Small Business Information Center. Com

E-Commerce Business: Should We or Shouldn’t We? 

Is your company a good candidate for an e-commerce business solution?                    Page #2 

Some of the basics of the e-commerce business solution are described on         e-commerce business Page #1, including a description of products which fit into the categories of commodities and brand name products which seem to sell especially well on the Internet.  Some of the problems associated with an e-commerce business were also alluded to, including a key concern of customers of whether products purchased over the Internet will actually be delivered to your home or office.  If your product does not fit into the “commodity” or “brand-name” category, or if your company is not well known, you will have to provide additional supporting information to your customer so that they can understand the quality and feel a sense of trust that your e-commerce business will deliver the product at the expected level of quality as promised.

E-commerce businesses are especially successful if they are companies that have created a regional or international reputation, in that they can use this reputation to expand their market when selling over the Internet.  Customer buying of products such as from Disney or from companies located in specific regions such as Macy's, may already be familiar with the companies and have a sense of trust about purchasing their products.  When purchasing from a known company, consumers feel confident that the product will actually be delivered, and have a huge advantage in the e-commerce business world. 

An understanding of the business’s legal limitations is also necessary when creating an e-commerce business.  For example, according to state laws, real estate companies in the United States cannot sell beyond their state lines where they are licensed and regulated.  This would limit the information that can be displayed on an online shopping website.  A real estate company selling a planned community can provide potential buyers with information on the property, an online tour of the homes, statistics on the community, and information on amenities and services, but cannot provide an online prospectus to potential purchasers.  The goal of the online shopping site for a real estate company in this circumstance would be to spark the interest of potential buyers.  The online shopping service goal for this type of e-commerce business website would be to produce leads that could be followed-up by local realtors. 

The following are some questions you may want to ask yourself to determine whether your company would be amenable to an e-commerce business solution: 

• Is your product easy for people to understand sight unseen?
• Is your product or company a brand or known name?
• Can you clearly identify the demographics of the people who buy your product?
• Would people find it more convenient to buy your product from their desk at home or in their office, rather than over the phone, fax or in person?
• Are you capable of reaching your potential market?  Are there people who would buy your product if they could get access to a distribution channel?
• Is it legal for you to sell your products directly to consumers and companies from an e-commerce business web site?

Overall, e-commerce businesses offer tremendous opportunities to sell to a global market if your business and product has certain characteristics which make it convenient and attractive.  However, your ability to establish a sense of trust is the critical factor upon which your e-commerce business will either thrive or die. 

Some information from Anita Rosen's  The E-Commerce Question and Answer Book- A Survival Guide for Business Managers  

Web page by Paul Susic M.A. Licensed Psychologist Ph.D. Candidate CEO/President Susic Psychological Consulting P.C.