Chapter 7: Getting Your Website Up

We start by discussing your pricing/payment strategies and the need for interactivity. With that information in mind, we move to the fun stuff, including databases, site hosting, XML, and merchant integration.

According to Young & Rubicam, buyers don’t think of just the eBay brand as just shopping; instead eBay is part shopping, part Internet, and part entertainment. As you consider your website’s theme and direction, consider these suggestions from eBay itself. As this book goes to print in the second edition, eBay has redesigned their front-end (using Apollo AIR) to make it more buyer-friendly. According to an internal eBay Buyer Engagement project in April 2007[1], buyers want:

A site that is “easy to use”
One that has updated information
One that “loads quickly”
A site that has relevant content, namely content which relates to why the buyer is there
Few distractions like banner ads and pop-ups
Variety and visually interesting content: text, video, pictures and sound/

These are all obvious to most of us, but bear mentioning when you’re considering the high-level goals of your web presence.

Before I outline the “back-end” or database structure of your website, I want to propose a pricing strategy. Your pricing strategy needs to be thought out now, so that the specifics can be designed into your website early on.

Pricing Strategy

Economic theory offers a plethora of complicated ways to set pricing. The parameters are set by what customers will pay. In this world, you interview sample “customers” and plot demand (price willing to pay) against supply / product choice, and your economically-efficient price is where the two lines cross each other. Of course, those who can’t do, teach! Alternatively, you can also analyze the pricing on eBay (for sold items), giving you actual real-world data. If you’ve been following Maui CEO so far, I believe you’ll soon be making enough gross margin to pay for your Maui golfing!

You will have time later to refine your pricing strategy. For now, we need to put a stake in the ground for your web design.

Your basic pricing strategy is to target a 40% markup over cost.

To get 40%, you actually start out marking up everything by 46%. This price automatically includes escrow services. Escrow, described in great detail in the eBay / PayPal chapter, is highly favored by buyers because escrow makes buyers feel more comfortable. In stark contrast, sellers, like you, would instead prefer to get paid with a bank wire transfer.

Pricing as it Relates To How You Accept Payment

For payment, you would ideally want to accept only bank wire transfers. Why? Because the money is deposited in your account in short order. You aren’t paying merchant fees, and don’t have to worry about fraud to the same extent as other payment methods.

The second most desirable payment option would be, in most cases, to receive a certified bank check. This is desirable for the same reasons as the bank wire, but the downside is that two trips were made to the bank—the customer/buyer, and you! Someone has to get the check and make the deposit. This is kind of hard to do when you’re in Maui! Customers don’t like sending a $5,000 bank check to a Maui address, for good reason.

The third most desirable payment option is to take a credit card, and so on. As you may know, you cannot legally charge customers more if they use a credit card. However, you can charge them less! Here is my recommendation as a starting place.

Recommended Discount Structure

Payment Method Discount Offered

Bank Wire <5%>

Cashier’s Check <3%>

Credit Card <2%>

Escrow <0%>

These discounts offer incentives for customers to pay with another method other than escrow, even though you’ve gotten them “hooked” in part by touting how all transactions include the safety of escrow. If a customer wants escrow, they are paying you 46% gross margin, and escrow.com will take about 5% for escrow fees, leaving you with 41% margin. Regardless of how the customer pays, you are able to cover your payment fees and still hit your target gross margin of 40%. You do this by offering them a discount! Let me say this another way: all sales should include free escrow. The presence of escrow reassures buyers. Your goal, once the customer is in checkout, is to get them to “waive” escrow and pay with a bank wire, cashier’s check or credit card.

Finally, I recommend offering buyers an additional 1% discount if they fill out a 10 question survey after the transaction is completed. This survey is the foundation for your customer knowledge and future marketing efforts. In my experience, this 1% discount for filling out a survey exchange has a response rate of about 85%–fantastic by any standard. I provide a sample professionally designed survey below—free of charge.

You will take this pricing structure with you into your database requirements. Let’s look at the sample survey, then interactivity, and then those pesky database requirements.

Sample Online Survey

We are interested in understanding how we can enhance your online shopping experience. Please take our 2-minute survey and receive an additional 1% off your current [product] purchase.

