Final Version January 2008

Developing an Online E-Business

For Small Businesses Seeking an Online Presence

Stony Brook Small Business Development CenterStony Brook Small Business Development CenterCreated by Philip ComoCreated by Philip Como

About the author Mr. Phil Como is veteran teacher of Business and Technology Education in the Smithtown Central School District. He also has worked as an adjunct professor through Long Island University, SUNY Farmingdale and Stony Brook University spanning the past 10 years of his service towards educating students on the college level. For the past 10 years Phil Como has developed and taught the E-Commerce and Entrepreneurship program at Smithtown CSD which helps students research, develop and write their own dot com business plans. With the help of over 150 industry mentors, Mr. Como’s students are provided with the opportunity to get true real world advice from mentors who are active in entrepreneurial development. Over his years service, he has helped over 300 students effectively develop their online dot com business plan proposals. Its was with this knowledge and experience that he has been asked to develop this beginners tutorial to starting an online business for those businesses that have an interest in expanding their current business online.

Stony Brook Small Business Development CenterStony Brook Small Business Development CenterCreated by Philip ComoCreated by Philip Como

Stony Brook Small Business Development Center

Developing an Online E-BusinessTutorial Overview

Topic 1: Choosing E-Commerce Is E-Commerce Right For You?

Advantages vs. Disadvantages Pure vs. Partial E-Commerce Gaining the Competitive Edge

Topic 2: Online Business Methods Choosing an Online Business Method

Using Existing E-Tailing Platforms-Yahoo.com

Using Existing E-Tailing Platforms-EBay.com

Option 1: EBay ProStores Option 2: Create a Seller Account Option 3: Create an EBay StoreFront

Topic 3: The EBay Advantage Developing An EBay Store Entity

Why Would You Create An EBay Store? 3 Types of EBay Store Subscription Plans Understanding Your EBay Store Layout Sample EBay Store Online Managing Your EBay Store Promoting Your EBay Store

Topic 4: Creating an E-Business on an Independent Web Platform Step One: Creating Your Domain Name Step Two: Types of Hosting Services Step Three: Features of Different Hosting

Services

Topic 5: Marketing Your Online Business Basics on:

Google Marketing Programs Yahoo Search Engine Marketing Programs E-Mail Direct Marketing Techniques Banner Advertisement Concepts Affiliation Programs Overview Networking toUS

/Local Town Organizations

Topic 6: Financing Your Online Business


Topic 1: Choosing E-Commerce

Is E-Commerce right for your business?Is E-Commerce right for your business?

Advantages vs. DisadvantagesPure vs. Partial E-CommerceThe Competitive Edge: Will you gain the

edge?

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Topic 1: Choosing E-Commerce Is E-Commerce right for your business?Is E-Commerce right for your business?

Gaining “The Network EffectGaining “The Network Effect” – The value of your online business is based on its customer traffic. Building the network effect is your primary strategy as a growing dot com.

Scalability of Your E-BusinessScalability of Your E-Business – Effective business planning/research will allow online businesses to grow in proportion to their customer base and to help predict future trends and the focus on greater control on the responsiveness of how transactions are completed.

Adaptability to ChangeAdaptability to Change – Adding new product/services or changing your business model to changing trends/market needs will make your dot com more competitive. Amazon.com started as a book store that now is a major online retailer.

Ability to Expand Your Market Ability to Expand Your Market – the ability of a dot com to grow their customer base by expanding products/services to meet larger market needs. Ticketmaster.com now offers event tickets for more than 20 different types of genres.

Innovative Web Marketing IdeasInnovative Web Marketing Ideas – online businesses have a tremendous advantage in using new marketing techniques and programs geared at building customer traffic and developing strategic partnerships on the web. Hotmail.com offered free email service to users and built their customer base through “viral marketing” (spreads like a virus and users seek to use their free services)

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The Competitive Edge: Will you gain the edge? The Competitive Edge: Will you gain the edge? E-Business Concepts that E-Business Concepts that

lead to online successlead to online success

Source: Thomson Pub, “Creating a Winning eBusiness”



Sellers Increased salesDecreased transaction costsOpen 24hr/7days Ability to reach target customers accuratelyOpens up to Global Markets/Needs Increased speed and accuracy of transactionsCustomization of orders=reduced supply chain

management costsUse of existing online networks builds traffic to sites

Back to Main MenuSource: Thomson Pub, “Creating a Winning eBusiness”



BuyersWider product availabilityPersonalized buying optionsShop 24/7daysEasy comparison shoppingQuick deliveryParticipate in auctions

Back to Main MenuSource: Thomson Pub, “Creating a Winning eBusiness”


Topic 1: Choosing E-CommerceIs E-Commerce right for your business?Is E-Commerce right for your business?

