A recent article at Inc. suggests that the easiest way to launch an e-business is not to have a great business plan but buy a website through a broker on which to launch it. I’d like to suggest that ‘easy’ is not a good route to business growth and that buying somebody else’s mistake is an unlikely way to achieve success.

Inc. suggested Ebiz brokers and eBay as the best places to find sites. There are more established locations to find sites for sale such as Flippa and Dalton’s Weekly

Looking at the ecommerce section of business brokers sites can also show up potential opportunities. UK brokers include:

Knightsbridge
Avondale.

Even if you can find a good site (and if they were going concerns with a good customer base why would they be on the open market, rather than brokering a goodwill deal with a competitor who can see their value?), there are inherent risks in this approach:

1.    The observable traffic on a site you purchase may have no value or even a negative value, if it’s not convertible
2.    Search engine rankings are fragile and Google, in particular is tough – if there are hidden dangers in the site you buy (cloaking, embedded automatic content generators, black hat blogging), stripping them out is costly and even when they’re gone, you’ll find yourself penalised by the Google algorithm
3.    The seller wont always give you the full story – it’s all very well asking questions but it’s quite another thing to get honest answers: when e-commerce fails, very few site owners are willing to own up to their mistakes in front of a buyer, even if they recognise them.

There aren’t any shortcuts to starting a successful online business. The business fundamentals have to be right

•    Products
•    Pricing
•    Promotion
•    Reaching the right customer base
•    Customer service.

If any of these are less than excellent, online customers find out quicker than any others, and spread their disillusion faster and wider than any others, using social media to inform a wide audience about your failure. They may be low barriers to entry in setting up an ecommerce business but without a clear strategy and unique selling proposition why will customers buy from a new online business?

If the fundamentals of the business are right, services like Volusion can help build a scalable online business. Volusion is an all in one software solution which already powers 30,000 online stores. It takes a lot of the headaches out of starting an online and, unlike many other solutions, it is targeted at UK merchants.

However if your aim is build the best possible online experience for your customers, starting from scratch with a bespoke website may not be the cheapest or easiest option but in the long run it still might be the best one.

How not to launch an e-business is a post from: On Internet Business

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From the beginning of July there have been concerns expressed over the pace of the UK’s economic recovery after evidence that the manufacturing sector in Britain is growing at the slowest pace for nearly three years.  Ireland’s manufacturing industry is shrinking and the economic boom in China is also dropping in pace. While the UK is not reversing direction or even stagnating, the healthy expansion seen earlier in 2011 is definitely on the decline.

However, while the making of things might be dropping, the buying of things is still growing, as in the space in which things can be bought! The top ‘retail destinations’ in the UK – London, Glasgow and Birmingham are about to be joined by Leeds, where a vast circular shopping centre is under construction. As property developers continue to invest in massive retail parks and shopping centres, UK high streets are seen as being under threat and in decline. Many familiar names have vanished in the past two years: Woolworths, Jane Norman and Habitat from city centres and Focus DIY from out of town shopping parks. So what makes speculators confident that big shopping venues will continue to thrive?

Retail analysts believe that three forms of shopping will grow in the next few decades:
1.    Diversity shopping – shopping with added extras; shopping centres with open markets attached to them are proving particularly popular, especially if the markets have theme days such as ‘organic’ or ‘local’ or events like chocolate festivals, beer fests or Christmas fairs
2.    Super centres – the bigger the centre, the more scope it has for appealing to the entire family: shopping with bowling or trips to the cinema added in, dropping of the kids for swimming or karate lessons while you buy the groceries, or mall walks for senior citizens that finish with a cup of tea and biscuit in a café – all currently bringing in multi-generational shoppers on a daily basis
3.    Online retail – the biggest growth centre for many retailers has been online shopping: the recognition that customer service is key to good online retailing has changed the internet-based marketplace and driven standards up so that many online retailers have the same kind of reputation in virtual reality as high street shops once had through word of mouth.

