Should you be selling a product or a service?

The Internet is primarily used to communicate, entertain,
educate and research. It is thus no wonder that
nonperishable, information-intensive products - including
computers and software, books, travel, consumer electronics,
magazine subscriptions - are the most popular online
products at present. Content-rich sites, subscription-based
sites to advertiser-supported sites focusing on a wide range
of topics, have been sprouting all over the Internet.

Services such as hotel reservation, air travel and
investments have successfully translated themselves to the
Internet.

Unique services such as Online driving schools have been
prospering. Some states in the US have set up online payment
sites for Government services. Residents of a state can log
on to a common site to pay all bills and other expenses,
such as parking tickets to the local/County courts.

However, all kinds of services cannot be run entirely on the
Internet. The Internet is less effective when face-to-face
selling is needed to close a deal. The Internet can give
lots of preliminary information that's useful in setting the
scene for the closing. But the actual closing takes place
offline - i.e., not on the Internet.

Products can also be marketed and sold successfully on the
Internet. The kinds of products and services that sell best
on the Internet are those that take advantage of the
convenience of the Net. Remember that convenience is the
primary reason why consumers flock to the Internet in the
first place. People can shop any hour of the day at any
site. They can avoid crowded stores, irritating sales
clerks, and even avoid pickpockets.

Offbeat or unusual products and services often attract
online attention and sell strongly. You would generally not
try to sell items people can get at the corner store. Thus,
few toothbrushes are sold on the Net; the same thing with
daily food and beverage purchases. But special cheeses, rare
cigars, Turkish plates, long-aged wines, even diamonds, can
and do sell on the Net.

Most products sold by catalog and mail order also sell well
on the Net. However, people tend to buy only those products
that could be shipped at a reasonable price. Higher shipping
costs diminish the price competitiveness of online products
and turns-off a lot of potential buyers. In fact, high
shipping costs is the primary factor that discourages people
from buying online more than any other single reason. An
Ernst and Young report shows that 53 percent of online
shoppers are concerned with shipping costs that are too
high, compared to only 19 percent who are concerned with
credit cards being stolen.

As an online merchant, you have to work out the advantages
as well as disadvantages of selling either products or
services. However, in the recent past, online services have
known to flourish. Nevertheless, if you chose to sell
products you need to rethink your product offering if the
total costs of the product and the shipping are higher than
what is offered elsewhere.

Take some time to evaluate your products or services. There
is a growing market of potential customers on the Internet,
you just need to offer the products and services they are
looking for.

What businesses are succeeding on the Net?

This week we will address the most basic question any
Internet business owner will have to answer at one point or
another…”what should I sell?”.

After the settling down of the dot-com bubble, sanity checks
have brought realistic expectations to the fore. Initially,
a backlash was seen, forecasting the doom of the Internet.
Finally, merits have made the Internet gain its rightful
place. In breakthroughs that show the promise of e-commerce
wasn't all smoke and mirrors, four dot-coms recently
reported their first quarterly profits. The list of the
Internet’s publicly held moneymakers includes eBay Inc.,
Amazon.com Inc., Yahoo! Inc., Overture Services Inc.,
Expedia Inc., FindWhat.com Inc. and E-Trade Group Inc.
Several privately owned dot-coms, including search engines
Google and DealTime, say they have been making money, too.

In 2001, the last full year where numbers are available, the
Department of Commerce broke out e-commerce sales versus
total U.S retail sales which revealed the $3.16 trillion
retail industry saw a total of $37.7 billion in sales take
place online -- comprising 1.2 percent of the total. This
year e-commerce is tracking about the same. Through the
third quarter, the last full quarter where numbers are
available, total retail sales were $856 billion versus $11
billion in e-commerce, about a 1.3 percent share.


There were big gains made in Home and Garden, a 78 percent
increase; Furniture and Appliances, a 75 percent increase;
and Toy shopping online with a 61 percent increase in the
year 2002. There is no doubt that online shopping is
growing.

