We all know that accepting credit cards is the key to online sales. Unfortunately, most merchants are unaware that acquiring a merchant account can actually save them money. And in many cases, big money!

For this experiment, we will use a fictional character named Bill. Bill owns and operates a great online resources for marketing tools and resources. Bills website is a membership based website, and therefore could potentially be approved for both third party processing and an internet merchant account. Bill starts off processing his business with a popular third party processor who offers him the following plan:

Start Up Fee – None

Monthly Fee – None

Transaction Fees – 13.5% (Initial or One Time), 15.0% (Recurring)

Bills sets up his business with this popular third party processor and charges $30 per month. He has built an extensive reciprocal link exchange directory, has purchased some PPC advertising on a few of the best search engines, and has reached a excellent spot in the content based search listings for the top 5 search engines. His customer base has grown from zero before accepting credit cards, to 150 members, is just one month. Bill can’t believe his success at internet marketing, and is planning on building even more web based resources and tools for his website, thus increasing the value and content. He is ecstatic at the initial results, so let’s take a look at Bills numbers:

$30 (Per Membership Sold) x 150 (Memberships Sold) = $4,500.00

$4,500 x 13.5% (Initial or One Time Transactions) – $ 607.50

$4,500.00 (In total sales)

- 607.50 (Total fees)

= $3,892.50 (Net profit after all processing fees have been deducted)

Ok. Well Bill certainly had an excellent first month accepting credit cards with his new business venture. But let’s see how Bill would have made out if he would have secured an internet merchant account for his new business:

Start Up Fee None

Monthly Fee $15.00

Discount Rate 2.35% (Initial, One Time or Recurring)

Per Trans Fee .30 cents

Gateway Mo. Fee $15.00

AVS Fees .10 cents

Now the first thing we see is that the merchant account company is showing us more fees. This may be disheartening at first sight, but we should really explore what these fees are, and how they affect our bottom line.

Start Up Fee: This remains the same. Bill paid zero to get setup with his new merchant account, just as he paid zero to get setup with the third party processing account.

Monthly Fee: The third party processor offered us no monthly fees, yet we must pay $15.00 with the merchant account company.

Discount Rate: The merchant account has labeled one of their fees as “discount rate.” These fees are the fees Bill will pay as a percentage of each transaction. They are similar to the main fee charged by the third party processor. This fee when charged by the merchant account company is substantially smaller than the high percentage charged by the third party processor. But we will wait till the end of this experiment to see who offers the better comprehensive deal.

Per Trans Fee: The merchant account company charges Bill .30 per transaction he processes through his merchant account. Of course, we have already established that Bill will pay no per transaction fees with the package he received from the third party processor.

Gateway Monthly Fee: Because Bill will also need an internet payment gateway for his merchant account to work online with his website, he will also be paying $15.00 a month for his Gateway Monthly Fee.

AVS Fees: The AVS fee stands for Address Verification Service. Bill will want to use this service, to help reduce potential fraud, and customer chargebacks to his merchant account. He will now pay an additional per transaction fee of .10 per transaction.

Let’s see the numbers behind processing with a merchant account as opposed to a third party processor:

$30 (Per Membership Sold) x 150 (Memberships Sold) = $4,500.00

$15.00 (Merchant Account Monthly Fee) – $15.00

$15.00 Gateway Monthly Fee) – $15.00

2.35% (Discount Rate) x $4,500.00 – $105.75

30 cents (Per Trans Fee) x 150 (Memberships Sold) – $45.00

10 cents (AVS Fees) x 150 (Memberships Sold) – $15.00

Total Fees (With Merchant Account) = $195.75

$4,500.00 (In total sales)

- 195.75 (Total fees)

= $4,304.25 (Net profit after all processing fees have been deducted)

With the merchant account, Bill was able to keep substantially more of his sales for himself, as profit. Bill could use these extra resources to advertise more, expand his operation, and even hire someone to work for him, even if only on a part time basis. The point is that that the better deal in credit card processing is always with a merchant account as opposed to using a third party processor.

Most third party processors leverage the high levels of risk and chargebacks they must face everyday, by charging enormous fees and rates to their entire customer base. Third party processors are synonymous with Adult related websites. This is the reason for their increased exposure to risk. They must charge high rates to overcome the losses they are subject to by processing for a category of merchants that, unfortunate as it may be for them, falls into a certain level of risk and fraud that most other merchants do not. Because the merchant account company restricts its clientele to only companies with non adult related content, they are able to offer an entrepreneur like Bill, selling online content through his membership based marketing website, a much better deal in credit card processing.

$4,304.25 (Net Profit with Merchant Account)

- 3,892.50 (Net Profit with Third Party Processing)

= $411.75 (Total Savings with Merchant Account)

This experiment has shown that the average website owner can save substantially by choosing wisely when it comes to their credit card processing solution. We have proved that most any entrepreneur can and will save substantial amounts of money by using a merchant account for their online credit card processing, as opposed to processing with a third party processor. In our little test, Bill saved $411.75, and that was just in the first month alone.

Remember, that the third party processor will charge more, 15.0% to be exact, per transaction, once the customer is charged on a recurring basis. This means that for the second month, Bill would have paid even more to his third party processor; $675.00 to be exact! And that is just on the first months returning 150 customers. Every time Bill has a recurring payment processed through his third party processing account, he would be subject to a 15.0% transaction fee on all those sales. Not a very thrifty choice for credit card processing.

