Prosper Newsletter: August 2007 > Ecommerce

You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.

Hosting Solutions

In order to do business on the web, you need a domain name and you need a web-hosting provider. In much the same way brick and mortar businesses lease a business where they have their store located, you must also lease a "location" for your Internet store. Instead of paying a landlord, you pay a web-hosting provider or webhost who leases you a spot on the Internet where you will have your website located. The webhost keeps your website up on the Internet so people can find it when they want to log onto it.

Hosting Your Own Website

There are several reasons to find a webhost instead of hosting your own website on your personal computer. Although hosting a site on your own computer is possible, it is not recommended unless you are very technical and you know what you are doing and are able to complete the large amount of work required to make your computer serviceable to host a website. Other problems you may encounter include Internet service outages and power outages, both of which would prevent customers from reaching your site Sometimes your internet service might be down, and if that happens or if you have a power outage, your website will not be available to your customers.

Safety is another reason to consider a webhost rather than hosting your own site. Since your website is up and running all the time, it is easier for a hacker to get into your personal computer through your website. Professional web-hosting companies have the security, firewalls and other protection that you need on your website. Webhosts will also protect all of the important information like credit card numbers and addresses that your customers store on your website. If a hacker does break in and steal your customers' information, the webhost would be responsible and you would not be held liable.

Selecting a Webhost

Some qualities to look for in a webhost are uptime, security, and fees associated with hosting your website. Webhosts run very large computers and servers to hold the space you are leasing. These computers are continually connected to the Internet so that your site is always accessible.

There are several hosting companies like Go Daddy or Yahoo that offer web-hosting services free of charge. These providers generally pepper your website with advertisements and pop-ups, resulting in a very unprofessional and inconvenient website for your customer. When choosing a webhosting company that will charge you a fee, remember that you get what you pay for. Webhosting companies have many features and options that simply aren't necessary. The companies will often offer many features and charge you for them, knowing full well that you will never really need to use them. There are several basic things, however, that you do need to manage your website.

When selecting a webhost, one of the most important things to look for is a webhost that has at least a 99.9% uptime guarantee so that your site is always ready and available. Reliability and speed are very important. The most reputable webhosts offer the 99.9% uptime guarantee. Some webhosts avoid the issue by never mentioning uptime. They will assume that you think it is an industry standard and never offer an actual guarantee. Make sure that there is some sort of written guarantee on the reliability of your host.

Many webhosts will offer you unlimited disc space for a fee. The truth is, most websites will not need more than five megabytes of space to run the site. Do not feel pressured to pay extra for unlimited disc space if you do not need it. If the site offers unlimited space at no extra charge, however, then it would not be a problem to take the extra space as long as you do not need to pay for it.

Bandwidth, or data transfer, is another important thing to watch for. Bandwidth is the amount of people that will be able to log onto your site at one time. It is like the gas that you put in your car. If you fill your tank up with gas, it is only going to go so far before you run out of gas. You pay for a certain amount of bandwidth, and only a certain amount of people will be able to log onto your site before you run out of bandwidth. Some hosts limit your bandwidth and make you pay extra to get more. You want to make sure that you have enough bandwidth, but that you aren't paying too much for extra bandwidth that you don't need. The average site uses less than three gigabytes of bandwidth a month. If you have a lot of pictures, video or streaming audio on your website, however, you will want to stay away from any host trying to sell you less than three gigabytes a month.

Another thing to look for from the webhost is a policy that outlines what will happen if you go over your bandwidth limit. If you do run out of bandwidth, some hosts will simply cut your customers off with a little pop up message that explains that your website is out of bandwidth for the rest of the month, and it will instruct them to visit later. This can be very embarrassing and make you look very unprofessional. A lot of hosts will promise that they will not take your site down, but if you go over your bandwidth after three weeks into the month, they will charge you a certain amount for whatever you use over that. Check their policies and see how much it is. Also, check the policy to find out what will happen if your site grows and you need to upgrade your bandwidth. Find out what you are getting into beforehand, and check to see if you can comfortably upgrade when necessary.

Technical support from your webhost is very important. You need somebody who will be able to answer your questions if you run into a snag. Many hosting companies advertise non-stop technical support, which is definitely worth paying a little extra for. It is worth it to have somebody there to help you no matter what time of the day you might have a problem. One way to test this is to simply log onto the website, and see if they have a link for a live chat. This way you can have live interaction with the technical support crew. Some hosts provide email support and others offer support over the telephone. Phone support is available in two different ways. Sometimes you have a toll free number that you can call at any time to receive help, and some companies offer a toll number. The reasoning behind the toll number is that they can keep costs lower if you are paying for the technical support calls. Check to see if you have to pay to contact the technical support, or if they have free access to the technical help.

Another thing that is offered by webhosts is FTP access. FTP access is File Transfer Protocol. It means that there is a program that you can install on your computer that lets you to simply connect to the webhost's computer and quickly transfer a whole group of files from your computer to their server. You can upload pictures, move things around on your computer and upgrade your website easier with this program. FTP access is almost a requirement for any advanced site.