The high street isn’t extinct, according to Anna Smee, director of business strategy at Hundred Consulting, rather it’s evolving, ‘… [it] has undergone a huge transformation in recent years, which is a result not just of the recession but the growing momentum of online shopping. We are seeing a shift back to specialist, often owner-managed retailers that offer a high level of personal service or an unusual mix of products that are not available in the big retail outlets on the outskirts of the UK’s towns and cities.’ And that could mean that the next Habitat or Woolworths will begin trading online, with a market stall that travels around big shopping centres, and builds a reputation for exceptional service before expanding through franchise or other entrepreneur-led systems to create a business empire based on an intensely personal experience for both shopper and shop-owner.

High street shopping courtesy of Maxwell Hamilton

Economic slow-downs around the world but shopping on the increase? is a post from: On Internet Business

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Yes, or no. Depending on your viewpoint and who you listen to. While some see it as a good thing, others fear that the double bank holiday weekends, back to back, will cause long term damage to small businesses. There’s a lot of secrecy about the cost of the wedding, but there’s also some concern about law and order costs. Those who are expecting to do well include retailers – but holiday companies are wondering if the spike in holidaymakers ‘escaping the wedding’ will mean that people have swapped a summer break for an extravagant weekend, with consequent losses over the summer to come.

Plus points
Visit London anticipates 600,000 extra visitors over the wedding period

Estimates on the extra expenditure on celebratory food and drink range from £230m to £360m.

1am licences will probably increase pub sales massively

Sales of collectibles could be up to £200m – yes, £200 million pounds is likely to be spent on plates, coins and jigsaws. And around a quarter of that will go to online retailers.

Minus points

Westminster City Council reckons street cleaning will cost £30,000 to £40,000 more than it usually does.

Those 1am licences are likely to add a large burden to the law and order budget as drunks cause damage to themselves and their surroundings. Add that to the security costs for the wedding, reckoned to be around £15m and the UK is facing a hefty bill for keeping the peace at home.

Loss of productivity from the bank holiday given to workers is calculated to be around £2.9bn. Small and medium sized businesses are being worst hit, with some saying that the two bank holidays in a working week could top them into the red.

There will be a loss in high street retailing on the day itself – calculated to be up to two-thirds of the usual Friday spend.

Prince William courtesy of Rob the Moment

Royal Wedding: Good for business? is a post from: On Internet Business

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Back in December, the Google algorithm was tweaked to deal with a surreal business scenario that was played out through the search engine rankings of an American eyewear retailer, the pages of the New York Times and the number-crunching desks at Google HQ.

Bad Retailers Punished

Essentially, one online retailer had realised that its many extremely poor online reviews and customer comments were actually pushing it up the search engine pages. So (it is claimed) it made an explicit company policy of ill-treating customers and abusing them when the complained, so that they would make negative ‘flaming’ online reviews which served to put the company at the top of the Google searches again, and again, and again.

When the NY Times wrote about this bizarre scenario, the comments redoubled and the company made the top spot on Google … at which point the Google mavens decided to do something. They designed a substantial revision to the search algorithm that stopped negative reviews driving a company up the popularity ladder.  How they did it has not been made clear, and there are still some questions about whether businesses can use this tweak to drive down their competitors by posting false negative reviews to drop rivals back down the rankings. Even so, the tweak made many online retailers happy.

Content Farmers Cut Out

In February a new algorithm, nicknamed Farmer, came into play, and now we’re seeing the results. The familiar name is the clue – this algorithm goes after content farmers who regularly top searches with content that is either derived from other sources (aggregated) or just packed with keywords (spammy).  This is meant to give more content-heavy, original-material sites a chance to reach the top 2 or 3 position, ahead of some of the sites that exist purely to link content to paid-for ads in the hope the viewer will click on them.