Nielsen//NetRatings found that more than 35.5 million U.S.
Internet users made shopping trips to virtual department
store sites during the week ending November 3, 2002 - that's
a 20 percent increase from the week ending October 20 and
roughly 14 million more than almost the same time period in
2001.

There is a growing tendency amongst Internet users to pay
for valuable content online. There are many reasons for
this. First, only a few websites operated by big companies
can afford to provide valuable content without being
compensated. The rest of us can't be so generous. And trying
to recapture our expenses by selling advertising on our
websites has failed to pay the bills. Online advertising and
click-through rates are on the decline.

Second, many people are now more than willing to pay to
receive quality services and products even if they were
offered for free earlier. Several paid content websites have
already proven this unmistakable trend. The discerning buyer
values his/her time as also the quality of information or
service and is willing to pay for it.

However, not all products can be sold on the Internet. Some
products may be better suited for online sales than others;
others simply will not work on this new commercial medium.
According to an Ernst and Young study, the most popular
online purchases are computer related products (40%), books
(20%), travel (16%), clothing (10%), recorded music (6%),
subscriptions (6%), gifts (5%) and investments (4%).

Businesses offering paid services have also prospered
enormously. The top three categories (Business
Content/Investment, Entertainment/Lifestyles and
Personals/Dating) accounted for 62% of all paid content
revenues in the first three quarters of 2002. The total
market for paid online content in the U.S. grew to $361.4
million for the quarter, a 14 percent gain over the previous
quarter and a 105.3 percent gain over Q3 2001. An
interesting statistic put forward by this report is that 85%
of money spent by U.S. Consumers for online content goes to
the top 50 sites in most of the categories.

The graph below (Top 3 Content Categories) is indicative of
this change.

In terms of “stickiness” of different categories, Business
sites - especially finance and investment rank the highest.
In other words, users are more likely to spend longer time
surfing through a business website compared to other
categories. This study was conducted by Nielsen//NetRatings.
The table below shows the most addictive web categories for
2002.

Category Time per person(hr:min:sec) Audience
Business – Finance and Investment 0:21:33 51,586
General News 0:15:47 64,822
Entertainment 0:14:32 45,922

Source: Nielsen//NetRatings

According to the above figures a person spends about 22
minutes on a finance website on an average.

Why should potential customers hire your service company?

Tell your customers what service you are selling and explain
what your service provides. What is the key benefit(s) to
your customers? What pain does it cure, what solution does
it provide? Compare your service with that of your
competitors and highlight what makes you stand out from the
competition? Keep working on this until you can clearly
separate yourself from the field. As stated earlier there
must be a convincing reason for doing business with you,
instead of your competitor.

Summarize the above into one tight, powerful, motivating
phrase that will persuade your customer to do business with
you and to trade their money for the benefits delivered by
your service.

As you start to work through the above four steps, you may
find this to be a lot harder than it looks. Don’t blow it
off and give up! You must have a USP. If it was easy,
everyone would have a great USP! Come up with a tight, sharp
USP that sells your service to your customer.

Write tight, get right to the point, be keenly aware of the
audience for the page, and don’t use a three-syllable word
when a one or two-syllable word will do. Use call-to-action
language and be interesting. The page should be so clearly
organized that, in seconds, visitors can understand and get
convinced to buy your product and be able to anticipate
where a hypertext link – or a “Continue” button – will take
them. Studies show that “ease of use” is the winning factor
on an e-commerce site.

If you’re going to promote your service and expand your
customer base using your website, potential clients have to
be able to trust you. Their confidence in you and your
products has to be boosted. Endorsements on your website
from a valued friend or colleague, or a referral from a
strategic partner are the types of “leads” that boost your
credibility. You and your service must be perceived as
being trust-worthy before your visitor will be confident
enough to contact you or even buy your product.

Show prospects that you have their best interests at heart
and that you can adapt or customize your service to meet
their individual needs. Foster an ongoing relationship that
steadily increases their trust levels and cements a view
that you are an “authority” in your field.

Another important aspect of convincing prospective customers
is to keep abreast of recent developments in your field.
Check on what your competitors are writing about, and watch
for new trends. This will keep your website current,
razor-sharp and unique. By keeping your eyes open, you will
be able to grab an angle or niche that hasn’t been well
covered yet by your competitors. Portray this angle or niche
on your website.