As with any business decision, be smart. Compare rates and plans, and make sure the “simple” setup is really worth the cost. In most cases, your Merchant Service Provider can setup your merchant account in as little as 24 hours. This is faster than your third party processor, and adds even more value to the otherwise already vastly superior deal you are receiving with your very own merchant account.

What a great idea! Start accepting credit cards and watch your profits soar. Nothing could be simpler. Or so you thought until you began researching merchant accounts. It can all get extremely confusing. There is an easy way to find the best deal that suits your business. You’ll be able to compare apples to apples and have a clear picture of what the merchant account will cost you.

Let’s take a look at some of the phrases you’ll encounter (in layman’s terms) when you begin to search for a merchant account.

— Merchant Account Provider – The company who arranges for your payment hardware or software and your ability to accept credit cards.

— Nova – The company who processes the credit card transactions and forwards them to the appropriate credit card company for payment (Visa, MasterCard, American Express, etc.)

— Set Up Fee – The one-time amount the merchant account provider charges to set up your company in their system. For this example, we’ll use a set up fee of $65.00.

— Discount Fee -One amount (there are others) that Nova and the merchant account provider deduct from each sale as a portion of their payment for your merchant account. We’ll use a discount fee of 2.25%.

— Per Transaction Fee – This is a second amount that the two companies subtract from each transaction as a portion of their payment. For our example, we’ll pick a per transaction fee of $.35.

— Terminal or Gateway Fee – Whether you have a real terminal or a virtual gateway via the Internet, you will be assessed monthly charges to cover the use of that service. Let’s say $10.00 for our example.

— Statement Fee – The fee for your merchant account provider to send an itemized statement each month. An average amount we can use is $15.00.

— Annual Fee – An annual fee just for having your merchant account. For the annual fee example, we’ll choose $35.00.

I know what you’re thinking! But don’t give up before you start. Remember, I’m going to show you a way to decipher all this information.

Choose a number — any number. This will be the total number of transactions you think you might conduct during the course of a year. For our example, we’ll use 100. Next, choose an average transaction amount for your product or services. We’ll say $175.00 for now. Finally, we’ll calculate a year’s worth of charges by using the amounts above and within the definitions.

Set Rate Charges:

Set up Fee = $65.00 (one time only)

Gateway Fee = $10.00/mth

Statement Fee = $15.00/mth

Annual Fee = $25.00/yr

Then multiply your estimated number of transactions by the $ .35 per transaction fee. That equals $35.00. Next, multiply the average transaction amount ($175) by the discount rate of 2.25%. That equals $3.94. You’ve estimated that you’ll have 100 transactions per year, so again, multiply the $3.94 by the 100 transactions. The total equals $394.00. All that is left is to add them all up.

Set up Fee = $65.00 (one time only)

Gateway Fee = $10.00 x 12 months = $120.00/yr

Statement Fee = $15.00 x 12 months = $180.00/yr

Annual Fee = $25.00/yr

Per Transaction Fees = $35.00/yr

Discount Rate Fees = $394.00/yr

Total Fees & Charges For One Year = $819.00

Let’s look at one other quick example just to show you that looks can be deceiving.

This company offers the following rates:

Set up Fee = FREE

Gateway Fee = $15.00/mth

Statement Fee = $10.00/mth

Annual Fee = FREE

Per Transaction Fees $ .30

Discount Rate Fees = 2.35%

Software Lease = $24.95/mth

Based on our same $175 average transaction and 100 transactions per year, we come out with the following figures:

Set up Fee = FREE

Gateway Fee = $15.00 x 12 = $180.00

Statement Fee = $10.00 x 12 = $120.00

Annual Fee = FREE

Per Transaction Fees (100 transactions x $ .30 = $30.00)

Discount Rate Fees = $175 avg. transaction x 2.35% = $4.11 x 100

transactions = $411.00)

Software Lease = $24.95 x 12 = $299.40

(an additional fee our first provider didn’t charge)

Total Fees & Charges For One Year = $1040.40.

Even with free set up and no annual fee, this company still charges over $200 per year more than the first merchant account provider we previewed. Be very careful – the word “free” can often times be deceiving.

Merchant accounts can open a world of new business for your company. They can provide a very convenient way for your clients to pay – and for YOU to get your money. However, when you shop for a merchant account, be sure to use a standard unit of measure like we’ve outlined above to be very sure that you are getting the deal best suited for your company.

We all know that accepting credit cards is the key to online sales. Unfortunately, most merchants are unaware that acquiring a merchant account can actually save them money. And in many cases, big money!

