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Start Your Own Online Business
Permission from Mobileguru Limited required for distribution and resale of this
document, its content s and information.
Copyright © 2009, Mobileguru Limited, All Rights Reserved
Contents
1
1.1
1.2
1.3
Introduction .................................................................................................................................... 1
Our Background ............................................................................................................................... 1
Why are we telling you all our secrets? ............................................................................................. 1
Online Market ................................................................................................................................... 1
2
2.1
2.2
2.3
2.4
2.5
2.6
Product Research........................................................................................................................... 2
Product is Key to Success ................................................................................................................ 2
Yahoo Popular Product Search......................................................................................................... 2
Google Popular Product Search ....................................................................................................... 2
Froogle Product Search .................................................................................................................... 3
Kelkoo Product Search ..................................................................................................................... 3
Market Research .............................................................................................................................. 3
3
3.1
3.2
3.3
Sales Model .................................................................................................................................... 4
Affiliate ............................................................................................................................................. 4
Reseller ............................................................................................................................................ 4
Retailer ............................................................................................................................................ 4
3.3.1
Wholesalers................................................................................................................... 4
3.3.2
Distributors .................................................................................................................... 5
3.3.3
Manufacturers................................................................................................................ 5
3.3.4
Drop Shipping................................................................................................................ 5
4
4.1
4.2
4.3
4.4
Company Model.............................................................................................................................. 6
Sole Trader ...................................................................................................................................... 6
Private Limited Company.................................................................................................................. 6
Public Limited Company ................................................................................................................... 6
Managing Company ......................................................................................................................... 6
4.4.1
Accountancy Services.................................................................................................... 6
4.4.2
Companies House ......................................................................................................... 7
4.4.3
Company Bank Account ................................................................................................ 7
4.4.4
VAT Registration ........................................................................................................... 7
5
5.1
Website Solutions .......................................................................................................................... 8
Build your own Website .................................................................................................................... 8
5.1.1
Software Tools............................................................................................................... 8
5.1.2
Hosting Services ............................................................................................................ 9
5.1.3
Domain Name.............................................................................................................. 10
Using a Developer .......................................................................................................................... 11
5.2.1
Managed Hosting ........................................................................................................ 11
5.2.2
Your own Hosting ........................................................................................................ 11
5.2
6
6.1
6.2
6.3
6.4
6.5
Merchant Card Services ............................................................................................................... 12
Choosing a Merchant ..................................................................................................................... 12
Merchant Charges .......................................................................................................................... 12
Payment Security ........................................................................................................................... 13
Payment Processing Options.......................................................................................................... 14
Payment Integration ....................................................................................................................... 14
7
7.1
Product Marketing ........................................................................................................................ 15
Online Marketing ............................................................................................................................ 15
7.1.1
Pay per click & e-mail Marketing .................................................................................. 15
7.1.2
Affiliate Programs ........................................................................................................ 15
7.1.3
Blogs & News articles .................................................................................................. 16
Traditional Marketing ...................................................................................................................... 16
7.2.1
Print Press, TV and Radio............................................................................................ 17
7.2.2
Billboards and Leafleting .............................................................................................. 17
7.2.3
Associates, Friends and Relations ............................................................................... 17
Search Engine Optimisation ........................................................................................................... 17
7.3.1
Web Page Optimisation & Links ................................................................................... 17
7.3.2
Search Engine Submission .......................................................................................... 18
7.2
7.3
Glossary of Terms .................................................................................................................................... 19
ii
1
Introduction
1.1
Our Background
MobileGuru started life from the bedroom with a desktop PC and some product
ideas. This is a real online business generating thousands of pounds each week
from its online mobile accessories sales alone. This document will provide you with
a detailed understanding of the steps involved in setting up your own online
business. You will receive practical advice based on our collective experience which
you can apply almost immediately. Whether you are new to business or have an
existing business but want to create an online sales stream, we can provide you
with the necessary tools to take that step into the World Wide Web.
1.2
Why are we telling you all our secrets?
Simple answer, we have been through the pain and this information is not free.
When you start the journey to setup any business, you will find many people giving
advice. However how many of them have been successful and how many know the
online market. Soon you will find the numbers start to shrink and you start doubting
the advice. Our aim is to share our experience to help others while charging a small
fee for this service.