How did you find us? (radio buttons)
1. Yahoo
2. Google
3. MSN
4. AOL
5. Other Search Engine
6. [Industry]
7. Friend/Family
8. E-bay
9. Other - could you have a radio button fill-in the blank options for this one?

Where else did you consider making your purchase before choosing [company name]? Check all that apply. (check boxes)
1. Start with your competition, including brick and mortar
2. Online competitor

Why did you choose [company name]? Check all that apply. (check boxes)
1. Best Price
2. Good Quality
3. Good Selection
4. Convenience of online shopping with home delivery
5. Most informative and/or user-friendly website
6. Friend’s recommendation [type their name here]
7. Other

Would you recommend [company name] to someone or purchase from us again? (radio buttons)
1. Yes
2. No

Are there any additional [product]-related items or services you are considering to purchase in the near future? (radio buttons)
1. Yes, I’m considering: ________________________
2. No

Gender: (radio buttons)
1. Male
2. Female

Annual household income: (radio buttons)
1. Less than $50,000
2. $50,000 to $100,000
3. $100,000 to $150,000
4. More than $150,000

How would you characterize the person(s) for whom the [product] is being purchased? (radio buttons)
1. Semi-professional to professional
2. Avid user
3. Recreational player
4. Just getting started

Other: _______________

Interactivity

We discussed this earlier, but interactivity refers to “the interaction between the site and a user of that site[2].” Countless academic studies[3], as well as common sense, prove that interactivity is a fundamental requirement for building trust and a comfort level conducive to purchasing—especially expensive items.

I have an exercise I facilitate with my eBusiness MBA students which highlights good interactive features. I ask the students to visit 2 or 3 of their favorite websites and list desirable web features. Students routinely identify websites which include:

Personalization (advise, product selection)
Opt-in email (early notification of product availability, newsletter, club membership)
‘Search the web’ capability from the home page
Clear identification of any shipping and tax charges

When you think of interactivity, I recommend you concentrate on creating virtual two-way communication. For instance, the shopper can give you a little information (like their ZIP or country code), and you give them information back (“free shipping to this city / state until Feb 15”). The visitor tells you what they are looking for (“10,000 gallon Koi pond”), and you send them an email telling them what your inventory will be before the data reaches the website. The customer wants to review your returns policy—and you provide it quickly (or email it to them). Since we’re not trying to create a social network, there’s no need to overdo it here. You’re not trying to win the “most interactive” website award. Along with the other suggestions mentioned earlier in the first paragraph of this chapter, keep your website sharp, crisp and professional, and don’t bury your shopping cart. Your home page should load in six to eight seconds (no longer!), and the customer should be able to have an item in their cart in three clicks.

With the baselines of pricing, payment and interactivity set, let’s now review the database requirements.

Database Requirements

As I stated earlier in the book, you should have the database done before the website is finalized. The database can be “turn-key,” meaning that you are using a generic database and shopping cart combination. A simple example is the shopping cart available from www.domaindirect.com or any of the hosting services you will examine later. A more sophisticated, but pre-packaged, shopping cart solution would be illustrated by the products offered by www.storefront.net.

Alternatively, you can outsource exactly what you want to either a local database programmer or someone you find on one of the indexes I referred to earlier, such as www.elance.com (recommended!). In all scenarios, here are my guidelines for acquiring a software developer. Note: if you are non-technical, you may have to read this section several times.

Formalize Specifications Up Front

The one thing that software developers and their clients don’t like is to find out in the middle of a project that the specifications given in the beginning are incomplete or don’t meet the business needs. If you’ve ever remodeled your kitchen or house, and made changes along the way, you know what I mean: people get frustrated and costs escalate quickly.

Therefore, you should have a good idea of how the software will flow and the kind of data that it will need to keep and process. In other words, first create a design document that clearly spells out the business and technical requirements. Describe the business needs early, so the developer will understand your business. Describe the problems that the software needs to solve or how the software will help the business achieve its goals. Create pictures of your web pages and flow charts to show the developer how the application should work.