*Pure vs. Partial E-Commerce

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PURE vs PARTIAL e-commerce: based on the degree of digitizationdegree of digitization of 1. The product can be physical or digital;2. The process can be physical or digital;3. The delivery agent can be physical or digital

TRADITIONAL BUSINESS SYSTEM

PARTIAL E-COMMERCE PURE E-COMMERCE

1.Physical enviroment 2.Virtual corporation 3.No online - brick and mortar

1. Physical enviroment 2.Mix online - click and mortar

1. No Physical environment2. All transaction processes

are completed through a back end and front end infrastructure

3. Even Supply Chain Mgt systems can be completed through a third party (UPS, FEDX or a Dropshipper)


Topic 2: Online Business Methods

Choosing An Online Business Method

Existing E-tailing Platform

Creating an Independent PlatformHosting Companies Types

• Virtual / Dedicated Hosting

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Topic 2: Online Business MethodsExisting E-Tailing Platforms

Yahoo Small Business Management offers both Yahoo Small Business Management offers both E-Commerce Plan E-Commerce Plan ServicesServices as well as a as well as a Marketing ServicesMarketing Services to businesses looking to use to businesses looking to use the Yahoo brand to help network their dot com. Use Yahoo services to the Yahoo brand to help network their dot com. Use Yahoo services to

DevelopDevelop, , HostHost, and , and MarketMarket your dot com business. your dot com business.

Ecommerce Plan Details• Features and benefits • Plan differences • Ecommerce basics • Professional store developers • Featured customer stores

•Small Business •Search Marketing

•Web Hosting•Ecommerce•Domains•Business Email•Search Engine Marketing

•Internet Access

Premier Search Engine Marketing Tools – @ Overture.com

Back to Main MenuSource: yahoo.com


ebay Selling Opportunities/Optionsebay Selling Opportunities/Options

1. ProStores – easy to use ebay company that will provide you – easy to use ebay company that will provide you with all of your web development, hosting, and marketing with all of your web development, hosting, and marketing needs to use needs to use outlineoutline of the ebay network. of the ebay network.

2. Selling on ebay – use the simple to use listing features to – use the simple to use listing features to create a sellers account and lists items individually as you create a sellers account and lists items individually as you wish with minimal web management needs. Merchant wish with minimal web management needs. Merchant payment options available through paypal.payment options available through paypal.

3. Create an Entire ebay Storefront – an easy to use tool that – an easy to use tool that will help small business owners create their online presence will help small business owners create their online presence and take advantage of the branding and traffic that ebay and take advantage of the branding and traffic that ebay brings to its site daily.brings to its site daily.

The ebay selling platform takes shape in many different forms. As a dot com business you The ebay selling platform takes shape in many different forms. As a dot com business you can simply use the ebay as an E-Commerce platform to set up your online business can simply use the ebay as an E-Commerce platform to set up your online business

structure, as a selling tool to supplement your current brick and mortar storefront by selling structure, as a selling tool to supplement your current brick and mortar storefront by selling individual items when needed, or you can create an entire ebay storefront that will act as individual items when needed, or you can create an entire ebay storefront that will act as

your store selling multiple items under the ebay online selling network.your store selling multiple items under the ebay online selling network.

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Ebay OPTION 1Ebay OPTION 1. ProStores – an ebay company for development, . ProStores – an ebay company for development, hosting, and marketing needs. This is NOT considered an ebay store. hosting, and marketing needs. This is NOT considered an ebay store. You would be an affiliate member of ebay.You would be an affiliate member of ebay.

