“Given the general increase in Internet usage and the number of households now with high bandwidth connections, it isn’t a surprise that small businesses with a Web presence are starting to sell more online”, Jim Collins.
The Web is quickly becoming a multibillion-dollar enterprise for the world’s businesses. Small businesses can save money approximately 73% by decreasing administrative costs by doing business online, of small businesses that sell online 64 percent of online store owners said the Internet has increased their revenues or sales and 48 percent felt the Internet helped to expand their geographic reach in the U.S.
The growth of online retail market in U.S. is increasing and it will be $230 billion by 2008, which is a full 10 percent of anticipated total U.S. retail sales.
For small and mid-size businesses to exist in the online shopping market, the two important points to consider are, make it easy for customers to find the site and to keep the potential customers coming back.
A shopping store can increase the online sales by increasing the traffic to the website. Online shoppers purchase a product after doing a lot of research with comparison sites and search engines by going through customer reviews and ratings. Thus small and medium shopping sites can get more traffic by listing on comparison and shopping search engines.
Small and Medium scale businesses need to identify that comparison engines are becoming the first stop to purchase online. Search engines and Comparison shopping sites are crucial traffic generators for small and mid-size online stores. 27 percent of US online consumers use comparison sites and 48 percent of online shoppers go through search engines. Especially, 90 percent of consumers seeking to purchase electronics first visit comparison shopping sites.
Shopzilla, Shopping and Froogle are the search engines which lists a shopping site’s product even without any data feeds. Small and medium shopping sites can get listed on those for free with its relevant product on sale. Once if a customer made a transaction then with the easy payment methods, in time shipping and credible customer service you can retain the customer.
Identifying the competitors and differentiating the products, prices, and services from those of the competitors is needed for mid-size online stores. A well-thought planning of shopping sites allows identifying them. Also, making the consumers as an online community pertaining to the shopping site is a winning strategy.
Holiday sales gives an opportunity for mid size online stores to increase their traffic. According to Nielson releases Nov, 2006, Holiday eShopping Index increased 12 percent from home on the day after Thanksgiving, garnering a unique audience of 19.2 million across more than 120 representative online retailers, compared with 17.2 million on Black Friday last year. There is 23% increase in holiday sales from 2005 to 2006 and it is an opportunity for small and medium businesses to get more traffic.
Small and medium shopping stores that started as specialty stores and later became well established as online store giants. Big specialty stores like Bestbuy.com is a home electronics retailer and newegg.com is an online computer parts, peripherals accessories and components shopping site. For example, from the day it started in 2001 Newegg.com focused to meet the demands and customer service.
For mid size online stores service, delivery, shipping and handling are important to retain the customer. About 98 percent of the orders that newegg.com get are shipped within 24 hours. 54 percent of Internet shoppers abandoned certain online stores due to concerns of service, delivery, shipping or handling. So the process of buying from a shopping site should be simple and easy to make a transaction.
There are certain constraints for online stores in which click fraud is decreasing the total annual revenues. Based on the annual survey of eCommerce fraud 2004 the mid-range companies, those with annual online revenues between $500,000 and $5 million lose 2.5% of revenues to online fraud compared to 1.9% in the year 2003.