1.3
Online Market
So you want to start your own online business. The fact that you have downloaded
this document gives you an advantage and will allow you to plan the steps
necessary to fulfil your ambition. In the coming chapters we have organised this
document in simple step by step approach.
This is the best time to start an online business. While the high street sales are
reducing due to global recession, one sector is seeing significant growth and that is
online internet sales.
So let’s begin on the journey to success and plan the next steps to a successful
business.
1
2
Product Research
2.1
Product is Key to Success
Not all products sell online, so it is very important you do your research before you
start spending money. Products that require the sense of smell or touch to evaluate
quality and make selection are difficult to sell online but that doesn’t mean you can’t
sell them online. Choosing the right product will make it easier to sell, especially
where the buyer is already familiar with the contents. Online search engines such
as Yahoo and Google list popular product searches. You can also search for
specific products and see how many other companies are listing this item. Ask your
colleagues, friends and families about the type of products they buy online.
2.2
Yahoo Popular Product Search
You can visit Yahoo shopping at http://shopping.yahoo.com and find the link at the
bottom of the page to their Top Searches section.
This lists all product categories and top searched product under each category. This
will allow you to identify market trends and what is popular in the market. Be careful
this isn’t the same as top sellers so use your judgement when comparing products.
2.3
Google Popular Product Search
There is a section in Google for identifying popular products or trends in the market.
You can find this at http://www.google.com/trends/hottrends where the top 100
search terms are listed.
This may not always be product items but reviewing the search terms will allow you
to identify popular products and with further market research this could be the break
through that helps you to succeed in online business.
2
2.4
Froogle Product Search
This is Google’s product search database where many online retailers market their
products. It is a good source for doing market research, in particular where you
know the product you want to sell. Comparing what competition exists and sale
prices of products will allow you to negotiate good prices with your supplier.
Visit http://www.google.co.uk/products for more details.
2.5
Kelkoo Product Search
This is an online shopping site allowing you to compare products from many
different suppliers. Similar to Froogle it is a good source for doing market research.
The products in Kelkoo are paid listings where as Froogle allows products to be
listed at no cost.
Don’t forget both Kelkoo and Froogle can also offer you a good medium to market
your products.
You can find a large selection of products to compare at http://www.kelkoo.co.uk/
2.6
Market Research
In this section we have given you some ideas to help you start researching your
products. They are mostly focused on online market research. However you can
also use traditional mediums such as libraries, newspapers, magazines and not to
forget colleagues, friends and relations.
There are also local directories such as Yellow Pages and Thompson Locals which
contains large lists of business in your areas. They may be traditional businesses
but the key is to identify a niche in the market and in particular business ideas that
may be successful online.
It is no good re-inventing the wheels, use all sources and try to enhance and
improve ideas to find your niche market.
3
3
Sales Model
3.1
Affiliate
Affiliate sales model is based on a revenue sharing agreement between a website
owner and an online merchant. The website owner will place advertisements on his
websites to either help sell the merchant's products or to send potential customers
to the merchant's website, all in exchange for a share of the profits.
Pay Per Click: Every time a potential customer leaves the affiliate website by
"clicking" on the link leading to the merchant's website, a certain amount of money
is deposited in the affiliate's account. This amount can be pennies or pounds
depending on the product and amount of the commission.
Pay Per Sale: Every time a sale is made as a result of advertising on the affiliate's
website, a percentage, or commission, is deposited into the affiliate's account.
Pay Per Lead: Every time a potential client registers at the merchant's website as a
result of the advertisement on the affiliate's account, a previously determined
amount is deposited into the affiliate's account.
For many website owners, this is a great way to earn some extra money without
actually having to "do" anything. All it involves is placing an ad on the affiliate's
website. There's no selling or promotion of any kind. The affiliate can just sit back
and wait for the profits to roll in.
You can run your whole online business on this model or in combination with one or
all of the other models listed in this section.
3.2
Reseller
This model varies depending on what type of product you are reselling. In the case
of physical products it can mean buying and reselling with a small profit margin.
However if you are a web host reseller for example, you could set your own price
with a small profit margin and pay the hosting company once you have made a
sale. You then become the reseller managing each account opened through your
company.
