Stories of Internet entrepreneurs, who rake in millions simply by punching a few keys on their laptops in-between sips of martinis while relaxing on tropical islands, are abound in popular media. Naturally, every small business is tempted to open its doors online.

Over the years, I have built a fair number of online stores for my small-business clients. Some are happy with their stores; others are not. Some do a brisk business; others barely recover their hosting costs. Those that failed have a common trait – a lousy business model. During the Internet boom, businessmen were so transfixed by hocus-pocus like click-rates and pairs-of-eyeballs that they hardly paused to think whether selling online is practical, or, in some instances, whether they have anything worthwhile to sell at all. Indeed, many spent more effort on collecting e-mail addresses than on actually selling anything.

What has all this got to do with me? Well, they paid ME to build their stores. Now that they can’t recoup their investment, they think I am partly to blame. Of course, they tend to overlook the minor detail that they paid me only to build the stores; not to question the sanity (or rather, insanity) of their undertakings. Their stores work as promised; they just don’t sell anything and they don’t make any money. So, due to no fault of mine, I have ended up having a bunch of unhappy customers.

But I have learned my lesson. Now, if you approach me for a proposal to build your online store, I ask you six questions before deciding whether to take up your assignment.

1. Do you already have a brick-and-mortar business?
   If you do, you have probably won half the battle. An online store provides an always-open extension to your retail store; another avenue for your customers to buy from you at their convenience. With a brick-and-mortar store, you are likely to measure the success of your online store in terms of how well it augments your core business. Without it, you are likely to measure the success in terms of how much money it brings in. In my experience, many small businesses are disappointed in the amount of money their online stores bring in. They end up spending too much money and effort for too little a payback. 
   
   


2. Do you plan to compete on price alone?
   It is difficult to compete in the online marketplace on price alone. Small businesses cannot hope to achieve the economies of scale that Amazon.com and Buy.com can. Unless you have another way of differentiating your offerings, making money from an online store is likely to be an uphill battle.
   
   


3. Will you sell niche, difficult-to-find, or specialty items?
   If you do, your online store has a better chance of succeeding. If you offer a unique class of products, value added services, or personalized services, you are likely to see more business coming your way. If you are planning on opening a general bookstore on the Internet, for example, failure is almost guaranteed. But if you are an expert on a specific niche of the books marketplace, such as out of print publications, foreign language books, or first editions, an online storefront might make sense for your business.
   
   


4. Are your items easy to ship?
   There is a reason why they don’t sell concrete mixers over the Internet. If your items are too bulky, shipping them may be a headache for you and just the cost of shipping and handling will be prohibitive for a prospective buyer. Your headaches may be compounded if, god forbid, your customer decides to return the items! Shipping is not such a big deal for big businesses that have entire departments dedicated to the activity. But for small business, that ship infrequently, it is a major consideration.
   
   


5. Can you set aside a few minutes at specific times every day to check, process, and fulfill online orders?
   Prospective owners spend quite a bit of time fussing over their website’s design and pondering how to get their products to show up towards the top of search engine search results. But few give much thought, if at all, to order fulfillment. Will you have the time and the inclination to package and mail the orders every day? Will anyone take care of online orders if you are sick, or are on vacation for a few days? Can you find a few minutes every day to update the inventory and prices in your online store? Just like a brick-and-mortar store, an online store needs updated item lists and up-to-date price lists. It needs a facelift periodically. It needs promotions and discounts to be updated regularly so as to attract customers. Customer service is even more important in your online store than it is in your in your brick-and-mortar store. Are you up to it?
   
   


6. Are you expecting a windfall overnight?
   If you are, you are likely to be sourly disappointed.  It takes a long time and considerable effort to build a loyal customer base. You have to be patient to be able to see significant gains from an online store. You can’t bet your next mortgage payment on income from your online business.

If your answers convince me that an online store makes sense for your small business and that your strategy is likely to pay off in the long run, I will gladly take up your job. Otherwise, I will send you to my competitor. If someone has to end up having an unhappy customer, it rather be him!