Finally, be wary of broadening the theme of your site too
much. Try not to dilute your product or service’s targeted
niche simply to expand your base of merchant partners.
Remember; focus on your selling your service. That’s where
the “meat and potatoes” of your business will come from.

Why should potential customers hire your service company?

Tell your customers what service you are selling and explain
what your service provides. What is the key benefit(s) to
your customers? What pain does it cure, what solution does
it provide? Compare your service with that of your
competitors and highlight what makes you stand out from the
competition? Keep working on this until you can clearly
separate yourself from the field. As stated earlier there
must be a convincing reason for doing business with you,
instead of your competitor.

Summarize the above into one tight, powerful, motivating
phrase that will persuade your customer to do business with
you and to trade their money for the benefits delivered by
your service.

As you start to work through the above four steps, you may
find this to be a lot harder than it looks. Don’t blow it
off and give up! You must have a USP. If it was easy,
everyone would have a great USP! Come up with a tight, sharp
USP that sells your service to your customer.

Write tight, get right to the point, be keenly aware of the
audience for the page, and don’t use a three-syllable word
when a one or two-syllable word will do. Use call-to-action
language and be interesting. The page should be so clearly
organized that, in seconds, visitors can understand and get
convinced to buy your product and be able to anticipate
where a hypertext link – or a “Continue” button – will take
them. Studies show that “ease of use” is the winning factor
on an e-commerce site.

If you’re going to promote your service and expand your
customer base using your website, potential clients have to
be able to trust you. Their confidence in you and your
products has to be boosted. Endorsements on your website
from a valued friend or colleague, or a referral from a
strategic partner are the types of “leads” that boost your
credibility. You and your service must be perceived as
being trust-worthy before your visitor will be confident
enough to contact you or even buy your product.

Show prospects that you have their best interests at heart
and that you can adapt or customize your service to meet
their individual needs. Foster an ongoing relationship that
steadily increases their trust levels and cements a view
that you are an “authority” in your field.

Another important aspect of convincing prospective customers
is to keep abreast of recent developments in your field.
Check on what your competitors are writing about, and watch
for new trends. This will keep your website current,
razor-sharp and unique. By keeping your eyes open, you will
be able to grab an angle or niche that hasn’t been well
covered yet by your competitors. Portray this angle or niche
on your website.

Finally, be wary of broadening the theme of your site too
much. Try not to dilute your product or service’s targeted
niche simply to expand your base of merchant partners.
Remember; focus on your selling your service. That’s where
the “meat and potatoes” of your business will come from.

Web Copy

We have all heard that “it’s not what you say, it’s how you
say it”. Well, the same applies to website content. In
this article we will discuss the importance of web copy and
how to turn your visitors into customers.

Your website content should convince visitors that your
service is either unique or superior to that of your
competitors in terms of quality or is competitively priced.
It should show your potential clients that you can provide
the solution that they are seeking. Your product or service
will solve their problems, answer a dream, enrich their
lives, and/or improve their businesses. You are the
dependable expert that they want and need!

Your website copy plays a major role in establishing and
growing your customer base. Web site copy creates the
“voice” of a company, just as the look and feel of a site
put a “face” on the company and on otherwise intangible
products and services. On an e-commerce site, the copy plays
a key role in closing sales as well as in up-selling and
cross-selling products and services. Good copy delights
first-time visitors, encourages return visits and propels
both customer acquisition and retention.

People read a Web page differently than they do a brochure
or a newspaper. They scan, scroll, click, hit the back
button, and hit the forward button. “Reading” is about
moving around and being in control. You have one chance to
make a first impression – to quickly convey the benefit of
staying on your Web site. I can’t overstate the importance
of first impressions, which in Web-time are measured in
milliseconds. The layout, functionality, message and overall
look and feel of your web page determine who stays – and who
clicks away.