PHP is a programming language that allows you to have what is called a dynamic website. If you are going to have content on your site that is constantly changing, blogging or has RSS feeds where you constantly have new content and text coming onto your site, PHP is a program that allows your site be continually upgraded without you having to reprogram it. If you have a simple website where the product does not change very often, PHP might not be a necessary option for you.

SSL is a very important tool. SSL stands for Secured Socket Layer, and it keeps your website secure. You will find that most reputable websites are in secure mode, and you will also want to keep your information as well as your customer's information private. It is good professional etiquette for you to protect your customer in this way. You will also find that many people will not buy from you if you don't have secure shopping.

There are two options with SSL. It comes in a shared SSL, and also in what is called a dedicated SSL. Most hosting is done on a shared SSL, which means that every time your website switches into a secure mode, the domain name changes. The host puts in a secure certificate for all the hosting clients to share, which keeps costs down for everyone.

Some people think that it is unprofessional to be on a shared SSL. They prefer the dedicated SSL, which means that the domain name will not change when switched to a secure site. It will always be the original domain name. Usually, it can cost anywhere from $75 to $1,000 per year for dedicated SSL, depending on the features and the amount of security available.

Another thing to watch for is webhosts that have a lower price tag in the beginning, but that will add on extra expenses if you want access to a secure shopping cart, or add other features that they might offer. After you add it all up, it's not a better deal after all. Make sure to check when you are setting up the website if there are any hidden fees involved.

You will also want to make sure that the more basic features are included, like email access, auto responders, mail forwarding and your own control panel where you can access your own website and change things as necessary.

Finding a decent price for a webhost is difficult because it varies with every website, but a good average price to pay would be between $8 and $30 a month. Anywhere in that range would be acceptable.

Also be aware of the length of the contract that you agree upon. Some hosts will lower the monthly costs if the contract goes for a longer period of time, this can be good if you know the webhost and you know you will be running the site for an extended period of time. There are also monthly and quarterly plans as well, which are good when you are trying out a new webhost. If you lease from them for a few months and find that their technical support is below expectations or that they go down for long periods of time, you have the option to switch to another webhost without breaking your contract.

Check to see if the webhost is a hosting reseller. A hosting reseller will be working for some other webhosts. They do not necessarily control the server or have as much access to it. They will simply lease the space for the other webhost. In a lot of cases, this means that you will not get the best service available. Sometimes you will have to directly call the company to find out if they are resellers or not.

Testimonial

Taking the Steps

In the Summer and Fall of 2005 I was feeling unfulfilled in my job as an engineer and also knew I was about to be facing College tuition bills in the immediate future for my 2 daughters, so I decided to enroll with Prosper to gain both a sense of fulfillment and also some additional income.

I was lucky enough to be assigned Andrew Melchior as a coach in the Internet Marketing group. Andrew encouraged me to choose something that I love and was passionate about so that the work would seem more like a hobby than more work to me. I chose to market ballroom dance shoes since my husband and I are ballroom dance enthusiasts. Since the start of the website, the business has continually expanded picking up new shoe lines and lucrative dance clothing lines.

Andrew taught me everything I needed to know to get my Google ranking up as quickly as possible. Within 4 months of launching my website www.bestballroomshoes.com, I had a ranking of 4! I had been told by many other professional website managers that it was impossible to be ranked at all before at least 9 months had passed, so I knew that the things that Andrew had taught me were above and beyond what even the professional webmasters know about getting that all-important Google ranking.

I launched the website in January of 2006. Since then, Best Ballroom Shoes has grossed over $95,000 at a profit margin of about 45%. At the time of this writing, May 28, 2007, the website and small shop in my home have grossed over $40,000 in 2007 alone, making me hopeful for gross sales of $100,000 for 2007 (since sales volumes increase drastically from August through December in this industry). Needless to say, this puts the strain of college tuition down while doing something I truly enjoy.

Since completing for formal program, Andrew has always been there to answer questions and to make sure that any inevitable Vermotion-related problems are dealt with as quickly as possible. He also is very encouraging when I email him with news that I am adding a new line of clothing or shoes.

I joined prosper with doubts and fear, but now I know that Andrew and Prosper in general are world class in teaching people to be entrepreneurs and supporting them long after they complete the program.

I cannot say enough great things about my coach, Andrew Melchior, in particular. He is very methodical in the way he goes about mentoring, and he is able to explain things to novices (as I was) in simple, understandable terms, making what many expert webmasters told me was impossible a reality!

Melissa S.

Tip of the Month

When researching suppliers for your website, you want to be careful who you choose to work with. A reliable supplier can help your business to thrive and a good relationship with that supplier can lead to larger profit margins on your part. However, an unreliable supplier can cause you profit loss and may even drive you out of business altogether. Whether you are looking for a dropshipper, a wholesaler or a manufacturer, there are certain things you want to look for before choosing which company to work with. Below is a list of key questions to ask before making a decision.

Dropshippers:

For more info