2008-04-17T16:27:40-07:00 Practical Ecommerce info@practicalecommerce.com http://www.practicalecommerce.com/ Copyright 2007 Confluence Publishing DBA Practical Ecommerce http://www.practicalecommerce.com/articles/718/Insuring-Against-Fraud-Data-Breaches 2008-04-17T16:27:40-07:00

A few insurance companies provide policies for credit card fraud and data breaches, covering both a merchant's hard cost of fraudulent sales and any liability for data breaches. AIG, the publicly-traded insurance company, was one of the first. AIG has offered Web Merchant Guard since 2001, a policy "designed for merchants that take card-not-present transactions and looking for catastrophic protection from online fraud," says Mark Camillo, AVP for AIG's Identity Theft and Fraud Group. "It's not something that's going to pay for the first dollar of loss, but it will pay for fraud that exceeds your normal level." The annual deductible for Web Merchant Guard is typically around 1 percent of a merchant's total sales, with premiums of several thousand dollars per year. Three to six other insurance companies offer similar coverage. "I don't think small merchants are aware of the repercussions of fraud," says Dan Clements, president of Card Cops, a website that gathers compromised...

http://www.practicalecommerce.com/articles/717/Merchants-Liable-For-Data-Breaches 2008-04-17T16:06:14-07:00

What do online merchants Art.com, Geeks.com and Bananas.com have in common? They're three in a small, but growing, list of ecommerce sites hacked for their customer's credit card data. Not only are there legal ramifications for not protecting customers' private data, but breached companies also stand to lose an average of $128 in business per compromised record. That's according to a 2007 survey of 35 breached merchants by Ponemon Institute, an independent privacy-management-research firm in Michigan. It's the Federal Trade Commission that sets guidelines for e-merchants holding customer data. Merchants must "protect the security, confidentiality, and integrity of personal information collected from or about consumers." Ones that don't take "reasonable steps" to do so, can be required by the FTC to submit to, and pay for, security audits for up to 20 years-even without a security breach. Since 2002, the commission has charged 20 companies for breachable data. The FTC can't...

http://www.practicalecommerce.com/articles/715/Legal-Security-Regulation-Is-Coming 2008-04-16T14:59:56-07:00

Let's consider the problem first. It wasn't until 1997 that credit cards could be "securely" used online. Obviously the definition of "securely" was rather subjective, but the consuming public was told to trust the new world of ecommerce. Ten years later, data breaches and related identity thefts are exploding in volume. Reported losses of sensitive personal data such as credit card numbers or financial information are up 40 percent, and in 2007 there were reportedly 446 breaches exposing over 128 million records. Since the very infancy of viable online commerce, there has been in the making a recipe for disaster. And that recipe begins with a little bit of self-indulgence, continues with a tad of self-regulation, is spiced up with a spoonful of regulatory intervention, and is consummated with a heaping helping of new laws. And new laws are the ingredients of today, laws that will control the life of data. How important is control of data to the online world? Pretty important....

http://www.practicalecommerce.com/articles/703/Interview-ICANN-Official-On-The-Domain-Name-Infrastructure 2008-03-26T19:07:05-07:00

The Internet Corporation for Assigned Name and Numbers, or ICANN, coordinates the domain name system globally. ICANN was created in 1998 to perform various Internet administrative tasks previously done by a range of bodies including universities, private companies and the U.S. government. These tasks involve ensuring the domain name system functions properly and that individuals and companies can easily obtain and use domain names for their lawful purposes. We asked Jason Keenan, Media Advisor with ICANN, how it all works. PeC: How is it that someone located in, say, Asia types Practicalecommerce.com in a web browser and our site appears? Keenan: Well, your website resides on a specific computer that is attached to the Internet. That computer is automatically assigned a unique number, called an Internet Protocol or IP address. Someone in Asia, or anywhere else, could type your IP address in the browser and your site would appear. But, the fact is that Practicalecommerce.com is...

