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E-COMMERCE: PURCHASING AND SELLING ONLINE

Updated on March 25, 2017

Small businesses that are considering purchasing or selling
online will find this a useful resource to help them identify and
select appropriate e-commerce options. Tips and strategies for
attracting and keeping online customers are also presented.
While the booklet focuses on selling online via your own website,
other options for purchasing and selling online are highlighted
such as e-marketplaces and online auctions.
What is E-Commerce?
E-commerce refers to the process of buying or selling products or services
over the Internet. Online shopping is becoming increasingly popular because
of speed and ease of use for customers.
E-commerce activities such as selling online can be directed at consumers
or other businesses. Business to Consumer (B2C) involves the online sales
of goods, services and provision of information directly to consumers.
Business to Business (B2B) refers to the online selling of products,
services, or information between businesses.
Why E-Commerce for Small Businesses?
Selling online can help your business reach new markets and increase your
sales and revenues. If you are interested in selling to other businesses, you
can use the Internet to find sales leads, announce calls for tender and offer
products for sale either through your own website or through an
e-marketplace site.

Searching for products and services online can save you
time and money by allowing you to find the best prices
without having to do all the legwork. You can use the
Internet to find new suppliers, post buying requests
or search for products and services. Online trading
networks can also be used to support efficient
information exchange between buyers and sellers.
Benefits of B2B E-Commerce Solutions
• Purchasing supplies – By creating an online account
for your business with supply stores you can purchase
office supplies and equipment online and save time
and money by automating the purchasing process.
• Purchasing direct materials – These are materials
that go into the production or manufacturing of your
products. Establishing a relationship with a vendor
and purchasing online may help reduce costs.
• Selling products or services to new vendors – Having
an online e-commerce presence opens up more
opportunities to extend your reach and gather new
vendors beyond your bricks and mortar offerings.
• Leveraging your existing web presence – If you already
have B2C operations, you can extend them to business
clientele – perhaps by providing private areas for
special pricing, delivery options, etc. However, this
additional functionality is not trivial and could require
rebuilding your online store at a significant cost.
Benefits of B2C E-Commerce Solutions
• Better customer service – Businesses can transact
directly with their customers 24/7.
• Elimination of intermediaries – Businesses, particularly
manufacturers, can offer lower and more affordable
goods to consumers by selling products directly,
eliminating distributors and retailers that add to the
cost of the products.
• Flexibility in pricing – Price tags can be adjusted easily
and instantly, benefiting the business and the customer.
You also have the ability to strategically cross-sell,
discount, and provide coupons and other online/
offline specials.
• Professional image – Even if you have a small business,
your e-commerce site can enhance your reputation by
projecting a larger picture and allowing you to compete
on a level playing field.
• Extended reach – Opening up an online storefront can
effectively extend your presence to a great number of
prospects, particularly those unable to access your
local bricks and mortar store.
FAST FACTS ABOUT E-COMMERCE IN CANADA
• There were 26,960,000 Internet users in Canada
as of March, 2011.
• In 2010, 51% of Internet users ordered goods or
services for personal or household use. In total,
Canadians placed nearly 114 million orders,
valued at approximately $15.3 billion.
• When it came to paying for their purchases,
89% used a credit card online, and 31% used
an online payment service.
• Growth rates of e-commerce spending are
predicted to grow significantly between 2011
and 2015. The percentage of B2C online revenue
compared to all retail revenue is expected to
reach approximately 10 % by 2015.
• Retail e-commerce spending was slightly below
CAD$20 billion in 2011, with strong increases
forecast until 2015.
• Security and privacy remain a key concern for
selling and purchasing online.

Ranked from most purchases to fewest, here is what
shoppers are purchasing online.
E-COMMERCE, TOP 10 TYPES OF PRODUCTS
ORDERED IN 2010
1. Travel arrangements (e.g. hotel reservations,
travel tickets, rental cars)
2. Tickets for entertainment events (e.g. concerts,
movies, sports)
3. Books, magazines, online newspapers
4. Clothing, jewellery or accessories
5. Memberships or registration fees (e.g. health
clubs, tuition, online television subscriptions)
6. Music (e.g. CDs, MP3)
7. Software
8. Consumer electronics (e.g. cameras, stereos,
TVs, DVD players)
9. Videos or DVDs
10. Toys and games
Source: Statistics Canada
Planning for E-commerce
Moving your sales operations online requires that you
look at your business needs and information technology
(IT) requirements and the options available to you in
order to formulate an e-commerce implementation and
fulfillment strategy. Here are some questions to consider:
1. Is e-commerce really the right option for my
business? If so, why?
2. Who are my competitors online and how well
established are they?
3. Can my existing business system processes in my
bricks and mortar storefront be brought online?
How do I integrate them?
4. What do I need the website to do – i.e. are there
straightforward categories and sub-categories or
do I need additional functionality?
5. Do I need the shopping cart to be able to do anything
beyond taking payments?
6. What resources or knowledge base do I need to set up
an online store?
7. How will I drive traffic to my online store?
Setting Goals and Objectives
Goal Setting Examples Examples of Objectives
Use Internet to expand business • Within 60 days, be able to communicate my company name,
its benefits, prices, customer list, products and services to
new prospects.
Expand sales outside local area • Build international presence by creating listings in international
directories within 6 months.
• Create national sales affiliate teams to help promote
e-commerce website within 45 days.
Sell $xxxx per month to existing clients • Design a cross-sell program and referral reward program to
existing clients, assess in 9 months.
Reduce direct marketing expenses from
flyer distribution and promo catalogues
• Introduce last minute alert program through text messaging or
email campaigns.
Enhance customer service • Implement a live chat service from the e-commerce site to be
accessible 24/7.
Choosing a Web Developer vs.
Do-It-Yourself (DIY) Options
Should you choose to work with a web developer or try to
create your own e-commerce enabled website? For those
just starting out in business with a limited budget, there
are many site builders (for example, Shopify www.shopify.ca,
Canada Cart www.canadacart.ca) that allow you to create
a storefront to sell your items online, to set up security
for credit card transactions, and to outsource shipping.
As your business needs grow, you may want to consider
hiring a professional to take you to the next level.
Either way, you need to do some research before you
invest your time and money in e-commerce. These are
basically the same things to consider if you were
planning to start a bricks and mortar store and they are
equally important in the virtual world.
• Research your site builder or developer choice options.
• Complete a Strengths, Weaknesses, Opportunities,
Threats (SWOT) analysis of your marketplace/industry,
both on and offline.
• Conduct a marketplace analysis – Who are your
customers and competitors?
• Consider marketing and sales strategies – How suitable
is your product or service to Internet marketing?
The purpose, style, scope, domain name, hosting and
security of your website are all areas to think about when
planning e-commerce. Understand all that is involved
in developing an e-commerce online presence and the
timing for each step along the way. Here are some items
to consider:
• Evaluation and Metrics: Determine in advance
what metrics and method of evaluation you plan
on implementing.
• Logistics: Develop pricing, payment choices, delivery
choices and return policies.
• Review and Update: Set some review dates; schedule
in regular updates to keep your site fresh and current.
Always address visitor needs.
• Upfront Costs: Understand what upfront costs are
involved in order to start selling online, whether that
is to buy a program or have a developer customize
one for you.
• Ongoing Costs: Be aware of ongoing costs, including
those related to cost of goods sold, shipping, hosting,
charge backs, web maintenance and site updates.
See Creating a Dynamic Web Presence booklet for more on
developing an effective website

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