Ebizbraintrust.com

Soon after you decide to add E-commerce to your small business, you may find yourself suffering from a touch of sensory overload. There are a lot of E-commerce engines, shopping cart systems and hosted storefronts vying for your attention. How do you sort through all of that to find the solution that best suits your business?

Finding the best solution is largely a matter of asking the right questions. Today I’m going to arm you with a few good questions - along with some related ‘thinking points’ - that should help you sort through all of the information and make the best possible decision. Here are five key considerations:

 
1. Does the E-commerce engine you’re looking at provide a first-rate shopping experience? This is the first question to ask because it’s all about your customers. The people who do business with you should be your most important concern when you start to compare E-commerce solutions. Put simply: If your web site doesn’t deliver an excellent shopping experience to your customers, nothing else will matter. Regardless of the rest of your grand business scheme, if your customers can’t find what they want, see it in detail and pay for it without pulling their hair out - chances are your site will be a flop from day one.

2. Is system management as straightforward as possible? You and your staff shouldn’t have to battle your E-commerce engine just to perform the daily tasks of online business. Not so many years ago, affordable shopping carts for small business included only very basic functions. They couldn’t track inventory, couldn’t manage quantity discounts, couldn’t handle multiple product options - some didn’t even organize products by categories. The industry has come a long way in a short time, however, so systems that provide full store management capability are now the standard. 

3. Is the E-commerce engine flexible enough to accommodate changing requirements as your business grows? Right now you may only want to sell 10 items. But what happens in six months when you want to expand your online inventory to 500 items, include apparel items with multiple size and color options and offer a series of downloadable e-books about how to grow better garden vegetables? In that case, you’ll need to make sure your system can handle complex option sets and paid digital downloads. Otherwise, you may face additional development expenses just to add fairly common features to your web site.

4. Are you getting more than ‘just’ a shopping cart? This is a theme that I’ve knocked around before. It’s not so much that your E-commerce engine should have every conceivable business and marketing feature built in - but it should be able to share your valuable customer data with whatever CRM, accounting or marketing software you want to use. In addition, it should include customer loyalty tools that help you build a solid base of repeat buyers.

5. Do your business plan and your budget fit together? This question is more about controlling your own expectations than anything else. In the world of E-commerce, you usually get what you pay for. If you want your site to display a large inventory, sell customized boxes of widgets, feature separate pricing for retail and wholesale customers, give your customers reward points, perform well in the search engines, offer multiple levels of quantity discounts and ship from three different warehouses - well, you need to realize that all of those things aren’t happening on a shoestring budget. Ask questions and be a realist as you develop your business plan and your project budget side-by-side and it’s much more likely that you’ll be happy with your new E-commerce web site.

In a previous post I addressed the topic of online payments and how they’re processed. Today I’d like to address the security of your E-commerce site’s payment transactions in a bit more detail.

A surprising number of small businesses avoid E-commerce (which could prove very profitable for them) because they believe credit card information submitted via the Internet can be easily compromised. Nothing could be further from the truth. In fact, if your E-commerce is properly implemented by a skilled developer, your customers are safer using an online interface than they are handing their card over to the staff at their local coffee-stop.

Here’s a quick little tale of credit card woe. A few years back The Missus and I traveled to Guatemala City. Shortly after we returned from our trip, several charges dated after our departure appeared on my card statement. During the entire trip I had allowed my credit card out of my sight on only one occasion - when I paid the bill after we had dined at an American-based chain restaurant (a Chili’s in this case) near the hotel. Obviously, in the three minutes my card and I were separated somebody had made use of the local photocopier. Ugh.

It was easy enough to sort things out on my end - the re-entry stamp on my passport was handy proof that I wasn’t in Guatemala when the charges were made - but it’s an example of something that can happen to any card-holder any time they hand their card over to another person for payment.

The singular vulnerability in the payment process - another person - is eliminated entirely under the automated payment processing model used in secure E-commerce. Payment gateway services like Authorize.net directly capture your customers’ credit card information. This means that their payment information never resides on your web site at any time, which in turn means that an unauthorized administrative login or a data security breach of your site can never expose your customers to fraudulent charges on their accounts.

Of course, in order to take advantage of this extraordinary security, your site has to be designed to use secure automated payments. That sounds like a no-brainer, but over the years I’ve come across an unsettling number of small business web sites that have no secure features on them at all. They have no security certificate, so credit card information is transmitted unencrypted and ‘in the open’. They keep the credit card information in a database on their web server and use the information to run a manual charge to the account using their point-of-sale system.

