E-commerce is a huge part of the global marketplace. During the 2009 holiday shopping season—the most important time of the year for retailers—consumers' online purchases increased 4% from the year before to a total of $29.1 billion, according to the market research firm comScore. Yet not everyone can be successful in the online marketplace. Successful e-commerce merchants are trustworthy people who plan ahead and are willing to invest time and money into their e-business.
The biggest requirement for running a successful e-business is trust. In this age of Facebook and MySpace, online merchants may think that privacy of a customer's information isn't important, but just the opposite is true. Eighty percent of Internet users polled in a recent survey said that the privacy of their personal information was either important or very important to them. That's for good reason, with identity theft at an all-time high. In 2009, the number of victims of identity theft rose 12 percent, and the total these people lost—$54 billion—is also more than a 12 percent increase from the year before.
Thus, businesses must be trustworthy to operate online. Consumers will not simply give their financial information to just anyone, so a site will lose business if consumers do not feel comfortable that it is a reliable, upstanding company. Companies must have comprehensive privacy policies and stick with them. Another good idea is to get digital certificates and TRUSTe seals, which are awarded by third-party organizations after they research the legitimacy of an online website. Such awards put consumers' minds at ease. Finally, even if an e-business does all this, it must also be trustworthy in the sense of fulfilling its promises: be up front with consumers about pricing and delivery times.
E-commerce merchants must also have a strategy to succeed in the online marketplace. Many people start websites because they think it is a quick and easy way to make cash, but in fact it takes a much greater investment than most people expect. Therefore, before launching a site, businesses must have strategies to handle issues large and small: How consumers will place orders, how deliveries will be made, how customer service issues will be handled? More broadly, how much do owners expect to earn over a certain period, how will consumers find the site, and how will success be judged. Online merchants without strategies will soon be overwhelmed by such issues.
Finally, merchants must decide if their products are suitable for the web. Requirements for successful e-businesses concern the goods and services themselves (Can they be delivered quickly and cheaply? Do they appeal to people outside a small geographic area?) as well as the logistics (Will going online save money? Will the benefits outweigh the costs?)
- comScore Reports $29.1 Billion in U.S. Retail E-Commerce Spending for Full November-December Holiday Season, Up 4 Percent vs. Year Ago.
- "Essentials of Entrepreneurship and Small Business Management;" Thomas Zimmerer and Norman Scarborough; 2008
- Identity Fraud is at an All Time High According to Javelin Strategy and Research's 2010 Identity Fraud Survey Report
- online shopping guy image by patrimonio designs from Fotolia.com