B2B Agriculture E-Commerce PrimerPrepared by Department of Food & Resource Economics, University of Delaware, CANR, and Innovative Exchange, Inc.

Overview: What is E-Commerce?Popularly, e-commerce is thought of as conducting business over the Internet. To put it all in perspective, lets address commerce first.

The Elements of Commerce

When you get down to the actual elements of commerce and commercial transactions, the details boil down to a finite number of steps:Product or servicePlace from which to sellMarketingAccept ordersAccept paymentFill ordersAccept returnsCustomer service

Overview: What is E-Commerce?E-Commerce Sales Channel

In an e-commerce sales channel you find all of these elements as well, but they change slightly. You must have the following elements to conduct e-commerce:A productA place to sell the productA way to get people to come to your websiteA way to accept orders normally an online form of some sortA way to accept money normally a merchant account handling credit card paymentsA fulfillment facility to ship products to customers (often outsourced)A way to accept returnsA way to handle warranty claims if necessaryA way to provide customer service

Overview: What is E-Commerce?B2B & B2C

Firms that do business on the Internet, whether exclusively or part of a broader business, generally fall into two categories: B-to-B and B-to-C.

B-to-B is short for business to business and applies to transactions between firms

B-to-C, or business to consumer describes firms that sell goods or services to a final consumer, usually a member of the general public.

Overview: What is E-Commerce?E-Commerce Hype

A huge amount of hype surrounds e-commerce. Given the similarities with mail-order commerce, you may be wondering why the hype is so common.

The Dell example:Dell is a straightforward company that, like a host of others, sells custom-configured PCs to consumers and businesses.Started as a mail-order company that advertised in the back of magazines and sold its computers over the phone.Dells e-commerce presence is widely publicized these days because Dell is able to sell so much merchandise over the Web.Dell sold about $14 million in equipment every day in 2000, and 25% of Dells sales were over the Web.

Overview: What is E-Commerce?E-Commerce Hype

The Dell example

Does this matter?If Dell were to lose 25% of its phone sales to achieve its 25% of sales over the Web, then it is not clear that e-commerce has any advantage, unless:What if the sales conducted over the Web cost the company less?What if people buying over the Web tend to purchase more accessories?What if, in the process of selling merchandise over the Web, Dell lost no sales through its traditional phone channel?

Overview: What is E-Commerce?The Lure of E-CommerceLower transaction costsLarger purchases per transactionIntegration into the business cycle People can shop in different ways; websites offer these new features:The ability to build an order over several daysThe ability to configure products and see actual pricesThe ability to easily build complicated customer ordersThe ability to compare prices among multiple vendors easilyThe ability to search large catalogs easilyLarger catalogsImproved customer interactions

E-Commerce and Farm Direct MarketingThrowing Numbers at You

2007 Farm Computer Usage and Ownership (US Department of Agriculture)Farms using computers for their business increased 3 percentage points from 2005 to 35 percentage points in 2007.In 2007, 80% of U.S. Farms with sales and government payments of $250,000 or more have access to a computer, 78% own or lease a computer, 66% are using a computer for their farm business, and 75% have Internet access.For farms with sales and government payments between $100,000 and $249,999, the figures are: 70% have access to a computer, 66% own or lease a computer, 51% are using a computer for their farm business, and 61% have Internet access.For farms with sales and government payments between $10,000 and $99,999, 62% reported having computer access, 57% own or lease computer, 36% percent use a computer for their farm business, and 53% have Internet access.

E-Commerce and Farm Direct MarketingThrowing Numbers at You

2007 Farm Computer Usage and Ownership (US Department of Agriculture):High-speed Internet has become much more available to Internet users in the farm sector since 2005.The proportion of operators using DSL doubled between 2005 and 2007, to 27 percent versus 13 percent.Cable, satellite, and wireless were each reported as the primary access methods on 7% of U.S. farms with Internet access, with satellite and wireless methods both at virtually double their 2005 levels.Dialup was again the most common method of accessing the Internet, with nearly half (47%) of U.S. farms still using it, down from 69% in 2005.A total of 55% of U.S. farms now have Internet access, compared with 51% in 2005.Conducting business on the Internet and usage of toll-free customer service numbers in MD&DE, 5% in 200763% of farms have access to a computer in 2007, compared with 59% in 2005.

E-Commerce and Farm Direct MarketingFood and agriculture products can pose particular challenges E-commerce in Agricultural Industries: ShippingSeasonalityConvenience vs. personal connectionConsider the costs

E-Commerce and Farm Direct MarketingOther Approaches for E-Commerce in Agriculture

Augmenting existing customer relationships and making it easier for these local customers to patronize your business.

B2B:Direct sales to restaurantsDirect sales to other farm marketsDirect sales to schools, hospitals, & other institutionsCorporate giftsB2C:Farmers market preordersDelivery servicesCSA (Community Supported Agriculture) sharesCSA weekly extras

E-Commerce and Farm Direct MarketingIdentify Internet Marketing Objectives

Before getting started, it is important for marketers to identify Internet objectives and determine what can be gained by direct marketing farm products on the Internet.Save timeSave laborSave moneySave materialsAdvertiseSell product

Internet Market Planning & Aspects of E-CommercePlan Ahead Business Plan, Marketing Plan & Internet Marketing PlanStarting any new enterprise can be risky. Before investing money, time, and energy in an unconventional agricultural business, new entrepreneurs should complete personal, market, project feasibility, and financial evaluations.A business planA marketing planInternet marketing planFarm direct marketing on the Internet provides many opportunities for producers to expand their existing businessInternet technologiesVarious ways to use Internet technologyWebsiteOnline directoriesE-mail

Internet Market Planning & Aspects of E-CommerceInternet Marketing Without a Website

Internet DirectoriesTopical directorieslocalharvest.orgagriculturehealth.comState Department of Agriculture Internet directoriesLocal community directoriesE-mailE-mail newslettersE-mail address everywhereE-mail lists and updatesNever, ever SPAM

Internet Market Planning & Aspects of E-CommerceDeveloping Your Own Website for E-Commerce

The things that are easy about creating a website for e-commerce:Creating the websiteTaking the ordersAccepting payment

The things that are hard about e-commerce include:Getting traffic to your websiteGetting traffic to return to your websiteDifferentiating yourself from the competitionGetting people to buy something from your websiteIntegrating an e-commerce website with existing business data

Planning, Designing & Developing Your WebsiteThere are several different ways to direct market on the web. Producers must, therefore, ensure that the solution fits in with their overall marketing plan, with their objectives for using the Internet, and with their resource constraints.

There three are primary types of websites that an individual producer can choose to develop:Website to transact salesWebsite to distribute informationWebsite to transact sales and distribute information

Fundamentals Objectives, Target Markets, Products & ServicesObjectives of the organizationNeeds, wants, and expectations of target marketsProducts and services that are being offered.

Planning, Designing & Developing Your WebsiteCommon Objectives

What is the purpose of your site?Advertising products & servicesSelling products & servicesProviding customer service and product supportProviding product or corporate informationCreating and establishing corporate identity or brand awareness

Target Markets

It is important to define every one of your target markets. For each one you will need to determine:Their needsTheir wantsTheir expectationsAppropriate WOW factor

Planning, Designing & Developing Your WebsiteProducts & Services

It is important to define the products and services you want to promote online. Sometimes the products and services you offer in your physical store are the same, but quite often there are differences:You may have fewer items if you are test marketing, or if some items are not appropriate for online sales because of competitive pricing or shipping logistics.You may have more products or services online for example: shipping items out of state, mail lists, etc.

Planning, Designing & Developing Your WebsiteOther Considerations:

The site should be designed to be search-engine friendlyKeywords in keyword and description META tags (Keywords inserted in the coding), page text, domain names, page titles, alt tagsDifferent META tags on each pageKeyword density and locationHeader tagsSearch localizationHypertext links, anchorsFile namesReferring websitesFlash and text in graphicsWebsite accessibility issues

Planning, Designing & Developing Your WebsiteOther ConsiderationsThe site should be designed to encourage repeat traffic:The more your brand is reinforced,The more your target markets feel a part of your community,The more likely they are to tell others about you,The more likely they are to give you permission to stay in touch,The more likely you will be the first in mind when they go buy your types of products/services.

