E-COMMERCE TASK - Student Blogblog.ub.ac.id/aruwmmy/files/2012/04/E-COMMERCE.pdf · Arum Prasasti |...
Transcript of E-COMMERCE TASK - Student Blogblog.ub.ac.id/aruwmmy/files/2012/04/E-COMMERCE.pdf · Arum Prasasti |...
E-COMMERCE TASK
ARUM PRASASTI
0910223028
Faculty of Economics and Business
Management Department
2012
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Review
Perbandingan 5 E-commerce Dalam Negeri dan Perbandingan 5 E-commerce Luar
Negeri
E-commerce di Indonesia saat ini semakin maju dan berkembang. Saya membandingkan 5
situs web E-commerce dalam negeri di bawah ini :
1. www.tokobagus.com
2. www.hijup.com
3. www.shopatvelvet.com
4. www.berniaga.com
5. www.rokuten.co.id
Kelima situs E-commerce diatas bergerak di bidang penjualan yang bisa dikatakan hampir
sama. Di tokobagus.com anda akan menemukan segala hal dijual mulai dari sepatu sampai
dengan peralatan rumah tangga. Dengan akses berbahasa Indonesia yang sangat mudah
dipahami dan terstuktur. Mereka juga memiliki fitur pasang iklan gratis di websitenya.
Sedangkan di hijup.com , mereka khusu menjual muslim wear , atau kata modernya hijaber
wear untuk wanita berjilbab yang ingin tampil modis, cantik , modern tapi tetap muslimah. Di
website ini tidak tersedia fitur pasang iklan , namun kemudahan berbelanja online mereka
utamakan. Pada shopatvelvet.com , mereka menjual women apparel mulai dari blus hingga
bawahan untuk wanita muda menengah ke atas dengan harga yang juga di segmentasikan
untuk kalangan menengah ke atas. Barang yang dijual disini semuanya limited stock sehingga
siapa cepat dia dapat. Kelebihannya jika kita tertarik pada suatu barang di situs ini namun
barangnya out of stock, kita dapat meminta email jika ada re-stock atas barang yang kita
sukai. Di berniaga.com dan rokuten.co.id , barang yang dijual hampir sama. Mereka menjual
segala macam barang dan memudahkan pembelinya untuk mengakses barang dijual di lokasi
terdekat dari kota masing-masing customer.
Sedangkan untuk situs e-commerce luar negeri :
1. www.magnoliabakery.com
2. www.amazon.com
3. www.shopbop.com
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4. www.butyk.co.uk
5. www.asos.com
Kelimanya memeiliki fitur yang hampir sama. Memiliki fitur member sign up , fitur cart atau
keranjang belanja , dan dengan variasi barang yang bermacam-macam. Magnoliabakery.com
menjual berbagai macam kue yang dibuat berdasarkan pesanan dan sesuia selera, melayani
delivery di wilayah New York city. Amazon.com kini mulai menjual berbagia macam barang
, namun keunggulannya adalah pada buku-buku textbook yang dijual dengan harga lebih
murah.Lalu, ada shopbop.com yg menjual berbagi macam apparel wanita mulai sepatu
hingga tas dengan merk dari desainer-desainer terkenal. Sedangkan di butyk.co.uk, tampilan
dari situs nya kurang menarik dan cenderung kurang informatif jika dibandingkan dengan
shopbp.com . yang paling saya sukai adalah asos.com , dia menjual berbagi macam pakaian
dari kepala hingga kaki dengan harga yang bervariasi pula untuk wanita maupun laki-laki.
Fasilitas delivery yang terjangkau sehingga bisa diambil di toko cabang asos yang tersebar di
seluruh penjuru Inggris.
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ARTIKEL REVIEW
1. INTRODUCTION OF E-COMMERCE
Electronic commerce, commonly known as e-commerce or e-comm, refers to the buying
and selling of products or services over electronic systems such as the Internet and
othercomputer networks. Electronic commerce draws on such technologies as electronic
funds transfer, supply chain management, Internet marketing, online transaction
processing,electronic data interchange (EDI), inventory management systems, and automated
data collection systems. Modern electronic commerce typically uses the World Wide Web at
least at one point in the transaction's life-cycle, although it may encompass a wider range of
technologies such as e-mail, mobile devices and telephones as well.
Electronic commerce is generally considered to be the sales aspect of e-business. It also
consists of the exchange of data to facilitate the financing and payment aspects of business
transactions.
E-commerce can be divided into:
E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes
gathered into a "virtual mall"
The gathering and use of demographic data through Web contacts
Electronic Data Interchange (EDI), the business-to-business exchange of data
E-mail and fax and their use as media for reaching prospects and established
customers (for example, with newsletters)
Business-to-business buying and selling
The security of business transactions
Economists have theorized that e-commerce ought to lead to intensified price competition, as
it increases consumers' ability to gather information about products and prices. Research by
four economists at the University of Chicago has found that the growth of online shopping
has also affected industry structure in two areas that have seen significant growth in e-
commerce, bookshops and travel agencies. Generally, larger firms have grown at the expense
of smaller ones, as they are able to use economies of scale and offer lower prices. The lone
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exception to this pattern has been the very smallest category of bookseller, shops with
between one and four employees, which appear to have withstood the trend
2. MOBILE COMMERCE RESEARCH FOR ONLINE RETAILERS
Keeping track of mobile trends, research and statistics gives small business ecommerce site
owners a solid foundation to plan a mobile commerce strategy. The following mobile
commerce research and statistics are from trusted industry sources and experts in the field of
mobile devices and electronic commerce.
Mobile Commerce Shopping Research & Statistics (2010 - 2011)
Mobile shopping research and statistics offers an in-depth look at mobile devices; including
smartphones, iPads and tablets. With these facts and figures you can learn how consumers are
using these mobile devices for online shopping-related activities.
The most common mobile shopping activity is researching products and comparing
prices, which 15 percent of mobile phone owners now do every month. (Source:
Experian Simmons; 2011 Mobile Consumer Report)
48 percent of mobile owners surveyed had made a purchase via their mobile phone.
