gain some experience. We will cover the following other web pages and you can start by looking at actual examples from the patiostore.com web site.

Policy Page

Order Forms

Shipping Polices

Helpful Pages

Special Offers

Registration

Policy Page

Your company policy pages advise and reassure your customers. Few customers will bother to visit this page, but when they do they expect you to have it. Polices that you can refer the customers to when you have a disagreement with them will come in handy. This page may also help you should you have a disputed credit card charge back.

The following is our recommendations of what to include on a policy page. You might want to visit a few web sites and see what they are doing also. Duplicate one of your web pages so that the look is the same and the top and bottom sections of the page will be done. Your software may have a method to handle this type of non interactive web page.

1. Include a main navigation area that lets the customer link back to your web sites main pages. Home page, order form, etc.

6. Sales Tax liability Statement.

2. Terms of sale section.

7. Warranty statements & procedures.

3. Freight and or shipping policies.

8. Trade mark statement.

4. Damaged goods policy & instructions.

9. Privacy statement.

5. Return goods policy and procedures.

10.Copyright statement.

When you write policies that effect your customers follow the rule of fairness to all parties. Ask yourself, if a reasonable person would agree with this policy? Ask yourself, if you would shop at a store with this policy. What ever your policy says, it is best to bend over backwards to assist a customer. When you get that unreasonable customer, refer them to the policy page and ask them to call back after lunch, or you will call them in about two hours. The time delay is to let them calm down, you will be more successful in dealing with them after they calm down and you have a chance to reflect on the problem.

Order FormsÂ

Your order form will need to be E-mailed back to you when the customer hits the submit button. E-mail confirmation will need to be automatically be sent to the customer advising them that the order was received. Contact your ISP for help with the necessary CGI scripting that will send the completed forms to you and an acknowledgment to the customer.

Some software programs hold the orders in the data base until you down load them. Other programs allow you to process the orders in real time and charge the customer right away.

In order for your customer's credit card number to be sent securely over the Internet, you will need your web site hosted on a secure server. Your ISP will handle this for you. You will also need an encryption service such as Verisign to handle the transaction. Your credit card company will insist on this also. There are several companies offering the service, see the appendix for a list. If you plan on offering, on line, real time, credit card processing, your credit card company will instruct you on what to do.

For an order form layout to follow look at patiostore.com's order form or check the layouts used by other companies on the web. Your order form should contain the following information and fields. Fields are places for a customer to enter information onto a web page; your web site construction software will have a way to add fields to web form pages.

1. The normal header for your web pages.
2. The page name. "ORDER FORM"
3. Discount information or sale dates if any.
4. Instructions if needed.
5. Customer name & address fields.
6. Credit Card information fields.
7. Product order information fields.
8. Price Information fields.
9. Instruction to you fields.
10. The normal footer for your web pages.

Shipping PolicesÂ

You can include shipping policies on your policy pages, or have a separate page for them. I prefer a separate page. I find that shoppers will visit this page more often then a policy page and I see no reason to make them wade through the other information. The policy used at patiostore.com is rather complete and long, if you follow our layout you could eliminate anything that does not apply to your business model. We also send an abbreviated hard copy of this policy to the customers when their order is confirmed. It advises the customer on how to receive a shipment and what to expect if something goes wrong.

Helpful Pages

Some pages on web sites are designed to be helpful to the public with the hopes that people who get the free information will shop at their store. The more people you can get to view your site and bookmark your pages the better. Below are a few of the helpful pages we offer. Make some of these free-information pages that pertain to the products you offer. You can add this type of pages after you have launched your web site.

Examples:

http://www.patiostore.com/deck6.html

Free Deck Plan For Above Ground Pools

http://www.patiostore.com/poolmath.html

How Much Water Is In My Pool

http://www.patiostore.com/pool9.htm

Pool Maintenance Problem Solver

RegistrationÂ

We have a contest registration form on our web site to capture those people who wish to be on our mailing list. We send out special offers every month. A very few of our web site's visitors actually register. If you choose to use a registration page on your retail web site, make it voluntary. If you use your customer list for a mail out, make it easy for the customer to opt out and get off the mailing list.