Web elements to keep them coming back:Contests and competitionsCartoons, jokes, trivia, gamesAdvice columns, tip of the dayWhats New pageBookmark this pageCalendar of eventsBlogsOnline communityCoupons, discounts, giveawaysSpecials and promotions

Planning, Designing & Developing Your WebsiteOther Considerations

The site should have viral marketing elements that encourage visitors to recommend your products or services to othersWord of mouth (tell a friend, send this to a friend)Pass it on (customers forwarding e-mails to a friend)Product or service basedThe site should include elements to leverage its sales forceAffiliate or associate programsThe site should incorporate permission marketing, in which visitors are encouraged to give you permission to send them an e-mail on a regular basisNewslettersContestsNotification of new giveaways

Planning, Designing & Developing Your WebsiteOther Considerations

The site should be designed to encourage customer loyaltyMembers-only areaE-club with offers/discounts/freebiesAppreciate their businessThe site should incorporate stickiness, encouraging visitors to stay a while and visit many areas of the siteAdvice columnsDescription of productsDiscussion forumsNews sectionsWeekly contests

Planning, Designing & Developing Your WebsiteUsing Competitor Sites to Your Advantage

There are a number of ways to find your online competitorsConduct searches with the appropriate keywordsVisit industry-specific Web portals and directoriesAnalyze the competitionVisual appealContentEase of navigationSearch engine friendlinessInteractivityWebsite stickinessReview the elements that address the criteria above and categorize them as:Need to have, essentialNice to have it if it doesnt cost too muchDont need or want at any price

Planning, Designing & Developing Your WebsiteStoryboard Your Website

A website storyboard can be thought of much like a hierarchical organizational chart in a business:Begin with your main page or home page at the topUnder the main page, you have your central navigation barSub pages below that

Planning, Designing & Developing Your WebsiteDetailed Website Planning

At this point, you are ready to think about construction. For each page of the site, you will need to develop content and specific graphics. Your designer will need to work on the site look and feel and ease of navigation.You will need to write your text.It may behoove you to have the copy reviewed and edited by an online copywriter with experience in grabbing readers attention and getting them to do what you want them to do.You will need to review and approve, making sure that only the form, not the substance, has changed.Content should then be reviewed and edited by an Internet marketer (unless the online copywriter is writing for that as well).The Internet Marketer will also develop content for page titles, META tags, ALT tags, headers, etc.The Internet Marketer will check for repeat traffic generators, permission marketing, viral marketing.

Planning, Designing & Developing Your WebsiteDetailed Website Planning

The Graphic Designer develops the look and feel in parallel with this effort.When all of this comes together, site development can begin. The development process should include adherence to guidelines for:ContentConsider contact information on every pageAvoid Under ConstructionInclude security informationInclude privacy policyMinimize use of background soundsText Formatting80% of web users scan text as opposed to actually reading itWrite for scan-ability bulleted lists, headers, and horizontal rules to create visual breaksColorsKeep online and offline images consistentLogos, corporate colors, other marketing collateralChoose background and font colors carefully for readability

Planning, Designing & Developing Your WebsiteNavigationConsistent locationNavigation bar that links to all the major pages on every pageGet anywhere on the site in three or fewer clicksSite map if you have more than eight major sectionsInternal search tool if the site is very largeGraphicsCombined size of text and graphics should not exceed 50kbUse descriptive ALT imagesUse thumbnails when appropriateAvoid image mapsAvoid flash introsVisualTest site in multiple browsersTest on a Mac and a PCTest with varying screen widthsAvoid scrolling textOtherTest download time. Users rarely wait beyond 15 seconds to download a siteEnsure there are no dead links

Planning, Designing & Developing Your WebsiteBeing Search Engine Friendly

Organic searches85% of people using the Internet use search engines as their way to find information.Most important web elements on a web page for organic search engine optimization:Page textTitle tagsKeyword META tagsDescriptions META tagsAlt tagsHypertext linksDomain namesFile namesHeadersPaid inclusionWith pay-per-click campaigns, you are guaranteed to be indexed by the search engines, up to the number of pages you have paid for, within a short, defined period.

Planning, Designing & Developing Your WebsiteDeciding between optimization and pay-per-clickLimited advertising budgetWebsite that cant be modifiedNeed immediate resultsGuaranteed top placementA need to change ad content or trainingAd-averse audience

Planning, Designing & Developing Your WebsiteOptions for taking paymentsStorefrontsShopping cartsOut-of-the-box softwareSoftware provided by the hosting companyBuild your own systemRefer to your shopping cart considerations handout to help you select a solution

Planning, Designing & Developing Your WebsitePayment Gateways/Merchant Accounts

Lets briefly run through the nuts and bolts or the process of online sales using credit cards:The customer visits your site.Customer clicks on a buy me button after reviewing sales copy.The selection is added to the shopping cart.At Checkout, the customers personal and financial details are recorded via a secure form.Details on the form are transmitted to a payment gateway service, which is separate from the cart. The gateway service securely routes the information through the relevant financial networks.If the transaction is successful, the customers credit card account is debited and your merchant account is credited.Once all funds have cleared, you are able to transfer money to your ordinary business checking account.

Planning, Designing & Developing Your WebsitePayment GatewaysA payment gateway is a separate service and acts as an intermediary between the merchants shopping cart and all the financial networks involved with the transaction, including the customers credit card issuer and your merchant account.Payment Gateway IssuesGateway compatibilityAVS protection

Gateway Compatibility

AVS (Address Verification) Protection

Planning, Designing & Developing Your WebsiteMerchant Accounts & Third-party Credit Card Processors

When selecting an Internet merchant account provider or third-party processor, you should address these fees:Statement feeApplication feeSetup feeDiscount rateMid-qualified and nonqualified rateTransaction feeMonthly minimumReserveCharge-back

Planning, Designing & Developing Your WebsiteAlternatives to Merchant Accounts (P2P)

P2P or person-to-person payment services keep track of funds available to both the buyer and the seller. The buyer and seller (or service provider) both need to have accounts with the P2P service.The most popular P2P service is PayPal, though there others are attempting to work up market acceptance. Public acceptance of P2P payment services is the main drawback of using this type of service as your sole payment method.Primary Benefits of P2P:P2P accounts are usually very easy to get.Purchase transaction approvals are typically straightforward (either the funds are available or they are not).Funding accounts and moving funds out of an account are usually fairly simple.Primary Drawbacks of P2P:Do not have universal public acceptance.May give the purchaser less confidence in the seller (ease in obtaining a P2P account compared to a merchant account).

Planning, Designing & Developing Your WebsiteDomain Registration

What is a domain name?A domain name uniquely identifies a website. Typing a domain name (also called a URL) into your browser allows you to visit that site.Anatomy of a Domain Name: You most often see a domain name listed as www.webixi.comThe center part, webixiThis is the unique part of the name. It represents your company or brand name. It is how you will be branded and known on the web.The last part is called the extensionWhat do the different extensions represent?.COM Abbreviation for commerce currently available to all.NET Abbreviation for network currently available to all.ORG Abbreviation for organization currently available to all.GOV Abbreviation for government reserved for government agencies.EDU Abbreviation for education reserved for educational institutions

Planning, Designing & Developing Your WebsiteDomain Registration and Hosting

Website HostingA web hosting service generally provides server space for your files or websiteIn addition, website hosts can provide a range of services that can be tailored to your needs and your price range. One example is e-mail.