Although mobile shopping was most popular with 18-34 year olds, more than one third
of respondents aged 55+ also made a purchase via mobile. (Source: Lightspeed
Research; Mobile Shopping Revolution)
Males 30-49 years-old tend to be the most active content consumers and mobile
purchasers; men outspend women, with 31 percent having spent $499 or more through
their mobile device in the last 12 months, versus 23 percent of women who did so.
(Source: Adobe Systems, Omniture; The Adobe Mobile Experience Survey: What Users
Want)
30 percent of tablet owners have used their device to shop online, while currently
only 25 percent of smartphone owners have used their phone to do the same. (Source:
eDigitalResearch; eCustomerServiceIndex)
In 2015, shoppers around the world are expected to spend about $119 billion on
goods and services purchased via mobile phones. That number represents about 8
percent of the total ecommerce market. (Source: ABI Research; Mobile Commerce
Study)
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In the United States, purchases attributed to mobile online shopping -- excluding
travel -- grew from $396.3 million in 2008 to an impressive $1.4 billion in 2009. In
2010, mobile online shopping excluding travel in the U.S. had more than doubled again,
to total more than $3.4 billion by year’s end. (Source: ABI Research; Mobile Commerce
Study)
Apps and music are the most common purchases, followed by clothes and
electronic books. (Source: Lightspeed Research UK; m-commerce prepared for Figaro
Digital)
Consumer usage of mobile coupons will see users exceed 300 million globally by
2014. (Source: Juniper Research; Mobile Coupons & NFC Smart Posters)
The study of more than 1,400 consumers shows more than half of consumers use
their smartphones to enhance their shopping experience, especially people under age 35.
(Source: Chadwick Martin Bailey; How SmartphonesAre Changing the Retail Shopping
Experience)
Retailers report that 21 percent of all mobile traffic comes from tablets; amazing
considering the iPad was launched barely a year ago. (Source: Forrester Research; The
State Of Retailing Online 2011: Marketing, Social, And Mobile)
Mobile Commerce Payments Research & Statistics (2010 - 2011)
Mobile payments (m-payments) are when consumers make a purchase using a mobile phone
instead of using cash, credit card or debit. Types of mobile payments include direct billing,
SMS transactions and mobile Web payments. These mobile commerce research and statistics
will help you understand what’s happening in the mobile payment industry.
Worldwide mobile payment volume is forecast to total $86.1 billion, up 75.9
percent from a 2010 volume of $48.9 billion. (Source: Gartner Inc.; Market Trends:
Mobile Payments Worldwide, 2011)
PayPal raised its 2011 Mobile Total Payments Volume (TPV) projections to $3
billion. (Source: PayPal Blog;PayPal Doubles Mobile Payments Predictions to $3 billion
in 2011 by Laura Chambers)
Overall, mobile payment services are expected to reach $245b in value worldwide
by 2014. At the same time, mobile money users are expected to total $340m, equivalent
to 5 percent of global mobile subscribers. (Source: Ernst & Young; Opportunities for
telcos in mobile money: 2011)
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E-payments and m-payments collectively accounted for an estimated 22.5 billion
transactions in 2010. E-payments (online payments for e-commerce activities) are
expected to grow globally to 30.3 billion transactions from 17.9 (in 2010-13), while m-
payments are expected to grow globally to 15.3 billion transactions from 4.6 billion in
the same period. (Source: Capgemini; World Payments Report 2011)
It is anticipated that this will begin to change in 2011 as the number of mobile
payment users starts a significant run up from 116 million to over 375 million in 2015.
(Source: In-Stat; Mobile Payments: Is the Market Ready?)
The potential for mobile payments is huge. Estimates for the volume of those
transactions vary widely but share a consensus that mobile payments will see sizable
growth this year and accelerate rapidly in 201
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3. Ecommerce Solutions: 5 Ways to Sell Digital Goods Online
Digital goods is the term used to describe "non-tangible products" such as computer games
and other software, custom-designed sewing or craft patterns, e-books, digital images, music,
ringtones, website templates -- basically any product that can be provided to consumers in an
electronic, or digital, format.
How Do Digital Goods Ecommerce Solutions Work?
For artists on a budget, the good news is that you don't need a fat wallet to set up an
ecommerce store for selling digital goods. Many digital goods ecommerce solutions are free
to use until you make a sale, at which time you'll pay a commission fee for the delivery
service. Other services charge a modest monthly fee, with no additional transaction fees.
If you already have your own website or blog, there are a number of digital goods shopping
carts that you can use to sell from your own site. If you don't have a website of your own --
and you should -- you can still take advantage of online shops and affiliate referral programs
offered by digital goods ecommerce providers to boost traffic and sales of your own work.
The best news is that you can still spend most of your time in the studio recording or
blogging to your fans, as digital goods ecommerce solutions tend to handle all or most of the
transactions for you, taking a percentage of the transaction fee. These delivery and payment
systems are simple to use. It is as easy as uploading the files, providing contact and payment
details and a description of each item you have for sale.
5 Ecommerce Solutions for Selling Digital Goods
Here are five easy-to-use and cost-effective digital goods ecommerce solutions that you can
further investigate to sell your digital products online. When researching available
ecommerce solutions for selling digital goods, be sure to compare features of each service,
including the number of products you can list, the transaction and per sale fee, and also if
payments are made after each transaction or if the solution provider pays out on a minimum
account balance.
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1. DigitalGoodsDelivery: For All Types of Digital and Tangible Products
Digital goods publishers can use DigitalGoodsDelivery.com's delivery system for virtually
any product that can be delivered to the consumer over the Internet, including standard movie
and audio files, plus zip files, Word documents, PDF files and more.
DigitalGoodsDelivery.com is intended for people who sell from their own website, and it is a
PayPal payments-based system.
After you upload the digital files, which remain hosted on and served by
DigitalGoodsDelivery.com, you can use the provided HTML code on your own site to create
PayPal button links for downloads. When someone buys an item on your website, the
customer pays you directly through PayPal. You can also use this interface to sell tangible
goods on your website. This lets you sell related products, for instance a t-shirt or mouse pad,
that features your images and so on, on your site alongside the digital products you have for
sale.
