Chapter 1:The Foundations of Entrepreneurship

Chapter 1:The Foundations of Entrepreneurship

E-Commerce and Entrepreneurship Revised by Wendy Wen 4-13-09 The Internet: Changing the Face of Business The most successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business.

E-commerce has launched a revolution, a new industrial order. Please name a website who changed or shaped the way you do things 2 The Internet: Changing the Face of Business

In the world of e-commerce, speed and flexibility matter much more than size . High-volume, low-margin, commodity products are best suited for selling on the Web before. Most commonly cited reasons among owners of small and medium-sized businesses for taking their companies to the Web: Reach more customers or global markets

Disseminate information more quickly Keep up with competitors Ability to open 24/7 Capacity to enhance customer service 3 More cited Benefits of Selling on the Web

Power to educate and inform Ability to lower the cost of doing business Capacity to improve efficiency in the purchasing process Ability to spot new business opportunities and capitalize on them Power to track sales results 4 E-Commerce Facts

Survey: Just 43% of U.S. companies with fewer than 100 employees have Web sites... Only 40% of those actually sell merchandise online Small companies account for more than 50% of all retail sales in the U.S., but they generate only 6% of online retail sales.

Why? 5 Factors to Consider Before Launching into E-Commerce How a company exploits the Webs interconnectivity and the opportunities it creates to transform relationships with suppliers, customers, and others is crucial to its success.

Web success requires a company to develop a plan for integrating the Web into its overall strategy. The best vs. The most practical Long-term vs. Short-term goals 6 Factors to Consider Before Launching into E-Commerce Creating a meaningful presence on the Web requires an ongoing investment of resources time, money, energy, and talent.

Set-up Cost & Maintenance Cost Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose tastes, needs, and preferences constantly change. Monitoring & Tracking Performance 7 12 Myths of E-Commerce

Myth 1: Setting up a business on the Web is easy and inexpensive. Cost: a few hundreds to a few thousands Time: a few days to more than a year 8 12 Myths of E-Commerce Myth 2: If I launch a site, customers will flock to it Myth 3: Making money on the Web is easy Myth 4: Privacy is not an important issue on the Web. 9

Privacy and the Web Privacy on the Web does matter! Jupiter Communications survey: 64% of Web customers distrust Web sites. Develop a company privacy policy. Post it and stick to it. 10

12 Myths of E-Commerce Myth 5: The most important part of any ecommerce effort is technology Myth 6: Strategy? I dont need a strategy to sell on the Web! Just give me a Web site and the rest will take care of itself Myth 7: On the Web, customer service is not as important as it is in a traditional retail store 11 The Importance of Service on the Web

Jupiter Research Study: 72% of online buyers cite service as a critical factor in their online shopping satisfaction. Unfortunately only 41% said they were satisfied with the service they receive from online merchants. 12 The Importance of Service on the Web

Study: 75% of Web shoppers who fill their on-line shopping carts become frustrated and leave the site before checking out. Reasons: Shipping charges too high Delivery times too long

Checkout process required too much information Insufficient product information available 13 12 Myths of E-Commerce Myth 8: Flash makes a Web site better. Myth 9: Its whats up front that counts. Myth 10: E-commerce will cause brickand-mortar retail stores to disappear. 14 12 Myths of E-Commerce

Myth 11: The greatest opportunity for e-commerce lies in the retail sector. B2C vs. B2B Myth 12: Its too late to get on the Web. 15 Strategies for E-Success

Focus on a market niche Develop a community Make sure your Web site says credibility Consider forming strategic alliances Make the most of the Webs global reach Promote your site online and offline 16 Strategies for E-Success

Develop an effective search marketing strategy Jupiter Media Metrix study: 77% of Internet shoppers go straight to a search engine to find the products and services they want. Bad news: Business owners invest less than 1% of their marketing budgets on search engine marketing. 17

Designing a Killer Web Site Start with your target customer. Select a domain name that is consistent with the image you want to create for your company and register it. Short, Memorable, Relevant & Easy to spell Give shoppers the ability to track their

orders online. Offer Web shoppers a special all their own. 18 Designing a Killer Web Site Follow a simple design for easy navigation Test the site on different browsers and different size monitors

How to Creating a Google-friendly site - Best practices for site management, Site design and content http://www.google.com/support/webmasters/bin/topic.py?topic=8522 19 How to Creating a Google-friendly site 20 How to Creating a Google-friendly site 21

5 basic approaches for launching an eCommerce store: On-line shopping malls http://pages.ebay.com/storefronts/subscriptions.html Storefront-building services http://www.oscommerce.com/solutions (Open source e-Commerce solution)

ISP e-Commerce option http://smallbusiness.yahoo.com/ecommerce/plans.php Hire outside professionals Build a site in-house 22 SEO Strategy

Natural listings - the result of spiders, powerful programs that crawl the Web, looking at key words, links, and other data. Paid (sponsored) listings short text ads with links to the sponsoring companys Web site that appear on the results page of a search engine. Paid inclusion when a company pays a search engine for the right to submit either selected pages or the contents of its entire Web site Best approach for SEO: http://www.google.com/support/webmasters/bin/answer.p

y?answer=35291&topic=15260 23 24 Traffic Analysis and Monitoring Site Traffic Analysis Tool Sample: http://www.webtrends.com Site Traffic Monitoring Tool Sample:

http://www.alexa.com/ 25 Gateway & Merchant Account Sample Gateway Function Diagram: http://www.authorize.net/how_it_works_diagram.asp?page_id=1233&step=3512 26 Ensuring Web Security

Virus detection software Intrusion detection software (IDS) Intrusion prevention software (IPS) Firewall Secure sockets layer (SSL) technology Definition: Transport Layer Security (TLS (TLS)) and its predecessor, Secure Sockets Layer (SSL),

SSL), are cryptographic protocols that provide security and data integrity for communications over TCP/IP networks such as the Internet ---- Wiki Benefits: That the website really is who it claims to be. (Now verifiable directly by the browser) That credit card numbers, are encrypted and cannot be intercepted. That the data sent and received cannot be tampered with or forged. 27 Return on Investment (ROI) Common measures of ROI: Cost per action (CPA) - the cost of producing a particular customer action, such as registering for a newsletter, requesting information, etc.

Cost per order (CPO) the cost of generating a customer order. Can be calculated across all product lines or for a single product. 28 Google AdWords ROI Calculator Source: http://www.google.com/adwords/learningcenter/text/19209.html 29

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