Web Hosting Selection CriteriaDependability and backupBandwidthStatistics providedPriceReputationManagement and maintenanceSecuritySoftwareSupport

Planning, Designing & Developing Your WebsiteTypes of Web Hosting ServicesShared server (virtual server)Dedicated servers (rented server)Collocation (owned server in a remote location)

ConclusionsAn E-commerce website can be the next step for your business strategy to increase your sales presence in your specific marketplace. Implementing an e-commerce site represents a new strategy for business growth. You have an opportunity to expand your marketplace and reach new goals with your company.

Questions?

*Farm direct marketing on the Internet provides opportunities for growers and farm markets to expand their existing business.This session is designed to show you how you can use the Internet to market and promote your business, and use e-commerce to sellyour products. Participantswill learn to identify and understand fundamental terms and concepts related to e-commerce, recognize the evolution of e-commerce in agriculture, and gain an understanding of aspects pertinent to selling and marketing on the Internet.*Overview: What is E-Commerce? (20 Minutes) 00:30

The Elements of CommerceWhen you get down to the actual elements of commerce and commercial transactions the details boil down to a finite number of steps. The following list highlights all of the elements of a typical commerce activity. In this case, the activity is the sale of some product by a retailer to a customer: If you would like to sell something to a customer, at the very core of the matter is the something itself. You must have a product or service to offer. Lets call it a watermelon. You may get your watermelons directly from a producer, or you might go through a distributor to get them, or you may grow the watermelons yourself. You must also have a place from which to sell your watermelon. Place can sometimes be very ephemeral -- for example a phone number might be the place. If you are a customer in need of a massage, if you call "Judy's Watermelon, Inc." on the telephone to order a watermelon, and if Judy shows up at your office to give you a watermelon, then the phone number is the place where you purchased this service. For most physical products we tend to think of the place as a store or shop of some sort. But if you think about it a bit more you realize that the place for any traditional mail order company is the combination of an ad or a catalog and a phone number or a mail box. You need to figure out a way to get people to come to your place. This process is known as marketing. If no one knows that your place exists, you will never sell anything. Locating your place in a busy shopping center is one way to get traffic. Sending out a mail order catalog is another. There is also advertising, word of mouth and even the guy in a chicken suit who stands by the road waving at passing cars. You need a way to accept orders. At Wal-Mart this is handled by the check out line. In a mail order company the orders come in by mail or phone and are processed by employees of the company. You also need a way to accept money. If you are at Wal-Mart you know that you can use cash, check or credit cards to pay for products. Business-to-business transactions often use purchase orders. Many businesses do not require you to pay for the product or service at the time of delivery, and some products and services are delivered continuously (water, power, phone and pagers are like this). That gets into the whole area of billing and collections. You need a way to deliver the product or service, often known as fulfillment. At a store like Wal-mart fulfillment is automatic. The customer picks up the item of desire, pays for it and walks out the door. In mail-order businesses the item is packaged and mailed. Large items must be loaded onto trucks or trains and shipped. Sometimes customers do not like what they buy, so you need a way to accept returns. You may or may not charge certain fees for returns, and you may or may not require the customer to get authorization before returning anything. Sometimes a product breaks, so you need a way to honor warranty claims. For retailers this part of the transaction is often handled by the producer. Many products today are so complicated that they require customer service and technical support departments to help customers use them. Computers are a good example of this sort of product. On-going products like cell phone service may also require on-going customer service because customers want to change the service they receive over time. Traditional items (for example, a head of lettuce), generally require less support that modern electronic items. You find all of these elements in any traditional mail order company. Whether the company is selling books, consumer products, information in the form of reports and papers, or services, all of these elements come into play.

*E-Commerce Sales Channel

In an e-commerce sales channel you find all of these elements as well, but they change slightly. You must have the following elements to conduct e-commerce:

A product A place to sell the product - in e-commerce, a Web site displays the products in some way and acts as the place A way to get people to come to your Web site A way to accept orders - normally an on-line form of some sort A way to accept money - normally a merchant account handling credit card payments. This piece requires a secure ordering page and a connection to a bank. Or you may use more traditional billing techniques either online or through the mail. A fulfillment facility to ship products to customers (often outsource-able). In the case of software and information, however, fulfillment can occur over the Web through a file download mechanism. A way to accept returns A way to handle warranty claims if necessary A way to provide customer service (often through email, on-line forms, on-line knowledge bases and FAQs, et cetera)

*B2B & B2CFirms that do business on the Internet, whether exclusively or part of a broader business,generally fall into two categories; B-to-B and B-to-C. B-to-B is short for business-to-business and applies to transactions between firms. This includes firms electronically purchasing inputs from other firms. This also applies to firms that act as intermediaries, or wholesalers, between firms. B-to-C, or business-to-consumer, describes firms that sell goods or services to a final consumer, usually a member of the general public. Firms may be involved in both B-to-B and B-to-C transactions.

*E-Commerce HypeThere is a huge amount of hype that surrounds e-commerce. Given the similarities with mail order commerce, you may be wondering why the hype is so common.The Dell ExampleThe hype doesn't explain the frantic rush by companies, both large and small, to get to the Web. Nor does it justify a small business making a big expenditure on an e-commerce facility. What is driving this sort of frenzy? To understand it a bit, let's take a look at one of the most successful e-commerce companies: Dell.

Dell is a straightforward company that, like a host of others, sells custom-configured PCs to consumers and businesses.

Started as a mail-order company that advertised in the back of magazines and sold their computers over the phone.

Dell's e-commerce presence is widely publicized these days because Dell is able to sell so much merchandise over the Web.

Dell sold about like $14,000,000 in equipment every day in 2000, and 25 percent of Dell's sales were over the Web.

*E-Commerce HypeDoes this matter? Dell has been selling computers by mail over the phone for more than a decade. Mail order sales are a standard way of doing things that has been around for over a century (Sears, after all, was a mail order company originally). So if 25 percent of Dell's sales move over to the Web instead of using the telephone, is that a big deal? The answer could be yes for three reasons:

If Dell were to lose 25 percent of its phone sales to achieve its 25 percent of sales over the web, then it is not clear that e-commerce has any advantage. Unless

What if the sales conducted over the web cost the company less?What if people purchasing over the web tend to purchase more accessories? What if, in the process of selling merchandise over the Web, Dell lost no sales through its traditional phone channel? There is also a widely held belief that once a customer starts working with a vendor, it is much easier to keep that customer than it is to bring in new customers.

These three trends are the main drivers behind the e-commerce buzz. There are other factors as well.

*The Lure of E-commerce The following list summarizes what might be called the "lure of e-commerce":

Lower transaction costs - if an e-commerce site is implemented well, the web can significantly lower both order-taking costs up front and customer service costs after the sale by automating processes. Larger purchases per transaction - Amazon offers a feature that no normal store offers. When you read the description of a book, you also can see "what other people who ordered this book also purchased." That is, you can see the related books that people are actually buying. Because of features like these it is common for people to buy more books that they might buy at a normal bookstore. Integration into the business cycle - A Web site that is well-integrated into the business cycle can offer customers more information than previously available. For example, if Dell tracks each computer through the manufacturing and shipping process, customers can see exactly where their order is at any time. This is what FedEx did when they introduced on-line package tracking - FedEx made far more information available to the customer. People can shop in different ways. Traditional mail order companies introduced the concept of shopping from home in your pajamas, and e-commerce offers this same luxury. New features that web sites offer include: The ability to build an order over several days The ability to configure products and see actual prices The ability to easily build complicated custom orders The ability to compare prices between multiple vendors easily The ability to search large catalogs easily Larger catalogs - A company can build a catalog on the web that would never fit in an ordinary mailbox. For example, Amazon sells millions of books. Imagine trying to fit all of the information available in Amazon's database into a paper catalog! Improved customer interactions - With automated tools it is possible to interact with a customer in richer ways at virtually no cost. For example, the customer might get an email when the order is confirmed, when the order is shipped and after the order arrives. A happy customer is more likely to purchase something else from the company. It is these sorts of advantages that create the buzz that surrounds e-commerce right now.