Pricing for DigitalGoodsDelivery.com starts at $9.95 per month. This provides all features
including unlimited sales volume, automatic file delivery, customizable buyer interface, and
custom emails with 50 MB of file storage. Additional plans for more storage are available
(see pricing plans).
2. E-Junkie: A Digital & Tangible Goods Cart
E-junkie is a shopping cart and digital delivery system for publishers who have their own
website and are looking for a way to include "buy now" buttons to sell downloads. Using E-
junkie, you can store your files on their servers, and buyers of your work receive an email
(customized by you) to download the product after a successful purchase. Cart buttons are
available for a number of payment systems including PayPal, Google Checkout,
Authorize.Net, TrialPay, ClickBank and 2CheckOut.
E-junkie can also be used to sell tangible products on your site. For tangible products, E-
junkie lets you include details such as shipping and packaging, sales tax, color and size
options, and more. E-Junkie pricing starts at $5 per month. This account gives you the
capability to list up to 10 products within a 50 MB space limit.
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3. PayLoadz: Sell Anything that Can be Downloaded
PayLoadz is a fully-featured digital goods platform that lets you sell just about any type of
digital product. It takes care of hosting and delivering the files to buyers, and other features
such as product key registrations for selling software. Sellers can define the file format,
delivery format and price for uploaded items. PayLoadz also lets you conduct transactions on
your own site. The code for digital goods shopping cart buttons code that you need for your
own site is automatically generated for you. You can also upload digital items and sell from a
PayLoadz store, or use their digital content delivery system for purchases on different online
auction sites.
The free PayLoadz account lets you use up to 1GB of file storage, and you don't pay fees to
PayLoadz unless your total sales for a 30-day period exceeds $50. Once you sell $50 worth of
digital goods, you will need to upgrade to a paying account, which starts at $14.95 per month
for unlimited transactions; a per-transaction fee also applies . PayLoadz also offers an
affiliate program via an ad syndication code that features specific products for sale at
PayLoadz.
4. Tradebit: Best for Music, Photos, eBooks, Software
Tradebit is an online marketplace for self-publishers to upload and sell their music, audio
files, photos, software and ebooks. With a Tradebit eShop you can upload files (up to 2GB in
size) and edit specific details including thumbnail views, price, description, tags, and so on.
After you finish with the details, you can link the digital product to PayPal, Google checkout,
or Clickbank and put the purchase code on your own Web space, with a 20-percent
commission going to TradeBit for sellers with a monthly sales volume of $1,500 per month.
If sales exceed that amount you'll need to upgrade to the Pro plan which is offered at a 15-
percent commission going to TradeBit. Tradebit also offers an affiliate program and
allows anyone selling digital goods on Tradebit to promote them with their ID to get
additional sale commissions.
5. Cleverbridge: Ecommerce Solutions for Digital Product Companies
The Cleverbridge digital goods ecommerce solution provides a full, customized checkout for
selling digital goods. The service offers faud protection, reporting and statistics, and support
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for multiple currencies and languages. Cleverbridge also offers payment s for all major credit
cards, PayPal, direct debit, WebMoney check / money order, wire transfers and more. For
software producers, Cleverbridge will handle generating receipts and delivers the license
keys, order confirmations and the product.
Cleverbridge does not make its pricing plan available on its website, however it derives its
revenues from a percentage of each transaction processed through its platform. Fees are based
on a client's average cart value, monthly revenue and the highest and lowest product pricing.
4. How-To Guide: E-Commerce Marketing on Facebook
Facebook How-To Guide: Create Business Pages and Ad Campaigns
Social networking site, Facebook, is used by more than 150 million people to share personal
information with friends online. The site celebrated its fifth-year anniversary yesterday and is
continuing to attract members with demographics that could serve e-tailers well in terms of
extending market reach and increasing branding.
The Web research firm Hitwise reports that, overall, Facebook was the fifth-ranked Web site
in terms of total market share of visits in January 2009. Furthermore, the time spent on
Facebook has continued to increase and reached an average visit time of just over 21 minutes
in January 2009.
More good news: When compared to 2008, there has been a pronounced shift in the age of
the Facebook audience. According to Hitwise, visitors aged 18 to 24 represented a 42 percent
share of visits for the four weeks ending Jan. 26, 2008, but have now dropped to 24 percent
for the four weeks ending Jan. 24, 2009. Now visitors aged 25 to 34 make up the largest share
of visits with 27 percent, with 18 to 24 and 35 to 44 closely following with respective shares
of 24 percent and 23 percent.
Facebook is aware that e-commerce site owners may want to capitalize on Facebook traffic,
so they allow members to create free Facebook Business pages or pay-per-click advertising
campaigns.
Leveraging Facebook business options can provide a new channel for your customers to
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interact, and at the same time help you acquire new customers as your Facebook fans spread
the word about your business to their friends.
In this Facebook how-to guide, we will show you how to use two of the business solutions
offered by Facebook. First, we'll walk through the steps you need to take to create your own
Facebook Business Page (also called a fan page) and then discuss the tasks involved in
creating a Facebook Ad campaign, which can be used to send visitors to your Web site or
new Facebook Business Page.
Getting Started: Get your Business on Facebook
To get started you will need to visit the Facebook Advertising page. Here you will find tabs
to access the following business options:
Advertising: Businesses use this tab to create adverts that will run on Facebook
pages
Pages: Businesses use Pages to create a presence on Facebook that will let others
join your page as a fan
Connect: Facebook connect lets users seamlessly connect their Facebook account
and information to your site.
Facebook Share: Design a button for your site to make joining your Facebook Page
easy for your customers
How to Publish a Facebook Business Page
The best way to start is with creating a Page for your business. Those who have created a
personal Facebook profile will find the process pretty simple, but the step-by-step form pages
will also make creating a Business Page painless for those new to Facebook.
You will need to have basic business information ready before creating the Page — decide on
a page name and find any images you want to upload. Remember that your company logo is
best for the profile picture. When you create the page you will need to include a description
of your Web site, product, brand, or company.
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With this information handy, simply choose one of three categories for your Business: Local
Business (and the industry), Brand or Product, or choose if this will be a Page for a public
band, artist or other public figure. Once you select a category, you are required to enter the
business name. When you submit this information, you will then see a Business Page that
shares some resemblance to personal profile pages on Facebook.