http://www.practicalecommerce.com/articles/683/ADA-And-State-Disability-Laws 2008-02-27T16:38:07-07:00

We are often asked about compliance with the Americans with Disabilities Act. There is a reasonably strong argument, supported by court decisions, that a stand-alone business operating as a website with no physical presence may not be covered by the ADA. But without prolonged litigation we will not know for sure, and there is contradictory law on the point. Absent court decisions deciding whether states can enforce state disability laws, it may be that you will have to accommodate the disabled even if the ADA does not require it. If your website is a robust ecommerce site taking payments and selling goods, and you market or sell to residents within a particular state, you probably have to comply with that state’s laws. We could discuss the legal issues in detail, but that is a legal exercise better left to the litigation environment. This is about solutions, and there are none on the legal front. For the small commercial website, the business solution is really quite simple....

http://www.practicalecommerce.com/articles/677/Email-Blacklists-Kind-Of-A-Crazy-Thing 2008-02-13T17:21:16-07:00

What is an email blacklist? Email blacklists are compiled by industry watchers who track down the originating servers for emails that have the earmarks of spam. The resulting lists of web hosts, domains or IP addresses are used by anti-spam software companies, Internet service providers and corporate IT departments to determine what emails get through. - Jennifer D. Meacham Bob Frady is making his mark as vice president of direct marketing for LiveNation.com, a concert ticket mega-site based in Beverly Hills, Calif. With 26 million members, LiveNation’s emailed notices and newsletters bring in millions in ticket, CD and T-shirt sales. It’s Frady’s job to ensure those emails get through. “Sometimes I feel like the Internet service providers are playing a game of ‘What am I thinking?’ and responding with ‘You should know,’” Frady said. “Whatever the rules are, we’ll follow them. We just want to know what the rules are.” Frady already follows...

http://www.practicalecommerce.com/articles/628/Managing-Risk-When-Enforcing-Online-Rights 2007-12-10T15:23:10-07:00

It never ceases to amaze me how much theft is going on right under the eyes of major companies and they don't appear to understand how to spot and deal with it. Of course it takes many forms, often very well disguised, but every business should do its best to keep the thieves away. Web business interests are in the beginning stages of a process involving gaining some reasonable control over property online. There is a raging battle between those who believe you should be able to have complete freedom on the web to do anything and those attempting to preserve business reputations and intellectual property rights. The following is a high level description of the process Dozier Internet Law recommends to protect your company assets and reputation. The first step is monitoring, and you should be able to do this in-house: 1. Sign up for Google Alerts and include the name of everything you need to protect. 2. Register your site with a "plagiarism”-reporting reporting tool like...

http://www.practicalecommerce.com/articles/585/Legal-The-Future-Of-The-Law-Of-The-Web 2007-10-15T12:05:34-07:00

One of the compelling aspects of Web 2.0 is the leveraging of user generated content (UGC) on a much more integrated and wide-scale basis. The laws dealing with UGC are nothing particularly new. A site that allows informational postings by third parties today already has to deal with risks arising from defamation, copyright infringement, trademark infringement, privacy violations and other user generated problems. But until recently this content was the actual product sold. Under Web 2.0 the purpose of the UGC changes. It is now used to promote or sell a distinct product or service, often in a highly competitive environment and at the expense of a competitor. Consequently, the likelihood of legal problems arising evolves beyond the content centric litigation we see today. The legal issues are becoming harder to manage; the interpretations of legal principles are still evolving; and technology will outpace court decisions and legislation at an increasing pace. It’s not going to get...

http://www.practicalecommerce.com/articles/582/Credit-Card-Chargebacks 2007-10-07T10:49:01-07:00

