From dropped shopping carts to identity theft, running a web-only shop is fraught with challenges. Here's how to combat them.
By Diana Ransom
Running an online shop might spare you the pain of paying rent each month, but rest assured, you'll still need Alka-Seltzer.
Just ask Daniel Hallac, a co-founder of Kidmondo, an online baby journal service. Since launching his web business in May of last year, he's learned that keeping customers' credit-card information on file is something better left to security specialists. And, when it comes to customer service, the global reach of a website can mean taking a few late-night service calls.
But of all the obstacles that have surfaced in the last year, Hallac says marketing has been his chief concern. "When you have a physical store, you get foot traffic," he says. "In a mall, for instance, you can leverage a bigger store's brand name, but when you're online you need a plan to get that search traffic to you."
Indeed, "finding a good location is harder on the net," says Tobi Lutke, the CEO of Ottawa-based website host Shopify. "You get walk-through traffic on eBay and Amazon, but then you're competing on margins with the entire planet." And although landing web customers can be a cinch for larger businesses with deep pockets, smaller, less-flush internet firms may get better results by devoting more time to marketing and improving sales.
To be sure, many books have been written about drawing users to your website. And although you may yet buy one (perhaps on Amazon), here's a primer on attracting and retaining online customers today:
Help them find you
As Hallac discovered, the web is a hard medium in which to stand out. To raise your profile on the cheap, get listed on sites like Google's products page and other fee-for-service sites, says Jennifer Shaheen, a small business technology consultant in White Plains, N.Y. To improve your site's search engine rank, consider shelling out for search engine optimization, which requires weaving likely search terms into a site's copy and embedding them into a site's code.
Site owners looking to economize can also sign up with affiliate advertising networks such as ValueClick's Commission Junction, Hydra and LinkShare, says Yao-Hui Huang, the chief executive of Gigapixel Creative, a strategic web design and development firm in New York. Because these firms subscribe to the pay-per-action model, owners pay for ads only when someone buys.