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Q: There are lots of websites being set up to be showcases for individuals and their products. Are they worth it?

Answered by Richard Hall, partner at Ernst & Young

Possibly. There are indeed sites being set up on the web, which simulate department stores or craft fairs. Of course, if you choose to use their services, you will have to pay for the privilege either through a flat fee or perhaps a royalty. You would need to investigate very carefully what the traffic is to the website. Just because it is on the net does not mean that thousands of people will find it.

There are many websites with very low traffic. Check out how the website operators are advertising and marketing their site. In addition ask them how many visitors there are (and ask for the number of visitors not just the number of hits, which could be much higher and give a false impression). They should also be able to give you details such as how long each visitor stays, which part of the site attracts the most interest and so on. Choosing the royalty method of payment would allow you to test out how successful this method of marketing will be.

Richard Hall is an Ernst & Young partner focusing on fast-growth, dynamic, middle market businesses. Richard leads a 3,000-strong team located in offices throughout the UK who are committed to helping middle market businesses grow. Richard's role includes leading the middle market transaction advisory services team.

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