Your story should be clear and to the point. The goal of any
web page should be to get the visitor to DO something: to
move on to the next step in a purchase sequence or to click
for more information about a product or service. Without
readable, compelling copy and clearly organized hypertext
links, visitors are much less likely to complete a
transaction – and return to your site again.

Writing for your Web page should always start from your
visitor’s perspective. What is your Web site visitor looking
for? Why is he/she here? How can you make his/her visit as
quick and efficient and positive as possible? You should
take the time to clarify the goal of each page before
starting to write. If the page is part of a transaction
sequence, identify what may be hindering the buying process.
Be sure instructions are clear and easy to read.

If you are selling a service on your website, your Unique
Selling Proposition (USP) is your service’s most powerful
benefit, in combination with a strong, unique feature of
your business. It answers that most difficult question:

AOL Search

America Online signed a multiyear pact with Google for Web
search results and accompanying ad-sponsored links, ending
relationships with pay-for-performance service Overture
Services and Inktomi, its algorithmic search provider of
nearly three years


Take some time to register with these search engines as soon
as possible and watch the traffic grow.

Excite

Excite has been around the web for many years now. Much more
of a portal than just simply a search engine, Excite used to
be a fairly popular search engine, until companies such as
Google seemed to have dominated the search engine market. As
of recently, Excite no longer accepts submissions of URL's,
and appears to no longer spider. To get into the Excite
search results, you need to be either listed with Overture
or Inktomi.

Looksmart

Getting a listed with Looksmart could mean getting a good
amount of traffic to your site. Looksmart's results appear
in many search engines, including AltaVista, MSN, CNN, and
many others.

Looksmart has two options to submit your site. If your site
is generally non-business related, you can submit your site
to Zeal (Looksmart's sister site ), or if you are a
business, you can pay a fee to have your site listed. Either
method will get you listed in Looksmart and its partner
sites if you are approved.

Once you have submitted your site, and it is approved for
listing it will take up to about 7 days for your site to be
listed on Looksmart and its partner sites.

Lycos

Lycos is one of the oldest search engines on the Internet
today, next to Altavista and Yahoo. Their spider, named
"T-Rex", crawls the web and provides updates to the Lycos
index from time to time. The FAST crawler provides results
for Lycos in addition to its own database.

The Lycos crawler does not weigh META tags to heavily,
instead it relies on its own ranking algorithm to rank pages
returned in results. The URL, META title, text headings, and
word frequency are just a few of the methods Lycos uses to
rank pages. Lycos does support pages with Frame content.
However, any page that isn't at least 75 words in content is
not indexed.

Inktomi

Inktomi's popularity grew several years ago as they powered
the secondary search database that had driven Yahoo. Since
then, Yahoo as switched to using Google as their secondary
search and backend database, however Inktomi is just as
popular now, as they were several years ago, if not more so.
Their spiders are named "Slurp", and different versions of
Slurp crawls the web many different times throughout the
month, as Inktomi powers many sites search results. There
isn't much more to Inktomi then that. Slurp puts heavy
weight on Title and description tags, and will rarely deep
crawl a site. Slurp usually only spider’s pages that are
submitted to its index.

Inktomi provides results to a number of sites. Some of these
are America Online, MSN, Hotbot, Looksmart, About, Goto,
CNet, Geocities, NBCi, ICQ and many more.

AltaVista

Many who have access to web logs may have seen a spider
named 'scooter' accessing their pages. Scooter used to be
AltaVista's robot. However, since the Feb 2001 site update,
a newer form of Scooter is now crawling the web. Whichever
spider AltaVista uses, it is one of the largest search
engines on the net today, next to Google.

It will usually take several months for AltaVista to index
your entire site, although the past few months scooter
hasn't been deep crawling too well. Unlike Google, AltaVista
will only crawl and index 1 link deep, so it takes a good
amount of time to index your site depending on how large
your site is.

AltaVista gets most of its results from its own index,
however they do pull the top 5 results of each search from
Overture (formerly Goto).

Yahoo

Yahoo! is one of the oldest web directories and portals on
the Internet today, and the site went live in August of
1994. Yahoo! is a 100% human edited directory, and provides
secondary search results using Google.