There is one final point for e-commerce that needs to be made. E-commerce allows people to create completely new business models. In a mail order company there is a high cost to printing and mailing catalogs that often end up in the trash. There is also a high cost in staffing the order-taking department that answers the phone. In e-commerce both the catalog distribution cost and the order taking cost fall toward zero. That means that it may be possible to offer products at a lower price, or to offer products that could not be offered before because of the change in cost dynamics.

However, it is important to point out that the impact of e-commerce only goes so far. Mail order sales channels offer many of these same advantages, but that does not stop your town from having a mall. The mall has social and entertainment aspects that attract people, and at the mall you can touch the product and take delivery instantly. E-commerce cannot offer any of these features. The mall is not going to go away anytime soon...

Should be at: Overview: What is E-Commerce? (20 Minutes Expired) 00:30

*E-Commerce & Farm Direct Marketing (15 Minutes) 00:45

Throwing Numbers at You ...

2007 Farm Computer Usage and Ownership (US Department of Agriculture)

Farms using computers for their farm business increased 3 percentage points from 2005 to 35 percent in 2007. In 2007, 80 percent of U.S. farms with sales and government payments of $250,000 or more have access to a computer, 78 percent own or lease a computer, 66 percent are using a computer for their farm business, and 75 percent have Internet access. For farms with sales and government payments between $100,000 and $249,999, the figures are: 70 percent have access to a computer, 66 percent own or lease a computer, 51 percent are using a computer for their farm business, and 61 percent have Internet access. For farms with sales and government payments between $10,000 and $99,999, 62 percent reported having computer access, 57 percent own or lease a computer, 36 percent use a computer for their farm business, and 53 percent have Internet access.

*Throwing Numbers at You ...

2007 Farm Computer Usage and Ownership (US Department of Agriculture)

High speed Internet access methods, such as DSL, cable, satellite, and wireless, have become much more available to Internet users in the farm sector since 2005. The proportion of operators using DSL doubled in 2007, at 27 percent, compared with the 2005 level of 13 percent. Cable, satellite, and wireless were each reported as the primary access methods on 7 percent of those U.S. farms with Internet access; with satellite and wireless methods both at virtually double their 2005 levels. Dialup was again the most common method of accessing the Internet, with nearly half (47 percent) of U.S. farms still using it, down from 69 percent in 2005. A total of 55 percent of U.S. farms now have Internet access, compared with 51 percent in 2005. Sixty-three percent of farms have access to a computer in 2007, compared with the 2005 level of 59 percent. Food and agricultural products can pose particular challenges for Internet marketers. Ecommerce and the small farm market can sound like opposing forces: ecommerce encourages sales across state and national boundaries, while small farm markets focus on the local market.

Ecommerce can be very effective to sell goods nationally or internationally, but it takes a very robust and focused marketing plan to get your message out on the Internet. It is very difficult to retain the attention of the average web surfer, especially to the point of actually buying a product from your farm market.

Some, who have products that can be easily shipped such as honey, dried herbs, or jams, will need Internet ordering capabilities on a Web site. But, producers who emphasize the freshness of their products (e.g., vine-ripened tomatoes) may not find it possible to sell easily via the Internet or may find the necessary capital investment to develop proper shipping materials cost prohibitive. Further, high shipping costs to the consumer for heavy products (e.g., maple syrup) may also discourage sales Lets dig deeper into some of these issues

SLIDE ACTUALLY STARTS HERE

Shipping

Since products are generally delivered through the mail when they are ordered online, they must be able to withstand being shipped Shipping is often an issue with products that require careful handling or controlled temperatures. Agricultural products with expiration dates cannot simply be stored until they are ordered If shipping fresh produce is a problem, producers may wish to consider developing processed or value-added products. jams, honey, dried herbs, and baked goodsspecial occasions and holiday items

SeasonalityConsumer shopping online is seasonal, just as it is offline. Typically, one-third of online shopping takes place during the fourth quarter of the year. Thus, at a time when there are minimal local fresh fruits and vegetables available in the North, consumers are doing most of their spending. This presents many marketing opportunities for producers in the Southern United States. Value-added producers in the North can take advantage of the buying spree as well by offering gift baskets.

Convenience, Versus Personal Connection.Many people use the Internet to save time and find additional product information. The reality is that shopping on the Internet for small farm products may be more convenient but does not save a significant amount of time. Many people like shopping at farmers markets, farm stands, or pickyour-own operations (PYO) because they want to be close to the farm or farmer. Farm direct marketing customers like to have a personal connection that, unfortunately, is minimized if a consumer buys online. Much can be done to personalize Web site shopping and marketing, but many farm direct market customers will be unwilling to give up their traditional activities.

Consider the CostsIn developing an Internet marketing plan, it is important to consider costs. How much additional product would have to be sold to have an Internet effort break even or make money? A marketing plan should be backed by strong and reasonable financial planning.According to The Wall Street Journal (April 18, 2000), only 38 percent of Internet retailers are profitable. Not everyone who visits a Web site will buy something. Although conversion rates (the percentage of shoppers who actually make a purchase) vary from one retailer to another, the average online shopper-to-buyer conversion rate is 2.7 percent. This means that there are only about 3 buyers out of every 100 people who visit a Web site. It is important to set aside time to do comparison shopping for an Internet provider, Web site hosting, hardware, software, and/or services. Farmers are required to do most of their Web updating and e-mailing during their busiest periods. Thus, it may be necessary to find an assistant. Internet marketing can be handled by a teenage son or daughter, a student, or someone wishing to supplement his or her income. Bartering with a customer is another way to acquire inexpensive Internet help. Professional designers can also offer constructive help in setting up an effective Internet site. Before proceeding, however, marketers should investigate costs and references to ensure that the designer is capable of creating an approach to the Internet that fits in with their overall marketing plan and is appropriate for the business.

**Other Approaches for E-Commerce in AgricultureOur initial thoughts, when thinking about e-commerce for the Farm Market is how to sell products online. But many farm markets will be best served by using ecommerce to augment existing customer relationships and to make it easier for these local customers to patronize your business.B2BDirect Sales to Restaurants

Direct Sales to other Farm Markets

Direct Sales to Schools, Hospitals & Other Institutions Many farms already have existing commercial customers. What about using internet sales to streamline that relationship for you and the buyer? I know that the personal contact with your commercial customer is very important. Ecommerce does not necessarily replace the human touch unless you allow that to happen. Say you make your restaurant deliveries on Thursday afternoons: you post the items for the week on Monday morning and call the restaurants later that day. If they are ready to make the order over the phone, you can go into your control panel to manually create the order for the restaurant buyer. Otherwise, if they would rather make the order at their leisure, allow them to login to your site with the login and password you provided and make the order at their pace. This workflow gives you the best of both worlds: allowing tech-savvy buyers to use the online system and keeping the hands-on ordering approach for those customers who are not ready to go online.Corporate GiftsSales and delivery of corporate gifts such as fruit baskets, Christmas wreaths, can help farm markets take advantage of increased online spending during the holidays.B2CFarmer's Market Preorders For farmers who go to a farmer's market and want to get higher revenue per customer, a preorder situation may make sense. Two days before the market, post the inventory of products you will make available for preorders. Then allow customers to come online (who have been primed at the market about this idea in previous weeks) and make their order. Just before the market, print out all the orders and box up the orders before you leave or as part of your market setup. Preorders will take time to grow, but after a number of years I wonder if farmers could forgo the market all-together and rely on these dedicated weekly customers. This is way for busy customers to streamline their farmer's market shopping and for you to build a strong relationship with each customer. Customers who can't arrive at the beginning of the market will also appreciate getting first pick of itemsDelivery ServicesProvide produce delivery services to metropolitan areas. Products can come from your familys operation as well as from surrounding farms that cooperate on the project. Locally produced fruits, vegetables, and processed products can be ordered online and will be delivered the same day.eg: http://www.urbanorganic.net/ (NYC)http://www.orlandoorganics.com/Orlando Organics has been in business since June 2002. We are not a co-op or a buying club, nor are we a retail store. We exist solely as a delivery service. At Orlando Organics, you sign up for a subscription of organic produce, choosing one of our primary produce options, and we deliver that produce to your home weekly or biweekly (every other week). (Unfortunately, we do not deliver to offices or business addresses. Sorry.)