Special Offers

Monthly, weekly or special purchase sales are great ways to increasing your sales volume. At patiostore.com we use a monthly special that can be found at the top of most every web page. We also do a monthly mail outs (e-mail) to our customer list. This is normally a special offer on selected items. Our third special consist of an on going clearance department, used to clear out returns off-season goods and over stocks. And lastly we do special buys and offer an item at a lower price then normal. We usually feature this in banner ads on the related web pages.
Our goal is to make the customer feel we are a high quality business that provides good service and offers good deals for our customers.

Next

Get started! The main focus is to get some pages built that contain products that you sell and get them out on the web. Then start the promotion process, it takes time and you can work on all the non-product pages while you wait. Site promotion is next.

Web Site Promotion #11

Web Site PromotionÂ

Placement on Internet search engines is still the key to getting your retail web site seen. Over the years this task has gotten more difficult to do as the number of web sites has grown and the search engines change their methods of ranking sites. If you have read through this book, you know that what you choose to offer for sell, can have a large effect on your web site's search engine rankings. Here we will cover META tags, doorway pages, page optimization, and other things you can do that will help you get or improve your position.

Web site promoting is a learning experience and requires constant vigilance. I suggest you get a current book on the subject and subscribe to a newsletter or two. You can find newsletters on line.

Who Are You Trying To Attract To Your Web Site?

In the beginning, before the World Wide Web became so crowded, we all wanted to attract as many visitors to our web site we could. Today when a search engine can return tens of thousands of hits, your web site can get lost. Customers do not have the patience to look at web site, after web site trying to find the good ones.

You have to ask. WHO?

Who do you wish to attract? And how can they find your web site? I shall assume that as a retail web site you wish to attract prospective buyers and not just general shoppers. To attract buyers you must be specific in your use of copy (text) and META tags as outlined below. Shoppers tend to search using general terms, for example; a buyer looking for patio furniture would use search words such as "patio furniture". Buyers on the other hand will tend to be specific as to the search words they use to search the Internet, for example, "Telescope Patio furniture". The search results will be quite different. I would rather have the buyer who knows what they want, who has seen it somewhere and who is looking for a better deal, rather then the customer who is just looking. Getting to the top of the search engine rankings is easier if you are trying to attract customers with specific requirements.

You can also attract customers with help pages. For example, if you sell swimming pool parts, pages that show the schematic drawings or installation instructions might attract a person needing the parts. Search engines like these information pages.

Unless you are willing to pay for good positioning on a search engine you will need to do something to stand out from the crowd.

META Tags.

META tags are words used by search engines to sort web pages by search words. If you view a web page in source mode, you will find the META tags towards the top of the page. Your choice of words will help decide what type of user you will attracted to and what your position will be on the search engines results list. Make a list of possible search words for the page you are building. Then refine that word list based on whom you want to attract to your web site.

Brand Name Items:

For our examples here we will use Telescope patio furniture. Telescope is a brand name of patio furniture. Because we are trying to attract shoppers looking to buy this brand of furniture we would use META tags as follows, "Telescope, Telescope furniture, Telescope patio furniture, patio tables, patio umbrellas, gardenelle patio furniture, Aruba patio furniture." The names are the brand names or the furnitures style name. We also repeated these words in the text in the top one third of the web page for use by search engines that read and rate the text areas. You can see how this was done at patiostore.com view the page in source mode.. The results of a search will get us buyers looking for the Telescope brand or a specific Telescope style of furniture. We will also get good search engine placement for those search words. Had we used general tags such as, "patio furniture, aluminum patio furniture, patio, patio tables, umbrellas." we would get lost in a sea of other web sites.

Non Name Brands:Telescope

If your items are not name brands you will have to use general descriptive words. I would recommend you get some name brand items to drive traffic for your non name brand items. If that is not possible you will need to use some of the other web page promotion methods discussed in this book to drive traffic to your web site. You can also pay for position and you can pay for key word placement.

