Where to Build Your Online Store
Chapter 7 guided you in selecting an appropriate location for your B&M store. Locating your online store can be just as important. Why? Because the location can give you credibility with potential customers. At relatively low cost, you can set up your store next to one or more of the big players—Amazon, eBay, Yahoo!—or as a standalone. Following is a closer look at each of the major online malls.
Beginning life as an online bookstore in 1996, Amazon (www.amazon.com) is now a humongous online shopping mall. It sells books, movies, electronics, computers and software, home and garden, groceries (yes!), toys, apparel, health and beauty products, sports and outdoor merchandise, tools, automotive, and even industrial products. Who knows what's next? Whatever your store sells, there's a good chance that Amazon sells it, too.
Actually, many of these lines aren't sold directly by Amazon. They are offered through Amazon Marketplace, separate businesses that contract with Amazon to market their wares. Once your account is set up, you list the merchandise you're selling, orders come to you, you ship them to the customer, and then Amazon pays you—less a commission. Customers give feedback on the transaction, helping you build credibility. You also can set up virtual stores, called aStores, through Amazon and link to them from your site to sell products for other merchants—and earn commissions.
One of the advantages of selling online via Amazon is that it handles the transaction and makes payment to you. If there is a problem with the customer, Amazon is good about resolving it.
Amazon also has a referral service, called Associates, that places Amazon products on related websites (like yours) and pays a commission on what is sold through the referral. If you are interested in these opportunities, visit Amazon.com and follow the links on the bottom of the page.
Yahoo! (www.yahoo.com) is one of the most visited sites on the Internet. It offers personalized home pages with news, sports, entertainment, and other information. It also offers shopping opportunities (http://shopping.yahoo.com) for clothing, computers, electronics, DVDs, music, books, flowers, gifts, home and garden, jewelry and watches, sports, outdoor, and much more. It's the world's largest shopping mall.
The Yahoo! shopping mall is composed of individual retail businesses that sell a wide variety of merchandise. Some of these businesses also have B&M stores (Target, JC Penney, Nordstrom), but many are online only. To become a Yahoo! business, visit shopping.yahoo.com, go to the bottom of the page, and look for the current links to Build Your Online Store.
In 1995, eBay began (under another name) as an online auction site. The site (www.ebay.com) soon caught on with shoppers around the world and now earns over $6 billion annually in listing fees and other financial fees. It purchased PayPal, an electronic commerce (e-commerce) money transfer service, in 2002. The eBay corporation also owns Shopping.com, StumbleUpon.com, Half.com, ProStores.com, and other online businesses with offices around the world.
Like other big online businesses, eBay partners with small businesses to sell a world of products—for a fee. Not all products sold through eBay are in auctions. Many are offered by affiliate eBay Stores. For a fee, eBay lists and promotes products from other sellers, passing along the orders, and guaranteeing the transaction. Buyers often prefer to purchase online through mega-malls such as eBay, Amazon, and Yahoo! rather than from standalone stores because of their security measures.
Other Shopping Malls
Once you begin shopping online, you'll discover dozens of other virtual malls, some of them more appropriate than others to what you sell. Use search engines to identify and try them out.
The primary advantage of online shopping malls is name value. Online shopping requires a higher level of customer trust than at B&M malls. A trusted online mall can give your new business instant credibility. Remember that setting up stores in more than one mall is relatively inexpensive. In fact, some have little or no start-up costs, and the only expense is a commission paid when you sell something through them. Of course, you must make sure that the online mall that has your store in it isn't keeping your money. Check out any online mall before joining. The big ones discussed in this section are proven; smaller ones may not be.
Your Own Store
Just like B&M businesses, retailers can have standalone online stores that don't depend on surrounding businesses to draw traffic. You can set up your virtual store anywhere on the Internet and customers can access you from anywhere in the world—if they can find you.
The main disadvantage of developing an online store outside of a virtual mall is that you'll have to work harder to develop traffic. There are many methods of doing so, such as search engine optimization and advertising through search engines such as Google and Yahoo! However, it's better to begin your online operation within a large virtual mall, then build your own site later—if ever—once you know more about the intricacies of online commerce.