As an example, here is the actual text I used to attract bidders to this book’s website:

Title: Project Description for Website with Blog, PayPal, and API calling capabilities

I am looking for a website which highlights my book. This book was published in 2005 and I am just completing a second edition. See www.mauiceo.com, which I created as a placeholder. The book won two awards and I would like to highlight both of them (Editor’s Choice and Reader’s Choice from iUniverse.com).

Objective of the website: 1) support the themes of the book Maui CEO as described below; 2) sell eBay research services; and 3) foster a sense of community through blogging.

The book’s story line is about leaving your day job and starting your own business wherever you live (like Maui). Key topics are China or India, import / export, containers or container ships, warehouses, and eBay. I would therefore want the website to be consistent with these themes, as appropriate. I can provide you an image of the book’s cover (which I paid for via license); the other images used on the website would need to be license / royalty free unless some image was so good and necessary, it would be worth paying for.

Here are my ideas about the website pages; the bolded name is the navigational title:

Home – clean, professional, up-to-date look. Site search capability.

Welcome and Executive Summary – Summary of book and a 30-second video –based welcome from me which I will provide.

Testimonials – text-based quotes. I’m not sure how to make this page exciting…perhaps we can have a “Submit your testimonial” option?

About the Author – text and photos, as well as the following options:

eBay Sales Assistant

I anticipate this to be four webpages: 1) the landing page from the navigational link “eBay Sales Assistant”; 2) the page where the customer selects their data research package and inputs their data; 3) shopping cart; and 4) results page.

Finally, as you contemplate the database structure, I see the need for tracking of the following customer information: access to see their report; what they ordered; a short tracking of the survey results; and their contact information.

Buy Signed Copy of Maui CEO

Blogs – it seems like WordPress is hosting these now, I’m fine with that.

As noted earlier, I currently have the domain www.mauiceo.com through Domain Direct (domaindirect.com); you would work through them unless there is a reason to move the domain elsewhere, which I’m open to. I just want everything to work seamlessly.

Thank you again for your consideration. If you have any questions, please feel free to contact me via Skype….<end>

If you need an administrative interface, outline the information that you would need to have access to and what will require updating. The developer can then help you determine if an off-line process is needed. Let me explain: if you want to update your inventory, you can either have a web page created where you manually enter the inventory information, or you can have the inventory updated from a database in your office. Other alternatives, such as acquiring inventory information from other web sources using web services, can also be implemented.

Outline the Data Requirements

In your requirements document to the developer, list all data that a) you want your application to keep just for further processing, and b) what data needs to be stored permanently. If you are accepting confidential information from an online user, such as credit card numbers, specify the level of security that is required. Most applications can easily be setup to use a secure channel between the web server and web browser using a technology known as Secure Socket Layer (SSL). However, if you are going to store credit card information in a database–which I discourage–you may want additional protection at that level. Keep in mind that you may be required by law or statute to notify cardholders if their personal information is accidentally released, or if obtained by non-authorized individuals.

Require a Mainstream Programming Language

You will most likely need to hire someone other than the original developer to do maintenance for you down the road. To ensure that you have the widest possible selection of developers, insist that the original site be built using one of the more common languages such as ASP.NET[4], ColdFusion[5] or PHP[6]. This language choice will also have an impact on the type of platform that the application will run on. For example, if you choose ASP.NET, you will be hosting it on a Windows Server. If you want to use a Linux or UNIX server, you need to make sure that the server supports the language your developer is going to use.

The choice of language also affects portability. As I mentioned earlier, if you use an outside hosting company like Domain Direct, you want to be able to transfer your web site from one hosting company to another if problems arise. Choose a language and platform that is prevalent in the industry. If you choose ColdFusion, your hosting company will have to have a ColdFusion Server and it will have to match the version of Cold Fusion that your site is built in. This can limit your options.

Choose an Appropriate Database

If your web site is small and not expected to get much traffic, you can use a database such as Microsoft Access to hold the data. This makes it easy to have information offline so you can analyze it using the query and report features of Access and you can even update your web site by just pushing the database via File Transfer Protocol (FTP) to the web host. More active sites will need more robust databases such as Microsoft SQL Server. There are a number of alternatives, and some are even free. Your software developer can help you decide on what is appropriate for your specific needs.