It seems like only yesterday we were gearing up for a new holiday shopping season. Alas, a plethora of shoppers seeking competitive pricing, free shipping and prime customer service is here. We’ve struggled to work out all the kinks in our shopping cart solution and backend system, so we can fulfill orders promptly. However, one thing that we may have overlooked is the potential of chargebacks. Chargebacks are designed for credit card holder protection. They allow cardholders to refuse payment due to fraudulent use of accounts, as well as non-receipt of goods. In some cases merchant banks approve chargebacks due to damaged items or items that were not as described in catalogs or online store pages, regardless if the merchandise was returned. The practice is sometimes abused by online shoppers, in hopes to get a product for free, but many times inquiries are made out of forgetfulness or ignorance. The majority of merchant banks charge fees for chargeback inquiries —...

http://www.practicalecommerce.com/articles/580/Caveat-Vendor-PCI-Is-Here 2007-10-03T17:52:14-07:00

Questions Regarding PCI Compliance? Have a PCI/DSS question for SecurityMetrics’ Brad Caldwell? Email them to Pat Callahan at pcallahan@practicalecommerce.com, and we’ll run the answers in future articles. - PeC StaffHere’s one of those cold chill up your spine thoughts: Every day, there are at least two new threats to data security developed by identity thieves and Internet system hackers. And it never stops. Security pros slam and lock one gate and the hordes find another chink and slither through. Now, here’s another real spine chiller: If they make it through and steal your customer’s data, it is your fault. Two thirds of the states now have laws that make it a prosecutable offense if an ecommerce merchant fails to maintain compliance with data security standards allowing hackers, phishers and other varmints to invade their system. California was, at this writing, close to passing the Consumer Data Protection Act, which would force retailers who compromise data...

http://www.practicalecommerce.com/articles/544/The-Law-Of-Data-And-Information-Security 2007-08-20T13:14:37-07:00

I don’t need to recite the many security breaches that have led to major financial losses for companies over the past twelve months. Every business should already know the risks of leaving credit card and account information exposed. Basically, the risk is total loss of your business, and possibly your personal assets as well. And the risks, of course, come from many directions. If you process credit cards, your contract mandates PCI DSS compliance on an ongoing basis with huge penalties flowing from breaches. The Federal Trade Commission could pursue website contract and privacy policy violations, just about any state Attorney General could sue for violations of a state’s data security disclosure laws, enterprising lawyers could file class action lawsuits, and every customer could sue for damages. Data loss is just an ugly problem to have, often leading directly to economic ruin. That is the problem. The solution fortunately has been laid out for you in the PCI DSS...

http://www.practicalecommerce.com/articles/517/The-Law-Of-PPC-Advertising 2007-07-09T10:25:40-07:00

Many of the legal issues existing today have little, or no, clear legal authority to guide us. This is because many of the abuses are: • Not discovered. • When they are discovered by the advertiser, they are settled confidentially. • When litigated it can take years to get a decision that is confusing, inconsistent and contradictory. Yahoo! and MSN recently launched a new and improved pay-per-click (PPC) advertising solution because the companies can make a lot more money from you through a PPC model — the most dominant advertising revenue model today. Here are the three biggest PPC issues to which you need to be paying attention: • Click Fraud: Traditionally a competitor would click on your ad, making you spend more money for poor results, leading you to deciding not to bid as aggressively or maintain a big budget with the advertisers, which leads your competitor to outbid you at a deflated cost. The more prevalent problem today is advertising distributor...

http://www.practicalecommerce.com/articles/511/Click-Fraud-Not-Top-PPC-Concern 2007-06-27T09:20:03-07:00

Click fraud has been a popular topic of discussion for a number of years, and it doesn’t appear the issue will fade away anytime soon. The industry is full of various numbers thrown around putting the click fraud rate anywhere from .02 percent (claimed by Google) to 30 percent or more. Who should you believe about click fraud, and how much should you be worried? First of all, it’s important to understand the real rate of click fraud can vary significantly from one company to another; thus, you should take any click-fraud rate numbers with a grain of salt. The percentage of click fraud will depend on a dozen different factors, such as ad position, bid price and specific industry type. The more competitive the industry and the more you pay per click, the more incentive there is for others to try to defraud you. Second, it’s very important to understand that click fraud by itself is not the determining factor in whether your pay-per-click (PPC) campaign is a success. I have...

