The Benefits Of E Commerce To The Small Business Owner

1900 words - 8 pages

Executives used to imagine their companies as the center of a solar system
orbited by suppliers and customers. The Internet is changing that dramatically. Now the
customer is becoming the center of the entire business universe. E-commerce relates
to that part of e-business that includes transactions that involve money. The larger
concept of e-business, however, goes well beyond buying and selling items on the
Internet. E-business is about using information, technology, and resources to conduct
business online. The processes of marketing your goods and services to your
members, e-tailing, can be compared to a store front where you display products and
solicit business from ...view middle of the document...

S. companies (Providence Business News, 19B). According to the United
States Small Business Administration, only 30 percent of the nation?s 24 million small
businesses accept orders on the Web, and far fewer can process credit card
transactions (Tedeschi, C12). Half of small businesses now have Internet access, and
about 20 percent have established their own website, according to results of a national
survey commissioned by the Small Business Banking Group of BANK ONE
CORPORATION (Providence Business News, 19B). A study conducted by the
University of Texas reports that the Internet economy generated more than $300 billion
in U.S. revenue in 1998. A company may expect to receive more than 50 percent of all
revenues via e-commerce in the next two to three years (Richter, 48). The core of e-
commerce is between businesses, and this segment is thriving. Business-to-business
e-commerce makes up the largest portion of Internet commerce, with sales totaling $8
billion in 1997, according to Forrester Research, a market-research firm in Cambridge,
MA (McCollum, 34).

Small business owners identified their websites as one of the most effective tools
for generating interest in their small businesses (13%), better than direct mail, radio,
television and telemarketing. Only word of mouth (25%) and newspapers (15%) were
considered more effective (Providence Business News, 19B). One increasingly popular
approach is to offer ?all-in-one? e-commerce packages, in which merchants pay a
nominal monthly fee for software that enables them to build a site that is then hosted by
a third party (website hosts) ? sparing the client the cost of Web servers and fast
Internet connections. For $100 a month, digital entrepreneurs can post their store on
Yahoo?s site and offer as many as 50 products for sale. The more products offered for
sale, the higher Yahoo?s monthly fee. Yahoo offers a host of additional features. It
aggregates orders and sends them via fax to the store owner for processing, encrypts
credit card numbers during processing and offers a shopping cart feature, so customers
can pay for multiple products at once (Tedeschi, C12). If you want to launch a website
for your company, you can hire a website hosting company like Yahoo to house and
maintain server equipment, or you can start from scratch. If you choose the do-it-
yourself route, there are several kinds of servers available that are geared toward small
businesses. These include Microsoft?s Internet Information Server 4.0, IBM?s new
Netfinity 3000, and Hewlett-Packard?s NetServer E 50. All three servers are priced
between $2,000 and $3,500. But buying the server equipment is only the beginning.
You?ll also need to choose a network infrastructure; the type you select will depend on
the size of your business, how tech-savvy you are and how often you plan to modify
your catalogs. Some good midrange packages are Catalog Builder from The Vision

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