There are many companies offering reseller agreements. The requirement varies
depending on product and the market.
3.3
Retailer
This is where you buy products from wholesalers, distributor or even manufacturers
at a trade price and sale the product at a retail price. Once you have selected the
products you want to sale, you can find suitable suppliers by searching online, local
directories and trade magazines.
3.3.1
Wholesalers
Wholesale is the sale of goods, generally in large quantity, to a retailer for resale
purposes. Wholesalers usually have a minimum order quantity and this means you
need to be certain this product will sale before you buy your stock. You can
negotiate a good price with wholesalers where you are buying large stocks.
4
However don’t be frightened to ask for reduction even with small volumes. They
want your ongoing business to boost their sales so it is always good to negotiate.
3.3.2
Distributors
Distributors are in many cases authorized re-sellers of products or merchandise.
Usually manufacturers of products work only with distributors to sale their products
to retailers. This allows the manufacturer to focus on manufacturing and the
distributer to concentrate on sales and distribution. You can work with a distributor
to identify popular products and negotiate prices. In some cases the manufacturer
sets the trade price. Having a good relationship with your distributor will ensure
success in business. Hence contact them and talk about your business, you will get
a lot of useful advice from a good distributor.
3.3.3
Manufacturers
Usually they prefer to operate through distributors and wholesalers. However there
are many companies who specialize in products that they want to sell direct to the
retailer. It really does depend on the product and the market involved as to whether
you have a direct relation with a manufacturer. Once you have identified a product,
go to the manufacturer’s website or contact them via phone or e-mail and enquire
about their product. Many companies are very helpful in providing information and
quotes.
3.3.4
Drop Shipping
This is where a product is shipped directly from the manufacturer, wholesaler or
even distributor to the customer without requiring the retailer to keep stock
inventory. There is clear advantage in using this method when you are starting up
as you can reduce the cost of stocks you hold in storage. The downside is that you
need to manage any issues and this will introduce an additional complexity in
resolving any issues or complaints from your customer.
5
4
Company Model
4.1
Sole Trader
Out of all the different company models, this is the simplest way to run a business.
It does not involve paying any registration fees, keeping records and accounting is
straightforward, and you get to keep all the profits. However, you are personally
liable for any debts that your business runs up, which make this a risky option for
businesses that need a lot of investment.
If you start working for yourself as a sole trader, you must register with HMRC as
self-employed, even if you already send in a tax return. There are some exceptions
and special rules for particular industries, like the construction industry.
You can find more details by visiting http://www.hmrc.gov.uk/
4.2
Private Limited Company
In the case of limited companies, they exist in their own right. This means the
company's finances are separate from the personal finances of their owners.
The shareholders of a limited company can be individuals or other companies.
However they are not responsible for the company's debts unless they have given
guarantees. The risk to the shareholders is that they may lose the money they have
invested in the company if it fails.
Before your business can begin operating as a limited company, it has to be
registered with the Registrar of Companies (Companies House). Incorporation is
the process by which a new or existing business is converted into a corporate body.
For more details visit http://www.companieshouse.gov.uk/
4.3
Public Limited Company
Similar to private limited company but they must have at least two shareholders and
must have issued shares to the public to a value of at least £50,000 before it can
trade. You can also have public unlimited company but these are rare and usually
created for specific reasons. It is recommended you take legal advice before
creating one.
4.4
Managing Company
There are many factors to consider when setting up a business. In addition to
deciding on a company model, you would also need to consider some of the
business areas listed below.
4.4.1
Accountancy Services
If you have decided to set up a limited company then the registration process can
be simplified by consulting a good accountancy group. In order to fulfill some of the
duties of a limited company, it will be necessary to appoint an accountant. Even for
sole traders you may want to consider this option though is not absolutely
necessary.
6
4.4.2
Companies House
Companies House is an Executive Agency of the United Kingdom Government in
the Department for Business, Enterprise and Regulatory Reform. All limited
companies in Great Britain are registered with Companies House and file specific
details as required by the Companies Act 1985.
