E-Commerce: Selling Direct to Your Fans
The new buzzword on the Internet is E-Commerce. That's fine
and dandy but what does e-commerce mean? Simply put, it's
electronic commerce or selling products online; simply not,
it's getting online, erecting a web site, promoting it, setting
up a store front/order page, processing orders, mailing CD's
and merchandise, and…well…you get the idea. Anyone
with a product is either already online or thinking about
it, including artists. You're always hearing someone saying,
"Man! You should get online and sell stuff…"
This person probably doesn't have a clue what it takes to
drive hoards of surfers to a site and fulfill orders. It's
a lot of work, but I'm going to show you how to be lazy and
get paid.
It seems like with anything new on the Internet there is wide
spread fear of fraud and theft. Most of these issues are just
old emails still floating around on the Net. The Internet
community has since addressed these concerns, making it safer
to shop than ever. Plus, there are signs that more netizens
are shopping online and more frequently. In 1997, there were
nearly 20 million online shoppers. They grew to 48 million
at the end of 1998 (Nielsen, 2/99 study on E-Commerce). Furthermore,
the age of online shoppers is mainly between 18 and 34, the
same demographic that makes the bulk of the record industry's
in-store sales!
For the first time ever in history an artist can reach the
same demographic that the record industry has dominated for
decades. Now is the time to get online and do your voodoo.
But I am getting ahead of myself. (Look for the next installment!
It's going to blow you away!) In this installment, we're going
to explore how you can become an E-Commerce dynamo. Let's
start off by looking at the various ways you can collect money
instantly from someone and not have to wait for a check to
be mailed and clear the bank. So put on your shrewd-business-man
cap and read this carefully…
Accepting Credit Online
If you already have a web site, it would be a mistake not
to accept credit cards in addition to checks and money orders.
It is a proven fact that cards increase impulse buys. Processing
credit cards are also the most efficient way to collect money
and fulfill orders. This convenience can come with a heavy
price tag, though. Card services charge higher rates for transactions
because they consider musicians to be "high risk."
If you have bad credit many card services will boast they
can finance you. Don't fall into this trap. Your transaction
fees and financing rates will be substantially higher, making
your profit margin shrink a great deal.
In addition, if sales do not reach a certain amount each month
the major card companies - VISA and MasterCard, especially
- charge a "minimum" processing fee to your card
service. They gladly pass this fee onto you - the customer.
Unless a large amount of merchandise is sold, accepting credit
cards on your own is not economical. Fortunately, there are
other options. One can use Internet Billing Services (IBS)
to accept credit cards and process orders without a large
initial investment. So how does one know where to begin?
What You Will Need
Whether you will be able to process credit cards on your own
is determined by several factors. If you are selling a lot
of merchandise and/or carrying several items (CDs, shirts,
stickers, MP3 files, etc.), you should consider processing
cards yourself. If you have bad credit, make a few sales,
or carry a couple of items, then go with an IBS.
Determine Your Needs:
* Do you sell a lot of merchandise? Carry several items?
* Do you have bad credit? Not making sales? Only have a
couple of items?
To accept credit cards on your own you will need a credit
card verification service, merchant bank account, order fulfillment,
and a service provider that furnishes SSL encryption. For
an initial setup fee and a percentage of each sale an IBS
will process credit cards for you. Many drop ship as well.
Here is a detailed examination:
Accepting Cards on Your Own
It is necessary to acquire and maintain the following to process
credit cards:
* A Merchant Bank Account
* Secured Socket Layer server access (SSL)
* Credit Card Verification Service
* Shopping Cart Page / Store Front
*Order Processing / Tracking
Pros and Cons
* Cost can vary from a few to several hundred dollars to
start off
* Financing and Insurance required to cover equipment
* Fees per transaction (need $1500 to $2000 in sales to
break even)
* Special equipment required
* Need to carry inventory, fulfill orders, shipping &
handling
* Storefront development / Maintenance / SSL
* Collection of Sales Tax
Internet Billing Services (IBS)
* Don't need a Merchant Bank Account
* Don't need Secured Socket Layer server access (SSL)
* No Shopping Cart Page / Store Front Development
* No Order Processing / Tracking
Pros and Cons
* Can cost nothing to small setup fee
* Most carry inventory and drop ship for you
* Larger IBS's require a UPC label to track orders
* Take percentage of each album sold
* Order page doesn't match site's theme
* Breaks professional facade and can be disruptive
An IBS is a tremendous saving of time and money! Until you
reach a large volume of sales, this is the only way to go!
A great IBS is CD Baby. They drop ship merchandise and don't
require a UPC label on your CD. Tell them that Taco Truffles
sent you and get a substantial discount! CDNow and Amazon.com
offer similar services, but they take longer to fulfill orders
and take a bigger hit. Plus, you won't get personalized attention.
The advantage of going with one of the larger guys is that
some customers prefer to buy from a huge reputable online
vendor. One can cover all the bases and submit materials to
each IBS, like diversifying a site in search engines. For
more information visit http://www.cdbaby.com.
(editor's note: for the more D.I.Y.ers, check out these
services as well: Card
Service International, iBill)
Well that's it for this month. Want more? Visit our site and
order our new pamphlet on non-Spam email promotion techniques.
For a limited time it can be yours free when you purchase
the The
Complete Guide to Internet Promotion for Musicians, Artists
& Songwriters. This guide covers in more detail how
to use e-commerce to your advantage. It also covers how to
integrate email with your web site effectively, increase your
contact list, and generate repeat traffic to your web site.
Visit here
to get your copy today.
Next time: I'm gonna talk about why you should get online
and why now is the time... But you'll have to come back here
and read it…
Next-Next Time: An overall strategy for promotion and distribution
of your music online - not just MP3 either. Stay tuned….
It's all here on MusicPromotion.net.
About the Author: John Dawes is an
independent Internet consultant and founder of MusicPromotion.net,
a company specializing in affordable web hosting and design for artists. He is
most known for his informative articles on Internet music promotion and is co-author
of international bestseller The
Complete Guide to Internet Promotion for Musicians, Artists & Songwriters,
with music industry guru Tim Sweeney.
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