http://www.practicalecommerce.com/articles/500/Click-Fraud--What-To-Do-When-Youve-Been-Cheated 2007-06-11T11:02:45-07:00

So you think you’re a victim of click fraud, and the question is now what? Well, it’s time to play “cyber detective” and get refunds from pay-per-click (PPC) engines for the wasted dollars. But keep in mind, because click fraud eats away search engine revenue in the form of reimbursed clicks, the burden of proof lies entirely on you. In order to rectify the situation, the first step is to gather all the information about fraud occurrences you feel may have occurred. You will need campaign and adgroup names, IP addresses, referring pages, geographic origin of the clicks in question, keywords that were searched for, the number and time range of the clicks and any other relevant data required by your search engine to process a claim. All of that information can easily be obtained from most third-party web analytics tools or from your server logs. The second step is to write a paragraph or two describing the abnormality in your PPC account, any click trends you may have...

http://www.practicalecommerce.com/articles/491/Critique-Part-One-General-Internet-Presence 2007-05-30T14:23:21-07:00

The Problem: Daddiesboardshop.com isn't taking advantage of branding opportunities on video and social networking sites. The Fix: Aside from the videos I found on YouTube and Google Video (which are a great start), very little appears externally to distinguish the authenticity of the brand and the shop in other venues. I recommend the store create more compelling content and get it out there. The Problem: Daddies Board Shop isn't leveraging strong relationships with existing customers. The Fix: The store should take greater advantage of social networks and meet-ups. Del.icio.us shows only six people bookmarked the site — which means the content should be more bookmark-worthy. Nor did I see evidence of similar efforts conducted on sites like Digg, Dandelife, MySpace and others. The store should post upcoming events on sites like Upcoming.org, Eventful or coordinate meet-ups at its physical location. The Problem: With so many friends, why the lack of links? The Fix:...

http://www.practicalecommerce.com/articles/490/Daddiesboardshopcom-Wins-Site-Review 2007-05-30T14:23:19-07:00

Melanie Loveland and her son Dan built a business together around a mutual passion — snowboarding. What started as a small, brick-and-mortar store in Portland, Ore., has evolved into a full-fledged multichannel merchant. It was a process the owners didn't foresee when the business started in 1995. Their business has seen dynamic change in the seven years since it launched a website. Daddies Board Shop now generates 80 percent of its sales through online channels and only 20 percent at the Portland store. Dan was the driving force to get the business online. However, as is the case with most small operations, the endeavor required the owner to roll up his sleeves and do it himself. "I bought [web design software] FrontPage and took a shot at it," Dan said. The original incarnation of the site was thin — about 25 pages of HTML that displayed snowboarding and skateboarding content. Once Dan put products online, however, orders began to roll in. "About two years later...

http://www.practicalecommerce.com/articles/483/The-Entrepreneur-The-Optimist 2007-05-16T10:27:09-07:00

Patrick Coughlin is experiencing firsthand the same challenges many online entrepreneurs face: It's hard to build a successful online business. Coughlin has owned a successful brick-and-mortar jewelry store in St. Clair, Mich., for 15 years. That business had grown to fill a 3,000-square-foot showroom in an idyllic community of about 6,000 people north of Detroit. Due to the increased demand for manufacturing and custom designs, American Diamond Importers is now developing plans for its next store, a 6,000-square-foot, state-of-the-art facility. In short, Coughlin is no rookie when it comes to operating a successful business. That doesn't mean he hasn't encountered hurdles with the establishment of his new online operation. In 2006, Coughlin won an eBay contest to launch a ProStore. By mid-August, his online store was open for business. Practical eCommerce has followed Coughlin's progress for the past seven months to chronicle the triumphs and struggles that accompany the...