For this experiment, we will use a fictional character named Bill. Bill owns and operates a great online resources for marketing tools and resources. Bills website is a membership based website, and therefore could potentially be approved for both third party processing and an internet merchant account. Bill starts off processing his business with a popular third party processor who offers him the following plan:

Start Up Fee – None

Monthly Fee – None

Transaction Fees – 13.5% (Initial or One Time), 15.0% (Recurring)

Bills sets up his business with this popular third party processor and charges $30 per month. He has built an extensive reciprocal link exchange directory, has purchased some PPC advertising on a few of the best search engines, and has reached a excellent spot in the content based search listings for the top 5 search engines. His customer base has grown from zero before accepting credit cards, to 150 members, is just one month. Bill can’t believe his success at internet marketing, and is planning on building even more web based resources and tools for his website, thus increasing the value and content. He is ecstatic at the initial results, so let’s take a look at Bills numbers:

$30 (Per Membership Sold) x 150 (Memberships Sold) = $4,500.00

$4,500 x 13.5% (Initial or One Time Transactions) – $ 607.50

$4,500.00 (In total sales)

- 607.50 (Total fees)

= $3,892.50 (Net profit after all processing fees have been deducted)

Ok. Well Bill certainly had an excellent first month accepting credit cards with his new business venture. But let’s see how Bill would have made out if he would have secured an internet merchant account for his new business:

Start Up Fee None

Monthly Fee $15.00

Discount Rate 2.35% (Initial, One Time or Recurring)

Per Trans Fee .30 cents

Gateway Mo. Fee $15.00

AVS Fees .10 cents

Now the first thing we see is that the merchant account company is showing us more fees. This may be disheartening at first sight, but we should really explore what these fees are, and how they affect our bottom line.

Start Up Fee: This remains the same. Bill paid zero to get setup with his new merchant account, just as he paid zero to get setup with the third party processing account.

Monthly Fee: The third party processor offered us no monthly fees, yet we must pay $15.00 with the merchant account company.

Discount Rate: The merchant account has labeled one of their fees as “discount rate.” These fees are the fees Bill will pay as a percentage of each transaction. They are similar to the main fee charged by the third party processor. This fee when charged by the merchant account company is substantially smaller than the high percentage charged by the third party processor. But we will wait till the end of this experiment to see who offers the better comprehensive deal.

Per Trans Fee: The merchant account company charges Bill .30 per transaction he processes through his merchant account. Of course, we have already established that Bill will pay no per transaction fees with the package he received from the third party processor.

Gateway Monthly Fee: Because Bill will also need an internet payment gateway for his merchant account to work online with his website, he will also be paying $15.00 a month for his Gateway Monthly Fee.

AVS Fees: The AVS fee stands for Address Verification Service. Bill will want to use this service, to help reduce potential fraud, and customer chargebacks to his merchant account. He will now pay an additional per transaction fee of .10 per transaction.

Let’s see the numbers behind processing with a merchant account as opposed to a third party processor:

$30 (Per Membership Sold) x 150 (Memberships Sold) = $4,500.00

$15.00 (Merchant Account Monthly Fee) – $15.00

$15.00 Gateway Monthly Fee) – $15.00

2.35% (Discount Rate) x $4,500.00 – $105.75

30 cents (Per Trans Fee) x 150 (Memberships Sold) – $45.00

10 cents (AVS Fees) x 150 (Memberships Sold) – $15.00

Total Fees (With Merchant Account) = $195.75

$4,500.00 (In total sales)

- 195.75 (Total fees)

= $4,304.25 (Net profit after all processing fees have been deducted)

With the merchant account, Bill was able to keep substantially more of his sales for himself, as profit. Bill could use these extra resources to advertise more, expand his operation, and even hire someone to work for him, even if only on a part time basis. The point is that that the better deal in credit card processing is always with a merchant account as opposed to using a third party processor.

Most third party processors leverage the high levels of risk and chargebacks they must face everyday, by charging enormous fees and rates to their entire customer base. Third party processors are synonymous with Adult related websites. This is the reason for their increased exposure to risk. They must charge high rates to overcome the losses they are subject to by processing for a category of merchants that, unfortunate as it may be for them, falls into a certain level of risk and fraud that most other merchants do not. Because the merchant account company restricts its clientele to only companies with non adult related content, they are able to offer an entrepreneur like Bill, selling online content through his membership based marketing website, a much better deal in credit card processing.

$4,304.25 (Net Profit with Merchant Account)

- 3,892.50 (Net Profit with Third Party Processing)

= $411.75 (Total Savings with Merchant Account)

This experiment has shown that the average website owner can save substantially by choosing wisely when it comes to their credit card processing solution. We have proved that most any entrepreneur can and will save substantial amounts of money by using a merchant account for their online credit card processing, as opposed to processing with a third party processor. In our little test, Bill saved $411.75, and that was just in the first month alone.

Remember, that the third party processor will charge more, 15.0% to be exact, per transaction, once the customer is charged on a recurring basis. This means that for the second month, Bill would have paid even more to his third party processor; $675.00 to be exact! And that is just on the first months returning 150 customers. Every time Bill has a recurring payment processed through his third party processing account, he would be subject to a 15.0% transaction fee on all those sales. Not a very thrifty choice for credit card processing.

As with any business decision, be smart. Compare rates and plans, and make sure the “simple” setup is really worth the cost. In most cases, your Merchant Service Provider can setup your merchant account in as little as 24 hours. This is faster than your third party processor, and adds even more value to the otherwise already vastly superior deal you are receiving with your very own merchant account.

In the last column we discussed the process of credit card enabling your brick-and-mortar business. I pointed out that research has shown that accepting credit cards can help increase revenue and speed up cash flow. This week we will look at setting up an online payment system for your business website. If you think hooking up a brick-and-mortar location with a credit card system stymies most bankers, try asking them how to do it on your website.

