Setting Up Shop Online

I used to wonder how anyone could earn money peddling their wares on the Web. Watching the phenomenal sales of heavy hitters such as Amazon.com and Music Blvd set me straight--e-commerce works. But does the formula spell success for small and medium-size businesses, too?

E-commerce solutions come in all flavors and sizes. Big companies often buy their own server and e-commerce software and run the whole thing themselves. But that can cost hundreds of thousands of dollars. For smaller companies or individuals who want to try their hand at business on the Web, there's a far easier and cheaper way.

A number of Web sites let you build an online store and run it with only a browser and a credit card. The benefits are obvious. You don't need a showroom--heck, you don't even need a real building to get started. Your store is open 24 hours a day, 365 days a year; you can update your catalog in a couple of clicks; and the information you can collect about potential customers is a retailer's dream come true.

But is it really that quick, easy, and affordable to set up shop on the Web? I went online to find out. I chose three electronic storefront services that provide everything you need to create and host a store on the Web: HipHip Software's Merchandizer E-Commerce System, Yahoo Store, and ICat Commerce Online.

I tested these services myself, setting up Bass-o-Matic International, a fictional store that sells rhino horns, semiautomatic weapons, and Furbies. I also contacted hundreds of real e-commerce store owners and asked what worked for them, what didn't, and what they would do differently if they were starting over. Read on to find out what I learned.