Before you launch your e-commerce site, make sure you have these 15 critical tools.

Here’s an inspiring fact for anyone starting an online business: If you gather everything you need before you launch, you’ll be far ahead of most people who start online stores.

Believe it or not, thousands of people launch e-commerce sites only to realize they lack an essential element. Six months in, after spending their nest egg, they ask: “You mean I need a pay-per-click campaign? But I didn’t budget for that.” Or, “I need Web analytics software? I had no idea.”

Assembling everything you need prior to launch will save you numerous headaches. And it will better prepare you to compete with established businesses, which are operating with full toolboxes.

The list below contains everything you’ll need to get your online store off the ground. Read it, assemble the items, and prepare to work long hours.

One more thing. This list assumes you already know what you’ll be selling. Of all the things you need to figure out ahead of time, deciding what to sell is the most important. It must be an item or service that few businesses already sell, one you can get for a low wholesale price or one you have a special knowledge of.

Something about what you sell has to allow you to stand out from the herd – at least a little bit – otherwise you’ll be trying to sell snow to Eskimos. And that’s discouraging.

So now you have something truly great to sell. Gather or create the following 15 items, and you’ll have a reasonable chance at making some money online:

1) A Business Plan

Writing a business plan seems daunting. You might say, “I’m starting a business, I don’t want to sit down and write a paper, like I’m in school.” But think of it this way: it’s free, and it will help you immeasurably.

Real businesses have business plans. For guidance on how to write a plan for an e-commerce site, go here.

Your business plan lays it all out. It details what you sell and where your profit comes from; how much inventory you’ll have on hand and where you’ll store it. It lays out your return policy — and you’ll need one of those. Most important, your business plan details your total start-up cost, from your ad campaign to Web designer to monthly server fees.

Are you sure you believe in your business enough to risk this amount?

2) A Reliable Source for Your Product

If you’re selling hand-sewn Korean quilts, are you confident the price of yarn isn’t going to skyrocket three months from now? Do you have more than one wholesale source? Hopefully yes, otherwise you could be in trouble.

The best problem of all: if you make your product in your basement, can you handle success if you suddenly get 125 orders? Make sure your supply line is steady before you plunk down your money.

3) A Good Domain Name

When you try to register your business’s domain name, you’ll probably find that the name you want is already taken.

In response, some people choose terribly cumbersome names. They find out that “Tshirt.com” is taken and then learn that “HockeyTshirt.com” is also taken. So they create an unworkable domain name like VeryCool-HockeyTshirt.com. Not only is it too long, it contains a hyphen, which should be avoided (some users forget to put them in, sending them to your competitor’s site.)

A good domain name is short and memorable and — most important — easily typed. Ideally, a user can simply hear it and know how it’s spelled. So GoodShoe.com is much better than GoodeShoe.com. In fact any word that’s hard to spell should be avoided.

The “.com” version is typically far better than “.net,” because browsers default to “.com.”

Be aware that your URL affects your search engine ranking, so if you want to be found for “shoe,” it’s a good idea to fit “shoe” into your domain name. One way to do this is to use your brand name along with a keyword term. So MillerShoe tends to work better than FantasticShoe.com. (Which is why MillerShoe is taken, but FantasticShoe is still available.)

4) A Reliable Web Host

Your Web hosting service is the technical backbone of your site: its service and support options will play a big role in your business’s operation. Hosting companies usually charge monthly, and the cheapest company isn’t always best.

Choose carefully the first time. Once you pick your Web host and install your files there, moving to a new host is, at best, a major headache. Ideally you’ll choose a good one and stay there.

To see a couple popular choices, take a look at Small Business Computing’s 2005 Product Picks.

5) A Web Designer

Many Web design software packages are so easy to use that business owners think they can design their own site. That’s a mistake.

Homemade Web sites aren’t like homemade cookies. No one likes the way they look. Worse, an ugly site makes shoppers wonder: should I enter my credit card number in this funky looking site?