The fact is most banks can provide you with the merchant account needed to accept credit card payments online, but beyond that, they have little to do with the process. Even larger banks may only have a single person on staff that is tasked as the “credit card processing expert” and if that person ever goes on vacation, you’re pretty much out of luck (voice of experience talking here, folks).

I have helped many clients set up online credit card processing systems and more than once I’ve had to sit down with the bank issuing the merchant account and educate them on how online payment systems work. Don’t believe me? This is a direct quote (here’s the Bible, here’s my hand) from the manager who was in charge of processing Internet merchant account applications at a local bank, “When someone pays online how do they swipe the credit card in their computer…”

You will need the following to accept credit cards on your website: (1) an electronic shopping cart system; (2) a payment gateway service; (3) a credit card processor; and (4) an internet merchant account issued by a bank or other financial institution or service bureau.

Here’s how online credit card processing works. (1) Your customer submits his credit card information at checkout on your website. (2) The shopping cart software sends the transaction to the gateway. (3) The gateway routes the information to the processor. (4) The processor contacts the bank that issued the customer’s credit card. (5) The issuing bank approves or declines the transaction. (6) The processor routes the result back to the gateway who then passes the result back to the website shopping cart system. The entire process is done electronically and takes seconds to complete.

We covered most of these elements last week. Here’s a quick refresher for those who missed the basics, then we’ll talk about the shopping cart system you’ll need to implement on your website.

Payment Gateway Service: The payment gateway service comes into play when a customer submits their credit card information to the webpage form. Think of the gateway service as the middleman in the process. The website’s shopping cart checkout system electronically submits the credit card to the gateway service that then routes the information to the processor for approval.

Credit Card Processor: The credit card processor is an electronic data center that processes the credit card transactions coming from the gateway company, ensures that the charge is valid, then settles the funds in your merchant account.

Internet Merchant Account: An Internet merchant account is a bank or account in which funds from online sales are deposited by the processor. Merchant accounts are usually issued by banks that are associated with the major credit card services like Visa and MasterCard. Be aware that many banks will not grant merchant accounts to Internet merchants as they are often categorized as “high risk ventures.” This policy varies widely and in the end, the granting of the merchant account will come down to economics from the bank’s point of view. If the bank sees even the smallest iota of risk, you will not be granted the account.

Fortunately, the growth of online sales has given rise to an entire industry of merchant service bureaus that will grant you a merchant account and everything else you need to accept online payments. The fees are usually higher, but it’s better than not having an online payment system at all.

Shopping Cart System. To accept online payments you must have what’s called a “shopping cart system” that allows the customer to select and purchase products from your website. A shopping cart system typically consists of three components: the product catalog, the shopping cart, and the checkout/payment system. The product catalog is the component that displays the items you have for sale on the website. The shopping cart system is the component that allows your customers to select products by clicking to “add items to cart,” and the checkout/payment system is the component that allows the customer to complete the checkout process and pay for their purchase with a credit card (or in some cases an electronic check). It is the checkout/payment component that communicates with the gateway system to complete the transaction.

Adding a shopping cart system to your website can be a simple or highly complex task, depending on the system you select. The cost of shopping cart software ranges from free (for simplistic form-based systems) to very expensive. Which shopping cart system is best for your business depends on a number of factors, including the product you’re selling, the depth of your product line, the purchase options you wish to offer customers, the inventory control functionality, and the extent of automation you desire.

There are numerous companies who can assist in the setup of your shopping cart and online credit card payment system. These companies typically charge several hundred to several thousand dollars for their services, but like anything you get what you pay for, so always use a company with good references in this area. When you’re dealing with something as important as credit card processing and cash flow, bite the bullet and get it done right the first time. The money you spend now will be returned many times in increased sales volume from credit card customers.

The most important thing to remember when setting up an online payment system is this: online it’s all about security and privacy. Though online credit card processing has been around for years there are still many people who are uncomfortable giving their credit card number online. These are the same folks who do not hesitate to give their credit card number over the phone or hand their credit card to a waiter who disappears with it for ten minutes. Online credit card processing is much less susceptible to fraud and abuse than of those scenarios.

Small Business Q&A is written by veteran entrepreneur
and syndicated columnist, Tim Knox.
Tim’s latest books include “Small Business Success Secrets”
and “The 30 Day Blueprint For Success!”
Related Links:
http://www.smallbusinessqa.com
http://www.dropshipwholesale.net

Just because you’ve built your e-commerce website doesn’t mean the customers will begin to come. You need to bring in the visitors, showcase your products, convince them to buy, and bring them back yet again to make any significant gains.

The customers need to be wooed by the unique customer experience that will bring them back, and have them sing your praise to their friends, spreading your name. This may seem like a tall order, but isn’t. Listed here are the top ten tips to build, manage and profit from your e-commerce website. Follow them and see the benefits for yourself.

1. Organize your Catalog around Product Categories

Many sites either provide a long list of products or lump them behind a search button, making it difficult to find them. Arrange your products into logical categories and subcategories, but do not overdo it. Research says it that most people get overwhelmed with more than 7 categories. The customer must be able to easily search any product without help.

Your product should have a clear and high-quality picture, short and detailed specifications. If necessary add video or pictures of different view points (top angle, side view) along with the product specification.