In step two, you will want to upload your business logo, provide information about your
business, contact information, hour of operation (if you have a retail or local office), and a
general description that describes your business. As you add more details about your business
you can view the changes live on the page you are creating. This is all you need to publish a
basic Business Page on Facebook.
Customize Applications and Business Details
On your Facebook business page you will see applications that you can include on the page
you have just created. When viewing your Business Page, there is an Edit Page link on the
top right. Here you can customize all options from a single admin screen.
In the previous step we took care of the profile picture, basic and detailed information boxes.
Now, you will need to customize the applications that you want to use. Each Application has
a small edit option by the title, letting you remove any of the available applications or
customize the application to your liking.
Here are the basic Facebook Applications for Business pages:
Discussion Boards: Enable your fans to get their ideas out into the open. Discussion
boards let you know exactly what your fans and customers think and want.
Events: Organize gatherings or let people know about your upcoming business
events.
Information: Manage settings for the Information application.
Notes: Share your business news, or engage your fans through written entries.
Photos: Upload photos to your page and allow your fans to share photos on your
page also.
Reviews: Fans and customers can leave honest opinions about your business.
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Video: A high-quality video platform for pages on Facebook.
Wall: The Wall is an open forum for your fans or friends to leave comments,
thoughts, and ideas about you on your Page or Profile.
The last option you will need to use is the Settings area. This is where you edit country
restrictions, place age restrictions and change the published status of your business page.
When you are happy with the way your Business page looks, you click the Publish this page
link.
Tracking and Gathering Business Page Fans
Within 48 hours of publishing your page, you will be able to access 'Insights,' which is
Facebook collected data about how your business page is being used. Here you can track
page views, number of fans, removed fans, wall posts, discussion topics, reviews, photo
views and more.
After you have successfully created a Business Page, you can link to it from your own Web
site, e-mail campaigns, or encourage your own personal Facebook friends to become a fan of
your page. Remember, when a personal friend becomes a new fan, that message is displayed
as a notification to all of your friend's friends. Similar to word-of-mouth marketing, this is a
great way to bring Facebook users to your new Business page.
5. Social Commerce Strategies for Small Online Businesses
Shopping, in many ways, has always been a social activity. Before the rise of the Internet and
online shopping, women would often shop for clothes or go to the mall with friends — and,
in the more distant past, were often on a first- or last-name basis with their service providers
(their dry cleaner, the grocer, their doctor, etc.)
Similarly, men have long been known to consult or compare opinions with other men when it
came to, say, cars and/or farm or yard equipment and/or electronics, and likewise had "their
guy" at the stores they frequented.
That social aspect of the shopping or commerce experience is in large part what instilled and
maintained customer and brand loyalty. Then along came the Internet, which, to a large
degree, changed shopping from a personal to an impersonal experience. Out went the social
aspect of shopping, the leisurely browsing and discussions around what to get, and in came
how quickly can we get shoppers to the product(s) they are looking for and to checkout.
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Yet according to new research from Guidance, an e-commerce solution provider based in
California, many shoppers miss that social interaction. And, especially now, when market
share is more important than ever, including some social activity or interactivity on your site
— things like customer-generated reviews and product rankings, and chat or message boards
— can help improve your bottom line.
Over the past few years, larger e-tailers have been adding social features to their e-commerce
sites, à la the Amazon model. However, smaller e-tailers have been more hesitant to do so,
typically because of the perceived cost and uncertainty regarding the return on their
investment. But according to research conducted by Guidance (and others) "every business
can benefit from having at least some social commerce, or social activities, on their Web
site," said Guidance CEO Jason Meugniot. And they are often more inexpensive and easier to
implement than you think.
Customer Testimonials
The simplest, and least expensive, form of social commerce is customer testimonials —
quotes from customers who have used and are happy with your product or service.
"Customer testimonials are amazingly helpful to retailers and service providers," said
Meugniot. And the more in-depth or detailed the testimonial, i.e., the more information about
a particular product or service the customer gives (as opposed to "I love you guys!" or "Great
hat!"), the better.
To maximize their effectiveness, strategically place customer testimonials near the product(s)
or service(s) the customer is raving about. Also, update your testimonials regularly (adding or
replacing comments every couple of months, if possible, or more often). And don't be shy
about soliciting customer feedback. Either directly on your home page or in your e-mail
marketing, ask customers to send you their comments — and offer some kind of incentive,
say 10 percent off their next purchase or free shipping, if you use their comment on your e-
commerce site.
Customer-Generated Product Reviews and Ratings
Of all the social commerce features or tools available to e-tailers, customer-generated product
reviews and ratings may be the most effective, in terms of impact on the bottom line. Not
only do user-generated product reviews add credibility to a site, but, according to research
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conducted by Bazaarvoice, conversion rates are higher on sites that feature customer-
generated product reviews (even if there are a few mediocre or bad ones) than on those sites
that do not feature reviews.
6. The Good News About Bad Reviews
Many small e-tailers worry bad reviews posted online by unhappy customers will seriously
hurt their business. The truth is, negative reviews don't happen that often. And even when
they do, they can actually be a good thing for e-tailers — and their customers alike.
Only 25 percent of online retailers have incorporated customer reviews on their e-commerce
sites, according to a January 2007 Forrester Research report. The low adoption is because
many e-tailers fear losing control over their marketing messages, said Sucharita Mulpuru,
senior analyst with Forrester Research. E-tailers are concerned negative reviews of one
product will hurt sales of other products they offer, damage their brand and reputation, or
both.
In reality, bad reviews are infrequent, said Andy Chen, founder and chief executive officer
of PowerReviews Inc., which provides customer review services to its e-tailer clients. The
average star rating among PowerReviews clients is 4.2 stars out of five, Chen said, with 5
being the best. Eighty-eight percent of all customer reviews are 4 or 5 stars.
Similarly, at Bazaarvoice, which also provides a customer review system for e-tailers, the
average customer review is 4.3 stars out of 5, said Brett Hurt, founder and CEO.
