Revenue: How a forum can seed a e-commerce store.

By Ted S · Mar 21, 2004 ·
  1. Ted S
    So you run a successful forum, that means you have the users but what you may not realize is you are only a short step away from also having an e-commerce business. Turning your forum traffic into a seed community for a well targeted store can mean increased revenue or even better, the start of a whole new job. While I can't guarantee you'll reach financial freedom, we can help you start up your own web store with just 5 simple steps. Follow this guide and you can have a fully functional store up and running in a matter of days! (Note: this article was originally written for a general e-commerce article, applying it to a forum community doesn’t change what you will need to do, but it does mean you need to be very, very well targeted in your product).

    Step 1 -- Get a product!

    This may seem obvious, but every day someone asks me how to start a webstore even though they have no clue what it is they plan to sell! Although you can sell any product, some work better than others; products commonly found in major stores tend to be harder to sell, while rare, hand made, or highly desirable products can do very, very well. If you can obtain your product (or make it yourself) for less then the retail, shipping and tax costs then you have a winner. Because you are using a forum to seed your store you need to pick something your users can relate to. Every forum can easily sell their own merchandise (t-shirts, mugs, etc…) but what you may not realize is your particular niche probably has a lot more you can sell. A diving forum can sell scuba gear, a women’s health forum could sell books, food products or even workout equipment and the list goes on and on. Ideally you will want to find products that are either cheap to purchase in bulk or that you can drop ship yourself, email some companies in your area and ask them what it would take to become a reseller – in most cases it is simply a matter of sending them the orders and paying on a monthly invoice. The product is the simple part so long as you always remember the golden rule: if a user can't save money buying it online they aren't going to order!

    Step 2 -- Pick a shopping cart

    There are generally two ways to approach shopping cart software: either you can build your own or you can buy or download a third party product. Building your own software is time consuming and can be extremely costly. Since shopping carts generally handle private data they have to be well written and extra secure, and since they also have a great number of features, development costs tend to be high. Of course if you build your own system you can control it down to the smallest detail, which allows you to better target your customers. Custom software requires you to balance cost with features and in the end only the larger, higher volume stores will really find themselves needing this level of control. For most stores, a third party program will more than suffice. With third party systems you have a whole range of options, from free programs like osCommerce to paid carts like X-Cart. Again, the choice comes down to control, features and cost. osCommerce is an extremely powerful and feature rich program, but it is geared towards developers. Free support is limited and in the end it's up to you to assume liability, perform upgrades, add features and do any other form of maintenance. Of course if you have a developer in house (or are a developer), osCommerce provides a great start towards running your own software; the look and features are all up to you and the cost is perfect! On the other hand, if you need something a little more user-friendly with more support and an actual warranty, we recommend a product like X-Cart. X-Cart is an affordable shopping cart solution that is very user friendly and will easily tie in with your merchant account. Using a third party shopping cart is the quickest way to get up and running and provides you with the most cost and time effective way to get your store up. You are however limited to someone else's license, someone else's timeline (for support and ordering), and someone else's interface. If possible try and get or build a store that integrates with your forum user base, you may not be able to store the data with your forum but letting users login with their existing forum account makes them feel as if the store is a part of your forum, not something you added on to make a buck.

    Step 3 -- Get your site hosted

    No matter how good your software is or how popular your product may be, you need a place to put your store and in many cases, you simply can’t fit it on the same server that runs your forum.
    • Large stores expecting over 50,000 users or $5,000 per day should consider purchasing their own server. Mid-level private servers generally run for around $150-$200 and give you absolute control over every aspect of your site. With a dedicated server you don't have to worry about your host overloading clients on the machine, you control the security settings and you can upgrade as you see fit. Of course running your own server means hiring a very technical and sometimes expensive system administrator to set things up for you. Many companies will of course do this for you, but unless your traffic and profit are high enough to cover the costs of network support, you don't want to go the dedicated route. We recommend ThePlanet for high quality, well priced servers with support that is virtually unmatched by anyone else in their price range.
    • For 99% of stores, a shared hosting account known as a virtual host will work. Virtual hosting comes in many flavors from many providers. For the most part you will need to decide between a windows host and a linux host. The majority of hosts use linux because of its open source (free to use or modify) environment; linux is cheap, fast and has dozens of simple to use control panels (software that automates tasks for you) that will help you run your site (some even include osCommerce or similar free shopping carts). Windows hosting is also a good option but is generally only ideal for people using ASP or Cold Fusion programming languages or an MS Access database. Many hosts will offer you all in one e-commerce packages, which may or may not be worth your money. As a general rule, check out the individual costs of each service (hosting, shopping carts, merchant account, ssl and a domain name) before you sign up with anyone for the entire package. Also be sure that you are satisfied with the quality of these services and are not simply settling for the easy way out -- if you can't figure out how to use the software now, you will have major problems down the road. We recommend Host Rocket for e-commerce hosting as they provide reliable and affordable hosting packages in a scaleable, expandable environment.