4.4.3
Company Bank Account
Having a business bank account may not be absolutely necessary for managing
your finances for a sole trader but it will help you to manage your finances better
and separate personal and business transactions. However for a limited company it
is crucial that you have a bank account to manage your company’s finances. Most
high street banks offer business accounts for start ups. You can also find specialist
banks online offering great solutions for business customers.
4.4.4
VAT Registration
Your business should register for VAT if your "taxable supplies" over the past 12
months has exceeded the VAT registration threshold. The threshold is currently
£67,000 (as of 1st April 2008). It is important to remember that VAT applies to the
company's turnover and not profit.
You cannot charge or reclaim VAT until you have completed the VAT registration
process and have been issued with a VAT registration number by HMRC.
7
5
Website Solutions
5.1
Build your own Website
Building your own online website can be easy but requires some basic
understanding of html and website development. Simple single page or multiple
page sites can be easily built with little technical skills.
Building an online shopping cart requires slightly more technical skills though can
be learnt if you are determined enough. There are many companies offering
shopping carts software tools that are easy to build and secure. If you are a
complete novice to website development then I would suggest you get few books
from your local library or even join an evening class at your local college. It will be
worth learning the basics even if you decide to use a developer as this will give you
better understanding of the whole process.
5.1.1
Software Tools
If you simply want to have an online presence with information about your company
and contact details, you can use software tools such as Microsoft Front page or
Dreamweaver. There are many other tools available but Dreamweaver is very user
friendly and suitable for beginners and experts.
You can find more information at http://www.adobe.com/uk/products/dreamweaver/
Building your own online shopping catalog requires the use of software tools or an
expert knowledge of programming. There are hundreds of different software tools
for building a shopping catalog. Simply search for shopping cart on any of the
search engines. You can download 30 day trial versions and test out the features
8
and functionalities. One of the most popular and scalable shopping cart
development software is available from Actinic. This is a very user friendly tool with
intuitive features and functionalities used by beginners and developers.
Visit http://www.actinic.co.uk for more details.
5.1.2
Hosting Services
Hosting selection is mainly dictated by the software tool you use, your budget and
the features and functionalities you want to offer on your website. Once you have
selected the software tool, ask the tool supplier for suggestions and
recommendations about hosting solutions. Also visit some of the forums and check
out feedback from other customers before buying any hosting packages.
There are many types of hosting packages from shared servers to your own
dedicated server. You can pay annually or monthly for hosting packages. Your
budget will be the limit as the server hosting solutions can be costly if you g o down
the route of dedicated solutions. If you are starting a new business where the
amount of traffic it will generate is unknown then use, a shared server solution. You
can later upgrade to better packages as your traffic grows.
It is very important that you select a hosting company that offers scalable solution
that will not stifle growth. There are many companies offering free or very cheap
solutions with unlimited bandwidth. Be careful as some of them have hundreds of
different sites sharing the same server and your website may not be accessible
most of the time. In many cases these hosts offer shared IP address and can get
blocked by service providers if any of the companies on that server misbehave.
There are many companies offering hosting solutions and you can find them by
searching for website hosting. One of the companies we have used and found to be
9
offering value for money and reliability is http://mediatemple.net/ . This company is
used by small and large businesses. The hosting packages support both
Dreamweaver and Actinic software solutions.
5.1.3
Domain Name
Choosing the right domain name for your business is very important. You should try
to use a name that easily explains the nature of your business. It should be short
and easy to remember. This will help your positioning on search engines and will
make it easier for people to return to your site.
You also need to decide whether you want a .co.uk, .com or any of the other
country or business related code. The nature of your business and your target
audience can be used to decide the code you use.
There are many companies offering domain names and sometimes even for free
and with hosting packages. Make sure the domain name can be easily transferred
without any restrictions. If your website is successful then this domain name will be
an integral part of your business.
Usually first time registration of domain names are for two years and then you can
renew annually or for more years.
We have used the services of http://www.register.com/ and found it to be very cost
effective and reliable.
10
5.2
Using a Developer
The cost of using a developer may not be as expensive as you imagine. In terms of
single or multiple page website solution to give you an online presence, the prices
can start as low as £50. If you want to sell multiple products from your website and
want to develop a shopping catalog the prices will vary and would depend on your
specific requirements. The developer can buy the domain name for you or you can
buy your own.
