Reliability

Moving to cyberspace, you have entered a much bigger world, a place that never sleeps. Neither are your customers. You may be sound asleep at home while there are customers placing orders on your site. At least, you would hope so. When you are doing business on the Internet your website has to be online 24/7. Be sure to select a reliable hosting company, one with a proven track record. To make sure you know what is going on with your website, it is advisable to use third party monitoring.

Focus On Success

Making the transition to online is going to be a challenge. Focus on your best products or services and you expand your business online. If you have a top ten best selling products in your brick-and-mortar store, upload them first to your site. Of course, there is no guarantee that the same products will be your best selling products online too, but it is worth a shot.

Use the Pareto Principle, the 80/20 rule, to see what to focus on online. Examine your best selling products and you will find that they generate the bulk of your revenue. Of course, if you have the time and resources it would be best to upload as many products as you can because you might find that different products sell better online than in your store.

Fulfillment

Imagine your online business is getting one thousand orders in a month. It means that you are doing a good job selling, and now it’s time to fulfill the orders. The key to fulfillment is communication. Your customers have to be informed about the time it takes to ship an order; about the time it takes to deliver their order. Your fulfillment details should be posted on your website close to your shipping policy.

Once your customer has placed her order, she wants to know how soon she can expect it. Clearly post your order processing time during the checkout process. The promise of quick fulfillment might help you close more sales.

If you are a sales oriented person, fulfillment might not be the highest priority process on your list. It is quite possible to destroy a business with lots of sales and poor fulfillment. During the early years of e-commerce, poor fulfillment has ruined many businesses.

Online order tracking should be part of your fulfillment strategy. Once customers place their orders, they are anxious to know how soon their products will arrive. As a result, you may receive a phone call or an e-mail inquiry for each order. To support so many requests, you might need to hire additional personnel. Instead, your fulfillment system should e-mail shipping tracking numbers. In addition to providing the service through e-mail, your website should have a “track your order” area where customers can track their orders once they have entered their order numbers. Making order tracking easy can save your company money and improve customer satisfaction.

Dealing With The Extra Space

Now that you don’t have to physically store every product you want to sell online, you can increase your virtual inventory without increasing your rent. You can offer a larger variety of products increasing your customer base. If you are a manufacturer, you can offer drop shipping your products for other businesses. (Drop shipping is the concept of the manufacturer-shipping product directly to the consumer instead of shipping to a wholesaler.) If you are a retailer, you can have products drop shipped to your customers directly.

Location Location Location

Brick-and-mortal retail is all about location. The right location can make or break your business. The same is true for online business, except it is virtual location that matters. Your online business relies on store visitors just the same as a brick-and-mortar business. Online businesses get most of their visitors through the search engines such as Google, Yahoo, and MSN. The better position you have the more traffic your site will receive. On the Internet, traffic is everything.

Price

The bigger market presents you with more opportunities, but it doesn’t come without a price. The fierce competition dictates competitive prices. You have to be able to set the right price for your product that allots for a reasonable profit margin while maintaining your competitive pricing structure. Many people that shop online are more price conscious than brick-and-mortar shoppers.

It is less likely that a consumer will make an impulse buy online than in a physical store. If your prices are higher than your competition, your visitors will never convert into buyers. Study your competitors, and make sure you have realistic prices. You don’t have to be the cheapest, but if your prices are higher than that of your competitors’ be sure you communicate the reasons loud and clear. We are more expensive, but we are better won’t do. Online shoppers are more sophisticated than that. For example, “We are more expensive, but we offer 24/7 days a week live phone support” might justify paying more for your product.

Your customers are looking for convenient ways to shop, but they have to feel secure in the process. Online businesses are responsible for protecting customer privacy. It is not enough to keep your customers safe and secure, you have to constantly communicate it to them. Posting your Privacy statement on your site conveniently is a good start, but there is more.

Explain your customers what is done to keep their information secure. Describe the technologies in the background ensuring customer safety. Give details, without getting too technical, about how encryption technology works. When you put in plain words the security measures you take your customers will appreciate it and they are more likely to trust you.

Planning

Proper planning is everything! To improve your chances for succeeding online, you must have goals. As you map out your online strategy set measurable objectives. It’s not enough to hire a web developer to build you a site and hope for the best. Be clear about what the transition, or expansion, to the Internet means to your business. Make conscious decisions about expanding business into cyberspace, and consider its impact on your sales, marketing, customer service, and all other business processes.

Bricks-and-Clicks

Bricks-and-clicks is a business model that unites offline (bricks) and online (clicks) presences. Sometimes, referred to as click-and-mortar or clicks-and-bricks. This model has been traditionally implemented by brick-and-mortar businesses such as Wal-Mart and Blockbuster. Bricks-and-clicks is a popular system because it offers best of both worlds, online convenience without the shipping charges. With this system customers can order online and pick up at a local store at a later date.