Yahoo! is also one of the largest traffic generators around,
as far as web directories and search engines go.
Unfortunately, however, it is also one of the most difficult
to get listed in, unless of course you pay to submit your
site. Even if you pay it doesn't guarantee you will get
listed.

Either way, if you suggest a URL, it is "reviewed" by a
Yahoo! editor, and if approved will appear in the next index
update.

Top Search Engines

Ok, so you may know how the search engines work and you may
know that you need to be listed by them, but do you know
which engines get you more bang for the buck? In this
week’s installment, we will review the top search engines on
the Internet today.

Google

Google has increased in popularity tenfold the past several
years. They have gone from beta testing, to becoming the
Internet's largest index of web pages in a very short time.
Their spider, affectionately named "Googlebot", crawls the
web and provides updates to Google's index about once a
month.

Google.com began as an academic search engine. Google, by
far, has a very good algorithm of ranking pages returned
from a result, probably one of the main reasons it has
become so popular over the years. Google has several methods
which determine page rank in returned searches.

Expensive, Dedicated Servers

Advantages Disadvantages
------------------------------------------------------------
Server, software and |The cost is higher than any other
network is managed and |options
supported for |
you |
------------------------------------------------------------
You can select a |
custom domain name |
------------------------------------------------------------
Search engines don’t |
view you as second |
class |
------------------------------------------------------------
Improved response time |
for support |
------------------------------------------------------------
Uptime is improved and |
generally guaranteed |
------------------------------------------------------------
Technical support is |
provided, generally |
24 hours a day |
------------------------------------------------------------
Generally offer a |
wide range of software |
options and |
configurable bundles |
------------------------------------------------------------
Improved bandwidth |
------------------------------------------------------------
Processing power is |
not shared |
------------------------------------------------------------

Your choice of server will depend on how much money you have
available at the beginning and how much you plan to grow in
the future. In my opinion, for commercial sites, free
hosting is a waste of time. Your users are going to get
blasted with annoying pop-ups every time they surf to your
page, it’s going to be impossible to get a decent position
in a search engine, and you don’t even get a real business
URL. No one’s going to remember your Web address if they
have to type www.freehosting.com/my_site. But it is
possible to choose a cheap host at the beginning and move up
as your business begins to bring in money.

Mid-Priced Web Hosting—Shared Servers

Advantages Disadvantages
------------------------------------------------------------
Server, software and |Shared processing power.
network is managed |
and supported for you |
------------------------------------------------------------
You can select a |
custom domain name |
------------------------------------------------------------
Search engines don’t |
view you as second |
class if you have |
your own domain name |
------------------------------------------------------------
Improved response time |
for support |
------------------------------------------------------------
Uptime is improved and |
generally guaranteed |
------------------------------------------------------------
Technical support is |
provided, generally 24 |
hours a day |
------------------------------------------------------------
Generally offer a wide |
range of software |
options and |
configurable bundles |
------------------------------------------------------------
Improved bandwidth

Cheap Web Hosting

Advantages Disadvantages
------------------------------------------------------------
Server, software and | Bandwidth restrictions.
network is managed and|
supported for you. |
------------------------------------------------------------
You can select a | Shared processing power
custom domain name. |
------------------------------------------------------------
Search engines don’t | Limited software.
view you as second |
class if you have your|
own domain name |
------------------------------------------------------------
Improved response time| Potentially limited disk
for support | space
------------------------------------------------------------
Uptime is improved |
------------------------------------------------------------
Technical support is |
provided, generally 24|
hours a day.

Free Servers

Advantages Disadvantages
------------------------------------------------------------
No Cost. | Search engines view free hosting
| services as inferior and
| sometimesd do not include them in
| their index.
------------------------------------------------------------
You manage the server | Some free hosting services do not
software and network. | allow you to use a custom domain
| name.
------------------------------------------------------------
| The bandwidth is restricted and may
| cause difficulty for visitors
| attempting to access your site.
------------------------------------------------------------
| Because the service is free, some
| providers do not strive for 100%
| uptime which could result in your
| site being frequently inaccessible.
------------------------------------------------------------
| Software availability is limited,
| and free hosts do not generally
| provide database options.
------------------------------------------------------------
| Disk space is sometimes limited;
| ensure that you are getting all the
| room you need.
------------------------------------------------------------
| Poor response time for support.
------------------------------------------------------------
| Very limited support.