http://www.practicalecommerce.com/articles/471/When-Is-It-Time-To-Hire-A-Call-Center 2007-04-30T13:38:49-07:00

More business is a good thing, but it creates challenges: A backlog of tasks, costly space and equipment demands and, frequently, a phone that won’t stop ringing. Many ecommerce business owners turn to customer call centers for help. That was the case for Revival Animal Health of Orange City, Iowa, a supplier of small animal products. The 65-employee company’s growth meant more phone calls from its customer base of breeders and pet owners than its on-site call center could handle. Customers who called after hours and on weekends had to talk to the answering machine. Tips To Engage A Call Center *Decide carefully. David Butler of the National Call Centers recommends you shop around and ask for a list of existing and former clients. "If they're not willing to share names, that should raise red flags." *Participate in the set-up process. "It was more overwhelming than I expected," said Karen VanderBrink of Revival Animal Services. "It was worth it, but the beginning...

http://www.practicalecommerce.com/articles/466/Legal-Your-Domain-Is-At-Risk 2007-04-23T13:44:32-07:00

The lawyers at my firm represent registrars. We also represent domain name owners. And we sometimes represent domain name thieves (yes, everyone is entitled to an attorney). Here is an insider's perspective on the new dynamics at play in domain name cybersquatting. Most domain owners think their registrar is licensed by some governmental agency with oversight responsibilities. That's not really the case. The due diligence of the Internet Corporation for Assigned Names and Numbers (ICANN) and registries in approving registrars is virtually nonexistent. All it takes to become a registrar is payment of the $10,000 fee. Yet my impression is that consumers take from the registrars a false sense of comfort — as if their mere existence ensures domain names will be protected. That assumption can get you in a lot of trouble. Recently, several registrars have failed in a highly-publicized fashion: • Some went out of business and left the domain name owners in the dark, thus...

http://www.practicalecommerce.com/articles/464/Basic-Definitions-Web-10-Web-20-Web-30 2007-04-18T14:44:05-07:00

"What do people mean when they talk about the Web 2.0?" is a query we receive repeatedly, and probably has as many answers as the number of people out there using the term. However, since talk about the Web 3.0 has surfaced in the last year or so, a whole new level of confusion seems to have set in. In an effort to help people understand the ideas behind buzzwords like Web 2.0 and Web 3.0, let's go through what exactly these terms mean (if anything), and how they apply to your ecommerce business. I want to make it clear at the start that this article is meant to be a broad definition of the challenges that cause people to think in terms of Web 2.0 and Web 3.0. Since these are buzzwords and not clearly defined terms, think of this as an attempt to provide a bird's-eye view of the ever-changing lay of the land on the web. In an effort to create discreet "versions" of the web that can be compared, I will borrow from the W3C Director Tim Berners-Lee's notion of the read-write web,...

http://www.practicalecommerce.com/articles/461/Can-Product-Recommendations-Help-You 2007-04-16T09:09:14-07:00

Most people prefer to get an opinion before purchasing a product — and if that opinion is from a current user, all the better. This desire to make informed buying decisions has given rise to product recommendation networks, such as Thisnext.com, which allow consumers to express opinions and preferences regarding any product on the market. Says Gordon Gould, ThisNext’s CEO, “Social shopping is the future of the Internet experience… More and more, people are trusting the voice of their peers more than traditional media.” What Exactly Is a Product Recommendation Network? A product recommendation network (PRN) is just what it sounds like — it’s an Internet site that enables buyers to give feedback on which products they’re happy with and why. Consumers are permitted to recommend products they like, but not products they’re unhappy with. The reasoning is that a few recommendations of the best products in a given category will be far more helpful to shoppers than...

http://www.practicalecommerce.com/articles/460/Crash-Course-on-Pay-Per-Click-Arbitrage 2007-04-11T10:02:52-07:00

