What about shipping charges? Online shopping breaks down most often over shipping charges. Imagine this: A customer sees a great price for just the product she’s been searching for. After entering the information on the electronic order form, she is startled to see a huge shipping fee tacked onto the price. The result? By barely lifting a finger, the shopper clicks off the site and goes elsewhere.

Some online companies absorb shipping charges; others include them in the listed price and offer “free” shipping. All the major postal carriers have websites that allow merchants to calculate the shipping charge for any item, based on weight and location.

Shipping efficiency and pricing can be major competitive advantages or hand grenades in an online store’s shopping cart. Try to make a profit on shipping charges — your store is more likely to lose the sale than gain the margin.

What will the elements of your customer service policy be? Because customers expect to be able to contact a company with questions, special requests or problems related to ordering, online businesses should offer an e-mail address or phone number for customer service inquiries.

Not only is customer service a great way to build loyalty, but it’s also a valuable feedback mechanism–customers are all too ready to sing your praises or call out improvements that need to be made to your product, service or image.

An important aspect of customer service is deciding how quickly the business will respond to customer inquiries and complaints (phone or e-mail). This response time should be realistic and consistent. If the policy says all phone calls will be answered within two minutes or returned the same day, that time line becomes a pledge to the customer.

Nothing frustrates an online shopper more than sending an e-mail to an address listed on a shopping site and waiting hours, days or interminably for a response. To keep customers on the site, businesses must keep them in the loop.

Be honest and follow through with your customers – your competitors are only a click away!

You’ve read the first two articles in my “Online Business” series and you’ve done the preliminaries. Now the first major choice you’ll have to make. Will you do all the work yourself or will you outsource it?

The doors of an online business never close. By not running a 24/7 operation, online business owners may fail to fulfill orders in the manner promised–a surefire way to lose customers and miss the chance to build loyalty. Internet businesses need to operate full time, so entrepreneurs must be realistic about how much help they will need.

Typically, online business owners find that their hands quickly fill up with the chores and challenges involved in simply running their businesses. They’ll often turn to web experts, or professionals who coordinate online business tasks every day. With the numbers of well-trained web professionals out there today, consider these possibilities when looking to hire:

• Hire someone who will be dedicated solely to web management, if the nature and size of the business supports it.
• Hire temporary employees to help set up the business and bring them back periodically to make changes to the site, expand online capabilities or launch new ventures.
• Outsource the development, design and hosting of the website and rely on an outside organization to keep it up to date and to manage growth.
• Use an “e-commerce in a box” product to set up an e-commerce site. These products typically charge a monthly fee (around $25) and provide an online store with virtual shopping carts (locations where shoppers electronically place the items they want to buy).

Choose wisely, your business depends on it.

Who is your target audience? Anytime a business opens its products or services to a new market, management must consider the geographic, demographic and socio-economic factors that determine how it will approach the consumer. Some offerings, such as toys, school supplies or nursing services may be targeted primarily to a specific age group.

Other products or services, like snow blowers or swimming pool supplies, could target a specific set of geographic areas. Every audience is unique, so merchants should tailor their marketing and communications in a way that connects consumers to their businesses.

How far will the business cast its net? In a global economy it’s entirely possible that a small business owner could start the morning with an e-mail from Milan, asking if he’ll accept payment in Euros. Online entrepreneurs must understand that, from day one, they are international businesses with display windows and checkout stations in every corner of the globe.

A business could tell its customers that it ships only to North American locations or accepts only U.S. dollars. But it may turn out that the overseas market is the company’s very best sales opportunity. Therefore it’s important for the online business to determine how it will work with customers in foreign nations.

How will shipping be handled? Is the company prepared to convert currencies? How will the business communicate with customers who speak different languages? Online businesses should consider not excluding an eager marketplace just because it seems difficult to serve.

There are several services that make it easier for international visitors to order from a U.S. store. PayPal, for instance, accepts payment on behalf of merchants in U.S. dollars, Canadian dollars, Euros, Pounds Sterling, Japanese Yen, and Australian dollars. The major U.S. credit cards accept purchases from foreign countries and make the necessary monetary conversions for the buyer.

You will have several important questions to address honestly here.

Does the web make sense for your business? The web has an immense power to transform a business. With that said, sometimes a product just doesn’t seem to lend itself to online sales — at least at first glance. Businesses like amusement parks, bowling alleys and utility companies either require the customer to be on-site or offer a product that is largely intangible.

But even for those types of businesses, customers have come to expect an online presence. A company can sell tickets or offer discounts through its website, show images and videos of its facilities, set up online games that relate to and increase demand for its offerings, or enable customers to make payments over the internet.

What are other companies doing? Just as with their brick-and-mortar stores, online entrepreneurs must understand the competition if they hope to survive. A competitive analysis will help equip online business owners with the information needed to promote and differentiate their online businesses.

The leap for entrepreneurs who open their doors on the internet, however, is learning not just what other competitors in their physical geography are doing to spark sales, but also what the competitors who share their cyberspace are offering. Say you want to sell beauty products online.

A keyword search for “lipstick” in Google, eBay and online shopping portals offers a glimpse at which competitors come up most often and highest on the list. Then, a look at those competitors’ product selections, pricing structures, promotional offers and target audiences can help shape your own storefront to stand out from the gaggle of competitors.

This can be a time-consuming process, but it’s invaluable research that costs hours rather than dollars. In this instance, time is money that will be returned many times over.

If there are already businesses in this space, it’s important to differentiate. Perhaps offer a more comprehensive set of products or services. Maybe the business will have a customer service or technology advantage, or consider tailoring the product to a niche market?