Choose a Developer Who Has the Appropriate Experience

If you fly on United Airlines, you can be assured that the pilot has a license and is trained to fly that type of aircraft. She is probably pretty good at the job. Contrast this with software development. In my experience, most of the people developing software are not good at it and don’t have the education or training in order to do a good job. Unless you can interview and scrutinize a developer by making them write, interpret, or discuss code in great detail, you will have to rely on the word of others. The intricacies of web development, security, data access, and other aspects of the work require some good talent. Look at one of the developer’s previous web sites will help you to see if the developer understands good page layout and workflow. Ask, of course, which parts of the website were their sole or shared responsibility.

If you use a site such as www.rentacoder.com, evaluate the developer ratings. Look over the developer’s resume, and evaluate what kind of background they have. At time of writing, RentACoder has a section called “Top Coders,” which lists developers who have completed lots of successful projects. Elance and Guru have similar rating systems, and even show how much money the developer / coder has made through their site!

In my experience, the best developers have degrees in Computer Science, Engineering, or Math. Business schools have Information Systems (IS) programs and many developers come from IS backgrounds. Virtually none of the IS developers have the skills necessary to write good code, because these B-school IS programs focus on spreadsheets and presentations, as opposed to a rigorous and demanding program that will produce good coders.

Since you’re not looking to hire a junior developer but someone who can step right in and do the work, make sure the person has at least a year of experience doing specifically what is required for your project. If your project requires a team of developers, make sure the team leader has extensive knowledge and will review and approve all code developed by team members.

Site Hosting

The possibilities are nearly endless in the choice for a site hosting company. Based on your choice in Chapter 4 for URL acquisition, you may want to stick with the same company.

My previous recommendation was www.domaindirect.com, as I have used them for years. Recently, email performance has had glitches and performance has been slow. This is not acceptable in today’s day and age, so I now recommend that you look at http://www.top10webhosting.com/ to get some other ideas. GoDaddy gets pretty good press.

Regardless of whom you select to do your site hosting, here’s the reminder: make sure the site hosting company supports your database type. For instance, not all site hosting companies support Macromedia’s ColdFusion, a wonderful web application development tool.

XML

XML, or Extensible Markup Language, is a markup language for documents containing structured information. XML is a new approach that has caught on with many programmers. From a business standpoint, XML allows you a structured way to tap into someone else’s inventory and show that inventory as your own.

For instance, XML is evident on one of my favorite websites, www.ebags.com.

eBags offers a huge inventory, so many choices that I believe they do not stock the entire product line themselves. For instance, a review of their Top 10 bestselling laptop bags shows six bags which “leave [the] warehouse within 1 business day,” and the other four bags “leave [the] warehouse within 2 business days.” Since eBags does not know where I am (since I have not entered my zip code or other identifying information), the only reasonable explanation is that eBags will stock certain items in their own warehouse (1 business day processing), and “drop-ship” all other bags from other suppliers’ warehouses (2 business day processing). XML is the means by which eBags ties into other databases and inventory systems—thereby allowing eBags to show inventory as their own.

For those of who want to utilize XML to the fullest extent, visit www.doba.com. Doba allows you to list some or all of their inventory on your website…and these retail merchants will drop-ship directly to the buyer. Cool. I’m not sure how profitable, but very cool.

Merchant Integration

As mentioned earlier but repeated here, you have three easy options to process credit card payments: a) Verisign; b) PayPal or equivalent; and c) Escrow.com.

Verisign is the leading company which enables your online business to accept all forms of payment, such as credit and debit cards, and checks. See www.verisign.com. Using templates available from Verisign, your business will:

create a script (called a “Gateway”) to interact with Verisign;
send customer information to Verisign (thereby requiring purchasers to enter personal information only once);
process the credit card charge; and
return an approval or declined key.

There is a nominal charge to use Verisign; however, you do need to have a merchant account, and I described the need for a merchant account (and how to get good rates) in Chapter 4.