The Host

This installment will deal with finding the right host for
your site; from the free to the very expensive, we will
discuss what your options are so that you can find your
“perfect host”.

A host is a server which provides a home for your website on
the World Wide Web. Just as your computer contains all your
files, so a host contains all the files needed to run your
website. Why can’t you just keep all those files on your own
computer? Because that would mean users would have to
connect directly to your computer to see your website. Not a
good idea—it wouldn’t be secure and it would make your
machine run like a tired snail. With a host, you can simply
upload everything you need to the server and your users can
then connect there to see your site. It lets the site run
faster and allows it to have all the security and extras it
needs.

Selecting a host is the first important step towards
building your Internet business.

Hosting services and companies vary from totally free,
shared servers to large-scale dedicated machines. You’ll
have to decide which is right for you and your business. To
help you make that decision, study the following tables:

Indexing

Once the spiders have completed the task of finding
information on Web pages, the search engine must store the
information in a way that makes it useful. There are two key
components involved in making the gathered data accessible
to users:

* The information stored with the data
* The method by which the information is indexed

In the simplest case, a search engine could just store the
word and the URL where it was found. In reality, this would
make for an engine of limited use, since there would be no
way of telling whether the word was used in an important or
a trivial way on the page, whether the word was used once or
many times or whether the page contained links to other
pages containing the word. In other words, there would be no
way of building the ranking list that tries to present the
most useful pages at the top of the list of search results.

To make for more useful results, most search engines store
more than just the word and URL. An engine might store the
number of times that the word appears on a page. The engine
might assign a weight to each entry, with increasing values
assigned to words as they appear near the top of the
document, in sub-headings, in links, in the meta tags or in
the title of the page. Each commercial search engine has a
different formula for assigning weight to the words in its
index. This is one of the reasons that a search for the same
word on different search engines will produce different
lists, with the pages presented in different orders.

An index has a single purpose: It allows information to be
found as quickly as possible. There are quite a few ways for
an index to be built, but one of the most effective ways is
to build a hash table. In hashing, a formula is applied to
attach a numerical value to each word. The formula is
designed to evenly distribute the entries across a
predetermined number of divisions. This numerical
distribution is different from the distribution of words
across the alphabet, and that is the key to a hash table's
effectiveness.

The search engine software or program is the final part.
When a person requests a search on a keyword or phrase, the
search engine software searches the index for relevant
information. The software then provides a report back to the
searcher with the most relevant web pages listed first.
Is Your website search engine friendly? If you have any
doubts, it may be time to take a look and make your own “big
break”.

Spidering

Before a search engine can tell you where a file or document
is, it must be found. To find information on the hundreds of
millions of Web pages that exist, a search engine employs
special software robots, called spiders, to build lists of
the words found on Web sites.

When a spider is building its lists, the process is called
Web crawling.

In order to build and maintain a useful list of words, a
search engine's spiders have to look at a lot of pages. How
does any spider start its travels over the Web? The usual
starting points are lists of heavily used servers and very
popular pages. The spider will begin with a popular site,
indexing the words on its pages and following every link
found within the site. In this way, the spidering system
quickly begins to travel, spreading out across the most
widely used portions of the Web.

How Search Engines work

Internet search engines are special sites on the Web that
are designed to help people find information stored on other
sites. There are differences in the ways various search
engines work, but they all perform three basic tasks:

* They search the Internet -- or select pieces of the
Internet -- based on important words.
* They keep an index of the words they find, and where they
find them.
* They allow users to look for words or combinations of
words found in that index.

Early search engines held an index of a few hundred thousand
pages and documents, and received maybe one or two thousand
inquiries each day. Today, a top search engine will index
hundreds of millions of pages, and respond to tens of
millions of queries per day.