Together, these new algorithms herald a substantially different future for online retailers and information providers – they attempt to stop bad retailers using their poor reputation as a search engine tool and they aim to stop content farmers clogging up search pages with keyword-rich but content-poor information.

For many online retailers this heralds a new opportunity – the chance to revamp their own content format to deliver quality information and good customer engagement, not just for its own sake, but because it’s worth competing for a first page ranking again. Or at least it is for now, until the farmers and cowboys work out how to beat this new system …

algorithm billboard courtesy of toastyken

Google’s latest algorithms go after content farmers and bad online retailers is a post from: On Internet Business

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IBISWorld Market Research has surveyed the global economy and picked out some industries that a set for growth in 2011 based on revenue and employment growth, current profits, and ease of entry.

Debt Collection

The agency world is growing – and debt collection agencies are a growth industry, proving that financial clouds provide other people’s silver linings.  It’s likely that expected employment and housing recoveries will result in debt collection booms as more liquid punters become able to pay back previously frozen loans.

E-commerce and Online Auctions

There’s been a massive growth in e-commerce, with specialist vendors making huge inroads into classic retail in everything from bespoke tailoring to furniture. There are new online commerce and auction communities too, such as Newegg, and even Ravelry for knitters!

Environmental Consulting

The plethora of new rules, plus new international agreements and the high profile environmental failures in the last two years have all led to a substantial investment in external environmental consulting and verification. But it’s not just big business – there’s a boom in community-based consulting in flood or drought prone areas or where newly built housing may turn out to be an insurance risk. Many ‘domestic focus’ consulting firms registered as start-ups in 2010 and lots of them have seen enough business to be hiring in 2011.

Advertising

Smart agencies are going digital – the demand for digital media is expected to nearly double in the next 5 years and many of the big agencies are setting up incubators to find the advertising talent to meet the projected need.

Employment Consulting

Training, retraining, reskilling and reworking are the buzzwords: re-working is getting the long term unemployed back into employment, reskilling is turning those who’ve lost their jobs into a viable workforce, retraining is about improving business (and non-profit) performance in the face of budget cuts and training is related to skills development and team retention – most of which require outside expertise. Boutique employment consultants are seen as the future: small specialist agencies that combine to meet the needs of large organisations such as government departments.

Photo courtesy of umjanedoan

Growth businesses in 2011 is a post from: On Internet Business

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If you run a business these days, and it’s not some totally niche enterprise like smoking shellfish from a hut on the beach, or handcrafting jewellery out of the bones of dead pets (yes, both businesses actually exist) you have to have some kind of online presence. And that presence is mediated in two ways. There’s what you say about yourself and what the world says about you. We all know that businesses ‘big’ themselves up, and we think we know that we can rely on reviewers to give a corrective view, a more balanced perspective – but can we?

The seduction of five star reviews

Take the iPhone app, phone tracker. When I looked at this a few weeks ago, I was really taken with it, it was the tenth most popular app on the site and it was really cheap. Wow! But when I dug into the reviews, it seemed like a con – all the actual comments on it said it was just a 1 out of 5 stars and that it didn’t work. The newest version apparently does work, there are loads of reviewers raving about it, but I am now unconvinced that it’s going to meet my expectations. So what was happening with the star ranking and the reviews not matching?

Probably what Michael Moyer describes in his article for Scientific American – we’re seduced into thinking that ‘the masses’ are an honest and objective reporter, while it turns out that both those reporting, and the systems that aggregate their reports, have a heap of biases that make the review process as unreliable a perspective as any other. Note the fact that only 1 or 5 stars tend to be given in review terms – a polarised response simply doesn’t reflect the status, ability or performance of any business and can’t be reliably used to assess that business.

Testimonials influence purchasing decisions

So what does a business do?  Well testimonials are good because they offer more identification than reviews: if I’m an SME looking for a certain kind of expertise and I see another self-identified SME talking about getting that expertise from an individual or organisation, I am more likely to identify with their endorsement. Case studies too, give a chance to offer a more balanced perspective. But overall, we’re currently caught in this tyranny until the buying public catches up with some of the downsides of rating and ranking, and we just have to work with what’s out there, no matter how frustrating it can sometimes be.

