generating income stream
“Having explored the concept and realised that an electronic
shop can generate a revenue stream, many of those clients
will opt for a more sophisticated approach and be prepared
to spend part of their additional income on developing it.”
Where the Advantix approach is different is
that it is prepared to launch a shop without an
upfront charge for the licensing of the site or
its customisation to the client’s needs.
Not until the shop has paying customers
passing through its electronic doors is there
any kind of charge, apart from the cost of a
URL if the client does not already have one
available. When business starts to be gener-
ated, Advantix makes a flat rate charge of £45
per month.
That figure is not unreasonable, but if the
first qualifying month’s gross margin amounts
to just a few hundred pounds, it would appear
to be a large slice out of the electronic trading
pie. It is understood that the company is con-
sidering introducing other business models
where the charge bears a closer relationship
to the amount of business done.
Free while building momentum
The Advantix offer does exactly what it says, delivering a free service until its
Hurdles overcome
clients’ business gains momentum. As there is only a limited amount of
customisation permitted in the system, it is unlikely that the shop page will
While Hempenstall and his team can construct look anything like the client’s main web site, although it will carry the ven-
an elementary ‘pre-fab’ shop within minutes dor’s logo and preferred colour scheme.
rather than weeks, there are surely more daunt- Adam Hempenstall questions whether that would be a major issue for many
ing obstacles to clear. No website has been clients, for whom the online shop would serve a very different purpose from
able to accept payments on line without con- any other web facilities they might be operating. He cites the example of a
tracting with a secure back-office service such successful hairdressing business, whose extremely ‘polished’ site is an ad-
as Datacash or WorldPay, which processes the vertisement for that company’s hair and beauty services. “The owners wanted
customer’s card details and organises the de- to start selling professional grade hair products online. As this would have
livery of funds to the shop owner’s account. detracted from the image that had been cultured for the company’s services,
Being approved as an online vendor to work the online shop was established as a totally separate channel to market, and
with those high profile players has never been has been successful for that reason.”
easy, with detailed checks being conducted
on the financial standing of the vendor.
Fortunately for online shop proprietors,
Achieving a commercial balance
payment collection has been simplified some- Advantix is unlikely to make its fortune by having companies paying it £45 a
what by Google with its Checkout system, and month in perpetuity. Hempenstall would be the first to admit that the service
they can be operational within about five days. is not meant to be the end of the relationship. “Having explored the concept of
The search engine provider’s rates appear selling online and realised that an electronic shop can generate a revenue
to be realistic at 1.5% plus 15 pence per trans- stream, many of those clients will opt for a more sophisticated approach and
action. Google encourages merchants to off- be prepared to spend part of their additional income on developing it.”
set their transaction costs by investing in Advantix has demonstrated why small businesses indeed have the poten-
AdWords. tial to move the UK economy forward. By introducing the ‘free’ service, it has
For every £1 spent on AdWords each month, found an additional route to market for its services by investing its skills and
site owners can process £10 in sales the fol- resources in a venture designed to reflect the mood of the moment. No less
lowing month through Google Checkout with- important, it will help UK small businesses expand their marketplace at mini-
out charge. mal cost and make the difference between survival and success. §
The Informed Executive
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