Profiting from E-Commerce

Profiting from E-Commerce

Edited by Dr. Terry Kibiloski

Image of a person's hands on a laptop computer browsing the webWhen you are developing a website to make high profits on the Internet, it’s important to understand the difference between electronic commerce (e-commerce) and electronic business (e-business). E-business is all encompassing, including any type of business you do online. It includes e-commerce (selling) and all other aspects of business online. If you only focus on the e-commerce aspect of e-business you may be missing a major opportunity for profiting from the Internet.

Most people associate e-commerce with the shopping basket type of website where you browse through various items for sale and add them to your shopping basket. Each item added to the basket is automatically recorded on your bill, which is summarized and usually paid at the end of your e-commerce session by typing in your credit card number and shipping address for the items you just selected for purchase.

In addition to this type of e-commerce, websites offer many other, sometimes overlooked, opportunities for e-business. A report by Ernst & Young LLP and the National Retail Foundation (NRF) shows the World Wide Web’s power to drive consumer purchases to other channels is often being overlooked.

In the latter part of 2014, Adweek found that 81% of shoppers conduct research online before buying and, on average, a consumer will visit three stores before making a purchase. That percentage has undoubtedly grown in the past few years. Additionally, Adweek found four reasons why many consumers avoided purchasing online: returning products might be complicated, did not want to pay shipping charges, shipping options did not offer fast enough delivery, and credit card fraud.

“The Internet is much more than a passive advertising vehicle,” said Ernst & Young Marketing Vice Chairman Stephanie M. Shern. Purchase decisions by consumers appear to be accelerated by the Internet. Shern said, “Retailers and manufacturers must understand this to unlock the incredible value of the Internet.”

Many retailers have established Internet/online presences for marketing and brand development purposes. But some have no plans to use the Internet for direct sales because of the “unsuitability of their (products) for Web sales.” Items appearing to sell well on the Internet, according to the study, include computers, software, books, travel, music, and magazine subscriptions. In addition, apparel sales continue to increase.

It is important to understand the frustrations of online shoppers so you can provide a friendlier, more satisfying shopping experience at your website. Not everybody has found a smooth-sailing electronic commerce experience, according to a study from new media research concern Jupiter Communications and NFO Interactive. The survey suggests retailers should be more concerned with customer service and retaining Internet buyers, rather than just generating sales and market share.

Even though e-commerce revenues for the past holiday shopping were higher than ever, many sites under-performed. A rush of traffic to some e-commerce sites either slowed or crashed them entirely. “Companies spent considerable dollars to acquire the customers that visited their sites,” said Nicole Vanderbilt, senior analyst for Jupiter Communications. “If they do not shift their efforts to alleviate technology issues and improve customer service in the coming months, they risk losing the customers they spent so much to acquire.”  The biggest source of consumer dissatisfaction came from items being out of stock, Jupiter said. High shipping costs came in second, while slow site performance placed third.

Those who shop online are no longer the early adopters who have more patience with new technologies and services; nowadays, the mass-market consumer is clicking on the “buy” button at e-commerce sites, Jupiter said. Those “typical” consumers are “far less forgiving of technical shortcomings,” Jupiter officials said.

Consumer watchdog group Public Eye showed a failure to deliver goods on time was the greatest source of customer dissatisfaction with online merchants. When goods were not delivered on time, the Public Eye survey found delivery delays that ran from a couple days to a couple months beyond customer expectations.

If you already have an e-business website, this should give you a few things to consider when trying to increase your profits using the Internet. If you are just getting started on the Internet, be aware that you don’t have to spend a small fortune to begin doing e-business or e-commerce.

Today, there are many web hosting services that have made it easy to build a professional looking e-commerce website.  Some even offer a free website, but then add on charges as you wish to expand your site to include more items and to accept payments online. Whichever service you decide to use, be sure you look for reviews on the web first. What have past customers experienced?  A good way to find out is to put the company name followed by “problems” in a search engine. Whichever hosting service you choose, be sure that they have excellent technical support staff who actually answer their phones and quickly assist you in whatever you need for your website.

The bottom line is this.  You can get into the e-commerce business rather quickly, and at relatively little cost, but the same principles apply to an e-commerce business as applies to a brick and mortar business.  You still need profitable revenue streams, good marketing, targeted customers, and good workers who offer excellent customer service, if you wish to survive and make a profit.

Dr. Terry Kibiloski, Editor of Computer Times, presented seminars at the Future Business Leaders of America (FBLA) national convention on Creating a Successful E-Commerce website. If you would like this presentation given to your company or group, send an e-mail to with the subject line E-COMMERCE WEBSITE PRESENTATION.

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