Choosing a Hosted E-Commerce Solution

By Sean Michael Kerner | Posted August 29, 2005

The promise of easy, installation-free e-commerce is almost as old the e-commerce industry itself. The reality, though, is that it's only recently that solid, full-featured, reliable and relatively inexpensive hosted e-commerce services have begun to appear. A hosted e-commerce service is supposed to solve an online merchant's non-product needs, offering a combination of shopping cart technology, merchandising, payment, shipping, marketing smarts and, of course, hosting.

Just about every major hosting company today offers some form of hosted e-commerce package. So how do you choose? In Part 1 of this series we'll look at what's important when choosing an e-commerce hosting provider; In Part 2, we'll apply those measures against the solutions offered by leading hosting companies including: Interland, 1&1, GoDaddy, Hostway and Yahoo among others.

What's Important
The first step in choosing a hosted e-commerce provider is first deciding and understanding what's important. Not all services are created equal. Though, in our experience, the basic needs of online merchants are almost always the same.

1) Full Wizard-Driven Setup
You want a hosted e-commerce solution because it's an all-in-one solution and it's supposed to be easier right? Then why struggle with the setup? A proper wizard should be able to take you — from start to finish — to a fully operational, production-ready, e-commerce storefront. Anything less than that is hardly a wizard and ends up being far more frustrating than not having one in the first place.

2) Lots of Templates
One size does not fit all, and one design template is not good enough for the many different businesses and their products. No hosted e-commerce vendor will ever tell you that they don't let you customize a template, design or style — but that's just not good enough. If the vendor doesn't offer a large selection of templates to begin with, you're still up a creek without a paddle.

3) Catalog Import/Export Features
Every e-commerce storefront will let you build a catalog; but not all of them let you import the data you already have. You don't want to have to type everything in again do you?

The ability to easily export data is equally as important. You may, at some point, want to change hosts and move your store to a different vendor's solution. It would be a major pain if you had to manually re-enter all of your product catalog data again, wouldn't it?

4) Additional Marketing Capabilities
It's not enough just to build a store; you've got to market it as well. Some vendors include a mailing list capability, which is certainly a start. Others vendors also include optional incentives such as gift certificates, coupons and the ability to run promotions and an affiliate marketing program. Integration with XML-based shopping feeds — such as Google's Froogle — is critical.

In our opinion, the more the merrier. Use as much marketing panache to attract visitors to your site to optimize sales. If they can't find you (or the product you want to sell), they won't come.

5) Payment Beyond PayPal
PayPal is an excellent payment gateway and serves the needs of a lot of e-tailers. It isn't the only payment gateway, though, and it doesn't meet everyone's needs. The best hosted e-commerce vendors know this and offer several payment gateways.

6) Shipping
Shipping has always been, and will always be, the lynchpin that holds e-commerce together. For a hosted e-commerce solution to be of any practical use, it MUST include automated and full-featured shipping calculation tie-ins to the major shipping companies (i.e. USPS, UPS, FedEx).

7) Analytics
Understanding where your business comes from is critical to e-commerce success; if you can't measure it, you can't manage it. Some of the hosted e-commerce sites include reporting and others include more advanced Web analytics like Urchin. The better you understand your visitors' online behavior, the better off you'll be.

What We Take for Granted
Service, support and the actual hosting for the major hosting companies and their respective e-commerce offerings is a given. That's not to say those elements are not important — they are. It's just that the hosting companies are, for the most part, all really good at service and by definition they're hosting companies. Among the four hosts that we reviewed (Interland, 1&1, GoDaddy and Hostway), perhaps Interland stood out a bit because it was exceptionally fast. But, by and large, all of the services provide excellent support and service.

Who's the Best?
So where does that leave you? The above info is all fine and nice, but which vendor offers the best solution? The answer to that question is not nearly as easy as we would like it to be.

The reality is that the hosted e-commerce solutions offered by the hosting companies are in a state of constant flux. Vendors constantly add new features to these services, which make it difficult (if not impossible) to make a finite recommendation. The reviews that we've done are only snapshots of those solutions at given points in time. We've written reviews that became out of date a few days later due to an upgrade that significantly altered or improved the solution.

In Part 2 we'll take a look at the leading hosted solutions to help you make an informed choice. We'll also include a chart that breaks down the basics based on what the vendors are currently saying.

Selecting a hosted e-commerce solution that's right for you isn't an easy task, but it is one that offers a great deal of choice.

Adapted from ECommerce-Guide.com, part of Internet.com's Small Business Channel.

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