Ecommerce PlanChoose from three levels of Choose from three levels of plan services offered. All plans plan services offered. All plans come with support to build come with support to build traffic, manage sales, and traffic, manage sales, and payment methods. payment methods.

• Ecommerce Basics • Store Design • Online Marketing • Payments and Security• Reporting and Analysis • Selling On eBay

Featured ProStores

•eGizmo.com

ProStores Learning Center

Back to Main MenuSource: ebay.com


Ebay OPTION 2Ebay OPTION 2. . Create a Seller Listing AccountCreate a Seller Listing Account. Simply use ebay to list your . Simply use ebay to list your individual items at your own pace to test out the “waters” on ebay. Each listing has individual items at your own pace to test out the “waters” on ebay. Each listing has fees that are charged based on what you sell and how you list your items for sale. fees that are charged based on what you sell and how you list your items for sale. Once you see your online sales progress most sellers advance to creating their Once you see your online sales progress most sellers advance to creating their own ebay storefront. Click on the own ebay storefront. Click on the Tutorial Link BelowTutorial Link Below to hear how to list an item. to hear how to list an item.

Selling Tutorial will help you through the Selling Tutorial will help you through the process of creating a selling listing with process of creating a selling listing with advice on: (click on play button)advice on: (click on play button)

•Text contentText content

•Marketing tipsMarketing tips

•Including photographsIncluding photographs

•Auction Styles/FormatsAuction Styles/Formats

•Understanding Listing Pricing MethodsUnderstanding Listing Pricing Methods Back to Main Menu

Source: ebay.com


Topic 2: Existing E-Tailing Platform – Creating An EBay Store

Ebay OPTION 3Ebay OPTION 3. . Create an entire EBay StorefrontCreate an entire EBay Storefront. Businesses just starting out . Businesses just starting out have the option to open an EBay store that will be used as the online selling have the option to open an EBay store that will be used as the online selling presence of your dot com. With this option you do not have to have your own presence of your dot com. With this option you do not have to have your own

domain name or hosting service provider, and you do not have to market your site domain name or hosting service provider, and you do not have to market your site through the traditional online marketing methods. Your website will be listed under through the traditional online marketing methods. Your website will be listed under

EBay stores and can also be accessed directly through the web. EBay stores and can also be accessed directly through the web.

AdvantagesAdvantages: Cost Effective for start up businesses, the EBay brand recognition is : Cost Effective for start up businesses, the EBay brand recognition is tremendous, and EBay customer traffic is potentially your traffic which will lead to tremendous, and EBay customer traffic is potentially your traffic which will lead to sales. Easy way to create a sales entity on the web without many requirements or sales. Easy way to create a sales entity on the web without many requirements or

legal needs.legal needs.

Disadvantages: You do not have your own URL (domain name) presence on the : You do not have your own URL (domain name) presence on the web, you are considered a part of the EBay Network, and your traffic is mostly web, you are considered a part of the EBay Network, and your traffic is mostly

EBay users which might not be your target market.EBay users which might not be your target market.

Source: ebay.com

Topic 3 : The EBay Store Advantage EBay Stores Currently Open

http://stores.ebay.com/Discount-Golf-Worldhttp://stores.ebay.com/Discount-Golf-Worldhttp://http://stores.ebay.com/VIDEO-CAMERA-CENTERstores.ebay.com/VIDEO-CAMERA-CENTER

http://http://stores.ebay.com/A-G-Essentialsstores.ebay.com/A-G-Essentials http://stores.ebay.com/Rinners-and-Brandon-Furniturehttp://stores.ebay.com/Rinners-and-Brandon-FurnitureSource: ebay.com


Topic 3: The EBay Store Advantage Creating Your Own EBay Store

Why Create an EBay Store?Why Create an EBay Store? Answer: Large “Ready-Made” Customer Base and packaged Answer: Large “Ready-Made” Customer Base and packaged

tools to help you succeed!tools to help you succeed!

1.1.

2.2.

3.3.

4.4.

Source: ebay.com


Topic 3: The EBay Store Advantage

3 Store Subscription Plans•Build Your StoreBuild Your Store

•Manage Your Manage Your SalesSales

•Promote Your Promote Your Ebay StoreEbay Store

•Promote Your Promote Your Store Off EBayStore Off EBay

•Track Your Track Your SalesSales

11 3.3.2.2.