Sadly, many web site promoters have used search words not related or only remotely related to what the web page is about, with the result that search engines have had to change their methods to try and improve the returned results. More is not always better.

Doorway Pages.

Doorway pages are flat html coded pages, which can be searched for by a search engine's spider and thus ranked.

You create flat html pages using software like Microsoft's front page or Adobe's Page Mill. You then use a re-direct to send the user to your web sites home page or link out to your department pages. We at patio store never delete a page we turn any non relevant or old pages into door way pages. these pages have thumbnail photos and links to the product pages, but no product information.

You can create doorway or department web pages and have the customer click on a link to get to your web site, or use a re-direct or direct link out to other web pages. For example, if you sold lingerie you might make a page for each type of garment such as baby dolls or night gowns. The web page could explain what they are and the comparison to other lingerie types. Add a link to your web sites home page and you have a promote-able doorway page. You could create a page with thumbnail pictures showing all your different categories of lingerie, with links out to your web site.

Page Optimization.

You can optimize a web page for a particular search engine. The best web site to learn this from is searchenginewatch.com. Besides META tags, some search engines read the text looking for sentences with repeated phrases. Some look for how many other web sites link to your web site, under the theory that the better pages will be more popular.

Directories such as Yahoo, are human based, you submit your page for review and approval. Directories are becoming more popular as web portals try to improve their revenue and customer experience. This subject will require some study and research on your part.

Customer Help Pages.

Help pages are less common then a few years ago because the many data based web sites do not make a provision for them. They still can be a good way to get extra traffic.
You create web pages that provide free information of interest to people who might be a customer.

For example; at patiostore.com/pool.html you will find links to a free deck plan for aboveground pools and a link to how much water does my pool hold? These are free information pages that are designed to encourage the user to bookmark the web site for future reference. As there will be very few similar pages on the World Wide Web, it is hoped the search engines will rank these high. You can add links from these pages and put banner ads on them. To see how this works try typing in a search on Google for "free pool deck plan" or "pool deck plan" and you will get links to Patiostore.com we were site seven last time I checked.

Paying For Position.

More and more web browsers are charging for rankings on their search engines. Some of the search engines are charging by the key words, highest bidder gets the best position. I am not a fan of this method and do very little of this type of advertising. If I had a very high margin product or a non-name brand product I might try more of this promotional method. You will have to decide if you can afford the rates and if the expense produces enough sales. We spend about $500 per week on promotion and my son spends about $1000 per week on his site.

There are a lot of web sites offering to send you leads or improve your web site's traffic. I have not found any yet that is cost effective. If you find one that gets you extra orders at an affordable price we would like to know about it.

Customer Databases.

The big advantage to an E-commerce web sites is that creating a customer database is almost automatic. This database can be an invaluable tool. The more customers that you can get entered into a data base for future E-mail promotions the better chance your business will have to grow. Besides adding actual customers in your data base consider giving you site visitors a reason to register, early notice of sales, a monthly drawing for discounts or a prize, or signing up to get a free newsletter.

The future value of your business will be based on, your customer name database, your search engine rankings, your product selection and size of your web site. The reason this is true is that, any competitor will have to spend money and time to catch up with or duplicate what you have created.

Paying For Outside Help.

There are lots of services that will offer to get you top ranking, or bring you customers etc. Be careful and ask for references and check them out very carefully. Most of what can be done, you can do yourself with a little effort. The more your know about what is required to get good search engine positioning for your web sites the more your company will grow. Before you hire someone to do your work for you be sure you know what it is you expect and you will get for your money. I personally would make the payment contingent up on the results achieved.

"Good luck comes to the man who earns it" Unknown

Shipping Cost #12

Shipping Cost

Shipping Merchandise.

Shipping is a major cost of being an online merchant. Expect shipping charges to range from 5% to 15% of your gross sales. You will need to learn about shipping cost, freight claims, proper packaging and the paper work required. The following is enough to get you started and point you in the correct direction to learn more.