If you've spent any time on pay-per-click (PPC) forums or in the blogosphere, you've probably heard about PPC arbitrage — the ill-reputed practice that drives bid prices up and makes life more difficult for advertisers. So, what exactly is it, and how can it affect you as an advertiser? In a nutshell, pay-per-click arbitrage is the practice of bidding on low-cost keywords, purchasing clicks from Google, Yahoo! and other search engines and then redirecting the visitors to dummy, one-page websites created solely for the purpose of hosting expensive AdSense ads. The arbitrageur makes money because he/she buys the first click at a cost much lower than the fee received as an affiliate when visitors click on the dummy site's ads. Enough clicks through the affiliate ad and the arbitrageur collects plenty of money to offset the cost of the initial PPC ad. Still, why is this even an issue for discussion when it could be argued that someone is simply taking advantage of market...

http://www.practicalecommerce.com/articles/459/Yahoo-Panama-So-Far-So-Good 2007-04-11T09:41:06-07:00

Yahoo!'s new paid-search advertising platform is performing well for advertisers. That's according to executives with three companies that have used the new system, known informally as Panama, since its inception earlier this year. Leigh Vosler is paid placement marketing manager with Sierratradingpost.com, a Wyoming-based retailer of outdoor gear and apparel. Link Walls is senior product manager with ChannelAdvisor, a provider of channel management solutions that manages paid search campaigns, in North Carolina. Tim Kauffold is director of business development for OneUpWeb, a Michigan-based consulting firm that also manages paid-search campaigns for others. Sierratradingpost.com, ChannelAdvisor and OneUpWeb have all purchased search advertising from Yahoo!'s old system and its new Panama platform. All three executives give Yahoo! positive reviews for Panama, which, they say, includes the following improvements and enhancements. •Instant Ad Approval — In most cases, ads...

http://www.practicalecommerce.com/articles/455/Self-service-Shouldnt-Replace-Customer-Service 2007-04-09T10:48:09-07:00

Customers are satisfied with their ecommerce experiences and in many cases seem to prefer online buying to brick-and-mortar shopping trips. That's what recent studies show — but it doesn't mean virtual merchants should allow complacency to take hold. The web is experiencing unprecedented growth as non-travel ecommerce has exceeded $100 billion. While service levels have displayed some ebb and flow, overall satisfaction with the channel has been strong in recent years — particularly in comparison to traditional retail. That said, I caution ecommerce owners to listen up and remain vigilant in their customer service efforts. Checklist for Excelling at Online Customer Communication 1. It is not enough to provide an 800/toll-free number if it cannot be easily accessed — starting on the home page. 2. Similarly, complete contact information should be provided and easily visible. 3. Call center representatives must be trained on products, operational functions and a...

http://www.practicalecommerce.com/articles/451/Selling-Your-Ecommerce-Business 2007-04-02T10:06:32-07:00

To web entrepreneurs who contemplate selling their online businesses, experts issue a single warning: Get your financial house in order. Online endeavors are frequently launched by people who have a great idea, a great passion or a distinctive skill set, but who often lack traditional business acumen. Partially-completed financial statements and an incomplete balance sheet might not impede day-to-day operations, but when it comes to selling the business, such disorganization can be a liability; a prospective buyer wants to see much more than a shoe box full of receipts. When you commit to selling your business, "you have to start running it like you are going to sell it today," said Mike Gravel, co-founder and managing director of eBizBrokers, Inc., a mergers and acquisitions firm specializing in Internet businesses. By doing so, you ensure that "when it comes time to sell, there will be no headaches. It will be an easy thing, from a due diligence standpoint." That means, as...

http://www.practicalecommerce.com/articles/450/Protecting-Your-Trademark-From-Web-Thieves 2007-04-02T09:52:48-07:00