2. Provide Multiple Payment Options

Keep all kinds of payment options available to your customers. Not everyone feels comfortable buying through a credit card, or has one. Allow for debit cards, fax, telephone, snail mail, paper and electronic cheques. And sign-up for fraud checking facility, without which you could easily end up losing entire day’s sales within minutes. Provide a currency converter if you offer products or payment in other currencies.

Including a telephone number for customer support on the order is a must. It gives the buyers some extra feelings of security that they can always talk to a live person if anything goes wrong in the buying process.

3. List out Clearly Outlined Policies

Privacy:

Make your privacy policy public. Keep it in a prominent place, and link it to the home, products and checkout pages, so that customers who are vary of providing personal and credit card details feel comforted. Tell them if you plan to share their email address with others, or plan to send in promotional mail or newsletters.

Further, allow them to unsubscribe or opt-out of such email if they think so. Never sell the customer’s personal particulars unless they have agreed, as this is a sure way to lose credibility doubly fast.

Security:

If you plan to collect sensitive information from your customers, you should use security systems like SSL (Secure Socket Layer). This guarantees that the data provided by your customer will not fall into the hand of a malicious hacker while transferring from his computer to the web server.

This also will reassure your customers that you are truly concerned about the security of their personal information.

Terms and Conditions:

Write clearly and prominently all the sales and after sales support terms so as to avoid confusion. The internet is worldwide, and your customer can come from any country. List your shipping and handling costs upfront, and be ready to ship anywhere on the Earth. Publish your returns policy, support hours, and even the approximate time taken to deliver the goods.

Send a confirmation note thanking the customer, and listing all the products, prices and key terms of the purchase in an email. Keep the customer updated of the order status at all times by email or by providing a link in your shopping page where they can check the status of their order anytime.

4. Build a Newsletter Around Your Products

To snag new customers and keep the old ones remembering you vividly, seriously plan to launch a newsletter, and send it to all prospects and customers on a regular basis. Apart from the credibility of being a serious player in the market, you dazzle them with your commitment by releasing the newsletter on fixed days – like 15th of every month, or every Monday.

You can also show your expertise in your field by writing regular, in-depth articles, covering the latest trends in the industry, and reviews of new products. Your customers, distributors, and partners will start to eagerly await your newsletter. Sprinkle your promotions and products in between the contents of the newsletter, and be ready to receive an increase in web traffic and order bookings every time you send out the newsletter.

5. Let Customers Gift Your Products

Allow people to gift your products to their friends and loved ones. Provide free gift wrapping, a personalized message or a free gift for the purchaser. Allow them to create Wish Lists that they may use to buy later.

These small things do matter and act as freebies that your competitor may not have. Although these are fast becoming standard feature, make sure you don’t end up with the dumb ones who haven’t figured this simple technique out yet.

6. Promote your Site Every Day

Strong marketing is the most important aspect of having a successful website. The best of sites won’t make money if people don’t come in hordes. Launch promotions, and get the word to everyone possible within your target audience.

You can do promotions using direct mail to your existing customer, in your newsletter, and fliers. All the methods of traditional marketing apply here. Don’t leave any technique untried. Remember the old adage – Market, market, market.

7. Measure Results and Reorganize

Measure the results you are getting from each promotion religiously, and note what works and what doesn’t. Experiment. Study. Fine tune. This is the only way to know how effective your campaigns and promotions are.

You can also bring in some external people to visit your site and give you sincere feedback about each page on your site. The more critical they are, the more changes you will make, and eventually it will benefit you and your customers.

Keep making changes and test what works and what doesn’t on a continuous basis. What works today may not work tomorrow.

8. Keep a Simple yet Effective Web Design

There is intense competition on the web. Make a compelling website that showcases your USP (unique selling proposition) and brings the customer back to your site. Differentiate from the rest by using your imagination to make your site standout from the rest. A cool, cathy, easy to remember name could definitely help.

Make a simple site, with plain HTML, and a consistent look and feel on all pages. Use an easy to read font, at least a 10 size font, preferably 11. Do not load with graphics and huge pictures on every page, which may slow down your page.

Although this advice is becoming old fashioned as most people are moving to broadband, it is still a good practice, as you don’t want to lose the customers who use a low speed modem.

Flexibility and ease of use are far more important than flashy graphics or cool Java applets. The objective is to keep the customer looking at the products, and not keep them waiting or lose them by slow loading graphics or effects.

Keep the catalog simple, and with a consistent design with links to Home, Checkout page, Privacy Policy, Terms and Conditions, Customer Profile pages handy and at the same, consistent place on each page. Make it easy to browse the store and mark products for later purchase.

9. Make the Login Process a Breeze

The less clicks needed to order, the better. Amazon patented their One-Click method that minimized the clicks, making the checkout process simpler and easier. Try to make the registration or login process minimal, and only keep the most relevant fields mandatory.

I was disgusted by the lengthy logon process which forced me to enter my middle name, date of birth, and mother’s maiden name for just registering for an online taxi booking service. I left it mid way, and went to another taxi operator’s site, which registered me within a minute. A simple thing can result in a costly mistake that loses the customer forever.

10. Reduce Popup Messages

Too many popups distract and disgust the customer. Especially after the visitor closes your website window, if you start to popup other windows with more promotions, it leaves a feeling of being chased. It is also the signature of most of the adult sites, so steer away from such insensitive practices.

Show your professionalism and respect the customer’s privacy and time. It will help to build your image as a serious and professional site and enhance your credibility.