And in the Forrester Research survey, in which 4,368 customer reviews were evaluated, only
16 percent were negative, said Mulpuru. Even then, the negative reviews were generally
considered helpful to consumers.
At the same time, consumers increasingly rely on reviews posted by other buyers. According
to an August 2006Jupiter Research study, 77 percent of online shoppers use reviews when
making purchasing decisions. As a result, consumers have grown to expect reviews on e-tail
sites.
The bottom line: E-tailers who don't encourage customer reviews because they fear negative
comments are missing out on a number of potential benefits. They include:
Useful feedback. "Reviews can provide valuable feedback that e-tailers should
listen to," said Mulpuru. Reviews are an easy, affordable way to find out what your
customers really think, which can enable you to spot problems with products, shipping,
or customer service before they get out of hand.
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Increase sales. Online shoppers are notorious for returning products, noted Hurt.
The reason: Shopping online doesn't provide the same tactile experience consumers get
in brick-and-mortar stores. Sophisticated tools such as 3D product views help enhance
online shopping, but customer reviews help close the gap too. "There is nothing more
powerful than being able to learn about a product through someone else's experience
with it," said Hurt. In turn, this helps e-tailers increase sales.
Decrease returns. Reviews can help set customer expectations properly, which
results in fewer returns. For example, a client of PowerReviews sells a compact, portable
air conditioner on its site, said Chen. Initially, the air conditioner earned positive
reviews. But soon, negative reviews began appearing, in which customers complained
the air conditioner couldn't cool a room below 63 degrees. Another reviewer responded
that the air conditioners ship from the factory in safety mode, which prevents cooling
below 63 degrees — a fact that wasn't clearly mentioned in the product's manual.
The reviewer told others how to turn off the safety mode. "After that, the air conditioner
received only positive reviews," Chen said. "If that negative review and the response to
it hadn't appeared, the e-tailer would have faced a lot of returns from unhappy customers
and wouldn't have sold as many of those air conditioners."
Increase credibility and customer loyalty. Having negative reviews sprinkled
among positive ones gives your company credibility among consumers. "If all your
reviews are positive, consumers will think they're fake or biased," said Chen.
The ability to read positive and negative reviews from other consumers helps customers make
more informed buying decisions, and that, in turn, will help keep shoppers returning to your
site, Chen added.
7. How to Choose Tools That Customize Online Shopping
A recent study by Forrester Research analyst Sucharita Mulpuru explores the concept of e-tail
"personalization," or the capability to provide customers with customized products and
offers. The report, "Which Personalization Tools work for E-Commerce and Why," outlines
this growing trend, citing relative newcomers in the field who now offer such services at
more affordable prices, even for small businesses. (Some of these players, such as Aggregate
Knowledge, CleverSet, Baynote and Mercado, have been covered here at ECommerce-Guide.
See our "Related Stories.")
Since shoppers generally embrace personalized buying experiences, Mulpuru explains how
Web shop owners can decide which tools will help them customize their transaction process.
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First, however, she provides a comprehensive overview of the trend, outlining exactly what
personalization encompasses, why e-tailers should be aware of it, the factors boosting its
popularity and what types of goals it accomplishes.
To start, she defines the term personalization. This can mean one-on-one interactions, such as
greeting return customers by name or letting them save a shopping cart, or accomplished on a
"one-to-many" basis, for instance, by creating different versions of your site for different
demographics. For the purpose of the study, she says personalization is "creating experiences
on Web sites or through interactive media that are unique to individuals or segments of
customers."
Mulpuru says e-tailers should be interested in providing personalized shopping transactions
because they increase customer engagement and loyalty through increased relevance.
"Enabled by external tools sometimes called personalization engines, recommendation
engines, discovery engines, or behavioral targeting tools, personalization allows retailers to
increase relevance through activities like matching cross-sells to customers based on interests
or customizing click-stream paths based on previous purchase or visit histories."
Specifically, this type of customer interaction is important because shoppers value
recommendations. "Seventy-seven percent of customers say that they find recommendations
in general somewhat to extremely useful, and roughly one-third of consumers who notice
recommendations on e-commerce sites report purchasing a product based on such
recommendations," according to the study.
What Took So Long?
So, the question is why have e-tailers been relatively slow to adopt personalization? Mulpuru
says the answer is simple: During the past 10 years it was too complex and expensive to set
up. Now, though, she cites a "renaissance" in the industry and says the following factors are
making it easier for online sellers to use personalization:
Cheaper deployment costs. There are are now tools based on a revenue share of
incremental revenue generated through the recommendation engine, eliminating any
upfront costs, which is naturally appealing to smaller e-businesses.
Flexibility within the tools. One of the most common critiques of personalization
tools used to be that they weren't flexible or adaptable on-the-fly. Given this well-known
shortcoming, developers of the new generation of tools have addressed this issue, either
work closely with clients to alter algorithms or to provide user interfaces where clients
can affect rules independently. E-business executives report that companies such as
Aggregate Knowledge and Certona respond very rapidly to client requests for change.
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Additionally, the fact that many of these solutions are software-as-a-service models
enables them to offer flexibility.
Time to focus on the "nice-to-haves." For years, e-tailers focused on basics such
as zoom functionality or on-site search tools or even site analytics. The majority have
now mastered these "must-have" tools and are now making forays into the next tier of
products that employ more quantitative approaches, and personalization is one of these.
In the past, companies matched product cross-sells on their sites manually. In fact, a
Shop.org survey of nearly 200 online retailers executed by Forrester found that 77
percent of retailers executed cross-sells by hand. Thirty-seven percent of retailers,
however, say that they will focus on automated product recommendations in 2008.
The Current Landscape
Next, the report does a good job of providing an overview of the current e-commerce
personalization industry, which is complex due to the many different ways it can be
accomplished. For instance, while some companies claim to simply help create cross-sells,
others promise to make a homepage more effective. According to the study, despite the
nuanced differences in all their approaches, there are "four key buckets" that e-commerce
personalization tools fall into as outlined here in the report:
Versioning tools. These tools typically personalize an experience by first defining
segments of consumers and then serving up different iterations of key pages of Web
sites (e.g., a homepage, checkout page or offer page). An example of such an execution
would be showcasing different versions of a homepage to different visitors (e.g., new
versus repeat) or different offers to different segments of consumers. In some unique
situations, the data that informs the outputs can also be used across channels to create
unique e-mail programs or even differentiated print campaigns for individual customers.
