E-commerce Challenges

e-commerce

America’s Depot, a new  full-service office supply ecommerce store, has just launched.

Seems like a great time to talk about the challenges of online retail.

America’s Depot was designed by Tristan Pittard of TaGG Studios and implemented by Nathan Mills on the Magento platform. Magento claims to be the most popular ecommerce platform in the world, and I see no reason to disbelieve them. It’s an open source CMS big enough to handle lots of products.It’s used by companies like Samsung and The North Face.

It’s also known for being slow, complicated to work with, and expensive (though, since it’s open source, it’s possible to use it for free if you don’t want the support of the enterprise version). Their native search is terrible, too, but there are extensions to help with that — and with many other issues, too. We’d never use it for companies with just a few products, but it can be a good choice for serious retail.

This is a good example of the first challenge of ecommerce: the shopping cart. It used to be that everyone hated their ecommerce shopping carts, though there are now enough choices that we don’t hear this as much any more. We usually use WordPress for small-scale ecommerce, and have had great results with Shopp (check out Trout Fishing in America) and with WP Ecommerce (check out FreshPlans). I’ve worked with the CMS of osCommerce, Volusion, and I forget all the rest, and I think it’s fair to say that all of them have their quirks but they can all be figured out with determination. Web Appers reviews 15 of them if you want details, but your best bet is likely to be choosing the one your developer knows best.

Once you’ve chosen a platform, give yourself reasonable time to get all your products into the database. You may be able to upload much of your list, but remember that the descriptions you use affect your search success. Good, unique descriptions make a big difference to your success. Multiply the number of items you plan to offer by 3-5 minutes each, at least, and schedule time to get all the products into the online catalog.

It’s probably fair to say that the one sure thing about the second challenge of ecommerce — getting all your products into the catalog — is that it will take longer than you think it will.

The third challenge is fulfillment. America’s Depot is working with a business wholesaler, and they’re smart to do that. I’ve worked in the past with folks who thought they’d save money by packing up all the products and shipping them to customers themselves, but it usually didn’t work out that way. Unless warehousing and shipping is actually the center of your business, or you really have just a few products, it can easily cost you more to do it yourself.

If you’re planning to manage your own fulfillment, try it out before you make a firm decision. Determine all the costs, including packaging, postage, and the price of taking packages to the shipper or arranging for pickup. Pack up some imaginary orders and measure the time involved in doing so. Calculate the cost of keeping all your products on hand, or of arranging rush shipments to fill an order quickly.

Modern shoppers expect to get their stuff fast and they resent paying for shipping. They’re intolerant of out of stock items, too. Get a reputation for poor customer service, and you’ll be out of business fast. That’s why you have to figure it out before you launch your site. You may not get orders when you’re first launched — but you might. Screwing up your first few because you haven’t worked out the details is a sure recipe for failure.

Payment is the next issue to consider. PayPal and Google Cart offer ways to accept payment with little upfront cost, but the percentage of the payment that goes for fees is high, and some shoppers are still nervous about using these services or unwilling to set up accounts before shopping. You should plan to accept credit cards, and you must make sure that you have a secure means of doing so. We use Authorize.net and PayPal, but there are plenty of alternatives. Sitepoint has a list. Since there are laws governing this industry, you may be safe just choosing the cheapest option, but be sure to count all the extra fees. Consider whether you’ll need to accept American Express, whether you’ll ever want to accept physical cards (at a trade show, for example), and which services mesh well with your shopping cart solution.

Got all that sorted? You still need a great website and a good integrated online marketing plan if you intend to make money from your ecommerce venture. America’s Depot is using social media including blogging, a community service program, email marketing, ongoing SEO, and paid advertising. If your plan is “if build it, they will come,” you should do a bit more planning before you get started.

This list may seem daunting, but it’s much less complex — and less expensive –than building a physical store. Ecommerce is easier than IRL retail in many ways. Just don’t let that fact blind you to the real challenges of ecommerce.

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