Trading Online Vouchers - good or bad idea?

The TOV or trading online voucher is a €2500 grant match funded to any small Irish business to spend on e-commerce activities. Match funded means you must also pay €2500. E-commerce activities include everything from web development to photography.

There are several reasons we are not big fans of the trading online voucher.

It has increased costs for businesses.

We purchased an electric car a few years ago. We had an installation point for an electric charger at our house. We could purchase a charger for a couple of hundred euro. We then had to find an electrician to install the charger – 30 minutes work at most. They all wanted €850, because there was a grant available for approximately that amount. The trading online voucher has had the same effect on web development. It was common for lots of small web developers to offer start-up sites for a couple of hundred euro. Now they all want €5,000.

It has led to deception being an acceptable practice.

We have had many supposedly potential clients ask us for a proposal. That’s not unusual, but when they tell you that their budget is exactly €5,000 you know it is a waste of time.  Probably 50% of the requests for proposals we get now are people who already have a web developer but need 3 quotes for the TOV. I usually reply and say “that’s seems awful expensive for what you need – I think around €1,200 would be reasonable – but that’s just me being perfidious.

We have also heard of people asking if a web developer can build a website for €2500 but send an invoice for €5,000. The net result is a free website for the company, paid for by the taxpayer.

It has led to thousands of business owners throwing away €2500.

This is my biggest problem with the TOV. I have had business owners come to me looking for an e-commerce website and insisting on getting the TOV. Up until a couple of years ago I would generally say yes - it is a few bob,

I would build a nice website and I would put it live. I would a fair and honest amount of work for the money.

To this day most of those websites have never sold anything much at all. The owners invests the €2,500, the government invests another €2,500, and everyone sits back and waits for it to become the next Amazon. That’s not how e-commerce works. If you consider e-commerce to be a garden, then your website is the potting shed. The plants won’t grow themselves and the grass won’t cut itself. E-commerce needs skills that you have to learn, and it needs an investment of time and money, An ongoing investment. €5,000 is more than enough for most e-commerce websites but it is only a start.

Years ago, in the late 90s when e-commerce was starting, I remember the promise that so many companies made – open a website and you will have 6 billion customers (the population of the world at that time). It was an utter lie and a foolish promise. If you open a website, you have no customers. None. Not one. Unlike a physical retail location, you do not even get passing footfall on the web. You won’t even get an accidental customer unless you go looking for them. When you do manage to find a “visitor” for your website you probably have a less than 1/1000th chance of turning them into a customer.

E-commerce is about increasing visitor numbers and increasing conversion rates. The trading online voucher will actually help pay towards that effort (so that is a positive in its favour to be fair), but not if you have already spent it on your website and believe that is your job done. Sit back and wait for the orders? Not gonna happen sunshine.

So, what’s the answer?

In my humble opinion ditch the grant and replace it with education grants. Approve courses in e-commerce and pay business owners to take them. If you attend every session and pass the exam you get refunded. Restrict it to approved education facilities.

This starts your relationship with e-commerce in the right frame of mind – an investment by you into your business – not a one off cost that can be recovered.

But that’s just my 2c? What do you think? I would love to know your comments whether you are a web developer, a small business owner, or an e-commerce expert.