As a result of their approach, these programs typically require extensive creative
resources to support the various "versions" of an optimization campaign. For companies
that want to slowly test what works first or want to carefully control their messaging,
these tools can be extremely effective.
Simple cross-sells. These tools take implicit and sometimes explicit data and
simply place what they believe to be the most relevant "adjacencies" in a predefined box
on a Web page. These are often low-complexity, inexpensive, easy-to-integrate and
simple solutions that help to automate the tedious processes of Web site merchandising
or cross-selling. Small to midsize e-tailers typically are the most active customers of
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these tools, and companies such as Avail Intelligence, Baynote, CleverSet and Loomia
are solid providers of such solutions.
Advanced cross-sells. These tools incorporate all of the features of simple cross-
sells but also have the capability to push suggestions to other parts of a site (e.g., a
homepage or outgoing e-mail programs). Advanced cross-sell solutions run the gamut
from souped-up single-cross-sell solutions that can operate seamlessly in different areas
of a Web site to more sophisticated solutions that create completely different navigation
experiences for different customers. The key element that distinguishes advanced cross-
sells is that they take outputs and feature them dynamically in a manner that is more than
just "a box on a page."
Interactive filtering solutions. Given the vast assortment of products available
online, consumers are often overwhelmed by the process of finding an appropriate
match for their needs. Interactive filtering tools ask consumers for specific inputs,
usually by posing a series of questions and then matching responses based on their
preferences. The key factor that differentiates these tools from the other e-commerce
personalization tools is that consumers essentially "raise their hand" and say what sort of
information they want, and companies work to provide specific data or products that
meets those needs. Companies such as Zafu.com and Karmaloop.com employ
interactive filtering tools particularly well.
How to Find the Right Fit
The report goes on to match which types of Web shops would perform best with what
personalization tools. If you have lots of resources and a budget to dedicate to personalization
engines, versioning tools and advanced cross-sell tools are recommended; if you have an
extremely broad and complex inventory of products, simple cross-sell tools, advanced cross-
sell and interactive filtering are recommended; and if you have the need to have close
control/input of the content at your site, versioning tools, advanced cross-sell and interactive
filtering models are best.
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8. iStorez Ties E-Mail Marketing to Social Shopping
Over the past year we have seen a huge spike in new shopping portals and comparison-
shopping engines. Each offers a different idea on how to make online shopping more
interactive and intriguing for the consumer. From sharing interactive wish lists with friends to
comparison shopping with coupons and even building entire communities of like-minded
consumers, there is seemingly no end to the options. For e-tailers, this means you have more
choices when it comes to affiliate programs and how your products and brand are presented
to online buyers. For instance, one popular way to boost sales is to use affiliate programs in
which you pay a small commission on sales when a third-party sends consumers to your page
and they make a purchase. And, in terms of increased exposure, listing on many of these
social shopping sites and specialized search engines is either free or very affordable for the
small Web shop owner, and often can be done by completing a few simple steps.
iStorez Offers Shoppers Plenty of Features
Given our coverage of this trend (see related articles box), we thought we'd seen it all, and
then comes along iStorez.com. This new site provides consumers with an online experience
that mirrors shopping at a mall, with the chance to window shop, discover hot trends and hunt
for bargains.
Anand Jagannathan, CEO of Kriyari, the company that owns the site, said that iStorez stands
out from other shopping portals because it lets browsers see different storefronts from the
user interface.
Once a consumer registers on the site, he or she can go beyond basic searching and create a
personal shopping mall and file it under a "My Mall" heading. This lets shoppers add their
favorite stores to a quick access list that can be published, with a unique URL, on their own
Web spaces. Shoppers can also browse storefronts that have been tagged by other users to
keep lists of storefronts of interest, to find storefronts that other consumers find interesting,
and also to share lists with other members. IStorez also offers its shoppers a refined search
feature that drills down into sub categories.
What's In It for Merchants?
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While price comparison engines work well for consumer electronics, Jagannathan says that
the iStorez approach is better for those merchants offering so-called "soft goods," such as
apparel. Shopping comparison engines generally work best when a consumer has already
decided on a product and is ready to find it at the best price online. By using storefronts that
promote your store, brand and specials, Jagannathan said you get the promotional information
to consumers at just the right time; when they are browsing to buy soft goods.
For example, shoppers who are getting their wardrobe ready for Spring may search iStorez
for "Spring Fashions" and have access to multiple storefronts, all focused on presenting
new spring fashions, accessories and similar items. Additionally, consumers will have
immediate access to spring fashion deals and related promotions and they can always create
their own personal profile to be notified of new arrivals or deals matching this search criteria.
Behind the scenes is where this shopping portal really gets interesting. What iStorez is doing
is taking the current seasonal promotions, products and deals from the merchant's e-mail
newsletters to organize and collect the products and present the information as individual,
interactive storefronts that the consumer can browse. Using automated engines, a merchant's
newsletter is scanned for keywords, promotions and product links. So, basically, the
information and new products that you are already presenting to consumers is fed to iStorez
which then creates create custom storefronts highlighting these new offers and products.
Storefronts on iStorez are updated frequently so shoppers are always viewing fresh displays
and current promotions. Merchants are also not limited to a single store interface either. You
can have 10 different storefronts on iStorez at any one time, each highlighting different
products and promotions to best match the consumer's search criteria. When a sale is made
through iStorez, the shopping site receives a commission, either by way of an existing
affiliate program or a custom program and rate for merchants not already using affiliate
networking.
Setting Up an iStorez Storefront
IStorez, despite displaying a beta tag on the logo, is a fully functional Web site that is going
into its third month since launch. Jagannathan said that it is a fully live site but there may be
some small upcoming interface changes as they garner feedback from both shoppers and their
merchants.
