Technology buyer's guide

How to buy e-commerce

Recent surveys suggest a mixed bag when it comes to small businesses and the Web.

A Verizon Communications survey in 2002 found that among small businesses (defined as companies with fewer than 50 employees) that have Web sites, 55 percent covered their Web costs or were profitable. More than 41 percent of small businesses saw an increase in revenue with a Web site.

A survey by the NFIB Education Foundation, a nonprofit that studies and educates on small-business topics, found that just 24 percent of small-business sites allow their customers to order online, leading the NFIB to label those sites as a “dangling appendage without purpose.”

Those statistics probably will improve as small businesses buy and design Web sites that better match their needs, say Web developers. Companies with revenue hovering at $1 million can rely on Web sites as electronic business cards or as brochures of their products and services.

But bigger companies, those approaching $3 million and higher, “should definitely be using Web sites as a branding tool and as a key marketing tool,” says Dee Thibodeau, co-CEO of Charter Solutions Inc., a Minnetonka-based technology solutions firm.

A sizable fleet of Web service firms exists to help small businesses get the right fit. Web development and Internet service firms design Web sites, sell e-commerce capabilities, and place and position — or optimize — those pages with search engines. Typically, these firms are involved with front-end services; their customers are then set up to handle everything on their own, says Thibodeau.

Other small businesses choose to buy off-the-shelf software or a generic online product that allows them to build Web sites and e-commerce capabilities on their own.

Either way, small businesses need to define their requirements, says Tom Salonek, CEO of St. Paul-based e-business and e-consulting firm go-e-biz and training firm Intertech in Eagan. “Like building a custom home, knowing clearly what you want allows for more accurate estimates and planning,” he says.

When selecting a vendor, these goals should be conveyed clearly to competing firms, says Jeff Hahn, president of Internet Exposure, a Minneapolis-based Web developer, Web marketing and ISP service firm. “Setting expectations and providing this initial clarity will save time and money for both parties.”

Research several firms by starting with their portfolios, says Hahn: “See if you can find a similar project to your own.” Small businesses should ask whether the firms can provide all the services they need. “It will save costs as well as focus that firm’s understanding of your business and your objectives,” Hahn says.

The biggest success factor, says Salonek, is “the firm you choose and the team working on your project. Ask around. Get referrals. If it’s a firm that doesn’t seem reputable with a deal that sounds to good to be true, it probably is.”

Before work is begun, implement a plan that defines and builds the Web site in phases. This reduces risk and increases the chances for success, says Salonek. It also allows small businesses to make incremental payments over time based on deliverables.

Realize that more features cost more money, says Salonek, who likens the process to building a custom home. “Prioritize up front what is required versus nice to have. If you have to make cuts down the road, you can do so with a clear plan.”

If you want to reduce costs, Salonek suggests small businesses brainstorm with vendors. “Ask your vendor what you can bring to the table to allow reduced fees. For example, could you allow an increased timeline so the project is done on what would otherwise be bench time? Could you have junior staff at a lower rate work on certain parts of your project?”

Web sites should be designed with search engines high on the list of priorities. “Customers who find a company’s product or service through a search engine are likely to feel they have not been sold to, but rather they have made an educated, researched choice,” says Hahn. Search engine optimization is one of the lowest-cost investments in marketing in terms of return-on-investment, he says.

For search engine optimization, whether the service is done internally or through a vendor, small businesses focus on “the 10,000-pound gorillas” of popular Google (www.google.com) and Overture (www.overture.com) — a lesser-known, behind-the-scenes engine of many heavily visited sites such as AOL and MSN.

With Google and Overture, says Salonek, small businesses can submit their site or pay to have an ad show up when someone types in search terms. “For a search term like ‘soy candle,’ you can define how much you are willing to pay per click and a maximum you are willing to pay per month,” he says. For small businesses that aren’t sure what search terms customers may use, they can access a free online service from Overture to find suggestions.

Small businesses can also purchase off-the-shelf or already built components that can reduce the cost of Web-site development, says Salonek. There are also easy-to-access packages for e-commerce, available through Web sites such as Yahoo (www.yahoo.com), that allow non-technical people to build full-service e-commerce sites, he says. “If you are willing to be flexible on some of your features, there may be things out there that are close to your requirements.”

These Web-based administration tools can manage products, pricing, discounts, as well as more complex tasks such as shipping and tax. In addition, companies using these services have the option of building customer lists online, and creating e-mail promotions. Costs start at $50 per month, and can increase to more than $200 based on the number of order buttons. There is also a small fee per transaction, says Salonek.

While small businesses might be interested in keeping down costs, they should also look at a “bigger picture of success,” says Hahn.

“Certainly, a company’s budget plays heavily into the scenario, but what every company is looking for is the value they get for what they are willing or able to allocate,” says Hahn.

Tricia Hamrin, founder and CEO of UpFront Productions, a Minneapolis-based brand development, graphic design and direct mail company, says the design of her company’s Web site wasn’t taken lightly. “UpFront is a growing company and it’s important for our Web site to reflect the quality work and creativity we offer clients.”

While she saved costs by developing the Web site internally — the company offers Web development as part of their services — she didn’t skimp on picking a site host. “They’re not the least expensive hosting company, but they’re reliable and that’s important,” says Hamrin, referring to Minneapolis-based Visi.com.

Hahn says: “Taking a look at the big strategic picture is where many companies can look to get the biggest benefit or economic success out of their Web site technology investments.” 


Sarah Brouillard