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Design Tip:
So, You Want An Ecommerce Site - Part 1
by Larisa Thomason,
Senior Web Analyst,
NetMechanic, Inc.
If you have a product or service to sell, chances are you've considered selling it online. It sounds easy: just post a Web site and wait for the orders to roll in. But are you prepared for the many decisions you have to make before you launch your online business? Those choices will have a huge impact on your operating costs, promotional strategies, and visitor confidence in your site.
Online Malls: Safety In Numbers
The first question you have to answer may sound silly if you're optimistically planning to become the next Amazon.com, but it's important. Do you really need your own Web site?
An online mall or Web mall is just what it implies: a single Web company owns a site that hosts an assortment of retailers. Online businesses affiliate with the mall and pay a monthly fee or commission on each sale. Some malls specialize in a particular area, like wedding supplies or vacation packages, while others host a large variety of stores.
Here is just a sample. Internet.com does regular reviews of Internet malls and portals. We've included a link to some of the services they've reviewed.
You may find safety in numbers in an online mall if you're just beginning an online business. Visitors to the mall mean traffic to your site even before you get listed with search engines. Specialty malls in particular may help you promote niche market products.
Internet Retailing On A Budget
The most attractive aspect of online malls for beginning retailers is the relatively low start-up cost. The owner typically supplies a Web store building tool that includes a shopping cart system. Some malls also handle credit card processing for their member merchants. These services let you avoid the cost associated with Web design, merchant accounts, Web hosts, etc.
But be careful: "retailing on a budget" rarely translates to "retailing for free." Commissions and other fees may cost more than you anticipate. A basic store that doesn't do online order processing is very affordable - $25-$50 month usually. But if you have the mall handle your credit card processing, you could pay $100 per month or more, plus transaction frees. Often, that will still be less than what you'd pay as an independent retailer, but be sure you know what you're signing up for.
Pay close attention to the mall's store building tool. Some tools limit you to a specific layout and color scheme, which results in all the stores in the mall looking exactly alike.
Research the mall carefully to make sure you understand all the charges, policies and restrictions it imposes on merchants. Contact other retailers to get their opinion on the service before you join.
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NetMechanic Poll
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Questions to ask before affiliating with an online mall:
- Does the mall charge a membership or setup fee?
- How much is the commission on each sale?
- Who handles credit card processing?
- If the mall processes orders, do they charge an extra fee per order?
- Will the mall allow you connect your existing Web site to the mall?
- Does the mall charge extra for its store building service?
- What are the mall's policies regarding order fulfillment and returns?
- How will the mall help you promote your business?
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Online malls are often a good way for inexperienced online retailers to test the market before they commit large financial resources to a standalone Ecommerce site. Many businesses start in an online mall, then graduate to their own sites.
Designing Your Own Ecommerce Site
If the limitations of an Internet mall aren't for you (or if you're ready to graduate from the mall), it's time to start planning your own Ecommerce site.
The easiest option is to hire a developer to deliver a turnkey Web site to you. Cost varies from several hundred to thousands of dollars, depending on the scope of the project. For the purposes of this article though, we're assuming that you're going to develop the site yourself.
Understand up front that you will save money, but you'll spend a lot of time on the project - if you do it right. It's time well spent though. You'll understand your Web site from top to bottom. You can do your own site maintenance and change product offerings or add new features to the site as often as you please.
It's important to make the right decisions in the beginning to avoid problems and unexpected costs later.
The Four Questions
The initial decision process is confusing because each decision you make impacts the others. With four major variables in play at once, you may feel as though you're trying to solve the world's hardest algebra problem.
Answer these four questions before you sign up for anything:
- Will I use an off-the-shelf shopping cart system or design my own?
- How will I accept payment from customers?
- What type of database do I want to use?
- Will my Web host support the answers to the first three questions?
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As you search for the answers, you'll begin to understand the complexity of the problem. Each choice you make limits your options in another area. The trick is to find the best set of viable options for your price range.
Consider these limitations:
- Most Web hosts only support a single database and/or shopping cart system.
- Off-the-shelf shopping cart systems often require you to contract with certain credit card processors.
- New retailers often have trouble qualifying for online merchant accounts and have to use higher-cost options (that the shopping cart system may not support!).
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Don't be discouraged. In the next Webmaster Tips Newsletter, we'll discuss how to decide what you really need for your site. You'll learn how to evaluate your options when selecting a shopping cart system, payment option, database, and Web host.
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