E-commerce and selling online: the basics

1 Overview
2 Get started with e-commerce
3 Maintain and develop your e-commerce services
4 Selling online: the benefits
5 Selling online: types of shops
6 Understand IT regulations and policies
7 Selling online: common mistakes
8 Make the most of IT and e-commerce

1. Overview

E-commerce (sometimes written as ecommerce) plays an increasingly important role in the way in which products and services are purchased. Selling products and services online can help your business become more profitable and lower your costs. E-commerce can also strengthen and improve the efficiency of your relationships with suppliers and other key trading partners. 

It's important to plan for the ongoing development and maintenance of any e-commerce system from the start. You also need to be aware of your legal obligations when selling online.

2. Get started with e-commerce

Investigate your options for getting online. Make sure you choose the right website and email addresses so your customers and suppliers can find you quickly and easily.

Consider the different ways to connect your business to the internet. A range of options are available including ADSL, dial-up, cable and satellite.

Pay attention to the design of your site. The overall look and feel will play an important role in its usability. There are also legal issues to consider in the design of the website. For example, you must ensure it's accessible for disabled people.

Sales and marketing online

If you want to sell directly through your website, you'll need to have the infrastructure in place to showcase your products and services and process orders electronically.

To complete your e-commerce solution, you'll need to set up the facility to accept payment through your website.

Once your shop is online, consider how to monitor its effectiveness, make it more powerful and ultimately sell more through it. Think about how you can drive traffic to your site. Also look at how you can build a community around your brand through the use of social media and other Web 2.0 technologies.

3. Maintain and develop your e-commerce services

Your work doesn't end once your initial e-commerce system is up and running. You need to maintain the site, constantly review how well it is operating and consider new opportunities and ways of working that it may present to you.

Maintaining your e-commerce site

You must ensure that the content of the site is accurate and updated regularly. This will help to promote a positive image for the business, attracting and retaining visitors to the site.

As your e-commerce presence grows, you must protect yourself against the threats posed by hackers, viruses and fraudsters. Identify the risks they pose and implement appropriate security controls to counter them.

Identifying new opportunities

Mobile commerce (m-commerce) is a type of e-commerce using mobile devices such as mobile phones, smartphones, tablet computers and other devices with a wireless connection. M-commerce brings new opportunities to small businesses both to sell new services and to operate existing businesses more efficiently.

Extranets can enable your business to communicate and collaborate more effectively with selected business partners, suppliers and customers. They can play an important role in enhancing business relationships and improving supply chain management. Intranets are an invaluable way to communicate with employees, especially for businesses with multiple locations and staff who work remotely or from home.

An e-marketplace allows you to use a variety of online services such as electronic catalogues, business directory listings and online auctions to sell your goods and services more effectively to other businesses.

Common mistakes

Remember that not all e-commerce developments are a success. You can learn a lot from the experiences of other e-commerce providers to help ensure that you don't make the same mistakes.

4. Selling online: the benefits

Selling online has a number of advantages over other selling methods, including:

  • Savings in set-up and operational costs. You don't need to rent high street premises or pay shop assistants.
  • Reducing order processing costs - customer orders can automatically come straight into your orders database from the website.
  • Reaching a global audience - increasing sales opportunities.
  • Competing with larger businesses by being able to open 24 hours a day, seven days a week.
  • Quicker payments from online transactions.
  • Improving your business using data gathered from tracking customer purchases.
  • Using your online shop as a catalogue for existing customers.

Online selling will work best if you have:

  • well-defined products or services that can be sold without human involvement in the sales process
  • fixed prices for all types of potential customers
  • products or services that can be delivered within a predictable lead time

5. Selling online: types of shops

Basic online shop

Allows you to sell a small range of products, providing photos, descriptions and prices as well as accept orders online.

Most customers shopping online will want to pay by debit or credit card. You can create electronic mail-order forms using web authoring software packages. These order forms let customers email their orders to be processed offline. You'll need a more sophisticated online shop if you want to accept card payments online.

A basic site is low cost and easy to create for a limited product range. But it might have restricted design and functionality and might be less secure than more sophisticated options. 

