ISPCON: Cashing in on E-Commerce

At the heart of every transaction is a credit card, and handling it right is key to cashing in on the booming internet economy.

by Alex Goldman ISP-Planet Managing Editor [May 30, 2008]

Dialup is shrinking, and broadband growing only slowly, but the growth of e-commerce remains rapid, said Elizabeth Bowles, president of Little Rock, Ark.-based ISP and e-commerce specialist Aristotle.net, in a morning session as ISPCON began.

The session, called Cashing in on E-commerce: New Opportunities and Issues, covered the basics, which mostly concern credit cards.

Accepting credit cards requires following rules, but the pain is worthwhile. Bowles said that 70 percent of the population of the U.S. now has an online connection, and that 94 percent of those online do at least some shopping. She said that the U.S. is eighth in the world in percentage of internet population who use online shopping, in part because the U.S. has better retail (many nations force stores to close or reduce hours on evenings and weekends).

In the U.S., people shop for:

1) clothing, shoes, and accessories

2) books

3) travel

Here's a thought, something Bowles didn't say: if you don't have at least one female employee in your web design or e-commerce outfit, you may be missing out on a big chunk of the top thing that people shop online for, clothing!

Developing countries contain some of the most enthusiastic online purchasers of books because even though shipping is expensive, there's often no alternative.

Of those who shop online, most use credit cards (the rest use online currency systems like Paypal). Among credit card users, 53 percent use Visa. This makes Visa the "big kahuna" of online shopping, Bowles said. If you can only follow one set of rules (every credit card company has their own), follow Visa's.

Online shoppers are loyal. According to Neilson Ratings, 60 percent of online shoppers said they tend to buy "mostly" from the same website.

Standing out in the crowd
Of course, the fact that e-commerce is growing may not be news to you. It's a popular market. The challenge is not entering the e-commerce market—it's standing out in the crowd. How do you distinguish what you offer from what everyone else offers?

Bowles said that the single most important way to distinguish youself is to offer good service. Don't just sell a website: make sure you customers use it. Become a partner, not just a vendor. It's high touch. It's handholding.

Help them get a merchant account (the top three merchant account providers are

There are some snake oil sales teams out there. "Many small businesses get sold a bill of goods," said Bowles. "They don't get what they need."

For example, the top reason that sales are lost on websites is, Bowles said, "order fulfillment."

People pick out something they want to buy and then they have to sign in. Maybe they don't have the information the site is asking. Maybe they don't want to provide it. Bowles said that about 30 percent of shopping carts are abandoned before the user inputs credit card data.

The big companies know about this problem and are dealing with it. "If you abandon a shopping cart at Circuit City, they will e-mail you."

You can also provide search engine optimization and marketing services. You can provide a customized website, something that's far more than just a template.

You can provide database optimization, so that what your vendor calls something is the same word that customers are using to search for it.

Some services will be specific to the industry of the vendor. The Ann Taylor Loft, Bowles said, allows you to "see a blouse on a waif-like person and also how it looks with a suit." On another website, Bowles said that she bought a stroller because the website showed her how it opened and folded shut.

There are many services you can provide, too numerous to list here. The goal is to increase the per-sale dollar amount. Make sure that you can demonstrate the value you have added.

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