5.2.1
Managed Hosting
Most of the developers offer a managed service whereby they will develop your
website and host it on a server. You will need to pay annually or monthly for
ongoing management and hosting. This is the most hassle free option but is not
flexible if you want to regularly update your pages or product details.
5.2.2
Your own Hosting
You can choose your own hosting company and the developer will build your
website and upload it to the server of your choice. However you need to ensure the
hosting company sets up the server to meet the development requirements. Most
developers will provide you with their minimum requirements to ensure your website
operates correctly. You can either manage your website or pay the developer
ongoing management fee. However you would need to pay the hosting fee
separately.
11
6
Merchant Card Services
6.1
Choosing a Merchant
There are many online payment processing companies such as Worldpay, Paypal,
HSBC and more. Before you open an account compare their charges and the level
of support they offer such as online fraud detection. You would need to integrate
your shopping catalog with the merchants secure server. Hence check with your
shopping cart supplier or your website developer before you open an account.
Merchants such as Paypal will open an account instantly where as Worldpay
requires details about your business and will complete a thorough verification prior
to approval.
Don’t forget that your business banking company may also offer online payment
processing. You can also use any in-store card processing terminals by taking card
details online and manually processing offline. There is more risk with processing
offline as you will be using the card holder not present option on your terminal.
6.2
Merchant Charges
The charges applied by each merchant differ and depends on the type of business
model they operate. We have listed below details of two very popular merchants.
Worldpay (www.worldpay.co.uk)
Set-up Fee: GBP 200.00
Monthly Fee: GBP 30.00 each month (first month payable upon application).
Transaction Service Charges:
GBP 0.50 per transaction for UK Debit cards.
4.50% on the value of all other transactions e.g. credit and charge cards.
GBP 0.06 per transaction for Fraud detection.
12
Paypal (www.paypal.co.uk)
No monthly fees
No setup fees
No gateway fees
Free eBay and web payment tools
Antifraud systems at no extra cost
Transaction Service Charges:
Depends on monthly sales
Starts at 3.4% + £0.20 GBP for monthly sales between £0.00 GBP to £1,500
GBP.
6.3
Payment Security
All payment processing companies use secure servers to process payment. The
golden padlock can be seen on your browser when you are in a secure web page. If
you are planning to take payment online without using a payment processing
company then you would need to buy an SSL Certificate from companies such as
Verisign. Your website developer can advise you more on how this can be used to
secure your website. You can also visit http://www.verisign.com/ for more details.
Picture above demonstrates the payment process and the security involved in
encrypting your credit card details
13
6.4
Payment Processing Options
Depending on your business and how you operate you can choose process
payments online only or have a mixture of online and offline processing. If you plan
to take phone orders then you can either process them through an in-store terminal
or use a virtual terminal offered by some merchants.
6.5
Payment Integration
Shopping carts such as Actinic can be easily integrated with most merchant
servers. They usually produce a list of merchants supported by their software tool. If
you have gone for a bespoke solution then your web developer would need to
integrate the carts to the merchant you have selected. It is best to discuss with your
developer prior to opening merchant account so that there are no complications
later.
14
7
Product Marketing
7.1
Online Marketing
Marketing your company and its products is an essential part of online business.
The strategies used vary depending upon your budget. However in your business
plan don’t forget to budget for marketing costs. Successful business online doesn’t
require deep pockets but a clear strategy and a plan of action.
7.1.1
Pay per click & e-mail Marketing
Pay Per Click
This is where customers click on an advert placed by you on a search engine or
marketing website and visit your website or product page directly. You get charged
for each click which you can pay monthly or in advance. Companies like Google,
Yahoo and many others offer pay per click advertising programs.
See links below to some of the major pay per click advertisers for more details.
http://adwords.google.com
http://searchmarketing.yahoo.com
https://account.uk.miva.com
http://merchant.shopzilla.com
E-Mail Marketing
This where you can send e-mail marketing communications direct to your
customers or use a third party list from a reputable supplier. There are companies
who provide e-mailing services where you can pay a monthly fee or pay per mail to
send to multiple e-mails. The service provided includes, e-mail list management,
template development and many more features such as online campaign response.