UPS & Fed-X Ground & DHL

These companies deliver smaller parcels worldwide. We will cover here the brown truck company, but they are all similar in the services offered and the general methods of operation.

The company supplies the shipping labels. UPS pricing software is available at no charge. Package tracking is available from the company's web site. When you ship a package, you e-mail your customer with the tracking number and the customer can track their package delivery. The company will send or fax you a daily shipping report.

UPS charges a pick up fee (about $6.00 in addition to the shipping charges) or a per day fee if you want daily pick up. You can drop packages off at their specified locations and save the fee.

UPS is slow to pay damage or loss claims; on the other hand they have very few problems. Some customers do not like their practice of leaving packages out doors when the intended receiver is not home. We find few problems with these shippers and use them when ever possible.

UPS has gotten where they charge for everything they do and we think they have gone to far, we now ship mostly with DHL.

Truck Shipments

Truck shipments can be expensive. Rates are negotiable in advance. We save money by shopping the freight companies every 90 days. Expect to pay an additional fee for residential delivery ($35.00 usually). Expect to pay extra for lift gate services for heavy items. Expect to pay a lot more for in house delivery. You will be expected to pay freight bills within seven days.

Classification code, the shipping zone you are shipping to, and the weight of the shipment determines the freight company's freight rates. They get the rates from a freight rate book and discount from the book prices based on your annual shipping volume. Because of this, were ever possible, have the manufacture ship the products for you (drop shipping) using the manufactures earned discount rate. The manufacture then adds the shipping cost to your invoice. Your other choice is to have the manufacture ship on your account (called third party billing). Negotiate the discounts with the freight companys salesmen to include all shipments charged to your account, with out regard to the point of origin. The freight companies do not normally discount third party billings shipped from several different cities (manufactures), you will have to request it. Also, try to negotiate away the residential deliver fee, if you don't ask you can't get.

Your freight company salesmen will bring you a rate book and other information; take the time to read it. Following the procedures set forth for filling out freight claim forms and filling out the waybill of laden. Proper paper work can save you money or cost you money, fair warning.

Other services offered by freight companies include. Door to door full truck, rail car shipment pick up and delivery, warehousing etc. The service of interest to you is re-directed shipments. Re-direct is when you call the freight company to re-direct the shipment to another address. For example, a manufacture will not drop ship? solution: you have the items sent to you, then you call the freight company and redirect the load to the customer after the shipment has started. There is a fee for doing this.

To find freight companies use the phone book, the web and check the yellow pages. Discount freight service companies can be found on line. Freight quote is one example of a discounter.

NOTE: Shipments that cross water cost a lot more. Hawaii, Alaska, Martha's Vineyard and Puerto Rico are not domestic shipments. Shipments to Canada have a duty charge. Shipments to an APO have to be by U.S. Mail. If your choice of shipper does not have a freight terminal in a given city they will hand of the shipment off to another carrier and charge you more, check when you shipper that they will honor the quoted charges.

Drop Shipments

Drop shipping means the manufacture or supplier is shipping to your customers for you. It cost the manufacture more to be your shipper and you can expect to pay a fee for the service. Drop shipping is the best way for you as a retailer, because you get to take advantage of the shippers discounted freight rates, you do not have to handle the goods, you do not have to keep shipping supplies on hand and you save labor cost.

For those same reasons and the extra expense involved, some companies will not drop ship for you. Add to those reasons for not drop shipping the fact that freight claims and product returns have to be handled by the shipper and you can see why some companies do not drop ship. The shipper is also using his funds paying your shipping cost with out getting a profit on the extra money they have spent.

When you get a manufacture that will drop ship for you DO NOT mess it up with petty complaints and claims that are not their fault. DO NOT bug them for information about the shipments. Put the information on your web site about the estimated shipping times and tell your customers what to expect, to avoid information request problems.

Air Freight

Airfreight is expensive and your customers will pay extra for the service. Be sure you understand the carriers insurance claims rules. Some companies will not pay freight claims for damage or loss unless the items are crate-ed. Get a freight quote each time you ship by air and unless you have shipped by that carrier before ask them if there is anything else you need to be aware of?

