Moving to E-Commerce The First Steps

Electronic commerce -- using electronic media to sell services or products online -- can provide businesses with a competitive boost and assist them in achieving goals and customer loyalty. The California Society of CPAs (www.calcpa.org) provides the following guidance to assist businesses venturing into e-commerce for the first time.

Laying the Groundwork

The first step is to look at your business's core competencies, processes, and services or products. Your e-business should build on your overall business strategy.
Just as with traditional selling, you'll need to clearly define and prioritize your customer or client base. Initial plans to use e-commerce should focus on a targeted market. For example, younger customers may be more receptive to using e-commerce than older individuals. Once you define the market, you can tailor your Web strategy and messages specifically to this group.
It is also important to establish the goals you want to achieve by using technology for commercial transactions (i.e., business-to-business). For example, are you trying to reduce labor costs, improve customer service, tie into suppliers, or generate additional revenue? Is your focus on reaching out to current customers or new ones? Your goals should direct the design and content of your site.

Understanding Customer Expectation

Take the time to do some research to understand what your customers want and value from your company. Position your products and services accordingly. Keep in mind that customers who frequent e-commerce Web sites are generally looking for the following:
  • Clearly stated information that assists them in making purchasing decisions.
  • Easy-to-use search tools.
  • Purchase options that meet their needs.
  • A wide variety of communications channels (telephone, fax, e-mail, etc.).
  • Various payment options.
  • Forum for addressing customer questions and complaints.
  • Clearly stated privacy and security statements.

Setting Up A Store

Your target audience, goals, and understanding of customer expectations will assist you in setting up your company's "store." In the online world, this is simply a location on your Web site.
To operate your online store, you will need to maintain a merchant account. A merchant account is simply your link between the online and brick-and-mortar financial worlds. It receives the proceeds of credit card purchases that are then turned over to you (the merchant business owner) in exchange for the right to collect on the debt from creditors.
Be sure to organize the items in your online store so that visitors can easily view, evaluate and purchase them. Essentially this involves creating and maintaining a database with a user-friendly interface to your Web site. You can purchase "shopping cart" programs that integrate a database into their packages.

Selecting Software

There are many software options to choose from to operate your online store. Essentially, the software you choose should be based on three considerations: how much you are willing to spend; the number of products you are selling online; and the ease of use that you and your customers require.
For most small businesses, a commerce software package ranges from $150 to $10,000. Look for a package that is compatible with the applications you currently use to track sales or inventory. Then make sure the inventory and sales order component will support the number of items you plan to sell on your site now and in the future. Choose a product that will enable you to easily add or delete items in your store.
CPAs can assist you in selecting the right software and establishing an e-commerce capability that meets client needs. Some CPAs hold the designation "Certified Information Technology Professional" (CITP), an accreditation offered by the American Institute of Certified Public Accountants. This certificate is granted to CPAs with proven experience in planning, implementing and managing information technology. The CPA/CITP can help you build a bridge between your traditional operation and your e-commerce activities.