The contents of each of these bags change from week to week and are based on seasonal availability, what we get the best price on, and are based on our goal of supplying you with a varied selection of fruits and vegetables every delivery. We get our produce from organic farms all over the country. We try and obtain locally grown produce whenever possible. Some items are never available here in Florida so we obtain them from other farms.

You will never get the exact same produce twice in a row, and often the contents will change very regularly from week to week. We keep our web site updated frequently so that you can see what produce will be in your bag each week, although sometimes availability causes us to make some changes. For examples of some of our produce bags, scroll down to the bottom of the produce options page.

CSA Shares Sell your yearly CSA shares online. Making the CSA sale easier for your supporters will create higher retention rates. This is especially useful for email announcements about the share sale because you can simply link to the CSA share store on your site and watch the orders roll in! CSA Weekly Extras Many farmers offer extra items each week that are above and beyond the cost of the CSA share. Whether the items are bulk products like bushels of apples, boxes of basil, and meat products or products from other sources like coffee, dairy products, and baked goods, an online sale is ideal because you can limit the "CSA Extras" store to just CSA members using a private "store" page option (as detailed in the restaurant ordering section) and tightly control inventory. So if you only have 25 dozen eggs to sell in week, the option to buy eggs will not be available after the first 25 are sold.

*Identify Internet Marketing Objectives

Before getting started, it is important for marketers to identify Internet objectives and determinewhat can be gained by direct marketing farm products on the Internet. Effectively using theInternet can be similar to having an additional staff person to assist customers, a billboard, a full-color brochure, or even a branch store. Internet objectives may include one or all of the following: Save time Save labor Save money Save materials Advertise Sell product

Should be at: E-Commerce & Farm Direct Marketing (15 Minutes) 00:45 Expired

*Internet Marketing Planning & Aspects of E-commerce (10 Minutes)

Plan Ahead Business Plan, Marketing Plan & Internet Marketing Plan Starting any new enterprise can be risky. Before investing money, time, and energy in an unconventional agricultural business,new entrepreneurs should complete personal, market, project feasibility, and financial evaluations. Workbooks are available to help work through the questions that arise in enterprise planning. Technical and managerial assistance in these evaluations is available from a wide variety of sources: Extension educators, local and regional organizations committed to rural economic development, small business development centers, state departments of agriculture, economic development agencies, banks, tourism agencies, state universities, and local community colleges. A Business Plan can then be developed to evaluate the enterprise financially. A Marketing Plan is developed to map out your marketing strategy Your Internet Marketing Plan is a part of your overall Marketing PlanBefore beginning direct marketing on the Internet, producers should develop an Internet marketing plan with specific objectives that fit in with the needs of the business operation as a whole.Farm direct marketing on the Internet provides many opportunities for producers to expandtheir existing businesses. Internet technology is similar to opening a branch store or having a billboard. It can be used to improve customer service, educate consumers, and save valuable resources such as time and money. Farm direct marketers should consider the various ways in which they can adopt the Web andadapt it to the uniqueness of their farm and incorporate it into their Internet Marketing Plan. Producers can have a Web site to sell or promote their products Producers can be listed in online directories. E-mail can be used to communicate with customers and distribute newsletters.

*Internet Marketing Without a WebsiteConsider Listing in Internet DirectoriesProducers who are not yet ready to invest in their own Web site may wish to list their operation with one or more of the directories available on the Internet. Some Internet directories charge for their services, while others do not. Internet directories offer a range of options and target different groups. Producers should consider the benefits as well as the costs of using these services.Topical Directories: LocalHarvest.orgwww.localharvest.org was developed by the Ocean Group in collaboration with the Community Alliance with Family Farmers. This Web site is a not-for profit venture to sprout and grow a definitive and reliable living public directory of small farms nationwide, and in so doing to provide people with direct contact to farms in their local area.16 While this service is free the first year, membership fees are collected in subsequent years. Agriculturehealth.com If you provide a fresh product, you have an eager market standing in line to buy it, but only a short window in which to sell it. Joining our user-driven database gets the word out about your farm market and what you have available at any given time in the growing season. That means more chances to get in front of more people who are searching for just what you have to offer. Joining also gives you access to produce growers in the area, supply sources and information you can use to grow your business. State Department of Agriculture Internet DirectoriesLocal Community Directories

Email Marketing ideas:

Maintaining a Web site may require excessive time and/or money and may not increase a producers profits. If that is the case, e-mail may provide an acceptable alternative. E-mail newsletters A producer with a CSA only and with all subscriptions sold may question the need for a Web site. If a Web site is not needed to promote the CSA, Internet marketing can still be a viable option. Assuming that most (if not all) of the producers shareholders have e-mail, instead of mailing out a monthly or annual newsletter, the newsletter could be e-mailed, thereby drastically reducing time, effort, and cost. Color photographs of the farm could be added as attachments at no additional cost.

E-mail address everywhere A producers e-mail address should be displayed on all business cards, promotional materials, bags, signs, etc. This provides customers an easy and inexpensive means of contacting the producer. Frequently asked questions (e.g., hours of operation, directions, production methods) might be addressed in a ready to be sent draft.

E-mail lists and updates An e-mail update is similar to a newsletter but shorter and more focused. For example, a PYO producer might develop a weekly e-mail update describing its hours of operation, directions, availability, etc.

*Developing Your Own Website for E-commerce

The things that are easy about creating a website for e-commerce, especially for small businesses and individuals, include: Creating the web site Taking the orders Accepting paymentThe things that are hard about e-commerce include:

Getting traffic to come to your Web siteGetting traffic to return to your Web site a second timeDifferentiating yourself from the competitionGetting people to buy something from your Web site. Having people look at your site is one thing. Getting them to actually type in their credit card numbers is anotherIntegrating an e-commerce Web site with existing business data (if applicable) There are so many Web sites, and it is so easy to create a new e-commerce web site, that getting people to look at yours is the biggest problem

Should be at: Internet Marketing Planning & Aspects of E-commerce (10 Minutes) 0:55 Expired

Upon Return, should be at 1:05 Expired.

*Planning, Designing & Developing Your Website (50 Minutes) 1:55

(Give out the Website Development Worksheet Handout & Portfolio Handout)

There are several different ways to direct-market on the Web. Producers must, therefore, ensure that the solution fits in with their overall marketing plan, with their objectives for using the Internet, and with their resource constraints There are three primary types of Web sites that an individual producer can choose to develop. How producers use the Internet depends on the type of products they are marketing.. There are three primary types of Web sites that an individual producer can choose to develop.Web site to transact salesWeb site to distribute informationWeb site to transact sales and distribute information

Fundamentals Objectives, Target Markets, Products & ServicesObjectives of the OrganizationNeeds, Wants and Expectations of Target MarketsProducts and Services that are being offered

*Planning, Designing & Developing Your Website (50 Minutes) 1:55

Common ObjectivesWhat is the purpose of your site. Generate a list of primary and secondary objectives. When you decide to update, add, or change any elements on your website, examine how these changes relate to the primary and secondary objectives that you have identified. If there is not a clear match between your objectives and your intended changes, you might want to reconsider the changes. Its amazing how many websites have been developed without adequate planning or without ensuring that the website ties in with corporate objectives. Some of the most common primary objectives include: Advertising products & services Selling products & services Providing customer service and product support Providing product or corporate information Creating and establishing corporate identity or brand awareness

Target MarketsIts important to define every one of your target markets. For each and every one you need to determine:Their needsTheir wantsTheir expectationsAppropriate WOW factore.g. Existing customers and Potential customers are looking for different things. An existing customer knows your company. Your products, your business practices, and the like are not a priority for this person on your site. A potential customer needs these things before giving you that first order. Customer is such a huge target market that it needs to be segmented.