Intermediate online shop

Typically an e-commerce package and should include catalogue management, enhanced order processing and a broader range of design templates.

It should also include encryption for secure ordering. Using Secure Socket Layer technology to collect card details (noted by the 'golden padlock' symbol in your browser's status bar) is key to encouraging online sales.

Some e-commerce packages may offer back end systems integration, ie they connect to your product database and accounts systems.

An intermediate-level site might not be suitable if you want to offer more complex products and services.

Sophisticated online shop

Should provide a range of options, including cutting-edge design and functionality, personalised pages and product news.

Software can be integrated to trigger order confirmations and automatically dispatch goods and replenish stocks.

You may need a design and development company to help define your technical requirements and integrate the website with your existing systems.

You could also consider free, open source shopping cart software packages. This should allow you to set up a sophisticated e-commerce website that has a wide range of options, features and support - even if you have only basic computer skills.

6. Understand IT regulations and policies

If you are selling online, you need to comply with legislation to ensure customers' personal data is kept secure, goods and services meet quality and suitability standards and online contracts are legally binding.

There are also internal policies that you are recommended to implement if your staff make use of the internet or email.

Data protection

If you store details about customers, suppliers or potential suppliers on your systems, you must comply with the Data Protection Act 1998.

Customer Protection Regulations

The Consumer Protection (Distance Selling) Regulations require you to give your customers specified information before they place an order. You also need to send the buyer an order confirmation and give them a 'cooling off period' during which they can cancel their purchase.

E-commerce regulations

When trading over the internet, the same rules apply as with the formation of other types of contract. The E-commerce Regulations 2002 are intended to ensure that electronic contracts are binding and enforceable throughout Europe.

Legislation is also in place to regulate the ways in which you can use electronic marketing to promote your e-commerce services.

If your business is a limited company or limited liability partnership (LLP), under the terms of the Companies Act 2006, your website must show:

  • the full name of the company or LLP
  • the registered office address of the company or LLP
  • the registered number of the company or LLP
  • the place of registration of the company or LLP
  • if the company is being wound up
  • the VAT number (if VAT registered)
  • membership details of any trade or professional association

Website notices

To comply with both regulations and good business practice you should include a variety of notices on your website. Typical examples include the terms and conditions under which your site operates, a privacy policy, any disclaimers that are appropriate and a copyright and trade mark notice.

Internal policies

If your staff have access to email and the internet, consider introducing policies that clearly state what is and isn't acceptable in terms of internet and email usage.

7. Selling online: common mistakes

Customers will be put off by:

  • out-of-date or incorrect information
  • difficult site navigation and purchasing processes
  • poor customer fulfilment and late delivery
  • lack of customer support
  • lack of business information
  • poor visual design

To make customers feel secure about buying from your site, you should:

  • make your site easy to navigate and user friendly
  • make sure photographic images on your site are accurate and show products in their best light
  • hire a customer service representative who can give advice on the phone to customers on more complex or expensive products
  • make ordering procedures straightforward and quick
  • confirm orders immediately by email
  • be honest - ie tell the customer if you can't deliver on time
  • provide a way for customers to track down the progress and availability of their order

Business Gateway runs events on selling. You can also talk to an adviser by calling 0300 013 4753.

8. Make the most of IT and e-commerce

To make the most of your IT and e-commerce investment, there are several points you need to observe:

  • Focus on the business benefits, not the technology
  • Only approve projects when you're confident they support your business objectives
  • Plan to achieve measurable improvements - eg if you start an online shop, it's a good idea to set sales targets and monitor their effectiveness.
  • Don't leave the planning to your suppliers or consultants - only you know what your business really needs from IT. Suppliers and consultants may have their own interests in mind and suggest you spend more than you need to achieve your goals.
  • Recognise that you need to provide ongoing support to your staff to ensure problems are quickly resolved and system performance issues addressed.
  • Get your budgeting right - if you have made provision for your IT systems, you will have the funds when you need to boost your system or take advantage of new technologies.
  • Review projects regularly to ensure that the planned benefits are being realised

Read our guide Business IT: the basics.

Contact your local Business Gateway office.

Your local office will be able to answer your questions on this or any other business subject. 

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