Select a Web design firm with great care, and be prepared to pay for quality work – you’ll get nowhere without it.

On a related note, can your Web designer handle your photo needs? Because you’ll need a steady flow of product shots.

6) E-Commerce Software

This is the software that will run your store, from product display to inventory management to checkout.

Selecting your e-commerce software is one tough choice. You can try it out ahead of time, but you won’t fully know how you’re going to like it until you’re up and running for a while. At that point, changing your e-commerce platform is like changing boats in the middle of the ocean.

Consequently, you want to do a lot of research before you choose. For more information and a list of well-known e-commerce programs, go here.

Realize a couple of key facts: A) the prices for e-commerce software have fallen, so you don’t need to spend a fortune unless your needs are complicated, and B) many of today’s e-commerce packages include a full range of tools in one package, from an inventory management system to marketing tools. Many of today’s merchants prefer this “all-in-one” approach because it makes life simpler.

7) A Credit Card Merchant Account

To accept credit cards online, you’ll need a merchant account, which is an account with a bank or other financial institution that allows you to accept your shoppers’ credit card numbers.

Setting up a merchant account gets pricey. Banks typically charge a set-up fee, a monthly fee, and a percentage of each transaction. (So even if you have just a few customers, you pay the set-up fee and the monthly fee. Ouch!)

To learn more about setting up a merchant account, go here.

Many first-time small merchants get a merchant account through PayPal. The company is moving aggressively to gain clients, so it offers a no set-up fee method of accepting major credit cards.

8) Knowledge of Search Engine Optimization (SEO)

If you don’t know how to set up your site to get high rankings in Google and Yahoo, you’ll never get the traffic necessary to build a thriving business. Some of your competitors are experts in this area. They even hire SEO consultants to fine-tune their site to attain its greatest ranking.

To educate yourself, read some of the copious online guidance about SEO. A good place to start is Search Engine Watch. While you’re there, look at the tips for submitting your site to the leading engines — that’s essential.

By the way, many Web designers claim to be adept at SEO. Not all of them are. The best practices for SEO change constantly, so if your designer last studied SEO in 2004, they’re not up on the latest tactics.

The point: you may need to hire a Web designer and an SEO expert. Wow, this is getting expensive!

9) An Accounting Package

Okay, so accounting software isn’t sexy — but you’ll quickly drown without it. Even before your first dollar of profit, you’ll need to track a long list of expenses. Once you start making sales, your accounting program allows you to answer the most important question: am I making money?

A small business favorite is Intuit’s QuickBooks, and Sage’s Peachtree is also popular. Not surprisingly, Microsoft is vying for market share with its relatively new SBA 2006 small business accounting package.

10) A Web Analytics Package (and Knowledge of Conversion Rates)

A Web analytics program tells you how shoppers are using your site. It reveals where users come from, what pages they visit and what keyword searches brought them to the site. An analytics package enables merchants to calculate their conversion rate. (Your “conversion rate” is the percentage of your visitors who make a purchase — a critical fact to know and track over time.)

Over the last couple years, having a good Web analytics program has become a major dividing line. E-commerce sites that effectively use their analytics programs tend to be winners; those sites that don’t mine data from an analytics package tend to fall behind.

Fortunately, there’s a package for every budget. Although you can spend a whole lot of money, you don’t need to buy a Rolls Royce analytics program to start.

Among the favorites are NetIQ’s Webtrends (they have a small business edition), Clicktracks and WebSideStory. (WebSideStory’s program starts at $27 a month.) There are many more good ones out there.

Google offers a free analytics program (based on the former Urchin analytics program), though in classic Google style they’re mysterious about how to get it. Merchant must “request an invitation.” It’s not clear on what basis Google awards invitation, and the search firm says it may take “several weeks” to get one.

(Editor’s Note: Our invitation took nearly three months to arrive.)