Source: ebay.com


Topic 3: The EBay Store Advantage Understanding Your EBay Store Layout

Source: ebay.com


Topic 3: The EBay Store Advantage Managing Your EBay Store

Advanced Tools for High Advanced Tools for High Volume EBay Stores (Add’l Volume EBay Stores (Add’l Fees Apply)Fees Apply)

Source: ebay.com


Topic 3: The EBay Store Advantage Promotion Tools Available

On EBay Promotions

Cross PromotionsCross Promotions - Like items will display on product pages.

Listing Frames –Listing Frames –Categories product listings

Off EBay Promotions

•Search Engine OptimizationSearch Engine Optimization

•Search Engine Keyword Mgr.Search Engine Keyword Mgr.

•E-Mail Marketing OptionsE-Mail Marketing Options

•Offline Promotional FlyersOffline Promotional Flyers

•Offline Business Card Offline Business Card TemplatesTemplates

Source: ebay.com


Topic 4: Creating an E-Busines on an Independent Platform

Step One: Choosing a domain nameStep Two:Types of Hosting Services

Virtual HostingDedicated Hosting

Step Three: Different Hosting FeaturesWeb DesignShopping CartsMerchant Account SetupControl PanelsMarketing Options

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Step one: Choosing a Domain NameStep one: Choosing a Domain Name – one of the most important aspects of your online presence. It will identify people to you, it will brand your business, and it will help to build traffic to your business through searches.

Three methods of choosing a domain name:1. The “Literal method – your name is literal to what you sell

(i.e. www.musicdownload.com. www.sportsshoes.com) 2. The “Implied or inferred method” – your name is implied in the wording of

your domain. (i.e. www.edigi.com, www.etrade.com)3. The “Branding method” – your name is based on a gimmick or has no direct

relationship to your dot com. Used to brand you business in consumers minds. (i.e. www.godaddy.com, www.google.com)

Domain Name Register Companies – (Domain Name Register Companies – (Fees range from $6.95 -9.95 per year)

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Step Two: The Basics on Hosting ServicesStep Two: The Basics on Hosting Services

Virtual Hosting Services – “The school bus of hosting”Virtual Hosting Services – “The school bus of hosting”

When choosing the option of creating your dot com on an independent When choosing the option of creating your dot com on an independent platform you take on the task of bringing all the pieces of your dot com platform you take on the task of bringing all the pieces of your dot com

together on your own. Although there are companies that will provide all-in-together on your own. Although there are companies that will provide all-in-one service packages to web business seekers one service packages to web business seekers ((virtual hosting services),, you you will be restricted in expandability or scalability when it comes time to grow as will be restricted in expandability or scalability when it comes time to grow as

a business. a business.

A benefit of using a hosting company that provides all the tools needed to do A benefit of using a hosting company that provides all the tools needed to do business online is the fact that you can upgrade your service plans to meet business online is the fact that you can upgrade your service plans to meet

growing business needs with minimal upgrade plan charges. growing business needs with minimal upgrade plan charges.

Dedicated Hosting Services – “The Taxi Cab of hosting”Dedicated Hosting Services – “The Taxi Cab of hosting”

Once you have outgrown the need for a virtual hosting company to handle Once you have outgrown the need for a virtual hosting company to handle your business operations online, businesses will use your business operations online, businesses will use dedicated hosting service companies that will allow a dot com to custom configure their

infrastructure needs based on the size and potential growth of their dot com.

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Step Three: Different Hosting Features

Web DesignShopping CartsMerchant Account SetupControl PanelsMarketing OptionsWeb Templates

Control Panel OptionsControl Panel Options

•Merchant Accounts

•File Management

•Promotional Devices

Hosting Plan FeaturesHosting Plan Features

•Memory/Space

•Shopping Carts

•Marketing Options through Yahoo/Google

•Web Statistics

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Topic 5: Marketing Your Online Business

Networking – US/ Local Organizational Networking

US Chamber of Commerce NYS Directory of Chambers of Commerce Long Island Town Listings/Chambers

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Topic 5: Marketing Your Online Business

Direct E-Mail Marketing (opt-in / opt-out lists)Direct E-Mail Marketing (opt-in / opt-out lists)

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Direct E-Mail Marketing allows businesses to focus email advertisements towards individuals that meet certain customer market criteria (demographics, psychographics, geographics).