    Step 4 -- Accepting Credit Cards

    Once you have your product, your software and your host you'll need a way to take your customer's money. While some stores accept only checks or paypal type systems, you should know that over 90% of customers choose credit cards when they have a choice! A merchant account allows you to accept credit card payments directly over your website without any delay or user interaction. Merchant accounts come in two flavors, 3rd party (run by someone else) and direct (your own account direct with the bank). You can read about these types of merchant accounts here, but for the most part, you will want to use a direct merchant account. Having the right merchant account will save you money (lower rates) and reduce fraud and charge backs with advanced screening tools. When it comes to web stores we recommend you choose a direct (true) merchant account like e-onlinedata. E-onlinedata is an authorize.net gateway provider which means you get a state of the art processing agent at a great rate.

    Whatever option you choose for your merchant account, be sure your shopping cart software from step 2 supports the merchant gateway. If possible, you will want to use a seamless integration method, which will allow your users to submit credit card data directly over your website, without making the user leave your website (3rd party systems like paypal force users to leave your website, this can mean less sales!). Also be sure to review our fraud prevention tips before you open for business. Finally, you will need an SSL certificate to go along with your merchant account. SSL certificates are used to encrypt your data and verify your business to the world. Without these documents hackers and other malicious users will have a much easier time accessing your client orders. You can purchase an SSL certificate from GeoTrust (via ev1.net) or InstantSSL for under $50. Many hosts may also provide SSL certificates for a low rate; just be sure the certificate is well accepted by browsers (over 95%) and costs less than $200.

    No web store is complete without customers and a forum user is not yet a customer! While there are many methods to getting business from your existing users (and new users), they all focus on one idea -- promotion. For internal marketing keep things subtle but prominent, you want your users to understand that this store is a part of the site they already use and not something external or third party. You also want them to feel like there is a reason to shop with you thus the need for professionalism. A good way to encourage users to become customers is to open a top level forum about your store, make a sub-forum for support, a sub-forum where you can announce new deals and a sub-forum for people to ask questions about products or suggest new products. Keep the forum in an appropriate area, perhaps a bit down your page so users don’t feel like you’re selling them out but make it visible and easy to find too. You may also want to integrate some banners promoting the store with a local feel (i.e. “Hey The Admin Zone users, Did you know we now sell widgets?” etc…). You should also have your admins put a link and line about the store in their profiles which will be viewed thousands of times. Finally, place a text link in your navigation area saying “Our Store”, you’d be amazed how many people click just to see what’s there!

    If you run out of forum promotion or just want to take your store to the next level, consider going to more general/ outside promotion along more traditional means: From Pay Per Click campaigns to banner advertising, to print ads, phone ads and TV ads there is no limit to the type of advertising you can run. Modern Insider provides a wide range of articles covering various promotion techniques that you may want to review later, but for now, always remember that the only acceptable advertising is advertising you can track. If you run ads online, track your click to sale ratio to discover how profitable your campaigns may be. If you run a radio, tv or print ad, offer a coupon code that you can use to track the results. If you're serious about turning your web store into a successful business then you need to take a serious approach to advertising. Once your store is up and running (and looking good), don't hesitate to purchase small ad campaigns all over the place. Track your campaigns and ditch anything not performing well; if you work hard and find some good deals you should be able to make a nice profit in a short time.

    Check List

    1. Day 1 - Get a product
    2. Day 2 - Pick a shopping cart and a hosting provider
    3. Day 3 - Find a merchant account
    4. Day 4 - Set it all up
    5. Day 5 - Finalize your site
    6. Day 6 - Start marketing your store!
    7. Day 7 - Your store is ready for business!

    There you go, that's the basics to running your own store. Things can become very complex quickly, but if you stick to this plan and create a task list, setting up your store will be a quick and relatively painless process. As you put your store together don't hesitate to check out your competition or other random stores for ideas of what to do and what not to do. Don’t forget to use your forum community not just to make sales but to get a feel for the utility of your store – your goal here shouldn’t be to exploit users but rather to get them interested in what you have to offer by offering what they want and already need. Keep things targeted and listen to what people have to say; there is no better method of promotion than word of mouth so make your existing users happy and they’ll tell the world what you have to offer. If you find yourself stuck feel free to drop me and get a bit of help or just some advice.

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