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Merchants interested in iStorez' shopping mall storefront approach may find that if they use
an affiliate network, such as Commission Junction for example, they may already have
storefronts showing on the iStorez Web site. For newer merchants or those not already using
affiliate networks, you can provide iStorez with details about your store and provide them
with access to your e-mail newsletters to stack your storefronts. For those without a
newsletter the iStorez program can still provide an interface to upload a storefront, on a
commission basis. Merchants can contact iStorez through its Web site to find out more about
turning their e-mail campaigns into attractive and timely storefronts.
9. Ecommerce Website Design Tips: The Product Page
Product pages on an ecommerce website are the pages that spotlight products and offer
shoppers a "Buy" button. Think of your ecommerce product pages as your site's "payoff"
pages. It all comes down to that moment when a shopper lands on the product page and
considers entering his or her credit card number.
A well-designed product page is absolutely critical to an online retailer's business. With this
in mind, Ecommerce-Guide spoke with Jakob Nielsen, a leading Internet usability guru,
about the essential principles of product page design.
Product Page Design: Step One is Simplicity
Because online merchants spend so much money driving shoppers to their product pages,
they want to make sure to make a sale from these pages. Consequently, many e-tailers crowd
their product pages with a plethora of items -- they figure that if one item doesn't clinch the
deal, then the item right next to it will.
But these crowded product pages are counterproductive. Simplicity is key in a product page,
Nielsen says. "Simplicity in the sense that it's about one product, because when you have
multiple products that's when you add complexity, and it just becomes overwhelming."
Focusing each product page on a single product has become the norm among successful
online merchants.
Clarity, too, is important. "The main thing should be extremely clear, like 'what is this
product?' Here's a picture of it, here's the price, and here's the shopping cart."
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But there are exceptions, he notes. All of a single product's options should be offered on a
single page. "There can be variants of a product, let's say, a shirt comes in multiple colors and
sizes — I would view that as one product." But in the case of two truly different shirts, they
are best placed on two different product pages.
In the case of items that are similar yet different -- for example, various types of camera with
different lenses -- links to them should be displayed not on a product page but on a category
page. (A category page is one level up from a product page, and it offers links to a broad
array of products).
In this case, these similar cameras should be presented on the category page with short
descriptions, such as: "Here's one for the professional photographer, here's one that's more
point-and-shoot, here's a more feature-rich camera." The key point: each link on the category
page should link to separate, individual product pages.
Product Page 'Dimensional Navigation'
Imagine a shopper on your product page who has found almost exactly what she was looking
for. However, she wants just one more attribute. If the product had this one last feature, she'd
plunk down her cash.
But that hypothetical shopper is stuck. Because, for example, the DVD player she's looking at
longingly fits all the specs she wants, except for one -- but your product page doesn't
show her how to navigate to find a DVD player that has that one additional feature.
The shopper "is typically lost in that situation; she has to go back up and visit all
products," Nielsen says. "And that's awfully difficult for people to do." To solve this
problem, Nielsen recommends what he refers to as "dimensional navigation." This navigation
style enables the shopper to move from one product to the other according to highly specific
criteria -- often just one more thing.
Building a page with dimensional navigation means "product pages should actually be linked
together," according to different dimensions or attributes that make sense to the customer.
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In other words, "If you know from market analysis that there are certain criteria that people
use to buy, build it into your navigation."
Product Pages Must Be Information Rich
Product pages should be simple, but they shouldn't lack ready access to a complete source of
information.
"Quite often people need to know some specifics to decide whether they want it or not,"
Nielsen says. "And this is one of the reasons people give up on buying, because they're
uncertain about some of its attributes -- like, 'Will it work with what I already have?'"
If you don't make it clear, "People aren't going to gamble and order it just in case it might
work," he says.
Providing information, however, should be done with care. While a classic mistake is not
giving enough information, "there's a dual problem of giving too complicated information."
Dumping a load of product specs can create the "deer in the headlights" effect in your
shoppers, which doesn't help sales.
The best strategy for providing information is layering. Layering is when all the information
is available, yet it's one click away -- but just one click. "It can't require another fishing
expedition to go and find it -- it's got to be a clear link that says 'technical specs' -- you click
that and then you get it."
That way, product information is readily available for those who want it, but won't confuse
those who don't need it.
Offer Expert Opinions on Product Pages
In some cases, presenting an array of expert opinions on the product page can be a seductive
sales tool. However, e-tailer beware: expert reviews must be used cautiously.
"They problem is, can people trust them to be independent reviews, or do they feel like it's
more and more sales information?" Nielsen says.
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Shoppers, of course, often visit other sites for research prior to purchase; so placing expert
opinions on your product page may be either redundant or actually distracting.
However, if a merchant has a truly accredited source to quote -- a well-known publication or
product guru -- "That's a big credibility booster," Nielsen says. "It's not just you saying it, but
there's actually someone else who's saying it as well." This is especially true if you can link to
an external site that is clearly independent of yours.
Ask 'Questions' Before Showing the Cart Page
Many product pages offer shoppers an array of product options; for example, 'what color do
you want that shirt in?' Or, 'how finely do you want that coffee ground?' A product page
should ask shoppers to select these options beforethey put that item in the shopping cart,
Nielsen recommends.
The reason: Once that item is in the cart, shoppers may proceed to check out without
realizing they haven't selected all their options. Also, customers often use the "Back" button
to exit the cart (instead of "Continue Shopping"), so any selections they've made to the item
in the cart could be undone.
He also cautions against presenting shoppers with multilevel menus on a product page to
select product options. If the user's mouse strays off the menu at this critical juncture, they
could become frustrated.
How to Build the Ideal Product Page
In Nielsen's view, a well-built product page must include certain key elements:
1. It has a clearly descriptive title and, if possible, a photo
Any search engine expert will tell you that a page's title is how it's found in search engines, so
a descriptive title is a must in a product page's title and text. As for the photo, it's best if a
shopper can click to enlarge it, and that this enlarged photo is significantly bigger, not just a
little bigger. (And to enlarge the photo, the shopper should be given the choice of clicking the
image itself or a "click to enlarge" link.) When the enlarged photo appears, it should be
accompanied by the same (or more) product information as the small photo -- don't ever leave
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the information behind. And the enlarged photo should definitely include a Buy button.