Not surprisingly, these unsecured web stores seldom see much in the way of sales. Online shoppers are increasingly security-aware and few of them, if any, will type in their credit card information unless they see that little security ‘lock’ icon appear at the bottom of their browser window.

Maintaining credit card information of any kind on your store’s web server is a grave financial liability for your business. I understand that for many businesses and small web sites the extra expense of a gateway account (in addition to their point-of-sale account) can be a nuisance. But when you consider that a single compromised credit card number could cost your business thousands of dollars, $20 a month or so looks like very cheap insurance.

In my last post, I touched on some of the important concerns that small business owners need to examine when considering the use of a hosted E-commerce solution. Today I’ll take a closer look at some of the advantages and disadvantages of building a stand-alone E-commerce web site.

First, realize that with a stand-alone E-commerce web site you’re generally letting yourself in for more work. A LOT more work. That’s why stand-alone sites truly aren’t a suitable solution for every small business. If you plan a very small online inventory and can be satisfied with minimal-to-basic marketing tools, then a hosted solution may be the best route to take.

More may not always be better

A stand-alone site will give you more tools and deeper resources, but none of that comes without a price tag. The differences in capabilities between hosted and stand-alone solutions can be substantial and so can the differences in their project costs. In fact, just the licensing expense for a good stand-alone E-commerce engine will usually outstrip the amount a small business can expect to pay for the complete setup of a hosted solution. By the time you add in custom design costs, programming modifications, SEO work and a few other project line-items, you’re likely looking at a significantly higher initial investment.

A stand-alone solution may also appear daunting to you if you run a business with limited personnel and/or time resources. A custom, stand-alone E-commerce project begins life as pretty much a blank slate. As the project progresses you work with your developer to fill in the slate’s open spaces with your business vision and their E-commerce experience. This takes time, thought and communications - which may be something you don’t have much opportunity to spare from running your day-to-day operation.

Most E-commerce engines are designed to include powerful tools intended for dedicated E-commerce, so they also carry a higher learning curve and require more time to manage to their full capability. No doubt, one of the primary reasons for the failure of many E-commerce sites is the inability of the site owner to commit the appropriate amount of time and effort to the store’s management and upkeep.

But frequently, more IS better

However, none of that is to say that even the smallest business can’t realize the maximum return from a stand-alone E-commerce site. Many very successful E-commerce sites are operated by one- or two-person businesses.

One of the biggest advantages to a stand-alone E-commerce solution is that a skilled developer can completely customize both the design and the programming to suit your specific business requirements. In my experience, no two businesses are run exactly the same way. This means that they frequently have demands that simply can’t be satisfied within the limits of a one-size-fits-all solution. An E-commerce project has the highest chance for success when it can be adapted to your existing business practices (instead of requiring that your business practices adapt to your web site).

Stand-alone E-commerce solutions are also entirely open-ended. There are no restrictions placed on the size of your store’s inventory, the amount of traffic you receive or the number of customer accounts you maintain. The company that hosts your E-commerce site may have several different service rates that scale according to the server resources you demand (i.e. more disk space for images or more bandwidth for higher traffic), but those service fee differences are generally negligible until your site begins to attract traffic of epic proportions - at which point you won’t be a ’small’ business, anyway.

A good stand-alone E-commerce engine is designed with powerful marketing and customer-loyalty tools built-in. It’s also built around industry-standard database technology that is open to custom programming and interfaces with common CRM and marketing applications. The database belongs entirely to your business - it’s not built on some shared data platform - and you have complete control over how your customer data is handled for marketing, privacy and security.

Stand-alone E-commerce sites offer better search visibility and are more open to search engine optimization than hosted solutions. For a business with serious marketing ambition, that’s enough of a deciding factor on it’s own merit. If your site can’t be found easily through search, all of your other marketing efforts aren’t likely to make up the difference. Your store’s customer base is built from your site traffic, and the best way to drive traffic is through search results.

When a small business owner makes the decision to enter into the world of E-commerce, the first decision that confronts them is usually whether they need to build a stand-alone E-commerce web site or sign-on with a hosted application provider like Monster Commerce (Network Solutions) or UltraCart.

Each approach has its advantages and disadvantages. What the small business owner has to decide is which method of online selling will provide the most value and return on investment. Today I’ll take a closer look at the plus and minus columns for online storefronts based on hosted applications.

The immediate advantage: Easy startup

Likely the first thing that will get you to take a closer look at a hosted E-commerce solution is the initial cost to get started. Typically, hosted E-commerce that’s aimed at the small business market will have a fairly low startup cost compared to the expense of developing a custom E-commerce web site.

Depending on the provider (and the cost), the startup fee will either give you access to a set of design templates that you can roughly customize through some sort of setup ‘wizard’ or it may buy you some time (usually a few hours) to work with an account specialist who can customize the store template for you.