The Tyranny of Reviews and Ranking is a post from: On Internet Business

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These are such different animals that at first you might not think to compare them, but I come across business people who have strong belief systems that incline them to rely on one or the other.

• The Google Rank Guys – these tend to be start-ups and online entrepreneurs who’ve grown up in a world of online commerce and focus on the grail of getting the best possible Google rank. They have a point – if you’re the best business the world it won’t do you much good unless people know your name and can access your services and these days that’s an online process.
• The Customer Feedback Fans – this business ideology says that if you have a great reputation you can grow your business organically, without worrying about what Google (and the other search engines) are doing with your online presence. They have a point too – long term gains from good customer relations are not just a way of keeping your business in the public eye, they are a way of learning what your customers want so you’re in the right place to provide it.

One thing we’ve seen in recent years is Customer Terrorism. If one in a thousand customers has a bad experience with you, they will share their experience a thousand times more loudly and widely than the 999 who had a good experience. Counteracting customer terrorism requires a two pronged approach: engaging that customer, and the people they’ve reached out too is one side of the equation, but the other is to maintain your investment in Google and other rankings so that the rant of complaint doesn’t feature as the top hit when your brand is entered as a search term. This is crucial management of reputation which companies need to have as a focus, if they are to survive the occasional blip of a bad customer experience going viral.

There’s a risk to over-reliance on Google too, which is that failing to build customer retention can leave you exposed to failure if your Google rank drops, which it can do for no obvious reason. It’s a poor strategy that builds a business on one supporting structure.

We use the NPS framework to help us evaluate how we’re doing and monitor recency, frequency and average order value to give us metrics that show how our regular customers are changing their relationship to us. This tells us about ourselves and our place in the market, but it also shows trends in the market as a whole, which then gives us a chance to respond to global changes swiftly and professionally, meeting client needs without compromising on quality or service.

Google doodle courtesy of dannysullivan

What Matters? Google Rank v Customer Feedback is a post from: On Internet Business

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Two reports in the past month have highlighted the way that online adverts and online retail are impacting each other and the global economy.

Online advertising seeks a future

The annual global media survey undertaken by Deloitte suggests that online advertising needs to innovate or die.  While the popularity of both printed and online newspapers had increased significantly, the influence of online advertising seems to be declining and online adverts are regarded as more annoying than print ones. Apparently, despite the continuing rise in internet use, the influence of internet advertising on buying behaviour remains low in the majority of countries surveyed. In some it is actually declining. Exceptions to this finding Japan, where online advertising takes first place for influence and Korea, where online ads are nearly as powerful as television in their effect on consumer preferences.

The future of advertising online was expected to be customisation: using the internet’s interactive nature to craft intelligent adverts that recognised and responded to the needs and interests of individuals. But there’s a backlash against this vision of the future too, as the survey revealed that consumers in almost all countries were reluctant to provide personal information to websites or have their internet browsing history tracked.

Interestingly, social media (the fourth-most popular internet activity behind search engine use, e-mail activity and news and current affairs) was still rising and may offer an alternative to online advertising.

Online retail seeks profitability

The recent conference of the International Council of Shopping Centres reveals that while many retailers are involved in online selling, far fewer have found it lucrative.

Issues that retailers wrestle with include set up costs for an online shop, stocking it and writing the kind of copy that entices consumers. Then there are what could be called ethical questions: when stocks run low, do you sell the last items to online customers or ones standing in front of a sales advisor in a physical shop?

