E-Commerce

What is E-Commerce? Well, at the most basic level it is any practice whereby products are sold via an on-line store - but there is more!

Selling products and services online can have major advantages for businesses, leading to increased profitability and lower costs. This white paper explains the factors in getting it right and the pitfalls of getting it wrong. It tells you about the advantages of online selling, and what you need to consider when building an online shop. It also explains legal requirements and the traps that are easy to fall into, as well as how to make sure customers can find your shop on the web.

Benefits of selling online

Selling online has a number of advantages compared with selling by conventional methods, including:

• Savings in set-up and operational costs. You will not need to pay shop assistants, rent high-street premises, or answer a lot of pre-sales queries.
• Customer orders can automatically come straight into your orders database from the web site, reducing the costs of order processing.
• You can reach a much wider audience. You will be able to be contacted by people worldwide, giving you the ability to increase sales.
• You can compete with larger businesses.
• You'll receive payments more quickly from online transactions.
• Your business can be open 24 hours a day, 7 days a week.
• You should be able to give better customer service and attract more loyal customers.
• You will be able to track purchases and use data to improve your offering.
• Your online shop can function as a catalogue for existing customers.

Requirements for selling online

If you sell or promote your products online, there are a number of special requirements that you must comply with.

• Provide customers and potential customers with the full name and contact details of your business, including an email address.
• Give your Value Added Tax (VAT) number if applicable.
• Give a clear indication of prices if you refer to them, together with details of any associated taxes and delivery costs.
• Provide details of trade associations, professional bodies or authorisation schemes the business belongs to.
• Clarify what steps are involved to conclude a contract.
• Acknowledge receipt of an order electronically and without undue delay.
• Give customers the chance to check an order and correct any errors before placing it.
• Make sure customers can store and reproduce any terms and conditions you supply - for example, put them in a format which can be saved on a computer and then printed.
• Tell customers how they can access any online codes of conduct relevant to that particular order.
• Make sure marketing emails are clearly identifiable as commercial communications and clearly identify on whose behalf it has been sent.
• Make sure recipients can identify unsolicited marketing emails immediately - perhaps by putting the words "unsolicited advertisement" or "unsolicited commercial communication" in the header.
• Clearly identify any discounts or promotions on your web site or in emails, ensuring any qualifying conditions are accessible and clear.

Businesses selling over the Internet must also comply with rules on distance selling. For more information you can read a complete guide to distance selling and e-commerce on the DTI web site.

Finally, as your web site will store customer information electronically, you will also need to ensure your information systems comply with Data Protection regulations. You can find out more information at the Information Commissioner web site.

Avoid online pitfalls

Many e-commerce web sites fail because of basic shortcomings that are easily rectified. Customers will be put off by:

• out of date or incorrect information
• difficult site navigation and purchasing process
• poor customer fulfilment and late delivery
• lack of customer support
• lack of business information

So it is essential to:

• make sure all information on your web site, especially on prices, is up to date
• monitor the information you provide on a regular and frequent basis
• make sure that resources and procedures are in place to support your
web site, so that orders can be processed quickly, emails can be responded to quickly and helplines are manned by appropriate staff at reasonable times

Also, when selling through an online shop, you don't normally have any personal contact with your customers, so you need to try harder to get and keep them.

There are further steps you can take to increase the chances of visitors to your site actually placing an order and to make them feel more secure about buying from your site. These include:

• making your site easy to navigate and user-friendly
• giving a 100 per cent no-quibble money-back guarantee if they don't like or want the product
• making sure photographic images on your site show products in their best light
• hiring a customer service representative who can give advice on the phone to customers on more complex or expensive products
• making ordering procedures straightforward and quick
• confirming orders immediately by email
• being honest - tell the customer if you can't deliver on time
• providing a way for customers to track down the progress and availability of their order