I hesitate to write this installment, because even though it is a topic where I am pretty well informed, what I have to say will be jumbled and idiosyncratic and incoherent. This is for two reasons: (1) selling over the internet is still new enough that the technology is raw and unreliable and not for the faint of heart; and (2) unlike many of the things I write about, I came to it not as a novice but with a pretty deep prior knowledge of the technology, and so what I’m able to say may not be useful or edifying for novices.
First, whether or not you actually sell over the internet, it is important for even the smallest of businesses to have an internet presence, be it only a single web page with a brief summary of what you do and how you can be contacted. More and more the Yellow Pages is a last resort for people in search of a service or product; the first resort is Google or some other search engine. One to four simple but informative web pages is probably the simplest and most effective advertising available to a small scale business. And the cost is very, very cheap; I see, for example, that GoDaddy offers an economy account which is more than capable of what I’m suggesting, for just $44/year.
Second, you can “sell over the internet” without actually transacting business online. If you have a small range of products that aren’t impulse buys, you could probably do well to just provide information and prices on your website, asking that customers contact you via phone or email to place an order. The drawback to this is that the simpler and safer the transaction for you, the more complicated and delayed for the customer. Simplest and safest would be to ask for payment in advance via a money order; this requires the customer to go buy a money order and mail it, knowing that the order won’t ship until it has been received. Somewhat harder for you (and easier for the customer) would be to accept a personal check; you can be safe by waiting for it to clear before you ship the order (thus increasing the delay for the customer) or you can take a chance by shipping when the check arrives. Easier yet for the customer, but much riskier for you, is to take a customer’s word that they will send a check and ship right away.
The next level of technology would be to still avoid online ordering but allow the customer to pay via a service such as PayPal or Google Checkout. This has the major benefit of letting your customer pay via credit card. I know very little about PayPal. I do know that Google Checkout allows a form of invoicing, where you would put together your customer’s order and email them an invoice which contains a link that allows them to pay you through their Google Checkout account. All this requires on your end is that you have a business checking account; every few days Google will deposit accumulated funds there. The transaction fee for Google Checkout is 2% of the sale plus 20 cents (and until the end of 2007 Google is waiving all transaction fees); the fee for PayPal is 2.9% plus 30 cents.
Email is theoretically the simplest and cheapest way to conduct these transactions with a customer, but in practice a phone call is often more comfortable for the customer and easier for you since it avoids the need for back-and-forth emails to clarify things. It’s very easy and cheap to get an 800 number these days, with a tiny monthly charge (e.g. $1 or so) plus a cheap per-minute rate, slightly more expensive than cheap long distance (I think we pay about eight cents per minute).
I think that’s about as far as you can go without providing online ordering. The state of online ordering software is getting better, but is still horrendously complicated from the point of view of a seller. When we first started out in 2001, I built a custom website on a hosting service that cost $160/month (similar capabilities are now available for about $5/month). I had to purchase an add-on software package for $300 that was poorly documented and constantly going wrong—possibly because I hadn’t configured it properly, but with such poor documentation and support there was no way to tell. And I had to arrange for the merchant account (which costs money) that would allow me to charge credit cards (which costs around 3% of the sale), and get that all working properly with my software.
After a couple of years of frustration, which increased with the size of the store, I discovered Yahoo Stores, a setup I would still recommend for requiring the least technical knowledge on the part of the seller. It is possible using Yahoo Stores to set up a store in less than an hour; it probably won’t be very attractive, and you’ll want to spend time polishing the look (or paying someone to do it for you), but it will work—very important! Plus you’ll be one of the million or so Yahoo stores, benefiting from the robustness of software that has been pummeled by all one million of them. And Yahoo also takes care of the mechanics of credit card charging; you point them at your business checking account, and they more or less do the rest.
The cost for a Yahoo store that does less than $100,000 in sales is $40/month plus 1.5% of each sale. This is in addition to the 3% or so that the credit card companies charge for a sale. This was justifiable (sort of) for us when we were charging full retail for our books, but when we dropped our markup to 15% these costs became very painful. But I didn’t know what to do about it.
Then in December I learned about Google Checkout. (I could have learned similar things earlier if I had studied PayPal.) Using this system, your software is only responsible for assembling the order and forwarding it to Google, which takes care of gathering the billing and shipping info, making the credit card charge, and placing the funds in your business account, all for only 2% of the sale amount plus 20 cents. Thus if I could get off Yahoo and only use Google Checkout for charge cards, I could save the extra 1% the credit card companies were taking from me, plus the merchant account fees (about $20 per month), plus the 1.5% that Yahoo took. And if I could find cheaper hosting, I could save that too.
I hadn’t paid attention to how cheap hosting has become. It is very cheap these days. Our new service charges us $7/month (if we paid two years in advance), and the bandwidth and disk space are way beyond anything I’ll ever use. I expect the change will save us over $1000 a year, more during 2007 when Google is waiving its fees.
Of course, what you get is little more than a powerful computing resource connected to the internet; what you fill it with is up to you. Our website design has evolved over the past six years, but is fairly simple both to the eye and in its underlying design, depending on a few dead-simple graphic elements, book and CD covers, and lots and lots of text. It would probably be possible to build and maintain such a website with a simple and cheap visual HTML editor like Microsoft Publisher (and I suppose such things must be available for free, but I’m not familiar with them). You could even do it with a text editor without too much heartache. But I do enough with websites that I own a copy of Dreamweaver, and while I don’t think a small operation can justify the cost, it is a joy to use. (If you’re interested, check for educational pricing at Academic Superstore, where homeschoolers qualify for deep discounts.)
In designing your website, I strongly recommend that you emphasize useful content, particularly if your product offerings are unusual. It always surprises me that many of the books and CDs we offer will show up in the first ten results of a Google search. There are lots of people who will tell you tricks and techniques to get such high search engine rankings, but I’ve never done anything along those lines. I have to figure that our high rankings are due to two things: (1) not many people sell what we sell; and (2) our product descriptions are packed with useful information.