Many retailers say they’re struggling to understand how to balance the online/physical equation, but they know they can’t walk away from it. Shoppers, especially those aged under thirty, demand the ability to buy online. Even more importantly, e-commerce can fund physical business: customers tend to spend three times more in an actual shop than they do on a website but many consumers are researching those shop purchases online before they travel to buy. And there’s another reason that online retail is booming: niche markets. Retailers are able to put end-of-run or stock clearance items online to clear space in a physical store for new items, and they can also offer specialist items (rare vinyl records for music retailers, collectables for enthusiasts and unusual sizes for clothing) online that they wouldn’t have space for in stores. E-commerce sales rose 18% globally last year, so it’s an important balancing act to get right.

Shopping trolleys courtesy of iboy_daniel

Online retail and online advertising – boom or bust? is a post from: On Internet Business

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Looking at recent research into small businesses and social media there’s a confused picture emerging.  BusinessBlogs suggests that a lot of social media marketing being done by small businesses is wasting time and money. But the University of Maryland’s Smith School of Business, found that adaptation in this area is moving faster, and is more positively viewed by small American businesses, than had been expected.

What is the small business social media experience?

Very different, according to whose research you read. BusinessBlogs may have a vested interest in finding problems as it has a Facebook for Business ebook to promote, while the academic research is a follow up on a similar phone-based survey, run in 2008. BusinessBlogs says:

1. For most SME’s (small business enterprise) social media or social networking for business benefit is an unknown quantity …best avoided until adequate know how is acquired.
2. Businesses need reasonable knowledge of how to participate effectively in online communities and understand the cost benefit ratio for the business so time wasting activities are avoided.
3. Each social network requires a unique strategy for engagement. … [you would] not use the same engagement strategy for Facebook and Twitter.
4. Use of automation tools to remove a lot of the manual input is a must for small business and this expertise is not in house – Businesses need to engage 3rd party social media professionals to identify what is appropriate to meet the needs of the business. A ‘one size fits all mentality’ is not appropriate.
5. Most businesses have no idea where to seek help and where to start in social networks and as a result can get into trouble early on.
6. Of the small businesses … using social networking successfully most spend on average over 2-3 hours per day in key social networks … most have no clear separation between business and personal use of social networks.

On the other hand, the Maryland research shows that technology adoption rates (the take-up of new forms of communication, in this case) in the USA have doubled 12 months from 12% to 24%. Its conclusions are quite different:

1. One in five small business owners are integrating social media into their business processes
2. 45% of surveyed respondents … believe their social media initiatives will pay off financially in 12 months or less.
3. Small business owners … believe social media can help them on the lead generation front, and that is the primary motivating factor for engaging in these new customer service channels.
4. [Despite] half of surveyed respondents [finding] the time it takes to use social media sites more daunting than expected, 61% are still putting in the hours and making active efforts to identify new customers.

Conclusions

• Some businesses are coping well with social media, and are managing to do this engagement in-house without having to separate out work/social engagement. This suggests that entrepreneurial businesses with a more relaxed workplace environment and less focus on demarcation of responsibilities are probably taking social media in their stride. Those with more hierarchical structures and classic boundaries between personal and business lives are more likely to be struggling to integrate social media in their marketing and PR.
• Finding new business leads is likely to be a key area of focus in social media strategies, but understanding the difference between engagement (communication) and promotion (outreach only) may be something that small businesses need help with.
• Having social media strategies will prove useless unless somebody in a small organisation is given the freedom and opportunity to build social media links that are meaningful in driving business. That opportunity needs to be measured, both for profit creation and for brand management – there have been enough scare stories of an intern or departing staff member using social media to tear a hole in a business’s carefully constructed image for even the smallest enterprise to know the risks.

Twitter addiction image courtesy of carrotcreative

Small Business and Social Media – useful tool or trouble ahead? is a post from: On Internet Business

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Consumers, already tending to reduce spending where they can, are under attack from a new generation of cyberhackers who are combining a basic knowledge of retail data collection with a sophisticated understanding of human behaviour.