U.S. Postal Service

The postal service is not user friendly. They charge less, but take more of your time in dealing with the paper work and going to the post office. The biggest problem when shipping by parcel post is no signature at delivery. Yes, you can request a signature and pay the extra fee. More paper work and more time at the post office. Your credit card company will need proof of delivery if your customer disputes the credit card charges or claims non-delivery of the product.

The post office domestic delivery rate is excellent. When do you ship by parcel post? When the package is small and low in value. When the customer requests it and does not mind having to go to the post office to sign for a package. When your time is not too valuable. If you are paying an employee by the hour, you cannot afford to ship by the U.S. post office, because when labor is added the package companies like DHL are less expensive.

Over seas shipments by the post office have a bad habit of disappearing. DO NOT ship by U.S. post office to foreign lands, unless your customer signs a disclaimer that says, delivery to the post office constitutes delivery to them and they, the customer assumes risk of loss.

Way Bill Of Laden

The waybill of laden is the shipping document that governs every thing that goes right or wrong with a shipment. Sit down with your freight company's salesperson or freight terminal manager to go over the correct way to fill out the paper work. Put down the wrong freight classification and you could pay more then need be. Make an address error and you may be paying to re-ship a shipment or a re-delivery fee. Fail to provide a customer phone number could delay the shipment. Be thorough and accurate and you will avoid problems and wasted expense.

Freight Claims

When a customer places an order and you send them a copy of their invoice, include instructions on how to receive the shipment and what to do if a problem arises. Remember that homeowners are not use to receiving shipments by truck lines; you have to let them know what to expect. See the letter or policies used by patiostore.com

Here are the highlights of it. The waybill must be noted at the time of delivery if any damage is noticed. If the boxes are damaged, inspect the order and or, note on the waybill of laden that " boxes damaged, possible concealed damage" and have the driver sign it. If this is not done the most that a freight company will pay is 33% of the claim amount. If the shipment is pre-paid freight the shipper files the claims. If the shipment is freight collect the receiver files the claim.

To avoid problems have a conversation with your freight companys salesperson about all aspects of shipping, remember the sales person does not know what you are aware of or not aware of. You have to ask.

Other Notes of Importance on damaged freight:Â

* Freight claims must be filed in a timely manner (seven days is timely).

* File the claim to include the freight on replacement items.

* Do not dispose of damaged items until advised to do so.

* Do not refuse a shipment that is damaged because the fright claim can not be made until the shipment lands somewhere again.

WarehousingÂ

There are warehousing services that will do your shipping for you. If your markup is high enough to afford the fees, this may be a good solution for you. Public warehouses charge for storage and for each service provided. They tend to do larger shipments that can be handled by forklift. There are also companies who specialize in being your warehouse and will provide full services as requested. A web search will quickly find this type of warehouse Service Company.

You might use this type company as a re-shipper when a manufacture will not drop ship for you. You have the warehouse pick up your orders and re-ship them to your customer.
One example of a full service logistics service company is Central States at www.cs-dist.com

Avoiding Problems

Crossing Water: Anytime a shipment crosses water on other then a bridge expect a large freight bill. For example shipments to Martha's Vineyard is not a normal shipment and it can cost more to go across the channel by boat, then across the country by truck.

Alaska & Hawaii: Normal freight rates do not apply, always charge your customer actual cost when shipping to these two states. Most shipments will go by air.

Canada: Same as Alaska and Hawaii with the addition of a duty or fee for the paper work.

Mexico: Best sent to a freight forwarding company and let the experts handle the shipment.

All Others: Ship via a freight forwarder to avoid problems and loss form an array of unforeseen events and hidden expenses.

Notify Customers of what to expect: That is the best way to avoid problems and refunds.

Upstairs - Down Stairs: Be sure the customer is aware that truck companies do curb side deliveries only. Most truck drivers are very nice and will deliver in to a garage or just inside the door. All other request, basement deliveries, up-stairs deliveries etc. are not included and can be very expensive to arrange. Most freight companies charge extra for lift gate service or any non drop and go services. When the customer wants more services, there usually are companies (in large cities) who do local deliveries that could pickup the shipment up at the freight company's terminal and provide the needed services.