The alternative to Verisign is to use pre-designed gateways between your site and either PayPal or Escrow.com. PayPal and Escrow have similar functionality to the Verisign setup I described above. PayPal and Escrow are easier to install than the Verisign gateway. Further, PayPal has de facto integration with eBay, and is probably the way to go for your business. See www.paypal.com and www.escrow.com. Online escrow, and a proposed way to have escrow for all of your transactions, were described earlier in this chapter. Don’t forget: if escrow is your default, why do you need two gateways? Answer: Escrow.com and Paypal.com.

<paypalmerchant.tif>

You can integrate PayPal pretty easily into your website, with the simple buttons or a more complete solution like the “Pro” version above. What I like about PayPal is that they will always be well-integrated with eBay. Also, PayPal is at the forefront of fraud detection; for instance, they have increasingly sophisticated algorithms which monitor a large combination of factors in determining the risk of a certain payor—including combining knowledge of the customer from eBay transactions and feedback with the PayPal-based transaction at hand. Google payments are also an option, but at time of writing, pose no serious challenge to PayPal for our purposes.

Getting Your Website Up

Once you have space available from your hosting company, files can be uploaded to that space. These files will include your database / shopping cart; your core navigation template and web pages created by your brand identity company; and any files needed for the site’s integration with the merchant processing.

Over time, you will need a mostly automated process for updating the timeliness and freshness of content on your site.

For now, find a simple way to send and receive files. Of course, based on the choices you made earlier in this chapter, your method of sending and receiving files may be dictated for you. Also, your Elance developer may have included this capability in their bid, typically with Linux-based, limited functionality.

If you don’t yet have this capability, consider IP Switch’s FTP Professional software. This software, believe it or not, will be the channel through which you can run your business from Maui! The software’s “Synchronize” utility keeps your remote sites up-to-date by automatically uploading files, which have changed, while deleting files that you’ve removed from the master directory. The scripting automates the transfer and management of files. While you’re golfing in the afternoon, your FTP script uploads certain files at regularly scheduled times. There are free versions of FTP out there, but like I said, having robust file management capability to start will benefit your new lifestyle later. See www.ipswitch.com.

Summary

If this chapter seems too technical after your second or third time through the text, you have two options. First, you can just use a pre-canned shopping cart and database. Your site hosting company will have one. The biggest downside is that you are stuck with that program’s limited functionality.

The second option is to take the information above, and have a bidder on Elance.com write the technical specifications for you. Then, you take those specifications and bid them out. For illustration, your bid request could say:

“We want to build a web site that will offer Jacuzzis for sale. Having already developed the home page and navigation bar, we are looking for someone to fully develop the other website specifications. We will take these completed specifications and bid them out to developers—including your own team if applicable. The website will focus on showcasing a few products; should utilize a mainstream programming language such ASP.NET , ColdFusion or PHP; and meet our business needs. These needs, as well as our timeframe, are articulated in the attached file.”

Once you have your specifications done, you’re off to a great start. You have used your words and language to articulate the business needs; these needs are translated into technical specifications; and the specifications are translated into working code.

Now, let’s figure out where to store those Jacuzzis!

[1] “Lessons from eBay Buyer Research,” Jeff Resnick of eBay, at the 2007 eBay Developer’s Conference (Boston).

[2] Hoffman, D. and Novak, T. (1996), “Marketing in hypermedia computer-mediated environments: conceptual foundations”, Journal of Marketing, Vol. 60, pp. 50-68.

[3] Merrilees, B. and Fry, M.L. (2003), “E-trust: the influence of perceived interactivity on e-retailing users”, Marketing Intelligence & Planning, 21/2 pp. 123-128. See also Urban, G.L., Sultan, F. and Qualls, W.J. (2000), “Placing trust at the center of your Internet strategy”, Sloan Management Review, Fall, pp. 39-48.

[4]ASP.NET is from Microsoft Corporation. See www.asp.net

[5]ColdFusion is from Macromedia. See www.macromedia.com

[6]PHP is from The PHP Group, and is a general-purpose scripting language that some feel is especially well-suited for Web development. See www.php.net