This blunt combination of rudimentary criminality and predatory people skills is causing retailers to lose both income and credibility at a time when any threat to customer loyalty is seriously damaging to business viability.

Point of sale has become the new weak point in the bandit chain, with some American companies actually being sold POS systems that have been inadequately, possibly deliberately inadequately, designed. These POS storage devices may be holding credit card information from swipes in unencrypted forms, allowing a skilled hacker to remotely access the vending point data and ‘empty’ it onto a memory drive, giving the thieves the card verification and PIN data from every transaction.

Many IT suppliers are preferring to settle such complaints out of court, rather than risk public exposure because they may have identical software systems in numerous physical or online retail venues. In the USA, it’s claimed that three times as many eating outlets were subject to credit card data theft last year as they were in 2008.

Data privacy and security have often been seen as the territory of the IT supplier and their support systems, but laws being implemented in some American states, and under discussion in the EU, are looking at an explicit liability for the retailer too, based on:
• Conducting due diligence on IT suppliers
• Ensuring security is as high for retail transactions as for personal data protection used in hospitals and government databases
• Training of employees to operate systems, recognise risk and inform the retailer of potential threats to data security.

Protecting the Customer

Most people use the same pin and password for every situation. ‘Grabbing’ passwords and usernames is an established behaviour of hackers, who don’t just use the individual information they obtain: they analyse the username/password combinations to allow them to predict future popular pairings that can then be tried on accounts and retail systems.

The easiest way to get cyberjacked is to continue to use the username/password combo that your IT support person set up, because a certain personality type is much easier to predict than a random individual, and hackers have become adept at predicting what the geek population may choose to use when creating passwords. Using a ‘crib’ of common usernames and passwords allows a simple piece of software to cycle through stored account details, usually finding at least a few that open to the popular words.

Linked to this kind of guesstimation has been a more sophisticated physical data grab, such as accessing the rotas and work schedules in IT companies, that then allows the hacker to see which systems each installer/trainer or support person has been working on … because if they used a username/password on one system, they may have used it on all the others too.

Staying Safe

Protect the information you hold about your customers by resetting supplied usernames and passwords and not allowing your customers or employees to choose passwords that they find convenient. Offer guidance about choosing a good password by installing a password strength checker as part of online registration systems and in the staff manual for physical locations.

CAPTCHA inputs can slow down a human hacker and stop an automated one in its tracks – savvy staff will also be able to recognise a number of failed attempts to access a system and flag that as a potential threat which can then be investigated.

More than 35% of passwords are dates of birth – men use their own, women use the birthdates of their children. This is data that is available in the public domain such as on Facebook, so if a hacker has a name and an account they can often find all the information they need without even bothering to run software!

70% of people use the same passwords for their business banking as they do for their online shopping, meaning that their bank accounts are open to anybody who can obtain data from the POS input. Educating people about strong passwords could be as simple as suggesting they take a favourite saying anything from ‘Seize The Day’ to ‘Beer: Breakfast of Champions’ and make their password out of the first two letters of each word. Guessing Sethda or Bebrofch is almost impossible for a hacker, but very easy for the customer to remember.

Remaining safe

While it’s impossible to force the consumer to be sensible, the retailer can do a great deal to ensure security.

1. Auditing current systems is important.
2. Driving a random ‘reset’ day in your organisation can make a hacker’s life hell. Random reset simply asks all your staff to change their passwords and usernames for every work system – done a couple of times a year it reminds everybody how to set a good password and can be used as part of your health and safety audit or CPD. It doesn’t just keep your business safe, it gives your staff the skills to ensure they maintain the integrity of their personal data outside the workplace, which means a ripple effect can run through cultures, making data-consciousness as natural as fastening a seatbelt.
3. Ensure future IT contracts have a requirement for the vendor/installer to inform you of known security risks reported to them. This allows you to revise your own systems to avoid the problems found by others.

Low tech cyber-crime targets retailers is a post from: On Internet Business

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