11. Use a Reliable Hosting Service

Use a service that is good, reliable, and can provide you with customer support at all hours. Web hosting is getting very cheap but it is better to pay a little more and get a fast and reliable web hosting. Nothing loses a customer faster than a slow site or a site that is down frequently. Compare a few hosting services, and ask around before signing up for one. You won’t regret it.

1. Balance – You want to find a directory rich in many different categories of products rather than the quantity of products available. Many of the directories try to advertise how many products are available in their directory (i.e. 500,000 products). Why is the number of categories important? A directory will not serve you well if it has hundreds of thousands of products, and none of them are in your product interest category. A directory with a good balance has focused on their categories of drop shipper products rather than the quantity. This gives you a better chance of finding something for your line of business.

2. Uniqueness – You will want a directory with uniqueness amongst it’s drop shippers. The drop shippers should offer a wide array of unique products that are not necessarily mass marketed. Why? Web sites offering unique and unusual products often do well on the Web versus sites trying to sell big brand name products that you can find with a mega retailer such as Wal-Mart. A directory offering a bunch of big brand name product drop shippers could land you in the highly competitive commodity market against the mega retailers.

3. Selection – A directory with a good selection of drop ship categories is important. The number of drop shippers or the number of products a directory carries should not be the goal. The goal and question should be, “Do they have a drop shipper that would fit my line of business?” A common mistake for many folks is getting fixated on the quantity of products a directory might offer with it’s drop shippers. The question they start to ask is, “A directory with over 1,000,000 products ought to have something for me to sell.” Wrong! Be sure to remember the first parameter we mentioned. Balance.

4. Search Method – The directory must explain the methods they use to find drop shippers. Be careful of directories that do not publish their search methods. If they do not explain their search methods, they may not have a solid search methodology. The directory could be full of a bunch of middlemen. At that point, the directory would be worthless to you. Directories using search methods such as trade show searches and foreign government agency searches are preferred over directories only focused on Internet searches. Why? Not all drop shippers and importers have a Web presence. A directory based on a bunch of Web searches could be missing some of the best hard-to-find drop shippers.

5. Sample – A sample of the directory should be made available to give an idea of format and information provided. The actual names of the drop shippers will not be given in a sample, but you will get an understanding of the type of information provided.

6. Price – This is a subjective parameter but there is something to consider. As an observation, most legitimate directories on the Web today are sold between the $60 and $100 price mark without any markdown. If you find one good drop shipper in a directory and you sell their products on your site, you could find your directory investment paid off quickly with just a sale or two.

7. Education – The company selling the directory should have a website fairly resourceful with FAQ’s and articles written by it’s own research staff or owner. Topics should include drop shipping, ecommerce, importing and general FAQ’s about drop shipping. Watch out for directory sites only containing FAQ’s about their directory and not drop shipping.

8. Custom Search – Find out if the company offering the directory will do a custom search for a drop shipped product. A custom search can sometimes be done under certain conditions with the directory’s parent company. As of this writing, Hienote is the only directory company advertising this type of service.

9. Toll Free Number – You should be able to talk to the folk’s offering the directory without paying for the call. Contact by email only is not acceptable! Also, be leery of directory sites without a toll free numbers or only a cell phone number given as this could be a suspicious con artist.

10. Customer Service – Any online business that cares about its customers should have a section dedicated to customer service. A company that offers a drop ship directory is no exception. It should have a section of it’s site dedicated to customer service. At a minimum it should have a toll free number, mailing address (not just a P.O. Box number!), email address, hours of operation, and a phone number for calls outside of the country.

11. Money Back Guarantee – A money back guarantee is always important to have with a directory. You want a way of getting your money back if the directory does not live up to it’s promise. Be sure to examine the guarantee policy.

With these eleven parameters you should now have have enough knowledge to get you started in the right direction for evaluating a drop ship directory. In addition, hopefully this has given some food for thought in terms of considering a drop ship directory for your online business.

Brad Beiermann Ph.D., is President of Hienote Inc., Crystal Lake, IL 60039. Dr. Beiermann is one of the leading experts in business technology and e-commerce. Hienote Inc. specializes in assisting businesses locate unique wholesale drop shipping companies. You can visit their site at http://www.hienote.com, or call 1-800-342-0386.

For anyone who has completed research regarding e-commerce, there are some common catch phrases that we all come across. ‘Competition Analysis’ is one of those catch phrases. Competition Analysis is part of the business plan. And it is an important part.

However, completing some of the tasks that are required for Competition Analysis can be overwhelming and expensive. This is a disadvantage for e-commerce startups with limited budgets.

The following is a suggestion that has worked for us at Rothline Entertainment, an e-commerce site located at http://www.rothline.com. After reviewing information on completing Competition Analysis, we immediately knew we could not afford to have an outside source complete these tasks. We were also overwhelmed with the idea of attempting to complete the tasks ourselves.

We brainstormed regarding who our competition is and how well they are doing. One of the free tools that helped us the most with Competition Analysis was http://www.alexa.com/site/ds/top_500

This site allows searching for e-commerce sites in specific industries in order to view status, link popularity, ranking, etc. For our company we began by selecting five companies that best fit our industry and were in the top 500. We took a look at what they were doing, and they must be doing something right if they are in the top 500.

