UK transport and retail group Virgin Group Plc is moving into e-commerce applications with a package aimed at small businesses who want to trade online. The company has launched a service bringing together payment processing, call centers and consultancy. Virginbiz.net intends to win over 100,000 small businesses in its first year, doubling the number of […]
UK transport and retail group Virgin Group Plc is moving into e-commerce applications with a package aimed at small businesses who want to trade online. The company has launched a service bringing together payment processing, call centers and consultancy. Virginbiz.net intends to win over 100,000 small businesses in its first year, doubling the number of businesses with less than 20 employees who trade on the web. Virgin claims that the service will enable firms to sell on the net inside a week and, with a price-tag starting at 400 pounds ($660), save 90% of the total costs of establishing net trade capabilities.
The Virginbiz.net package includes internet access, web site design, 50 email addresses, domain name registration, chat rooms and internet shopping cart facilities, as well as links with a secure payment provider. Virgin claims that banks take a minimum of nine weeks to perform credit checking and authorization for firms wanting to trade online, so the link with transaction processor Worldpay is a critical step towards cutting the start-up time. The company, a subsidiary of group ISP Virgin Net, has set up a portal to access editorial advice specifically for small businesses on legal, human resources and financial matters.
Virginbiz.net currently has 10 staff, but this is slated to rise to 18 in the next three months, and the firm has signed partnerships with web consultancy Iomart, Worldpay and internet service provider AboveNet. Iomart has 30 consultants based at a call center in Stornoway, Scotland, who will talk businesses through setting up their websites. All customer data will be stored on Oracle databases, and Virginbiz.net has also brought Sun Microsystems into the deal for its Solaris servers, which will power the system.
The service is designed to appeal to the lowest end of the market, while also including the financial linking required to process internet customers. Over the next year, Virginbiz.net will add editorial content for personalizing the portal, geared towards vertical market sectors.
The company is also considering linking the front-end systems with back-end financial applications in an ERP-style supply chain. Currently, firms wanting to tally their store-room inventories with those on their web site have to synchronize numbers manually. This is a natural advantage for firms like IBM and Sage which come to the market from an IT rather than a general business and retail background, and Virginbiz.net will have to avoid losing ground to rival packages which offer this kind of integration.
Microsoft Network is expected to offer a rival service early next year in the UK, but Virginbiz.net is confident that its size gives it an agility that bigger firms cannot match. Giants find it difficult to dance, says marketing director Afam Edozie. The company is also placing faith in the Virgin brand, and was keen to link founder Richard Branson’s reputation for entrepreneurial flair with the 3.6 million small businesses in the UK. As for the brand-names of Microsoft and IBM, Edozie says their brand is actually a hindrance, since they are seen as catering for larger enterprises, rather than firms with under 20 employees.
Virginbiz.net aims to hit revenue of 50m pounds ($82.7m) within 18 months. If it hits its target numbers of 100,000 businesses within a year, with each paying the basic service price of 400 pounds ($660), the company will take 40m pounds ($66.1m) in its first year. Virginbiz.net is launching a 1m pound advertising campaign which will last three months to target small businesses through trade journals. Ultimately, Virgin also sees the installed base of small businesses as a lucrative market for its other financial services and products.