Additional elements of the setup (including product entry) are typically wizard-driven, which means you don’t need any specialized knowledge of development languages like HTML in order to get your store running. You may need some patience to work step-by-step through multiple setup routines, but otherwise there’s no rocket science involved.

Hosted applications also offer simpler and less expensive payment options. Most of them will process payments for you, which means you don’t have to purchase a security certificate or sign up for a payment gateway account. In some cases you may not even need a merchant banking account.

The monthly bill

Of course, those payment services aren’t free. Hosted application providers charge a higher monthly fee than you’ll pay for almost any stand-alone hosting. Your essentially renting an E-commerce engine and a payment platform. Also be aware that some providers charge you a small percentage of your store sales in addition to their monthly fee, while others may have an escalating fee structure that’s based on either your sales volume or the scope of your store inventory.

It’s a moderate plus that your store is automatically updated with the newest features as the provider develops them - although the flip side is that you have no choice to opt-out of application upgrades that you think may not benefit your business.

Although it’s largely an aesthetic issue, the heavily template-driven nature of hosted applications makes your site design difficult (if not impossible) to customize in any large measure. That’s not to say all stores based on a specific application look alike, but if you want a unique design or specific ‘look’ then hosted E-commerce may not be the best solution.

Competitive disadvantages

To my way of thinking, the biggest disadvantage is that hosted E-commerce applications don’t provide you with all of the tools you need to give your site a competitive edge in the very crowded Internet marketplace.

Most hosted applications provide search visibility that’s mediocre at best, and they don’t give you many options for enhancing the site’s search optimization. In some cases you may be able to pay the application provider (or a skilled developer) for additional search engine optimization - but a good stand-alone E-commerce engine should have a lot of useful SEO tools built-in that you can make use of yourself.

In addition, hosted applications offer fairly limited sets of marketing tools and are usually difficult to interface with external CRM or marketing software suites. Some offer ‘advanced’ marketing features for an additional fee but - again - these are all features that should be included in the basic functionality of any good stand-alone E-commerce engine. Stand-alone sites that are built around industry-standard SQL databases are typically very open to a variety of data interchanges, while hosted application sites generally use more proprietary data structures that aren’t as open (or aren’t open at all) to advanced development work.

How important to the long-term success of your E-commerce site is your choice of hosting service? Pause for a moment and consider: Without reliable and secure web hosting, you don’t have an E-commerce site in the first place.

I touched briefly on the topic of web hosting in my previous post. Today I’ll take a bit deeper look at hosting and try to explain what makes your choice of hosting service such a mission-critical decision.

Uptime and much, much more

The standard talking points of uptime and cost aren’t entirely unimportant to your site’s hosting equation, obviously. Server uptime is a central consideration - but technology has progressed to the point that almost any service that manages to stay in business can claim impressive uptime statistics. Even more important to an E-commerce operation is the host’s error rate and error handling process. E-commerce stores seldom ‘crash’ these days - but if they’re improperly (or inattentively) hosted, they may throw critical errors that prevent your customers from completing their transactions. An experienced E-commerce host should have a very low error rate, and should also have a process in place for flagging errors when they do occur so that their technical staff can quickly run them down and correct them.

The simplest way to avoid a slew of technical issues is to select a service that has experience in hosting other stores that run the same E-commerce engine as yours. That insures that their hosting supports both your store’s chosen development language (such as ASP or PHP) and any specific server-side components that your E-commerce engine may require.

It’s a mistake that’s more common than you may think. I am frequently contacted by customers AFTER they have signed up for some sort of hosting account - and more often than not, it’s a hosting account that won’t support much in the way of E-commerce and doesn’t offer advanced security features. Essentially, they’ve wasted their money because the hosting they’ve paid for won’t work for their business.

Be careful out there

Security is an equally important concern. Ideally, your hosting company will be in compliance with the Payment Card Industry Data Security Standard  - a security protocol that establishes hosting requirements for network security mechanisms, data handling and storage and the handling of security certificates and encryption.  All but the very smallest E-commerce stores should also be hosted in an environment that maintains store data on a separate database server that is isolated from the actual ‘web’ server that is open to traffic from the Internet. This arrangement makes it very difficult for any type of security intrusion to gain access to your customer information or any other sensitive business information that may reside in your store’s databases.

[A quick side note: You should NEVER maintain customer credit-card information or other sensitive personal data (like Social Security numbers) in your store's databases. Even in the most secure hosting environment this is an enormous financial liability for your business, and it's a business practice that needlessly exposes your customers to identity theft and/or financial fraud. In fact, hosting companies that strictly adhere to the requirements of the PCIDSS won't allow retention of such sensitive information on their servers.]

