Buying Online: Business needs a cautious approach

A good Internet site takes money and dedication

Many have been tempted to set up a business online, and many more will do so in the future. But the great majority have been - and will be - disappointed.

The problem is that expectations are too great: There are 100m people on the Internet, so if only 0.1 per cent of them look at one site, that's 100,000 surfers. The parallel with selling to China ("if a billion people spend $1 each ...") is clear. As with China, this is a flawed philosophy; unless you do it right, you will fall on your face.

Be cautious, too, about the "limited downside" argument: "Well, it will only cost a few hundred to put up a site, so I can't lose much." A reasonable transactional site will cost at least pounds 5,000, and the time spent organising and running it will be (or should be) considerable.

So much for the dire warnings. There are many sites selling successfully on the Web, but they have not followed any magical formula, just a simple set of common-sense rules:

1) Find out whether your product or service is likely to sell online. According to the Irish consultancy Nua (www.nua.ie/surveys), there are 56m Americans online against 20m Europeans and 14m Asians. So if you have a product that is likely to appeal across the Atlantic, and that can be transported there easily, you should be encouraged. Anything that appeals to American nostalgia is likely to do well, as the success of the Scottish- themed Highland Trail (www.highlandtrail.com) testifies.

An even surer route to success is to be specialist. One of the hottest retailers on the Web (literally) is Hot, hot, hot, a Californian company selling a huge variety of spicy sauces. Aquatic Connection (www.aquacon.com) will sell you a shark.

The other category that can sell well is rather the opposite - standardised products that people are prepared to buy them without seeing them. These goods must also be easy to ship. The best-known examples are books. Amazon.com has revolutionised the book retailing industry by selling books online, offering a superb service and undercutting traditional players.

Even easier to ship is software, information and (just starting) digitised music, which can be sent down the line and have no physical form.

2) Set up an attractive Web site. The easiest way to establish a transactional Web site is to use standard software packages that include a catalogue, an ordering system and secure credit card payment.

You may be tempted to design your own Web site: software such as Adobe PageMill makes it possible to produce a professional result. Only do this if you have great visual confidence, however.

To persuade people to buy from your site, it is essential to give confidence - simplicity is fine, amateurism is not. Produce the concept yourself, and then hand over to a professional.

This raises two questions: What should go in the site, and which professional should you choose?

Transactional sites have a big advantage over non-selling sites; there is an obvious reason to visit them. A simple catalogue nicely laid out and easy to navigate, may be enough.

Good artwork or photos are essential, with enough information to give customers confidence (many will not have heard of you) and ideally some "content". A Web site can carry vast number of words without hiccuping.

Choosing the right designer is tricky. There is no standardisation of pricing. I know one company that had quotes ranging from pounds 2,000 to pounds 40,000 for the same specification site. Best bet is to go on recommendation; failing that, trawl the Web for sites look attractive and find out who designed them.

3) Make sure people know about your Web site. Promote your site "offline" - put its Web address on all your stationery and advertisements.

Make sure it is easy to find online; the trick is to make it "search engine friendly". You should also consider taking "banner ads" on other sites - the more specialist the better..

4) Make sure you can support the orders. The slickest transactional site will soon lose its popularity if the company cannot deliver fast and give back-up. You should acknowledge the order by email, and send another email saying when the product has been despatched.

Have a system to handle email complaints and comments (which may be numerous), as well as a despatching process. If your online volume is substantial, try talking to one of the big courier firms.

David Bowen is editor of Net Profit newsletter.

www.net-profit.co.uk