The IMRG e-retail sales index this week reported a growth in e-commerce of 16%, despite the recession.  This news supports our post ’E-commerce in the Credit Crunch‘ from 1st December, which stated that some of our customers where reporting a sizable increase in sales.

So despite October this year seeing the first monthly traffic fall since records began, it looks like e-commerce continues to out perform the High Street.

We have many customers who have made the transition from eBay to EROL. They do this for a variety of reasons:

• Security – you own the software and all information that creates your site.
• Design -you have complete control over how your site works and functions
• Search Engine Optimisation (SEO) – very fine SEO control on each individual page allowing you to maximise your chances of appearing in the top search engine (Google’s) results pages.
• Cost – once your online earnings go over a certain threshold, then it becomes cheaper to have your own (rather than an eBay) shop…

…Taking a look at cost in particular:

As mentioned, we have found that there is normally a threshold that those selling on eBay reach before it becomes economical to switch to running your own e-commerce store.

eBay costs

To illustrate this, eBay charge an insertion fee of £0.10 plus £0.35 for optional features, then 8.75% of the final sale price. If the payment is taken via PayPal then a further charge of 3.4% plus £0.20 is charged. With a product sale of £50*, the cost for selling via eBay/PayPal would be £6.57 per product (approximately 13% of the product sale price).

If you are selling one item a day via eBay with an average value of £50*:

Total first year cost: £2398 inc VAT

EROL costs

The costs to consider when setting up your own e-commerce website are:

• Domain Name: £20.00 inc VAT per year
• Hosting: £90 inc VAT per year
• Payment Gateway: £360 inc VAT per year
• Software: £460 inc VAT one off fee

Total first year cost: £930 inc VAT

Summary

Taking the above example, this is a saving of £1000 per year! This money could be put back into the site – building traffic, improving design or usability. Remember, when you invest in your site, you are investing in just that – your site, but when you spend money on eBay the money can rapidly seem to go into the ether.

*The average order value through all EROL stores during 2008 was £59.89.

The BBC recently reported a decline in both High Street and online sales, highlighting a 4% drop in online sales compared to last year’s figures. In comparison to the last three months leading to Christmas last year which saw UK internet sales rise by more than 50%.

In July this year online sales were accounting for nearly 20% of all retail spending, suggesting that online sales was going to continue outperforming the High Street shops. Is it all doom and gloom with this first decrease in Internet sales since 2001? Should those who are looking to start an online business fear the worst from under-confident consumers?

Feedback from our customers would suggest otherwise – more often than not they are actually reporting a sizable increase in sales, for example: Jeremy James from I Want Pants told us sales are up 62% compared to the same week last year, and Duncan Innes from Sussex and the City reported a sales increase of around 400%!

With the credit crunch and Christmas around the corner more and more people are turning to online stores searching the that ‘must have’ bargain.

What are Heading tags?

Heading tags are HTML tags used to create titles and subtitles within your content. They also tell your web-browser what to emphasize (make bigger) and are important to tell search engines what your content is about.

They are in order of importance from <h1> (most important) to <h6> (least important).

Heading Tag Examples.

Heading 1 (<h1>)

Heading 2 (<h2>)

Heading 3 (<h3>)

Heading 4 (<h4>)

Heading 5 (<h5>)

Heading 6 (<h6>)

How does it affect Search Engine Optimisation (SEO)?

Read full article…

The Standard Rate of VAT in the United Kingdom is changing from 17.5% to 15%. This change will be effective from 1st December 2008 to 31st December 2009.

EROL store owners will be glad to know it is simple to change the VAT level in EROL.

How Does it Actually Affect Those Running Small Businesses?

2.5% doesn’t seem like much of a change, and whilst I don’t think it is enough to warrant me buying that much ‘needed’ Flat Screen TV, it will surely make an impact on the larger scale.

This change is inconveniently timed for small business owners: a great number of small businesses are now having to rush around, making changes to their prices in time for the adjustment on Monday 1st December 2008. Obviously, this is not what they want to be doing – in what is the first week of the Christmas order rush.

Christmas campaigns, planned and put into action months ago, will now have out-of-date prices (think brochures, displays and other promotional items – now all with the incorrect price). One EROL customer who owns a boutique store faces the challenge of re-creating 3000 price tags over the weekend – all of them handwritten.

The question most store owners are asking themselves is ’should we bother passing it on?’. While the Chancellor ‘urges’ retails to do this, those who have bought in stock ready for Christmas and have paid for that stock at the 17.5% rate will think they have to keep the 2.5% to cover costs.

Those with bespoke shopping cart systems who have already paid a considerable amount for their system could now find they have to pay again to change the VAT rate. This is because VAT rate has been ‘hard-coded’ into their custom software – having the VAT value  ‘hard-coded’ into the shopping cart system means it will cost the store owner time, effort and money to hire a web-developer to change it to the new 15% rate. Lesson learned: don’t hard-code the VAT rate into your online store.