We made a list of their strengths and weaknesses and compared our strengths and weaknesses to theirs. This was the best free Competition Analysis tool we had come across. It provided information on our competition and allowed us to begin carving out what our special niche could be and how to compete. The only thing that it cost was time.

For a startup e-commerce site with a limited budget I recommend trying this approach for Competition Analysis. This approach does not have to be your only tool but it can be a beneficial tool to add to your marketing toolbox.

Most people who get into business know what’s involved. They have completed hours of research before getting into it. That’s great! Even so, we may still have some myths that need to be debunked. Now and forever. We all may have some lingering ideas; after all many have these myths are quite tempting. However, it’s important for serious business owners to quickly get them out of the way so some really forward moves can be made. In the world of the Internet businesses, the industry is rife with myths that ultimately can be as harmless as a distraction or as worse as a serious loss in capital, which could ultimately lead to business failure.

There are many persistent myths out there but we’ll go over the most popular ones.

This is not a definitive list but it shows some pervasive myths that can potentially get in your way on the road to e-commerce success. Becoming familiar with them will not only help you in your own business endeavor but it will also help you avoid suspicious and far-reaching business propositions.

Knowledge Management for beginners

Knowledge Management (KM) can be defined simply as the process through which organizations generate value from their intellectual and knowledge-based assets. Knowledge assets are often grouped into two categories:

(1) Explicit Knowledge

Generally, everything and anything that can be documented, archived and codified. Examples include patents, trademarks, business plans, marketing research and customer lists.

(2) Tacit Knowledge

The rest. Tacit knowledge is the know-how contained in people’s heads. The challenge inherent with tacit knowledge is figuring out how to recognize, generate, share and manage it.

Most often, generating value from such assets involves sharing them among employees, departments and even with other companies in an effort to reach – or go beyond – best practice.

Where Collaboration technologies can help? and hinder

For explicit knowledge, the focus can usefully be described as “connecting people to things”, whilst for tacit knowledge, the focus is “connecting people to people”.

As such, structured and unstructured search technologies are usually the core of strategies to encourage greater sharing of explicit knowledge; the user searches for a document either by typing some text into a search engine or by clicking through a document taxonomy.

Similarly, a well structured “yellow pages” directory, where one can search for people with particular skills or experience, forms the centrepiece of tacit strategies; where the aim is to connect people often for 10 minute telephone conversations / requests for help that could save a week’s work.

Both explicit and tacit strategies are, however, much enhanced when combined with Collaboration or “work-group” technologies. By creating “communuities of interest” around cross-functional themes, individuals can share documents, plans and other material, find and discuss issues with subject-matter experts and even allocate tasks and calendar items to each other.

For example, a community for “customer insight” might have members drawn from call centre operations, marketing and IT teams (to name but a few) who share a common interest in better understanding the customer need. They could each contribute into the team space document repository materials that (once added together) create powerful new insights and possible future revenue enhancement. By sharing, they (a) gather a sense of belonging to a wider network of similarly minded people, (b) gain knowledge that helps each to better achieve their objectives and (c) gain recognition for being an expert in their particular area.

Benefits (for your business case) include: (a) better customer service through improved response times, (b) faster new product development and time to market, (c) enhanced employee retention through rewarding knowledge sharing, (d) reduced Opex through the streamlining of processes, (e) reduced IT network and storage cost growth through a reduction in email file attachments.

There are, however, risks to collaboration, where poorly implemented. For example, if individual community documents are not accessible through the overall portal search, then you risk creating information silos, where only a select few can access information that is of much wider use. Also, part of your portal benefits are likely to stem from people visiting all areas of the site and learning about other departments and teams. If people spend all their time in their own team rooms, the benefits of this wider perspective will be lost.

Typical Team Room Functionality

Most intranet portal offerings contain some collaboration functionality, either (a) as a standalone optional module, (b) as a partly integrated standard portlet or (c) as a fully integrated function, combined with email systems.

Typical elements include:

1) Shared Calendar:

The team can maintain a single calendar of notable team events or shared deadlines. Where not fully integrated to email systems, this functionality is sometimes only sparingly used.

2) Discussion Forums:

The team can set up and post to threaded discussions, where issues or opportunities can be fully explored. It can take time for people to really get used to using this functionality and taking such discussions off the email system. A key role is that of the moderator, who can (a) spark new discussions, (b) invite people to join them, (c) deal with any abuse of etiquette and (d) capture and structure the result (e.g. a key decision) before archiving the thread.

3) Shared Documents:

The team can workflow, version control, security protect and store / retrieve documents, including policies, reports, analysis and plans. This functionality is often the most heavily used and of particular value for project teams, where many hundreds of key documents may be created in the course of delivery.

4) Allocate Tasks:

The team can set-up tasks and allocate them to themlseves or other team members. Reminders appear in the team calendar and (where there is email integration) in the email inbox of the task owner. Again, it can take time to get people usign this functionality but – once working well – can be of immense value for teams driving at particular outcomes and deadlines.

Some final thoughts

Collaboration technologies can be a very powerful addition to your knowledge management strategy, complementing structured search and yellow pages functionality. It is important to get the implementation right. In particular, to really think about ways to move people from email to teamrooms (e.g link to files in a teamspace rather than attach them) and to ensure that documents in teamrooms can be accessible via the wider portal search functionality.