*Planning, Designing & Developing Your Website (50 Minutes) 1:55

Products & ServicesIts important to define the products and services you want to promote online. Sometimes the products and services you offer in your physical store are the same, but quite often there are differences.You may have fewer items if you are test marketing, or if some items are not appropriate for online sales because of competitive pricing, or shipping logistics You may have more products or services online for example shipping items out of state; maillists, etc.

*Other Considerations The site should be designed to be search engine friendlyo Keywords in Keyword and Description META Tags, page text, and domain names, page titles, ALT tagso Different META tags on each pageo Keyword density and locationo Header Tagso Search Localizationo Hypertext Links, Anchorso File Nameso Referring websiteso Flash and text in graphicso Website Accessibility Issues

*Other ConsiderationsThe site should be designed to encourage repeat traffic

o The more your brand is reinforcedo The more your target markets feels a part of your communityo The more likely they are to tell others about youo The more likely they are to give you permission to stay in toucho The more likely you will be the first in mind when they go buy your types of products or serviceso Web elements to keep them coming back

Contests & Competitions Cartoons, Jokes, Trivia, Games Advice Columns, Tip of the Day Whats New page Bookmark this Page Calendar of Events Blogs Online Community Coupons, Discounts, Giveaways Specials & Promotions Employment OpportunitiesUseful Links

*Other Considerations The site should have viral marketing elements that encourage visitors to recommend your products or services to otherso Word of Mouth (Tell a friend, Send this to a friend)o Pass it On (Customers forwarding emails to a friend)o Product or Service Based The site should include elements to leverage its sales forceo Affiliate or Associate Programs The site should incorporate permission marketing, where visitors are encouraged to give you permission to send them e-mail on a regular basis

o Newsletterso Contestso Notification of new giveaways

*Other ConsiderationsThe site should be designed to encourage customer loyaltyo Members Only Areao E-Club with Offers/Discounts/Freebieso Appreciate their businessThe site should incorporate stickiness, encouraging visitors to stay a while and visit many areas of the siteo Advice Columnso Description of Productso Discussion Forumso News Sectionso Weekly Contests

*

Using Competitor Sites to Your AdvantageOne of your websites objectives is always to meet and beat the competition in terms of search engine rankings and website content. To do so, you must understand what they are doing. Take the time to research them and compare.There are a number of ways to find your online competitors: conducting searches with the appropriate keywords Visiting industry specific web portals and directoriesAnalyzing the competition Visual appeal content ease of navigation search engine friendliness interactivity website stickinessBy analyzing your competition, youll get a good feel for users experiences when they visit those sites. In your planning, you should review the elements that address the criteria above and categorize them as: Need to have; essential Nice to have if it doesnt cost too much Dont need or want at any price

*Storyboarding Your WebsiteNext you are ready to visualize and plan your website; integrate your objectives, you target market information, the findings of the competitive analysis and your own ideas, as well as those of others. This is done through storyboarding. The storyboard is the foundation of your website; it should show you , on paper, the first draft of the content and layout of your site; it gives you the chance to review the layout and make changes before development begins. A website storyboard can be thought of much like a hierarchical organizational chart in a business you begin with your main page or home page at the top. Under the main page you have your central navigation bar, and subpages below that.

*Detailed Website PlanningAt this point, you are ready to think about construction. For each page of the site you will need to develop content and specific graphics for that page. Your designer will need to be working on the site look and feel and ease of navigation. You will need to write your text It may behoove you to have the copy reviewed and edited by an online copywriter; someone with experience in grabbing the readers attention and getting them to do what you want them to do You will review and approve; making sure that only the form, not the substance has changed. Content should then be reviewed and edited by an Internet marketer (unless the online copywriter is writing for that as well) The Internet Marketer will also develop content for page titles, META tags, ALT tags, Headers, etc.; The Internet Marketer will check for repeat traffic generators, permission marketing, viral marketing

*Detailed Website Planning The Graphic Designer will develop the look and feel in parallel with this effort When all of this comes together the site development can begin. The development process should include adherence to guidelines foro Content Consider Contact Info on every page Avoid Under Construction Include Security Info Include Privacy Policy Minimize use of background soundso Text formatting 80% of web users scan text as opposed to actually reading it Write for scannability bulleted lists, headers and horizontal rules to create visual breakso Colors Keep online and offline images consistent Logos, corporate colors, other marketing collateral Choose background and font colors carefully

*Detailed Website Planningo Navigation Consistent location Navigation bar that links to all of the major pages on every page Get anyplace on the site in 3 clicks or fewer Site map if you have more than 8 major sections Internal search tool if the site is very largeo Graphics Combined size of text and graphics should not exceed 50Kb Use descriptive ALT images Use thumbnails when appropriate Avoid image maps Avoid Flash Introso Visual Test site in multiple browsers Test on a Mac and a PC Test with varying screen widths Avoid scrolling texto Other Test download time; Users rarely wiat beyone 15 seconds to download a site Ensure there are no dead links

*Being Search Engine FriendlyOrganic Searches85% of people using the Internet use search engines as their way to find informationSearch engines use programs called bots to actually search the Internet for pages, which they index using specific parameters as they read the content. The bot reads the information on every page of your site and then follows the links. When you make a search at a search engine, you are actually searching their database, or their view of the Internet at that time; not actually the Internet. Many search engines and directories either partner with or license the use of another search engines technology. For example, Googles results can be found on AOL and Netscape searches as well as sites like CNN that include a Google search bar. Googles paid advertising results also appear on other sites. Ask.coms results come from Teoma, while its paid results come from Google.Most important Web elements on a web page that you must address when performing organic search engine optimization Page Text * Title Tags * Keyword META tags Descriptions META tags ALT tags Hypertext links Domain Names File Names HeadersSearch engines function differently, but Googles main search function looks for: keywords in the visible body text header tags title tags hypertext links ALT tags Heavy weighting to link popularity; extra points for the quality of links and relevancy of text around the links

*Being Search Engine FriendlyPaid InclusionWith PPC campaigns, you are guaranteed to be indexed by the search engines, up to the number of pages you have paid for, within a short, defined period.Paid listings are displayed on the same page in a separated area; for example at Google, across the top and right hand margin.Typically, you can set your budget how much you are willing to spend per month, per day and per click.Deciding Between Optimization and PPC1. Limited Advertising Budget If budgets are tight or nonexistent and you can't afford to pay for website visitors, even after taking into account the value of their desired online action, you will want to place a great deal of emphasis on effectively implementing search engine optimization in-house. 2. Website That Can't Be Modified Optimization for organic search engine listings typically involves modifying a site's design, content, and navigation. For example, heavy reliance on Flash, frames, or graphics may need to be changed in order to incorporate more optimized text. However, some businesses feel that an optimized website does not provide the multi-media experience their customers require or expect. If your business falls into this category, then Pay Per Click advertising may be the only way to achieve good results. 3. Need Immediate Results A basic Pay Per Click campaign on Overture or Google can be up and running and driving visitors to your web site in a matter of hours. Significant improvement in organic rankings may take several months to achieve. If you require immediate results Pay Per-Click advertising will need to be your top priority. 4. Guaranteed Top Placement No-one can guarantee consistent, top organic listings for high volume key phrases in a competitive market sector. Search engines change their algorithms (indexing criteria) regularly and no one can control how or when sites are indexed, except the individual search engine itself. If you absolutely must guarantee consistent top placement on high-volume keywords in a competitive market sector, you will need to rely heavily on Pay Per Click advertising and have sufficient budget to fund it. Investigate current bid rates, can you afford top placement on the highest-volume words? If not, expand your keyword list beyond the most obvious and popular key phrases and advertise across a larger number of less popular, more specific and cost-effective phrases. Remember that most searchers enter two or three words to form a key phrase rather than a single word. Ultimately, focus on the keywords that work best and achieve the best conversion rates and the highest return on investment (ROI. 5. A Need To Change Ad Content or Timing If you need to frequently change the content of your ads, for example to promote particular products or to make seasonal offers, or if you want to be able to turn your advertising on and off, you will need to rely on the control and flexibility offered by Pay Per Click advertising. 6. Ad-Adverse Audience More Internet savvy search engine users recognize information that is displayed as a purchased advert and this limits its credibility. In this case the integrity associated with a high natural ranking is invaluable. If your target market is likely to be Internet wise (IT professionals, students, etc), optimization should be your main focus.

