Preparing your website for e-commerce

Selling via the Internet is only one of a number of reasons behind why companies’ have a website. Initially e-commerce gained prominence as Internet enthusiasts tried to source and purchase software or hardware over the Internet.

E-commerce quickly gained appeal with a broader audience selling products such as books and compact disks. This created a new generation of companies, for example Amazon and eBay, with a revived spirit of entrepreneurship and view of international business. Many other companies soon realised they too could set up shop on the Internet and open their doors to a global audience.

Preparing your website for e-commerce transactions involves much more than just implementing a payment facilitation mechanism. It requires addressing a range of issues including:

1. Pricing and shipping charges

Customers want the full cost of the product or service including the product price, shipping charges, taxation etc, provided up front.

Transparent price structures are fundamental to building trust and credibility online. It is important for you to have a clear understanding of how your online initiative is positioned with respect to any existing sales channels and what implication any price variations (with other sales channels) will have on customer perceptions.

Ensure that customers find it easy to place a transaction through your site. If a problem arises your potential customer is unlikely to return again. (Ernst & Young report ‘Meeting Customer Expectations’, Global Online Retailing Report, November 2000).

A checklist of issues follows:

• Are prices clearly visible?
• Do the prices communicate the value of your merchandise/services?
• Does the online sales price encompass the whole cost of distributing the product to the customer (ie credit card transaction fees, bank charges, taxes, insurance etc)?
• What shipping charges are applicable for delivering the product to the customer’s location?
• Is information available on an estimated delivery date?
• Is confirmation information provided for a successful online transaction?
• Does the confirmation information re-state the full price and delivery information?
• Are contact details available should a problem arise?

A tip - don’t request personal details and/or credit card numbers until the full cost of the purchase has been disclosed. A Jupiter consumer survey found that 73 per cent of consumers evaluate the total price of products, including shipping and handling, before making an online purchase.

2. Taxation and/or customs duties

Generally the taxation on Internet transactions occurs at the point of sale. However, this rule is not as clear when it is applied to digital goods (ie. those delivered over the Internet), such as software and books. Governments worldwide are refining and developing new tax rules as they relate to e-commerce.

It is important to continue monitoring developments with regard to the international law for taxes on digital goods. For example, European Union (EU) firms are required to tax online sales of software, music and videos (VAT taxes ranging from 15 per cent to 25 per cent). The Economist Intelligence Unit's ebusiness forum's 'doing e-business' profiles covers e-commerce taxation issues.

In Australia and internationally, there is support for the principle of tax neutrality between electronic and traditional forms of commerce. The EU's value added tax (VAT) on e-commerce is a recent development.

Custom duties are generally collected at point of destination (by the purchaser) rather than at point of sales and/or departure. The type of good and the export destination will define the value of any customs duties.

In addition, the World Import Regulations Directory (WIRD) provides export-related information for over 80 countries including:

• documentation requirements
• tariffs
• taxes
• packaging and labelling regulations
• trade samples
• methods of quoting and payment

You must make clear (and if necessary explain) any taxes or customs duties applicable to the purchase your customer is making via your website.

3. Supporting processes

You need to make sure that your company’s business processes and systems are aligned to support your website’s objectives. For example, transactions through your website, must be supported by the delivery of the product to the buyer.

Here are some questions you can ask yourself:

• What processes exist to cope with periods of high demand – for example Christmas time?
• If products are unavailable – update your website?
• How do you intend to fulfil orders – from local warehouses in Australia or overseas?
• What is the capability of your existing IT systems to handle traffic, requests, security, etc?

A post sale and/or service element also needs to be factored into the equation:

• Are your return policies and guarantees clearly visible to the buyer?
• Do you have physical stores (in Australia and/or overseas) displayed where buyers can return goods?
• Is your contact information clearly visible should the buyer have any questions or problems?

4. Issues with going international

One of the features of the Internet is the ability to reach consumers worldwide. Establishing and maintaining a website can expose your business to new international business leads, which will mean considering a new set of issues, including:

• Language – English may be a second or third language of your visitors so try to keep the content in very readable and jargon free. Research by Global Reach shows that 63.5 per cent of all Internet users speak languages other than English. It may be a good idea to include a glossary for any specific business or product terms, especially for technical products. You should also consider whether you need your website or part of your website in another language, ie. the primary language of your target audience.
• Marketing – additional resources may be required if your aim is to penetrate specific countries.  You may consider securing a local domain name. You should also review of the legal and regulatory obligations in the applicable countries you are targeting.  You may also consider testing your website in your target country.
• Exchange rates – if your prices are in Australian dollars then consider a currency converter.  Then visitors can calculate the cost of purchasing the product in their local currency. This is a useful tool where there are significant currency fluctuations. You also need to assess the cost of accepting foreign currency payments on your website.
• Metric system – you may need to make adjustments to your content to accommodate overseas visitors.
• Time zones – Allow for this in your contact information. You may use a local representative or toll-free number. Make it easy for potential buyers to work out the time differences.
• Dedicated resources – to monitor enquiries from your website and to respond quickly to potential business enquires. Also, have you thought about how you might respond to calls or enquiries from prospective non-English speaking customers? One easy way solution is to make use of online translation software, which can provide you with a quick (very literal) translation of written foreign text.