In this day and age of constant connectivity, the website that a business creates can be the difference between driving traffic and driving traffic away. This is true whether there is an e-commerce component to your business or not. For the purposes of this article, we will divide businesses into two categories — those who sell or offer services on the Internet and those who do not. No matter who you are, how you go about setting up and maintaining your website can spur the success of your business.
If you want to sell products or offer services online, you need to have an e-commerce business website. To be effective, you need to decide whether you want to utilize a third party business such as Amazon or another retailer’s marketplace or if you want to sell your own products on your site. Each platform comes with pros and cons including:
- Upfront selling fees
- Hosting fees
- Inventory storage fees and potential inventory taxes
- Transaction fees that may include swipe fees and the like for credit card transactions and electronic fund transfers
- Shipping and handling offset fees
Each platform is different, and an understanding of specific requirements is essential to understanding which of these, if any, is the right forum in which to sell your products or services. There are Internet horror stories of vendors who invested huge sums in products to sell in this fashion and lost everything merely because the true cost of selling through a third party was not understood.
All of the above-mentioned fees erode whatever margin you have baked into your product offering. For example, if a third party charges 5% to sell your product, a 3% inventory fee and 2% for credit card transactions, a $10 product suddenly brings in substantially less profit. This does not include any added expenses for re-ships and damage allowances that are often passed on to you, the vendor. It is a complicated calculus and it is often best to consult with an experienced professional to determine if a third party is the right vehicle for your business.
If you choose to operate your own website to sell your products, you also are looking at costs. You must examine whether to develop your own site or have it professionally done. Along with this expense, there will usually also be a hosting fee associated with the maintenance and upkeep of the site. Furthermore, shipping and handling costs will now solely be your responsibility. Infrastructure costs like computer terminals, software, and shipping stations will also be on your shoulders. Again, it is a complicated balance and there are numerous factors to take into consideration when making your decisions.
You still need the Internet to be successful even if you do not sell product on the Internet. Think of how you use the Internet to shop, procure services, or choose restaurants. For example, you need to get your oil changed and you are pressed for time. You go to the website of your local garage or dealer to book an appointment. If they lack the ability for you to do so, how quickly do you move on to someone who does? Or, if you are able to get past this inconvenience and you need to know their hours and you can not find them on the site, does your frustration take over and do you decide to go elsewhere? It sounds like common sense to include hours, contact information, and the ability to book appointments (when applicable) on your site, but it is remarkably easy to find professionally designed and hosted websites that do not include this information.
Another common failing in business websites is outdated or inaccurate information. It is frustrating to want to patronize a business, but to only see the events listed on its website from two weeks ago instead of seeing what is happening this weekend. A website does not necessarily need to be remade every other day, but current events, sales, and offerings are key updates that must happen.
Again, decisions regarding your business’ Internet presence are complicated and can be expensive either on the front end (design, hosting, and more) or the back end (eroded margin and profit). It is important to the success of almost any business, though, to get these decisions right. The skilled business professionals at De Cardenas LLP have years of experience advising new and established businesses how to leverage the Internet to drive success. Give us a call at 626-577-6800 (Los Angeles) or 415-590-4869 (San Francisco) or click here to set up a consultation to see how we can help you and your business with issues ranging from incorporation to website construction and management.