*Options for Taking PaymentsStorefrontsAnother option is a storefront. With storefronts, all information is entered by the store owner (producer) using software developed by the host. An example of a storefront is Yahoo! Store (store.yahoo.com), which allows a producer to have a small store with 50 items for $100 a month. In the case of a storefront like Yahoo! Store, the producer must have a merchant account with a credit card processor and must pack and ship the items sold. The storefront is, as the name implies, a place that hosts a store, but the producer must maintain it. For many producers, there may be more cost-effective options. Others might argue that the simplicity of a storefront enables them to concentrate on other issues and that being on a mall-type Website gives them improved exposure. Options for Taking PaymentsShopping CartsOut of the Box SoftwareAll you need to build your store is provided by the package, often with payment gateway provided. Some are a breeze to work with; others can be troublesome. Very largely, you get what you pay for: the better packages with extensive backend facilities are expensive, though not as expensive as a site that doesn't work properly.An Out of the Box solution that is tailored to the look and feel of your site is an attractive alternative.Software Provide by the Hosting CompanySome hosting companies provide shopping cart solutions. Remember, however, that: you must still assess the software provided to ensure it does the job properly: evaluate the alternatives. You may have to include banners etc. advertising the hosting company: these can interfere with the image or integrity of your store. the hosting company gets their cut somewhere: the merchant account provided may not be the best going: shop around. Modest hosting charges allow for only limited support: check their rates for anything else. The hosting company may store credit card information from their server; you also may be locked in: transferring to another system/hosting company/merchant account can be difficult, especially if there are long leases involved.Building Your Own SystemBy far the most expensive option, but provides great flexibility. In general, this is the larger company route, for corporations with deep pockets, teams of IT professionals and timescales of six months or more. Be cautious of web development companies that offer their 'own in-house ecommerce solution'. Unless that solution is very basic (when you'd be better off sticking with an 'out of the box' program) there is always the danger of time and budget overruns. And even if matters are firmly secured by the contract, you may still be landed with a system that only the originating company can maintain or extend.

Refer to Shopping Cart Considerations Handout

Shopping Cart Sofware Considerations professional-looking result? suitable templates? customizable? displays sufficient products? graphics and thumbnail graphic displays of products? adequate product description possible? coupons can be used? gift wrap service? products grouped hierarchically for ease of reference? product cross-selling possible? products can be displayed in several categories? automatic price adjustments possible? resulting store easy to navigate for customers? payment system intuitive and easy to use? works with all browsers? demos with browser versions. database-produced pages are search-engine friendly: if so, how? customer/merchant search facility for products? volume discounts, and how handled? also handles digital products or subscriptions?Platform Unix or Windows product? What version/variant exactly? what database? hosting company has sufficient expertise to maintain the system, recover database crashes, etc.?Backend functions proper records kept of purchases? customer details? tax levels? shipping information?o flat fee, by weight, UPS, Fedex realtime calculations?o supplies order tracking for customer? handles multiple currencies and tax levels? can minimum orders be set? what credit cards accepted? what fraud protection schemes?o AVS addresso AVS zipcodeo CVV2 records readily integratedo directly into current accounting / saleso packages?o with software supplied?o via compatible databases? customer emailed with sale confirmation and shipping details? doesn't use cookies (some customers turn off the facility).Ease of Build and Maintenance uses wizards throughout? resulting code can be easily 'tweaked'? needs simple programming in Perl, Coldfusion orASP? uses a proprietary programming language? suitable only for the advanced programmer?Integration can work with what payment gateway systems? can work with what databases?Inventory Control automatic by product? automatic by supplier?Marketing automatic submission to search engines? emailing to customers? email auto-responders?Statistics sales, page views, referrings URLS? sales by customer? sales by product?Pricing Policy license fee? installation fee? previous upgrade prices? additional coding charges?Support software produced by large and reputable company? software has good customer base? adequate build instructions? online tutorials available? software user's club and help center?

*Payment Gateways/Merchant AccountsLet's briefly recap the nuts and bolts of the process of online sales using credit cards.1. Customer visits your site 2. Customer clicks on a "buy me" button after reviewing sales copy 3. The selection is added to the shopping cart. 4. Once at the 'checkout', the customers' personal and financial details are recorded via a secure form - well, it should be secure anyway :). 5. Details submitted from the form are transmitted to a payment gateway service, which is separate to the cart. The gateway service securely routes the information through the relevant financial networks. 6. If the transaction is successful, the customers' credit card account is debited and your merchant account is credited. 7. Once all funds have cleared, you are then able to transfer money to your ordinary business checking account.

*Payment gateways A payment gateway is a separate service and acts as an intermediary between the merchants' shopping cart and all the financial networks involved with the transaction, including the customers' credit card issuer and your merchant account. Think of it as a EFTPOS terminal in cyberspace. It checks for validity, encrypts transaction details, ensures they are sent to the correct destination and then decrypts the responses which are sent back to the shopping cart. This is a seamless process and your customer does not directly interact with the gateway; as data is forwarded to the gateway via your shopping cart and a secure (SSL) connection. The shopping cart is configured via plugins to send information in a format that is acceptable to the particular gateway. The proper choice of payment gateway is another vital element which will contribute to your success or failure as an online business. Payment gateway issues As with any other ecommerce element, shop around, compare prices and read the fine print. Here are some of the major points to consider when selecting a payment gateway service. Gateway compatibility If you have already purchased a shopping cart package, ensure that the payment gateway service is compatible. If a service is not listed, contact the shopping cart vendor for clarification. Many shopping cart software companies are happy to support other payment gateway services if there is a demand for it, and usually at no extra cost. If you haven't yet selected a shopping cart, get a list of supported applications from the payment gateway service provider. A payment gateway may offer great pricing, but if the range of shopping carts or storefront software it supports is limited, the whole process of setting up for taking online payments may cost a lot more than you think. I've noticed some gateways only support horribly expensive and restrictive shopping cart software packages and services. AVS protection Ensure the gateway at least offers AVS protection. The Address Verification System (AVS) AVS decreases the incidence of accepting fraudulent transactions by verifying the cardholder's billing address with the card issuer. Using AVS on your transactions may also benefit you by a reduction in fees charged by your Merchant Bank.

*Merchant AccountsInternet merchant accounts and third party credit card processors. Some type of Internet merchant account is necessary in order to have a place to receive funds from credit card sales.Internet merchant accounts can be gained from most major banks or third party processorsSelecting an Internet merchant account provider or third party processor: Shop around and then shop around some more - this is a very confusing section of ecommerce. If you make enquiries with a company and they don't respond within 24 hours, or are somewhat vague in their responses - avoid them. Banks are notorious for utilizing poorly trained salespeople rather than those with hands-on product knowledge or an understanding the complexities of ecommerce. Ensure they explain all charges to you thoroughly by enquiring about the following rates: Statement - the charge each month for issuing you statements on all transactions Application fee - some institutions will charge you for the privilege of applying for an account, regardless of whether your application is successful or not. Setup fee - once your application has been approved, there may be other fees associated with establishing the account. Discount Rate - a percentage deducted for each product sold. Also known as the Discount qualified rate Mid-qualified and Non-Qualified rate. A higher rate for transactions that don't qualify for the discount rate. Usually applied in circumstances where AVS is not checked or the card is keyed in by the merchant. Transaction fee - added to the discount rate, a flat rate on each transaction Monthly Minimum - what you will be charge regardless of the level of sales each month Reserve - some providers require you to maintain a certain level in the account to cover charge-back fees. Charge-back - the killer fee which may cost you up to US$30 per fraudulent transaction (which includes any client disputing a transaction successfully).