How valuable is your business or product name? Most small and mid-size businesses aren’t aware of the value of protecting trademarks. When the focus is on making payroll, monitoring sales, providing quality customer service and reaching financial projections, it might not seem like a top priority to police the web for thieves. However, it ought to be. Others steal your name to hurt you. Such theft has an immediate impact on your sales, retentions and service costs —which pounds your bottom line. So, as someone who represents both the infringed and the infringers on a regular basis, I offer the following comments. How does it happen? You may not know how to find or recognize trademark theft. It is likely designed to avoid detection. For example, if someone steals your name and uses it in a search engine pay-per-click (PPC) campaign, the thief might not run the ad in the geographic location of your company headquarters. You won't see the advertisement in your state...

http://www.practicalecommerce.com/articles/447/Diagnosing-Site-Performance-Delays 2007-03-26T11:40:35-07:00

When your site begins to experience performance drains, which usually show up as slow-loading web pages, the problem's diagnosis can be more challenging than its solution. The first thing developers should examine is the nature of the website. Is the site a static HTML website, or does it rely on dynamic scripting such as ASP, PHP or Perl? If the site is a static HTML site, then database connections, web services and inefficient scripts are probably not the cause of performance bottlenecks. Bottleneck sources might be found in the server's Internet connection — if client-side connections and ISPs have been ruled out — or in the server hardware and software. Perhaps the server is overloaded and unable to respond to the number of requests your visitors generate. Perhaps the allotted disk space in the hosting account is full or the server is not configured properly. The answer might be simple: Upgrade your hosting account or switch to a hosting company with a more reliable...

http://www.practicalecommerce.com/articles/446/Seven-Insurance-Issues-For-Merchants 2007-03-26T10:58:26-07:00

When an ecommerce business begins to grow, new risks mount and site owners should examine insurance options. Finding an insurance agent who understands the challenges of online business has been tough for many e-business owners. Only recently have insurance options become available. Online businesses differ from their brick-and-mortar counterparts in ways that present unique challenges for insurance companies. "An ecommerce business owner has the challenge of facing all the traditional risks that any business faces, plus those unique to ecommerce," said Nancy Callahan, a vice president with AIG Insurance, which offers ecommerce coverage. Callahan says the traditional risks include protection for your property, your employees and those who do business with you. Generally speaking, those risks fall into property and casualty insurance — the property coverage protects the physical assets and the casualty coverage protects the company if someone gets hurt or suffers financial...

http://www.practicalecommerce.com/articles/440/Quick-Query-Selling-Digital-Content-Via-Major-Retailers 2007-03-19T13:02:04-07:00

Karl Hirsch is the CEO of Protexis (Protexis.com), a company that links retail outlets with companies wanting to sell digital content such as software, music, video, e-books and other digital products. What does Protexis do? We help publishers of digital content sell and fulfill content through established online channels, typically online retailers. Is this technology something new? The technology is not new, but the electronic distribution model and opportunity for retailers and publishers is new. Electronic software distribution has been around for nearly a decade now, but it has largely been used as a way to sell direct to consumers — not through established online retailers. So what Protexis does is connect publishers with merchants and then help those publishers reach more consumers in a more efficient and open way. How does the system work? A publisher of digital content would come to our hosted service through a web interface. He would upload his content, and...

http://www.practicalecommerce.com/articles/439/Setting-A-Value-For-An-Ecommerce-Business 2007-03-19T12:44:01-07:00

How much is my business worth? It’s a question most entrepreneurs eventually ask, and online merchants are no different. They want to know the enterprise they’ve invested in and continually work to build will have real value if they ever choose to sell. The good news is that profitable online companies do have value. The bad news is that there is no easy, industry-defined way to calculate what an ecommerce business is really worth. Mike Gravel, co-founder and managing director of eBizBrokers, Inc., a mergers and acquisitions firm specializing in Internet businesses, said that, as a very broad guide, a business could expect to sell for two to five times its earnings before income tax, depreciation and amortization (EBITDA). Profit and profit margins remain primary factors in getting maximum value from a website’s sale. Having a high gross sales number doesn’t always equal a large sale price — profit is generally king. “We had a [potential] client who was doing...