The Internet is providing brick-and-mortar businesses an opportunity to serve your customers online. Making that transition from a brick-and-mortar business to an online one can be a challenging task. Having an online presence is going to compliment your existing business, but it is going to require a real commitment from you and your employees.

Whether or not your brick-and-mortar business becomes a click-and-order business, your initial goal must be to integrate your online presence into your existing business infrastructure. Wal-Mart, Staples, and many other successful brick-and-mortar businesses have made the transition. Moving online doesn’t mean abandoning your brick-and-mortar presence, rather it is to compliment it.

As you develop your online presence you are all of a sudden in the convenience business. But convenience is meaningless if your customers can’t trust you. Trust and convenience doesn’t add up to anything unless your customers can find your site online. And, if you are too expensive all the trust in the world will not help you to close the sale.

Practical Example: FedEx Trade Networks is a great forwarding company. I have used this company for years, and they do an excellent job. They are a well-established company. The company takes care of all aspects of your ocean freight. They help you care of shipping, brokerage, taxes, duties, permits, and required licenses. With FedEx Trade Networks you can expect door-to-door service. They’ll pickup the shipment at the factory overseas and deliver it to your business in the U.S.

Expect to receive a response from the factory within a couple of days. Never make a buying decision based on only one quote. Be sure you make contact with several factories. Don’t get excited too soon. Build a profile on each factory you contact. Make a note of how long it took to get in touch with the factory. How many days it took them to respond to you. Did they provide you with detailed information? Were they sensitive to your questions?

            Don’t commit to doing business with the company until you have established a rapport with them. Research the company online. Visit online forums within your industry and search for comments about the name of the factory. Google the name of the company and see what you find out.

            Ask for samples. Samples are usually free, but expect to pay for shipping. I recommend asking for pictures through e-mail prior to shipping anything. Shipping, even a small sample, can cost you close to $50.00. A sample from here, another sample from there could add up. Make sure your contact understands exactly what you are looking for.

            Expect to pay for tooling and other set up charges if you are creating a new product. Get multiple quotes from various factories, to get a feel for tooling fees. Tooling can cost several hundred to several thousands of dollars. Before you pay for tooling, be sure the factory understands the exact dimensions and material of your product.

            Request your contact to photograph the sample next to a ruler, so you have point of reference. The Chinese use the metric system, but they are used to working with American companies and can provide you with measurements in inches. If they can only provide you with metric measurements, there are free online utilities that can quickly convert from metric to inches.

Find out the FOB price for the product before you get your sample. If the price is over your budget, there is no point in getting a sample. Many people get overly excited about receiving a sample that they forget negotiating a good price. The price always decreases as the size of the order increases. Be ready that your contact will want you to buy more than you need. Be firm, and explain that this is your first order, but subsequent order will be larger. Explain that you are looking for long term partnership, and you are going to be placing orders in the future for larger quantities.
            Throughout the above processes, you are going to get an insight into the responsiveness of the factory. It is a good sign if they are quick to communicate with you. Pay attention to whether or not they pay attention to details. Are they following your instructions? Do you have to explain everything twice to them? Are they easy to do business with? Use this opportunity to build a profile of the company.

            If your experience is less than desirable in the early stages, you should look for another company. You might be out a few hundred dollars, but at least you have eliminated a potential disaster.

            Once you have received the sample, and you are ready to place your order you will be required to wire transfer the deposit. The deposit is usually 30 to 50 percent of the order total. To minimize risk, try to negotiate the smallest possible deposit. Wire transferring your deposit is not without its risks. If your contact wants to walk away with your money, there is not much you can do about it. I was only ripped off once, but it doesn’t mean it can ‘t happen to someone else more often. Importing takes risks. Don’t cut corners. Constantly communicate with the company. Clearly explain your expectations. Build a good working relationship with them.

            After the order has been completed, you will be required to pay the balance. Don’t agree to pay until you receive the faxed Bill of Lading. Once you receive the copy of the B/L, you can be sure that the product was loaded at port. Unfortunately, you won’t know for sure what you got until you receive it on your end. Importing is risky business. It is an exhilarating experience, requiring careful planning, negotiations, and bit of luck.

Dumping

Dumping penalties can greatly increase your product costs. Certain products such as candles imported from China are penalized by an extremely high dumping tax. Prior to committing to import a product, research applicable taxes. If you are not careful, you could end up doubling your product costs. Unfortunately, antidumping laws have little to do with maintaining a “level playing field,” and a lot more with good old-fashioned protectionism. Research potential taxes and duties at United States International Trade Commission’s website usitcdotgov.