*Alternatives to Merchant Accounts ( P2P )P2P or person to person payment services keep track of funds available to both the buyer and the seller. The buyer and seller (or service provider) both need to have accounts with the P2P service. With P2P, if the buyer has deposited the appropriate funds at the person to person payment service then the transaction is approved and the purchase amount is deducted from the buyers account and added to the sellers account. In the P2P payment scenario the complete transaction can be processed internally making it unnecessary for the P2P company to access any external banking organization in order to complete the transaction. The most popular P2P service is PayPal though there are others that are attempting to work up market acceptance. Public Acceptance of person to person payment services is the main drawback to using this type of service as your sole payment method.In order to purchase with P2P, the buyer is required to have a funded account with the P2P service. P2P competitors of PayPal are hard to find, most likely because PayPal is hard to beat, particularly in P2P market acceptance. If you are looking for a PayPal P2P alternative you might want to try Yahoo! PayDirect (though finding PayDirect information without signing up is difficult). . If the buyer is unable to obtain a credit card or doesn't want to use credit cards online, or if the merchant is unable to qualify for a merchant account, person to person services are a good alternative. A merchant who currently has the ability to process credit card payments via a merchant account may even want to look into adding a P2P payment option in order to open their market to those customers who do not have credit cards available to them. The primary benefits of P2P payment methods: 1. P2P accounts are usually very easy to get. 2. Purchase transaction approvals are typically straightforward (either the funds are available or they are not) 3. Funding accounts and moving funds out of an account are usually fairly simple The primary drawbacks of P2P payment methods are: 1. Do not have universal public acceptance 2. May give the purchaser less confidence in the seller (ease in obtaining a P2P account compared to a merchant account)

*Domain Registration & Website HostingDomain RegistrationWhat is a Domain Name?A domain name uniquely identifies a website. Typing a domain name (also called a URL) into your browser allows you to visit that site. One unique domain name can be used as a company's web address and for its email addresses. Domains are much more than just names typed into a web browser. Your domain name is how the world will think of you and your business. It's part of your brand and your marketing plan. You can have multiple domains that each relate to some aspect of your business. A domain can be easy to remember and help establish you on the web. Anatomy Of A Domain Name You most often see domains listed as www.webixi.com

1. The first part, "webixi" This is the unique part of the name. It represents your company or brand name. It is how you will be branded and known on the web.

2. The last part is called the extension In our example it is ".com." Other popular extensions are .net, and .org. Many people will automatically type in .com after any domain. Securing the other extensions can make sense for many people, as they help protect your brand throughout the web.

What Will My Email Address Look Like? One of the most popular reasons to have a domain name is to have personalized email, either for your business or for personal reasons. An email is a unique address, followed by your domain name, such as "pat@webixi.com.com" or "sales@webixi.com.com." You can often create multiple email addresses for each domain you own, so that each member of your company has their own address. What Do The Different Extensions Represent? Common extensions include: .COM Abbreviation of "Commerce" currently available to all .NET Abbreviation of "Network" currently available to all .ORG Abbreviation of "Organization" currently available to all .INFO Abbreviation of "Information" currently available to all .BIZ Abbreviation of "Business" currently available to all .GOV Abbreviation of "Government" reserved for government institutions .EDU Abbreviation of "Education" reserved for educational institutions

*Domain Registration & Website Hosting

Website HostingA web hosting service generally provides server space for your files or web site.Aside from those two basics, web site hosting can include a range of services that can be tailored to your needs and your price range. The services you'll need for your business are a function of how much technical knowledge you have, the amount of traffic you expect and the quality of service you desire.Small e-commerce startups might require substantial support on a limited budget. As a result, the choice of a web hosting service is important to the success of the business. Some web site hosting services are particularly suited to small business web hosting. Those that have experience with e-commerce business can provide the hand-holding you need to set up and maintain your business, even without broad technical knowledgeWeb Hosting Services: Selection Criteria

If you're not entirely sure how to ascertain your needs, go through this list of criteria for selecting a web site hosting service for your new business:

- Dependability and Backup. Servers go down and sites crash. Your web site hosting service has to provide some guarantee of reliability. If you lose all your files and customer data, your business can fail in an instant. Select a web hosting service that provides backup and rapid recovery. The details should be part of your service contract. Check that your FTP and e-mail accounts are included in the reliability guarantees. - Bandwidth. Decide whether speed is an important factor. If you expect a high volume of traffic and you have a large inventory of products, you'll need substantial bandwidth to provide the access that your customers expect. When potential customers have to wait for content and images to download, they tend to move on. - Statistics. Basic web hosting services that provide server space and connectivity may be sufficient when you start your online business. However, as you add products and marketing strategies, you'll want to examine traffic and sales data. Inquire about your web hosting service's software options to be sure that you'll have access to your statistics and the ability to analyze the data when your business takes off. - Price. In web hosting, as in all areas of commerce, you get what you pay for. While you can easily find free web hosting services, you'll quickly see how little control free web hosting gives you. In reality, your free web hosting service is providing space in exchange for monopolizing part of the space with its own ads. Paid web hosting gives you control and flexibility. The more you pay, the more services you can expect. The cost of web hosting services will be discussed later. - Reputation. While many web hosting service providers are competing for customers, the range of services they offer is so diverse that it's hard to tell the solid experienced provider from the fly-by-night amateur. Discuss your needs with online business owners who know web hosts by their reputation. Don't be afraid to pay a bit more for a reputable service. - Management and Maintenance Although the server that stores your site and your files is in a remote location, it's a physical piece of equipment that requires maintenance. Networks and databases are complex systems that have to be updated and managed effectively. At times, servers will have to be shut down for maintenance. Similarly, your service may be interrupted as new software is installed. Be sure that you understand when and how often your service is likely to be interrupted, particularly if your business and your web hosting service are in different time zones. Good management also includes monitoring of traffic and data flow, prompt reporting of problems and the responsibility for domain name registration. - Security You can never be too paranoid about the security of your customers' information. A web hosting service must be able to handle the encryption of data, firewalls and other security systems that protect your business. Look for the security certificates that will reassure your customers that their information is safe with you. - Software. Most online businesses that sell products require special software such as a shopping cart and systems that handle credit card payments. You might also need database management capability. While some online businesses have the technical know-how to manage these aspects themselves, you can save money and time by letting experienced professionals handle the specifics while you concentrate on fulfillment, marketing strategies and personnel issues. Check that the hosting service provides adequate handholding as you set up the systems for your new business. Support. You'll certainly need support from your web hosting company to set up your online business. As you research various systems, you may be surprised at how varied support systems can be. Does the web site hosting include a 24/7 phone line with no waiting, or do you get voicemail and a long delay before a call-back? If your important clients are scattered all over the world and your business operates at all hours, you'll need a provider who can back you up at all hours any day of the week. You can't provide customer support to your own clients if you can't rely on your web host to provide good support for your business.

*Domain Registration & Website Hosting

Types of Web Hosting Services Shared ServerShared servers are appropriate for small sites with a low volume of traffic. In this case, you share the server with other clients. Costs are lower but you give up control of such variables as your bandwidth and operating system.

Dedicated ServerSome web hosting services provide floor space for your own dedicated server. You can have complete control over a rented server, with your choice of operating systems and software programs

CollocationAnother type of service is called collocation, in which you own the server but it's kept in a remote location with other servers. The web host provides the hardware maintenance.

Should be at: Planning, Designing & Developing Your Website (50 Minutes) Expired time 1:55

*Conclusions

An e commerce website can be the next step for your business strategy to increase your sales and presence in your specific marketplace. Implementing an e-commerce site represents a new strategy for business growth. You have an opportunity to expand your marketplace and reach new goals with your company.

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