11) Awareness of Competitive Sites

Just as your Web analytics tool tells you what’s going on at your own site, you must be highly knowledgeable about your competitors’ site. How does their inventory stack up with yours? Their navigation? Some merchants even sign up for their competitors’ newsletters to know every sale they offer.

To find out how much traffic your competitor is getting, you can use the Alexa service (http://www.alexa.com). This tool doesn’t give absolute numbers of visitors, but it provides a relative ranking number. Another tool that shows your competitor’s page rank (among other things) is the Google Tool Bar.

12) A Shipping Rate Structure

Before you get your first order, you’ll need to decide what you’ll charge for rush and standard delivery.

If you’re willing to lose some money on shipping, offering inexpensive shipping is an aggressive move to attract customers. Shoppers love cheap shipping, and free shipping over certain purchase levels is also a popular technique.

On the other hand, many sites make a tidy profit by tacking a few extra bucks onto shipping fees (even beyond labor costs to cover packing).

Your decision about shipping charges should be partially guided by what your competitors are doing. Your rates should be in line (or hopefully lower) than theirs.

If your product can be sold internationally, look at this guide to reaching customers beyond U.S. borders.

13) A Security System and Data Backup

The Internet is a veritable den of thieves, with new forms of data theft, phishing and scamming invented everyday.

You’ll need software to protect your site. Of the several good programs available, a favorite of small online business owners is the McAfee Internet Security Suite 2006, which stiff-arms all manner of viruses and hackers.

No matter how secure your site, though, you want your business data backed up. (In fact you need to have your business data backed up.) Both Symantec and Maxtor make well-respected back-up systems.

14) A Marketing Plan

This is the big one. An effective, multi-prong marketing campaign is an online business’s best friend – the more you can spend on advertising, the better. Go here to learn about creating an online marketing plan.

The best marketing plan evolves and grows over a business’s life — it’s certainly not a “set it and leave it” kind of thing. So you can start small if need be, yet during your site’s early days you’ll need these basics:

• Many types of free marketing Listing your site on Google’s comparison shopping engine, Froogle, is free. Also free — and good for driving traffic — are joining a Web Ring; offering a free service to users; writing articles or blogs to attract traffic; and sending out an online press release using PR Web.
• An e-mail newsletter You can use your e-mail newsletter to inform shoppers of your special deals and to offer previous buyers a special discount – a great sales technique. You’ll need e-mail software, like the low-cost version of Constant Contact or the Gammadyne Mailer. Group Mail offers free version here.
• A link-building campaign You can trade links with non-competitive sites for free, but some sites hire professional link building services. The reason: search engines boost your ranking if your site has many inbound links. Whether you do it yourself or hire some help, an active link building campaign is essential.
• A pay-per-click campaign It gets expensive to buy sponsored links from the Google’s Adwords or Yahoo’sSearch Marketing services. But your competitors are undoubtedly doing it. So if you’re not, it’s unlikely you’ll be competitive (unless you have a very compelling product or price). As online competition has increased, a PPC campaign has become essential.

With time, you might consider using an affiliate marketing program, in which other sites get paid a percentage of each sale they send you. But it’s questionable whether a brand new site will benefit from an affiliate program. Although some new sites have profited, many new sites has yet to build the name recognition that makes using affiliates profitable.

Be aware that creating an affiliate program through such portals as Commission Junction can cost several thousand dollars up front. You may want to investigate whether or not your e-commerce hosting provider allows you to create your own program.

15) Plenty of Gumption

It’s a familiar scenario: a business owner invests a substantial amount in site design and advertising, launches a new site, and…it gets about 137 page views a week. Then, a good bit of time later, that number rises to about 300 page views a week — and almost no sales.

Merchants in this case often complain: “I thought there were 200 million Internet users. So where are they?”

Well, just like in the brick and mortar world, it takes time and continued investment to build a business. Gumption is required. If creating a business was as easy as building a Web site, we’d all be raking in the cash.

But keep at it. E-commerce is still new — there’s time to take your lumps, learn from your mistakes, and find out how to turn a profit. Good luck!