Key To Successful E-Commerce Is Research

ByJonathan Katz Businesses considering jumping into the e-commerce craze may want to thoroughly research their market before getting started, according to research by Pinnacle Decision Systems, a privately held computer consulting and software company in Middletown, Conn. "Being first in your market on the Internet isn't always a good thing," says Lisa Kerz, Pinnacle Decision Systems' senior product developer for the Internet. "Study your competition and see what they are doing right and wrong and learn from their mistakes. If you're coming in late to the game, you have the advantage of 20/20 vision on your competitors mistakes." E-commerce entrepreneurs need to determine whether a market exists for their product because not everything can be sold on the Internet, Kerz adds. This can be determined by sifting through online news and chat rooms or by forming a focus group. Some of the products that can be difficult to sell are:

• Products with high shipping costs relative to the product, such as small impulse purchases (gum, candy, etc.)
• Products that require alternative shipping methods, such as bulk mulch.
• Highly regulated products, which include alcohol, tobacco, and fireworks.

Products that have a higher chance of success include clothing, books, groceries, specialty foods, consumer electronics, and computers, Kerz says. In addition to research, e-start-ups should consider time as a factor of success. The longer a company takes to develop their site, the less chance of prosperity, says Stacey Kivel, director of information technology at Pinnacle. "Computer people are using a segment of time called a 'Web Year' that represents how fast time goes by on the Web," Kivel says. "Currently a Web Year is equal to only a few months, meaning the Web is aging quicker than you are. This also means you don't have time to waste and need to hit the ground running." Other factors that should be taken into consideration are security, an attractive domain name, and Web-site design, according to Kivel. "When you are on the Internet, you must remember that the world is your market," Kivel says. "For those who plan ahead and constantly innovate, the Web can be an exciting and profitable venture."