Online marketing companies provide these focused emailing lists to businesses at a subscription rate. Recipients have the option to “Opt out or Opt in” by responding to an email

advertisement so it is not considered a form of SPAM.

Sample of a BtoC Email ListSample of a BtoC Email ListSample of a BtoB Email ListSample of a BtoB Email List

Source: constantcontact.com & Greatlists.com


Topic 5: Marketing Your Online Business Advertising Advertising

ProgramsPrograms

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Google is one of the great American online success stories that brings all of us hope that we too Google is one of the great American online success stories that brings all of us hope that we too can multiply our worth 100x. As a result of Google’s growing wealth comes its ability to offer can multiply our worth 100x. As a result of Google’s growing wealth comes its ability to offer diverse services to its customers. Since Google is such a giant and maintains a tremendous diverse services to its customers. Since Google is such a giant and maintains a tremendous market base it offers marketing services that are revenue generating as well as a tool to help market base it offers marketing services that are revenue generating as well as a tool to help

users, or online business, to generate revenue for their online businesses. These two users, or online business, to generate revenue for their online businesses. These two marketing programs are marketing programs are Google Ad SenseGoogle Ad Sense and and Google Ad WordsGoogle Ad Words

For Advertisers: Google AdWords Advertise to people searching on Google by positioning your ads based on search terms searched through Google. Once an individual searches Google using your “AdWords” your business advertisement will be positioned on the page with the search results. A great way to target customers to your website. Subscribers pay for search terms based on the traffic that search term brings per month. You also pay for page positioning (page 1-5).

1. Google Ad Words1. Google Ad Words

Source: Google.com



ProgramsPrograms

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1. Understanding How Google 1. Understanding How Google AdWordsAdWords Works WorksRequested Requested Search TermSearch Term

Estimated Google Estimated Google Search Page Positioning Search Page Positioning of your ad based on the of your ad based on the search termsearch term

Estimated CPC “Cost Estimated CPC “Cost Per Click” you would Per Click” you would pay every time pay every time someone clicks on someone clicks on your adyour ad

Source: Google.com



ProgramsPrograms

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1. Understanding How Google 1. Understanding How Google AdWordsAdWords Works Works

Ads That Appear on Page 1 of a Google search for “Digital Camera” Each

time someone clicks on these ads the advertiser

has to pay the “Est. CPC”



ProgramsPrograms

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Google Ad Sense ProgramGoogle Ad Sense Program

The Google search engine crawls the The Google search engine crawls the web for businesses that would be web for businesses that would be relevant to your business and places an relevant to your business and places an ad on your page. This is an additional ad on your page. This is an additional revenue stream for businesses that are revenue stream for businesses that are looking to benefit from advertisers looking to benefit from advertisers looking to advertise on your website. looking to advertise on your website. Google uses their search tools to make Google uses their search tools to make this a reality.this a reality.

Source: Google.com


Topic 5: Yahoo Search Engine Marketing Programs

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What is SEO, Search Engine Optimization?What is SEO, Search Engine Optimization?

Search engine optimizationSearch engine optimization ( (SEOSEO) is the process of improving the ) is the process of improving the volume and quality of traffic to a volume and quality of traffic to a web site from from search engines via via ""naturalnatural" ("organic" or "algorithmic") " ("organic" or "algorithmic") search results. Usually, the earlier a . Usually, the earlier a site is presented in the search results, or the higher it "ranks", the more site is presented in the search results, or the higher it "ranks", the more searchers will visit that site. SEO can also target different kinds of search, searchers will visit that site. SEO can also target different kinds of search, including including image search, , local search, and industry-specific , and industry-specific vertical search engines.engines. (WikiPedia definition with hyperlink definitions)WikiPedia definition with hyperlink definitions)

What are Search Engine Marketing Programs?What are Search Engine Marketing Programs?

