Acouple of years ago, retailers were told to go online or die. Now, with a few large exceptions, e-commerce looks like a fool's game - no place for a small retailer, surely?
Paul Sims, of independent florist Bath Buds and Blooms, disagrees. His website at www.bathbudsandblooms.co.uk, opened last September, is providing a quarter of his business, and it's growing fast. Sims and his partner Chris Cox paid design firm Webbed Feet £1,200 to set up the site, a similar cost to a single advert in a directory, he points out. They will also be charged £100 annually. "We've had a lot of companies phoning up, talking about exorbitant fees, says Sims. "I had one saying, we'll charge you £7,500."
The shop is on Moorland Road in Bath, a local shopping street well away from the central area favoured by tourists. But the website has opened Buds and Blooms to custom from around the world: Sims has received orders from Korea, Hong Kong, the US and Switzerland. He says half his web business comes from overseas.
The orders are sent by secure email, and Sims then processes them as he would a telephone credit or debit card order - technically known as a "customer not present" transaction. He accepts orders for delivery anywhere in the UK, but has friends in several cities who can provide orders on his behalf, as well as access to a specialist delivery service, for orders outside Bath.
One idea for boosting repeat business is an email service where customers enter a date when they want to be reminded of an anniversary or a birthday. It's automated; Sims just sees the orders it generates.
Across town on Walcot Street, an area at the edge of the centre known for specialist independent shops, Ann-Marie Dyas is similarly pleased with her web sales. She owns the Fine Cheese Co, which also includes a shop in Cheltenham, a wholesale service for local hotels and a mail-order catalogue.
Mail, phone and web orders account for 10% of her business: the website www.finecheese.co.uk is generating about two-thirds of a week's orders. "I think it's doubling year over year," she says, of the web business.
Dyas paid a firm called Web-Pro "less than £5,000" to set up the site in 1999. As with Buds and Blooms, she has found it generates overseas orders for UK addresses. She shows recent Father's Day gifts ordered by offspring in Los Angeles and the United Arab Emirates.
However, she found it took a while to take off. "It's not as quick as opening a new shop, where you know within months if you have got a business or not," she says. "You have to show some patience." She says promotion is key. "The website address appears on every piece of communication." The site itself uses photos of the shop, to get across its atmosphere.
Over the last couple of years, the firm has changed many of the mail-order catalogue's photos from atmospheric shots with several products - which Dyas thinks work badly on the web - to crisp white-background photos in which the products are separated. These can be cut up, and used on the website.
In terms of delivery, the Fine Cheese Co gets customers to specify when they want the product, so it can deliver as close to that date as possible. To this end, it asks for alternative delivery options, if the customer is out. "We've even had someone who said, put it in the rabbit hutch," she recalls. The office address, or a friend down the road, is the usual choice.
But other retailers in Bath have done less well with e-commerce. The Linen Press, an upmarket gift shop for bath and bedroom goods near the Royal Crescent, has got little use from its website at bathbedbeyond.co.uk, which it opened in November 1999.
"The trouble is, we sell quilts and nighties - touchy-feely things that people want to touch before they buy," says joint owner Mike Cavell. The shop plans to turn the website over to its designers, in return for a reduced fee on each sale. "We'll still be involved, but to a lesser extent." The shop also had problems with its domain name, which is similar to a large US company's name.
Another light web user is Bath Aqua Glass. Its main shop, the Glass House, is in a prime tourist location within the shadow of Bath Abbey. It specialises in coloured handmade glass, particularly the dark blue Bristol variety, and a cyan-coloured range called Bath Aqua Glass.
Annette Martin, owner of Bath Aqua Glass, described sales through bathaquaglass.co.uk as "a sideline": she receives about four orders a week this way. "Most are from customers that have been in the shop, then they reorder," she says, particularly those from the US.
Martin says development of the website is not her priority. Instead, she has opened a visitors' centre on Walcot Street, where people can see glassmakers at work. And other forms of promotion work better: "I'm glad I've got a website there, but I'd rather invest in the shop, or the old-fashioned leaflet."
She says one of the problems is web designers, who "cost a fortune and promise the world. We've been through about three." She now takes advice from UK Online for Business (ukonlineforbusiness.gov.uk), which provides a free directory of designers they have checked for financial stability and quality, by looking at accounts and taking customer references.
Andy Poulton, a west country e-business adviser at the service, says the experience of these small retailers is not atypical. "Products that make gifts lend themselves to an e-commerce site. You don't need to have the full tactile information," he says. "Online florists are extremely popular."
He reckons that retailers should budget about £1,000 for a brochure site that doesn't take orders, and at least twice that for one that takes card details online, if the work is given to a third party.
Getting card details processed by a firm such as WorldPay, NetBox or SecPay - The Fine Cheese Co uses SecPay, whereas Buds and Blooms process cards in the shop - can be expensive. It can add 2% to 4% to the existing merchant account cost, and the firms can take several weeks to pass on the cash, Poulton warns.
However, Dyas says using a third party for card processing allows finecheese.co.uk to be listed in more search engines, as it is considered more secure. "It would exclude me from certain transactions completely," she says, of not doing so.
At Bath Buds and Blooms, Sims says he is keen to get more online business, but not too much. "Both me and Chris like talking to people," he says. "If we had 100% on the web, it wouldn't be the same." Given that he's found that locals prefer to drop into the shop rather than order online, this seems unlikely to happen soon.
Taking your business online
o Calling in the professionals? UK Online for Business (ukonlineforbusiness.gov.uk) has a vetted directory of web designers if you decide you want to pay someone else to sort out the technical details and create your website. But beware - even a modest website can be expensive.
o You could do it yourself: at the Business Solutions website you can read about how one businesswoman set up a website that saved her business during tough times: www.theguardian.com/sbs/story/0,7369,674867,00.html
Setting up shop online
If you want to trade online, how can you keep the costs down? If you are handy with a computer - and, particularly, can design decent web pages - setting up shop online can be quite cheap.
Firstly, you need web-space. Several internet service providers, including Freeserve and BT Openworld, provide users with this as part of their service. Alternatively, it can be hired from about £30 a year.
Your web-space will have a domain name, but you may want something snappier. The cheapest option is Nominet UK domain names, such as those ending with .co.uk. These cost £8.81 for two years from www.lowcostnames.co.uk, which provides web-forwarding, email forwarding and national-rate telephone support. Several firms have similar-priced offers, but watch that they don't place an advert while forwarding traffic to your website.
Then there's the question of payments: accepting them online could be your biggest cost. You could side-step this by providing online or emailed reservations, in lieu of a cheque or card payment.
A low-cost method for accepting payments comes from www.nochex.com, which offers a cash transfer service denominated in sterling (unlike paypal.com, which is US dollar-based). Nochex charges 99p or 1%, whichever is larger, for a user to "upload" cash from his or her bank account, and the same amount for each "download". Transfers are free. But if you want to make it completely free for customers who don't have an existing Nochex account, you might want to meet their upload fee.
To accept debit and credit cards, you will need a merchant account with a bank, which can cost 2% to 8% of revenue, along with a secure method of accepting card details: unencrypted email is not good enough.
Functionality for this, and for providing an online catalogue and shopping cart system, can be found in software such as Actinic's, which costs around £350. You can find freeware online providing similar services, but you need to know what you are doing. If a customer's credit card number gets pinched by a hacker, they are unlikely to give you much repeat business.
