E-commerce can level the playing field:

The same point can be made for small businesses, which can reach wider audiences through electronic commerce-purchasing, selling and exchanging goods and services over the Internet.

So how can small-business owners take advantage of the e-commerce phenomenon? First, it’s important to understand that ecommerce isn’t an end unto itself, but a tool to grow your business-as such, it should be used only if it serves your business strategy. Ask yourself a few questions:

Can you effectively promote your product or service online?

Can you offer better customer service online, and are you equipped to fulfill online orders and interactions?

Are you prepared to make the ongoing investments in e-commerce capabilities: Web site, enterprise management, logistics, etc.?

If you can answer yes to all of these, here are a few steps to get started:

First, it’s useful to consider the nature of business being conducted. There are four general categories of e-commerce: business-to-business and business-to-consumer; consumer-to-business, which includes request services like priceline.comand orbitz.com; and consumer-to-consumer, which includes auction sites like eBay.

Defining your audience will help you devise a go-to-market strategy.

You also must decide to what extent you want your e-commerce operation to be integrated into your physical business infrastructure. Most sites today offer the customer the ability to conduct a transaction and pay online, and many give the customer delivery options, the ability to track their orders and other customizations.

Once your approach and strategy are in place, you’re ready to build your site. You’ll need a Web address, hosting service and design.

Many hosting companies offer do-it-yourself design options by providing basic templates or “site in a box” packages.

When designing your site, keep in mind that the Web is an extension of your sales and marketing effort-it’s important to give visitors ready access to the information they need, good photos of your product and compelling descriptions of your services.

If you choose to accept e-cash or credit card payments, a merchant account will also be necessary, with companies like Pay-Pal, e-onlinedata, Authorize.net and others providing the necessary “online shopping cart” and processing solutions.

Then it’s time to let the world know you are ready for business.

Search engines are a major source of customer visits, and most will allow you to submit site information for free. In many cases, for-fee placements on major engines (sponsored links) will be too expensive for the small-business budget. A smaller-scale approach might be to purchase advertising on targeted sites that reach your demographic.

E-commerce can be a powerful tool for expanding sales and giving small businesses a bigger reach. Like Friedman says, the Internet and e-commerce are great levelers, giving companies of any size access to a regional, national, even global audience of potential customers.

Taylor is an assistant professor of information systems at Indiana University’s IU Kelley School of Business-Indianapolis.

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