Search Engine MarketingSearch Engine Marketing, or , or SEMSEM, is a form of , is a form of Internet Marketing that seeks to promote websites by increasing their visibility in the Search Engine result pages. Yahoo Search Engine Marketing ProgramsYahoo Search Engine Marketing Programs allows users to select and bid on search terms they want their business to displayed as a part of a “Natural” search result.

Source: Wikipedia.com



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Yahoo Search Engine Marketing

1. Use the Yahoo tools provided to search for terms that are relevant to your business that have a high number of traffic “hits” per month.

2. After selecting your desired search term, click to see the bid amount “cost per click” CPC for that term.

3. The amount of your bid amount will determine where your business ad appears in the search results. (i.e. page 1,2, 3..etc)

4. Create a search engine marketing plan which selects multiple terms that can be chosen by seasonal usage. To view the seasonal usage of terms use the Yahoo tools provided.

Play Demo

Click Here

View demo

Source: Yahoo.com



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Search Term: Search Term: “Digital Camera”“Digital Camera”

These paid search ads appearing in the shaded area

on the top of search results and ads appearing to

the left of the search results are the result of term bidding or search engine marketing techniques. Each time an individual

clicks on these links the advertiser

must pay Yahoo the agreed upon

bid amount, based on the term searched.

Natural Search Results.

SAMPLE YAHOO SEARCHSAMPLE YAHOO SEARCH

Source: Yahoo.com

Topic 5: Affiliation Programs Overview

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Affiliation ProgramsAffiliation Programs Help to Create Additional Revenue Streams Through Strategic Help to Create Additional Revenue Streams Through Strategic Internet Partnerships.Internet Partnerships.

Affiliate Process Overview

1. Customer Visits an affiliates webiste.

2. Customer is directed to your website through strategic ad placed on affiliate website.

3. Customer makes purchase on your website.

4. Your website compensates affiliate for sale through an agreed upon sale commission (5-15%).

5. This partnership works both ways where by each partner in the affiliation benefits from new directed sales revenue and by commissions on sales.

6. Amazon.com was the first to create this marketing/revenue model.

Topic 5: Affiliation Programs Overview Amazon.com

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Other Online Sample Affiliate Program

Directories

Topic 5: Banner Advertisement Concepts

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1.Types of Banner Ads

2.Banner Exchange Programs

3.Buying Banner Ad Space


Back to Banner Menu

1.1. Types/Sizes of Types/Sizes of Banner AdsBanner Ads

2.2. Flash Banner AdsFlash Banner Ads

Howstuffworks.com/Banner-Ads

http://www.flashbannernow.com/http://www.flashbannernow.com/


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LinkExchange LinkExchange BannerSwap BannerSwap SmartClicks SmartClicks Free Banners Free Banners

LinkBuddiesLinkBuddies

2. Banner Exchange Programs2. Banner Exchange Programs


Exchange service that places your banner ad on other websites and in return has other participating online businesses place ads on your website. The advantage of a program like this is that it is mostly free, if there is an even exchange in banners. The disadvantage is the fact that you do not have control of which sites your ad is placed. The exchange web service positions the banner ads based on relevance. Some examples of companies based in Banner Exchange Programs;


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3. Buying Banner Ad Space3. Buying Banner Ad Space


The most popular methods of acquiring banner ad space is through;The most popular methods of acquiring banner ad space is through;1. Approach Web sites yourself 2. Employ an advertising agency

Typical Costs Associated with Banner Ads

CPM: Cost Per Impressions CPM: Cost Per Impressions

On average, medium to large scale popular dot com’s, cost range from $5 to $100 per thousand impressions on a webpage. An impression is the amount of times a banner ad appears. Larger dot com’s will sell advertising banner space in packages of 20,000 to 50,000 impressions. Smaller web sites are more negotiable with their impression allowances and costs so shopping around and contacting smaller dot com’s would be to your advantage.


Topics 6: Financing Your Online Business

Business Capital Investment - leveraging from existing business capitalleveraging from existing business capital

VC Investment – funding from venture capital investor groupsfunding from venture capital investor groups

Bank Business Loan – terms based on existing business experience/successterms based on existing business experience/success.

Personal Financing -(friends/family/self)(friends/family/self)

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