You can find many companies by searching for e-mail marketing on any search
engine. Constant Contact is a company who we have previously used and you can
find more details by visiting http://www.constantcontact.com.
7.1.2
Affiliate Programs
Advertising programs with an affiliate program can reach many new customers
through a large portfolio of sites. Here you can pay per click, pay per sale and even
pay per lead. The campaign can include one or all of the different methods
available. This requires more of an investment in marketing than some of the pay
15
per click programs. However you will get campaign managers helping you to plan
your campaign and target your specific customers.
Listed below are two of the popular affiliate marketing companies
http://www.tradedoubler.com
https://www.cj.com/
7.1.3
Blogs & News articles
One of the simplest ways to promote your website is to create blogs or news pages.
There is no cost involved and you can get an audience provided your material is of
interest to your targeted audience. If you are managing your web pages then create
a news section and find related news to your market area and add news each day
or every week.
There are many companies providing blogging services. You can subscribe to one
and become an editor running a communication space online. This will be your
window to the world to attract key customers attention by writing about your market
area. The visitors can follow links to your website or any ads you place on your
blogging section.
You can find more details about blogging at https://www.blogger.com/start
7.2
Traditional Marketing
Just because you are running an online business doesn’t mean to say that all your
campaign needs to stay online. There are many mediums available offline that can
offer good marketing campaign to your key audience.
16
7.2.1
Print Press, TV and Radio
Newspapers and Magazines
Local, national and even international news papers and magazines can offer good
deals for placing ads on their prints. You need to negotiate and plan in advance
your campaign and any promotions. News papers and magazine offer last minute
deals to fill empty spaces. Contact the companies in advance and ask them to keep
your contact details for any last minute offers.
TV and Radio
Most people think TV and Radio campaigns are very expensive. Traditionally that is
the case but with hundreds of satellite TV and Radio channels the cost of
advertising is coming down. There are TV companies offering 16 spots of 30
seconds commercials for £600. In addition to that you would need to budget for
commercial production. So don’t rule out this medium as it can offer a god solution
for certain markets.
7.2.2
Billboards and Leafleting
Billboard campaigns can be anywhere from towns to motorways. The cost varies
depending on location and poster quality. You can also get a publisher to print
leaflets for your campaign and distribute to your local areas.
7.2.3
Associates, Friends and Relations
Everyone’s plan of a marketing campaign includes internet, newspapers, TV and
Radio but don’t forget your associates, friends and relations. They are very good
ambassadors and can help to promote your company. Most people take an interest
in other peoples experience, likes and dislikes. Promote your business and
products to people you meet outside your business environment.
7.3
Search Engine Optimisation
We have left this till the last but this is a very important part of website promotions.
Your involvement in this area will depend on whether you are managing your
website or using a web developer. This topic requires a document especially
dedicated to this subject alone. Hence please don’t get disappointed if we are
focused on high level optimization activities.
If you are using a web developer, discuss your requirements for ongoing search
engine optimizations. This is essential for good online presence.
7.3.1
Web Page Optimisation & Links
Some of the tips we have given throughout this document is focused around
achieving good positions on search engines. If you have followed these advices in
this document then you have already taken the first steps towards optimizing your
website.
The contents of your website, the number of websites linking to your site all help to
achieve a good position and improve you’re ranking on search engines.
For more details visit http://www.google.com/support/webmasters/?hl=en
17
Link Exchange
This is an activity that can help your sites ranking provided you manage the sites
you link to and the ones linking back.
You can ask other websites within your business market to exchange links with you.
The more links you have back to your site the better your chances are of getting a
good ranking.
7.3.2
Search Engine Submission
Once you have launched your website, make sure you submit the URL to all major
search engines and directories.
Listed below are some of the search engines and directories, there are many more.
Simply find the link to submit a site (usually at the bottom of the page) and follow
the instructions.
http://www.google.co.uk/addurl/?continue=/addurl
http://uk.search.yahoo.com/info/submit
http://www.dmoz.org/add.html
18
Glossary of Terms
Term
Definition
WWW
World Wide Web
VAT
Value Added Tax
URL
Uniform Resource Locator
SEO
Search Engine Optimisation
PPC
Pay Per Click
PPS
Pay Per Sale
PPL
Pay Per Lead
19

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