The personal touch

Finally, one of the biggest differences between ‘budget’ hosting and a full-service hosting company is the level of support that they provide. Your E-commerce site is a money-making operation, and you should select a host that treats your company’s bottom line as a priority. With a good hosting partner you shouldn’t need a lot of technical intervention, but when you do you should be able to contact a technician personally in order to get your questions resolved. A good E-commerce hosting partner will also have procedures in place to monitor your site for errors and correct them quickly when they occur.

More than anything else, when you pay for a ‘premium’ hosting partner most of what you’re paying for is that personal level of service. Since the difference in cost between budget and full-service hosting is frequently less than $60-$70 a month, that seems like sort of a business no-brainer to me.

Translating your E-commerce idea from concept into reality requires an investment of time, money and resource. For the small-business entrepreneur, a first-time E-commerce project can generate a few unpleasant budget surprises.

Some of your project’s budget elements may be self-evident, but a few are less obvious.  An experienced and reputable E-commerce developer should work through a complete ‘first year’ budget with you before your project begins. In addition to the one-time development costs associated with getting your site built, tested and functioning properly there are continuing costs that should figure into your long-term calculations of profitability.

Here are six of the primary budget elements you need to consider when planning your E-commerce project:

 
1. Web site design and development. This is the most obvious budget element, and often it’s the only cost item many people are thinking about when they ask “How much will my E-commerce site cost?” Naturally, the development cost of your project will depend upon the scope and complexity of your site. The development cost should also include the cost of your E-commerce engine.

(Please note that I don’t use the term ’shopping cart software’. If you want your online store to be successful in today’s competitive marketplace, your selected E-commerce application should be much more than a simple ’shopping cart’. It should include tools that allow you to manage customer loyalty functions, maintain customer relations and share information with all of your online marketing programs.)

2. Photography and other artwork. Your company’s logo and the photos used on your various pages are important pieces of your web site’s graphic appeal. If your company doesn’t yet have a logo, you should strongly consider making the investment in having one created as part of your overall marketing plan.

In addition, note that the photos and images used on your site aren’t necessarily ‘free’. In order to avoid legal issues, most development companies will only use images that are either original images (photos or graphics) provided by the customer or images licensed for a fee from graphic services. If you’re not planning to take your own product photography, then you either need to arrange for approved use of images provided by a manufacturer/distributor or budget to acquire original product images from a professional photographer.

3. Data entry and data management. How many products are you selling online, and who’s going to enter product information into your E-commerce database? While most developers will provide data entry services at additional cost, many will offer you the option of entering production information into your E-commerce database yourself in order to reduce project cost. Entering your own product information is a good way to learn the ropes of your site’s management console, but it can be a bit time-consuming - so be prepared. If your product information is available in an organized electronic format (such as a database or an Excel spreadsheet), your developer may also offer programming services to import the information into your new E-commerce database.

You also need to budget staff time (or developer support time) for continuing maintenance of your product information and customer/sales data. E-commerce engines usually provide you with plenty of tools for maintaining your store; all you have to do is plan for the time you’ll need to keep everything up-to-date.

4. Web site hosting and security. There are a lot of ‘budget hosting’ services that can seem pretty attractive at first blush, but in the world of E-commerce hosting you usually get what you pay for. When your web site IS your business, you need uptime, service and data security and you would do well to pay a premium to get them. Inexpensive hosting services may have good uptime records in general, but E-commerce applications can be pretty demanding. Your best bet is to find a hosting company that successfully hosts other sites running the same E-commerce engine which also offers ‘real’ technical support people (not just a ‘trouble ticket’ system) who are easy to reach. Technical experience and personalized support usually come at a premium hosting rate, but when your business is at stake it’s the only option that makes sense.

5. Web site maintenance and updates. While your E-commerce engine should provide you with the tools you need to manage your products, customer data and marketing you still need to budget for ongoing support from your developer. E-commerce applications are often updated to provide new features and improved security, and those updates typically need to be applied by a knowledgable developer. A continuing partnership with your developer is also useful in maintaining your site’s overall security and in managing your site’s long-term search engine appeal.

6. Marketing. Traffic to your new web site is not going to magically materialize. Search the Internet and you’ll find millions (if not billions) of words devoted to online marketing, but strangely enough marketing is the budget element most frequently overlooked when a business plans a new E-commerce project. There are dozens of marketing options avaialable but they all carry a cost, either in time, money or both. Your E-commerce developer should work with you to develop a marketing plan for your site - just be prepared to devote additional resources to the task of attracting customers to your online store.