Popular Myths About E-Trading

This article appeared in the August 99 edition ofComponents in Electronics .

Much has been and is being said about the Internet and "e-trading" or "ecommerce" and a good deal of it is so much hot air! All the figures about how many billion trillion $s/£s of business will be on the Internet by the year dot frankly bore me silly. What counts is that, despite English reserve, much business will be transacted on the Net and woe betide the company which ignores it!

The other myths about e-trading abound so I thought it might be useful to smash them:

"It's expensive"

Rubbish - you can even do a site yourself using easy-to-use packages like Dreamweaver or FrontPage and the cost of hosting a commercial site is minimal - but make sure your hosting company ("ISP") can support your site creation tool and also give you other important support such as secure access (get them to confirm these points in writing before signing up to them). Also grants may well be available through your local Business Link - they paid for a third of the cost of our site.

"It's not profitable"

Whilst it is true that Amazon, for example, still makes a loss, their rationale is that they are ploughing profits back in for growth and we all know that growth means no profit. It is not "sexy" to be seen to be making profit as a Net based business. But all this does not apply to "real world" businesses using the Internet. Whilst one should not expect too much in the early stages from an ecommerce activity, if you set it up properly with the right terms and conditions tailored for use on the Net, you could add considerably to customer service and save considerably on overheads. It is especially effective in putting smaller businesses on an almost even footing with their larger competitors, opening international markets otherwise beyond their reach.

"It's complicated"

Nonsense - there are now endless software packages available to simplify the process. The only bit they do not cover is the legal angle which even HMV has admitted it should have done at the very outset of their ecommerce activities.

"It's dangerous"

Not true if it is done properly. There are security and fraud issues here and these can largely be covered by decent software, although not entirely but enough to make it commercially very viable. The other issues are legal and can be dealt with through a mixture of corporate planning and protection as well as effective terms of trading for the Net and even insurance.

"There are no laws on the Internet"

On the contrary, there are too many with lawyers struggling to cope using antiquated laws not designed for the Net. It can only be hoped that in time a global legal view will be taken. If the new Ecommerce Bill is eventually allowed through it is anticipated that it will place the UK as the leading zone for ecommerce in the world.

NEED TO KNOW MORE?

For further information on ecommerce, contact Maitland Kalton or Julian Danobeitia.  Should you prefer to telephone, call us on +44 (0)207 278 1817.

Kaltons Solicitors, Suite 302, Spitfire Studios, 63-71 Collier Street, London, N1 9BE. Telephone +44 (0)20 7278 1817; Fax: +44 (0)207 278 1835.

© Kaltons Solicitors August 1999.  All rights reserved.