Starting An Online Store: The Essential Checklist - Part II

We continue with the essential e-commerce startup checklist.

Yesterday, we gave you seven top tips for getting your e-commerce venture started. Today, we conclude with the final eight items on your startup checklist.

8) Knowledge of Search Engine Optimization (SEO)
If you don't know how to set up your site to get high rankings in Google and Yahoo, you'll never get the traffic necessary to build a thriving business. Some of your competitors are experts in this area. They even hire SEO gurus to fine-tune their site to attain its greatest ranking.

To educate yourself, read some of the copious online guidance about SEO. A good place to start is Search Engine Watch. While you're there, look at the tips for submitting your site to the leading engines — that's essential.

By the way, many Web designers claim to be adept at SEO. Not all of them are. The best practices for SEO change constantly, so if your designer last studied SEO in 2004, they're not up on the latest tactics.

The point: you may need to hire a Web designer and an SEO expert. Wow, this is getting expensive!

9) An Accounting Package
Okay, so accounting software isn't sexy — but you'll quickly drown without it. Even before your first dollar of profit, you'll need to track a long list of expenses. Once you start making sales, your accounting program allows you to answer the most important question: am I making money?

A small business favorite is Intuit's QuickBooks, and Sage's Peachtree is also popular. Not surprisingly, Microsoft is vying for market share with its relatively new SBA 2006 small business accounting package.

10) A Web Analytics Package (and Knowledge of Conversion Rates)
A Web analytics program tells you how shoppers are using your site. It reveals where users come from, what pages they visit and what keyword searches brought them to the site. An analytics package enables merchants to calculate their conversion rate. (Your "conversion rate" is the percentage of your visitors who make a purchase — a critical fact to know and track over time.)

Over the last couple years, having a good Web analytics program has become a major dividing line. E-commerce sites that effectively use their analytics programs tend to be winners; those sites that don't mine data from an analytics package tend to fall behind.

Fortunately, there's a package for every budget. Although you can spend a whole lot of money, you don't need to buy a Rolls Royce analytics program to start.

Among the favorites are NetIQ's Webtrends (they have a small business edition), Clicktracks and WebSideStory. (WebSideStory's program starts at $27 a month.) There are many more good ones out there.

Google offers a free analytics program (based on the former Urchin analytics program), though in classic Google style they're mysterious about how to get it. Merchant must "request an invitation." It's not clear on what basis Google awards invitation, and the search firm says it may take "several weeks" to get one.

(Editor's Note: Our invitation took nearly three months to arrive.)

11) Awareness of Competitive Sites
Just as your Web analytics tool tells you what's going on at your own site, you must be highly knowledgeable about your competitors' site. How does their inventory stack up with yours? Their navigation? Some merchants even sign up for their competitors' newsletters to know every sale they offer.

To find out how much traffic your competitor is getting, you can use the Alexa service (http://www.alexa.com). This tool doesn't give absolute numbers of visitors, but it provides a relative ranking number. Another tool that shows your competitor's page rank (among other things) is the Google Tool Bar.

12) A Shipping Rate Structure
Before you get your first order, you'll need to decide what you'll charge for rush and standard delivery.

If you're willing to lose some money on shipping, offering inexpensive shipping is an aggressive move to attract customers. Shoppers love cheap shipping, and free shipping over certain purchase levels is also a popular technique.

On the other hand, many sites make a tidy profit by tacking a few extra bucks onto shipping fees (even beyond labor costs to cover packing).

Your decision about shipping charges should be partially guided by what your competitors are doing. Your rates should be in line (or hopefully lower) than theirs.

If your product can be sold internationally, look at this guide to reaching customers beyond U.S. borders.

13) A Security System and Data Backup
The Internet is a veritable den of thieves, with new forms of data theft, phishing and scamming invented everyday.

You'll need software to protect your site. Of the several good programs available, a favorite of small online business owners is the McAfee Internet Security Suite 2006, which stiff-arms all manner of viruses and hackers.

No matter how secure your site, though, you want your business data backed up. (In fact you need to have your business data backed up.) Both Symantec and Maxtor make well-respected back-up systems.

14) A Marketing Plan
This is the big one. An effective, multi-prong marketing campaign is an online business's best friend - the more you can spend on advertising, the better. Go here to learn about creating an online marketing plan.

The best marketing plan evolves and grows over a business's life — it's certainly not a "set it and leave it" kind of thing. So you can start small if need be, yet during your site's early days you'll need these basics:

  • Many types of free marketing Listing your site on Google's comparison shopping engine, Froogle, is free. Also free — and good for driving traffic — are joining a Web Ring; offering a free service to users; writing articles or blogs to attract traffic; and sending out an online press release using PR Web.
  • An e-mail newsletter You can use your e-mail newsletter to inform shoppers of your special deals and to offer previous buyers a special discount - a great sales technique. You'll need e-mail software, like the low-cost version of Constant Contact or the Gammadyne Mailer. Group Mail offers free version here.
  • A link-building campaign You can trade links with non-competitive sites for free, but some sites hire professional link building services. The reason: search engines boost your ranking if your site has many inbound links. Whether you do it yourself or hire some help, an active link building campaign is essential.
  • A pay-per-click campaign It gets expensive to buy sponsored links from the Google's Adwords or Yahoo's Search Marketing services. But your competitors are undoubtedly doing it. So if you're not, it's unlikely you'll be competitive (unless you have a very compelling product or price). As online competition has increased, a PPC campaign has become essential.

With time, you might consider using an affiliate marketing program, in which other sites get paid a percentage of each sale they send you. But it's questionable whether a brand new site will benefit from an affiliate program. Although some new sites have profited, many new sites has yet to build the name recognition that makes using affiliates profitable.

Be aware that creating an affiliate program through such portals as Commission Junction can cost several thousand dollars up front. You may want to investigate whether or not your e-commerce hosting provider allows you to create your own program.

15) Plenty of Gumption
It's a familiar scenario: a business owner invests a substantial amount in site design and advertising, launches a new site, and…it gets about 137 page views a week. Then, a good bit of time later, that number rises to about 300 page views a week — and almost no sales.

Merchants in this case often complain: "I thought there were 200 million Internet users. So where are they?"

Well, just like in the brick and mortar world, it takes time and continued investment to build a business. Gumption is required. If creating a business was as easy as building a Web site, we'd all be raking in the cash.

But keep at it. E-commerce is still new — there's time to take your lumps, learn from your mistakes, and find out how to turn a profit. Good luck!

James Maguire is a contributor to ECommerce-Guide.com. His column appears every Monday.

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