Number One Problem: Improper receipt of a shipment making filing of a freight claim problematic.

Inbound Freight Cost Accounting

In bound freight charges are part of the cost of goods (not an expense). Add the inbound shipping cost to the items cost to get total cost of goods received. Mark up the total cost of goods to get the selling price.

For example: You buy an item for $100 and it cost $12 to get it to you, your cost is $112.00

Out Bound Freight Cost Accounting

Out bound freight cost on a profit and loss statement is an expense item or a cost of goods item. Shipping cost charged to a customer is shipping income. For example, you sell an item for $200 and charge the customer 5% shipping and the actual cost of shipping is $22.00

Your shipping income will show $10 shipping income ($200 x 5% = $10) your shipping cost will show the full $22.00 for a net cost of shipping of $12.00. The profit on the sale will be reduced by the $12 not collected from the customer.

Due Diligence.

Due diligence is a term that means to do your home work or to educate yourself as to the pertinent facts. If you want to keep shipping cost in line, you will need to do the following.

* Re-shop freight rates every six months with different carriers.
* Instruct your personal on the proper methods of doing the paperwork.
* Review freight claims every month.
* Review freight bills every month looking for any potential problems.

I instruct my bill paying department to let me see any freight bill that is higher then the normal percentage of freight cost compared to the sales price, or any bill that looks high. If we get a freight estimate before we ship, we compare the actual freight bill to the estimate for any extra charges and billing errors.

When you find a problem or potential problem, type up a memo on your solution to the problem and lay it on the corner of your desk for two days. If after two days, you still think that your solution is a good one, then act. The reason for this delay is that shipping is a large expense that requires thoughtful action and not quick seat of the pants solutions. For example, lets say you sold an item and found out later that all the profit went to freight. Your first inclination will be to raise the price of the item. If you do that you could kill the sales. The high freight cost could be an error, it could be that it shipped by truck when UPS would do, it could be that the item went from coast to coast and that on most orders that is not the case. The point is, do your homework before you make a change that impacts your future business.

E-commerce Software

E-commerce software

The following information was copied from the os Commerce web site. It is a Free software that is data based driven. Keep in mind that the learning curve to modify your site can be a long one.
There are many other software programs available on which to build your store.

Os Commerce's community forum will help you with making the software program into what you want it to do and look like.

os Commerce E-Commerce SoftwareÂ

os Commerce is an online shop e-commerce solution under on going development by the open source community. Its feature packed out-of-the-box installation allows store owners to setup, run, and maintain their online stores with minimum effort and with absolutely no costs or license fees involved.

os Commerce combines open source solutions to provide a free and open e-commerce platform, which includes the powerful PHP web scripting language, the stable Apache web server, and the fast MySQL database server.

With no restrictions or special requirements, os Commerce is able to run on any PHP3 or PHP4 enabled web server, on any environment that PHP and MySQL supports, which includes Linux, Solaris, BSD, and Microsoft Windows environments.

os Commerce is an online shop solution that offers a wide range of out-of-the-box features that allows online stores to be setup fairly quickly with ease, and is available for free as an open source based solution released under the GNU General Public License.

os Commerce was started in March 2000 and has since matured to a solution which is currently powering 1395 registered live shops around the world.

Today, an international based team is dedicated in taking os Commerce to the next level, moving towards an e-commerce framework solution that would not only remain being easy to setup and maintain, but also making it easier for store administrators to present their stores to their customers in their own special ways.

The success of os Commerce is ensured by a great and active community where members help one another out and participate in development issues reflecting upon the current state of the project.

You are more than welcome in contributing to the success of os Commerce by helping out in the realization of the project, by participating in the forums, by donating to the team developers or sponsoring the project, or just by spreading the word!

We welcome you to the open source community!

http://www.oscommerce.com/

"You can do anything You think you can" Jim Glasgow