Read the guide at http://www.viney.com/DFV/intranet_portal_guide or the Intranet Watch Blog at http://www.viney.com/intranet_watch.

Knowledge Management for beginners

Knowledge Management (KM) can be defined simply as the process through which organizations generate value from their intellectual and knowledge-based assets. Knowledge assets are often grouped into two categories:

(1) Explicit Knowledge

Generally, everything and anything that can be documented, archived and codified. Examples include patents, trademarks, business plans, marketing research and customer lists.

(2) Tacit Knowledge

The rest. Tacit knowledge is the know-how contained in people’s heads. The challenge inherent with tacit knowledge is figuring out how to recognize, generate, share and manage it.

Most often, generating value from such assets involves sharing them among employees, departments and even with other companies in an effort to reach – or go beyond – best practice. For explicit knowledge, the focus can usefully be described as “connecting people to things”, whilst for tacit knowledge, the focus is “connecting people to people”.

Search technologies made simple

There are essentially two types of search technology: structured search and unstructured search:

1) Structured Search:

In a structured search (example Yahoo) the user clicks down through a directory of categories to find the material sought. The tree structure of the directory is called a taxonomy, with a root node at the top that applies to all objects and nodes below that classify more specific subsets of the total set of objects. A well-known example of a taxonomy is Carolus Linnaeus’s Scientific classification of organisms. The root node is (implicitly) “organism” and nodes below are Kingdom, Phylum, Class, Order, Family, Genus, and Species.

In Yahoo, the root is “Directory” and there are 14 main nodes, including Society & Culture, Social Science and Reference. If I were searching for best man’s speech tips (which I was not so long ago), I could try (on Yahoo) clicking down the branch of the tree: Directory > Society and Culture > Weddings > Speeches and Toasts. Alternatively, I could try Directory > Social Science > Communications > Public Speaking.

There are obvious pros and cons to structured search. The main con is that I might head down several blind alleys on the tree before finding the most useful branch. The main pro is that – once I have found that branch – I am likely to find a whole collection of relevant material gathered together in one place.

For the librarian (maintaining the taxonomy), there is another key con. As our wedding example illustrates so well, there are often two or more places one could put any given information. Oh the agonies of choice!

2) Unstructured Search:

In an unstructured search (example Google) the user enters a series of keywords into a search engine, which searches an index of content (regularly crawled) and brings back results, ordered by closest match to the search string.

The main pro of an unstructured search are that I do not have to second-guess where the right branch is on the taxonomy tree, but rather leap in at the leaf I am looking for. The cons are rather less obvious and the main one is that some materials I might actually find very useful may not come up in the search. This can be due to my poor selection of search terms, deficiency in indexing / search algorithms or poor metadata in the content itself.

Should I implement search functionality and, if so, how?

Search invariably scores well on any prioritisation of intranet functionality and is generally “out-of-the-box” with your portal solution, so I would definitely recommend you include it in the scope of your project.

It may not surprise you to hear that the most effective search implementations allow the user to chose between structured and unstructured search options and to easily navigate between the two. For example, my unstructured Yahoo search on “best mans speeches” takes me straight to a relevant document, but also tells me where it sits in the directory. By clicking on the directory category, I can bring up all the other materials in that area (where I ultimately find the best resource for my need).

To implement the structured search part of your solution, you will need to develop a taxonomy structure for your organisation and the information resources your people need to do their jobs. This can be quite a challenge! For example, should an HR grievance policy be found under ABC Co > Human Resources > Employee Services Unit > Policy or under an ABC Co > My Employment > My Rights > Grievance branch?

My advice is to keep it simple and give it room to evolve and change. An ideal taxonomy should be flat and broad (having no more than three levels) and should suit the provider or creator of information rather than the user of it (as they are the people who will populate your library and you need it to be easy for them to do so).

To ensure the unstructured component of your solution is effective, you need to ensure firstly that people avoid jargon in the body of their documents (using instead keywords that users will recognise) and secondly that a high percentage of documents contain decent metadata. Metadata can be simply defined as “data about data”. For example, the grievance document metadata might include author: Tessa Jones, job title: Employee Relations Officer, department: Employee Services, function: HR, subject: Employment, title: Grievance policy.

Can search help with tacit knowledge sharing?

Absolutely! Many organisations fail to recognise this. Connecting people to people (for that 10 minute telephone conversations that could save a week’s work) is often much more valuable than storing documents.

You should create a well developed yellow pages database, where people have entered augmented their white pages details (job title, email address, telephone number) with information about their skills, experience and interests. Then – when someone searches for grievance – in addition to (a) the word document policy, the results also include (b) a link to Tessa Jones’ Yellow Pages entry and (c) a link to the Employee Relations teamspace, where Tessa – and her line colleagues across ABC Co – collaborate on policy development and employee relations management.

Some final thoughts

The humble search function can be the most powerful agent for improved knowledge management your organisation has ever invested in. By extension, therefore, it can become the definitive “killer application” on your intranet portal. However, it is vital that the search capability can acccess all the information and people in your organisation and that result relevancy is high. This is not as easy as it sounds and requires proper planning and detailed work.

About the author:

David Viney (david@viney.com) is the author of the Intranet Portal Guide; 31 pages of advice, tools and downloads covering the period before, during and after an Intranet Portal implementation.