Ideally, the alternate photos should show different views, allowing the shopper to visually
"stroll around" the item. Nielsen describes the ideal product photo as "big, detailed and free
of visual distraction." (And if that picture doesn't reveal all the product's details,
accompanying text should fully describe it.)
2. It provides ALL the information a shopper will need
A product page should include not only a detailed list of product attributes (with a nearby link
to still more information) but also final cost, including, if feasible, shipping charges and tax.
In Nielsen's consumer research studies, 11 percent of "sales catastrophes" (a failure to make a
sale) were due to the product page not providing enough information. Also important: avoid
jargon or industry-specific lingo.
3. It states product availability and, when appropriate, delivery time
You've ruined a customer relationship when you force a customer to go through check out to
discover that the item won't ship for three weeks. On the other hand, letting them know the
item is "in-stock" and "usually ships same day" is an attractive offer. "The bottom line is that
the product page should clearly indicate whether an item is in stock, and if it is not, the page
should explain the situation," Nielsen notes. Lack of information about ship date and
availability "really lowers willingness to buy."
4. It links to your site's guarantee policy and, if possible, the manufacturer's warranty
Many experts have noted that a prominently displayed guarantee policy, with a money-back
offer, is a trust builder (and hence a sales builder). In fact, many design gurus say that
guarantees should be on every page of a site, not just the product pages.
5. The no-brainer: a prominently displayed 'Buy' button
If shoppers can't get it into the shopping cart -- easily -- they're not going to buy it.
Remarkably, in Nielsen's studies of consumer interactions with e-commerce sites, "We've had
cases where people haven't been able to find out how to buy, because it's so complicated."
His study found that six percent of sales catastrophes were created by a user's difficulty
getting the item into the cart.
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10. 4 E-commerce Need To Know Regulation
When starting a small business ecommerce site, retail is one type business that many people
lean toward. While it may seem that the requirements for conducting retail business online
are easier than those for a brick-and-mortar store, it's important to know you still have rules,
regulations and standards to comply with.
In the United States, the Federal Trade Commission (FTC) is the primary agency that
regulates ecommerce activities. This includes regulations for a number of ecommerce
activities such as commercial email, online advertising and consumer privacy. Another
organization that ecommerce site owners should become familiar with is the PCI (Payment
Card Industry) Security Standards Council. This organization provides security standards and
regulations for handling and storing your customer’s financial data.
Some of the important regulations you will need to learn about before starting your online
retail business include protecting consumer privacy, handling customer data, collecting taxes
and complying with online advertising regulations. In this ecommerce regulations guide we
discuss these four issues and provide details that every ecommerce site owner should know to
comply with federal laws in the U.S.
Protecting Your Customer's Privacy Online
Online privacy is a big issue as many ecommerce sites collect and retain personal information
about customers. Some of the personal data you will likely obtain would include a customer's
name, address, email address, and possibly their credit card and other types of financial
information. As the ecommerce site owner it is your responsibility to ensure this personally
identifiable information is protected, and that when you collect such data you comply with
federal and state privacy laws.
Ecommerce site owners should provide a privacy policy and post it on the ecommerce
website. This policy should clearly identify what kinds of personal information you will
collect from users visiting your website, who you will share the information you collect with,
and how you will use and store that information.
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Most small business ecommerce site owners approach a privacy policy like any business
requirement. You could have a lawyer draft a privacy policy document for your business, or
secure a trusted service provider to manage and host your privacy policy. Once you have
privacy policy in place, be sure to remain in compliance with it -- if not your business can
face costly legal fees. For more tips on creating a privacy policy, see Ecommerce Content:
Writing a Good Privacy Policy.
Online Advertising Compliance
Ecommerce site owners must know about the applicable laws for online advertising. Like
traditional advertising for brick-and-mortar stores, online retailers must also comply with
regulations when advertising online. The FTCregulations for advertising are designed to
protect consumers and to prevent deceptive and unfair acts or practices.
One of the main forms of online advertising for a small business ecommerce owner is email.
For this reason, ecommerce business owners need to become familiar with federal advertising
laws to ensure the content of any emails is compliant, but also be familiar with the CAN-
SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act) of
2003. This act establishes requirements that any business that engages in email marketing
must follow.
Under the CAN-SPAM Act, hefty penalties can be levied against email marketers who
violate the law -- each email sent that violates the act is subject to penalties of up to $16,000.
Additionally, any commercial email message you send must include notice that the message
is an advertisement, and it must also include opt-out information and your business postal
address. To comply with this law you must also honor opt-out requests promptly. The FTC
website defines the laws you need to know about email marketing.
How to Collect Taxes Online
When you shop at a store you pay tax on the purchase, and the Internet does not change this -
- but there are differences.
Have you ever noticed that some ecommerce websites charge you tax when you make an
online purchase, while others don’t? The reason is because if a business has a physical
presence in a state (e.g. a store or office), then it is required by law to collect state and local
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sales tax from customers. However, if the business doesn’t have a "physical presence,” then
collecting tax on purchases is not required.
This dates back to a 1992 Supreme Court ruling that said states cannot require mail-order
businesses, and by extension, online retailers to collect sales tax unless they have a physical
presence in the state.
For ecommerce site owners, the one thing you will have to research is how your state
classifies a physical presence. In legal terms, this is called a "nexus," and each state defines
nexus differently.
Navigating sales tax laws can be difficult. To ensure you are in compliance with tax laws, it's
always best to contact your state's revenue agency to ensure you have the correct information
on taxation before starting your ecommerce venture.
How to Handle Customer Financial Data
PCI compliance is a term familiar to many people researching ecommerce regulations. As an
ecommerce site owner, one of the standards you will need to know about is the PCI DSS
standard, which is short for Payment Card Industry (PCI) Data Security Standard (DSS). All
organizations, including online retailers, must follow this standard when storing, processing
and transmitting credit card data.
The PCI Security Standards Council is the organization -- founded by a number of financial
institutions including JCB International, MasterCard and Visa -- that is responsible for the
development and implementation of security standards for account data protection. Through
its PCI Security Standards, the organization seeks to enhance payment account data security.
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