Starting Your Own E-Business: Part 2 � Choosing a Platform

By James Maguire | Posted October 05, 2005

In part one of this story, we talked about the various details you need to think about before starting an e-commerce business. Now it's time to start building. Selecting which software you'll use to build your online store is a critical decision. It's like laying the foundation: all the other tools, from your credit card account to your marketing plan, will be influenced by this one decision. So choose carefully. Very carefully.

"But wait," you say, "I already have Web design software — can't I just use that, and then simply add a secure method for accepting credit cards?"

You can, but it's a limited solution. Because an online store has so many special requirements, like inventory management and product display, merely building a Web site and calling it an "online store" won't get you very far. You're best served by buying or licensing software specifically intended to handle the heavy lifting of e-commerce.

As you shop for an e-commerce platform, you'll encounter a blizzard of choices, each of which has a blizzard of sub-options. Before you choose one, browse through them until the jargon starts to make sense. The market for e-commerce platforms is far more confusing and lingo-heavy than, say, the market for cars. It's worth educating yourself before you buy.

Even the most established vendors have only been around a few years, so the market is still evolving quarter by quarter. This means that prices and product offers can vary wildly by vendor. You can spend $10,000 a month and get a Rolls Royce, or you can spend a few hundred bucks a month (or less) and get an almost new Toyota. Either one might be right for you, based on your needs.

Test Drive and Get References
To help you sort through the many options, you can "test drive" the software before you buy it. Most vendors will allow you to demo their software (if not, that's a red flag). They either have a model store set up that you can access, or some other way for you to poke around the controls.

Don't plunk down your money until you've really opened up the hood and gotten a feel for the software. You'll be spending a lot of time with it.

While you're investigating, get references. The only way to find out the truth about a platform is to ask people who use it - and not the people the company recommends. Find a user who isn't on the official list, and ask them how they feel about the platform.

The All-In-One / ASP Trend
One key concept to be aware of: some e-commerce platforms are "all-in-one" solutions that provide everything: hosting, accounting tools, Web analytics, even marketing tools like e-mail management. In contrast, some platforms are just the core e-commerce platform itself, and you buy the other tools from separate vendors. Adding confusion, some platforms are in-between; they include, say, hosting and the basic e-commerce software, but you shop elsewhere for the rest.

The all-in-one solution has become ever more popular with online merchants in recent years. The advantage is that A) someone else has done the homework of gathering all the needed tools into one handy package, and B) all the tools are integrated, so they work well together.

As a related concept, some vendors of e-commerce platforms license their software on an "ASP" basis. ASP stands for "application service provider." This means the software seller hosts the software on his or her own servers and the online store owner accesses it remotely. This way the store owner doesn't have to worry about servers going down (hopefully). Also, ASP vendors tend to offer a lot of hand holding in terms of maintaining the store owner's software.

The e-commerce industry is moving toward platforms that are all-in-one solutions offered on an ASP basis. This frees the strewn from technical concerns as much as possible. It allows e-tailers to concentrate on selling and leave the technical snafus to someone else. An online merchant who licenses an all-in-one solution on an ASP basis doesn't need to hire tech people — a huge savings. The salary of a tech person can buy a lot of pay-per-click advertising.

But don't let the trend toward all-in-one packages be your deciding factor. You might buy an inexpensive stand-alone platform, find a cheap place to host it, and you'll be off and running. If you're truly a small fry who's tech savvy, you might not need a tech person very much.

One more thing: you might be successful. If that happens, your software platform must be able to grow with you. In industry lingo, it must "scale," as in "scale larger." Don't be seduced by a platform whose initial price is low, but that won't scale. When your business grows you'll be stuck with a platform that's too basic. And it's really a hassle to change your software platform once its in place.

The general rule: buy as much platform as you can reasonably afford upfront. Get a platform that can grow with you.

Questions to Ask Before Buying E-Commerce Software
Before you buy your platform, look back at your business plan (you did make one, didn't you?) and find out what specific tools you'll need. Based on your needs, ask the vendor's salesperson the following:

Some Really Key Questions:
Do you provide tech support, by telephone, 24/7?
What other important tools are included? Web analytics? Hosting? Accounting package?
Does the platform help with cross-selling and up-selling?
Does the platform have built-in site search? Is so, what kind of tools will I have to enable me to influence search results?
From the page the shopper chooses an item on, what is the total amount of pages they must click through to complete the purchase?
(A higher number of page results in a higher percentage of abandoned shopping carts.)

Site Building Questions:
How many products will your software allow me display? Dozens? Thousands?
Is there a wide array of templates that come with the software, so I can avoid a cookie-cutter look?
If I hire a HTML expert to jazz up the site, will custom-written HTML pages interface with your software?
Does your solution generate both static and dynamic Web pages? (Static pages are written in HTML and are more likely to get recognized by search engines; dynamic pages are created as a shopper requests them, and allow you to more easily present a large catalog of items.)
How much do upgrades cost?
What sort of flexibility does the product shipping section allow me to offer? Will it be easy for me to offer a shipping discount based on total customer purchase?

Marketing and CRM (customer relationship management) Questions: Does the platform help with gathering shoppers' e-mails, and administering an e-mail marketing campaign?
Does your system include a method for tracking coupons or special offers?
Can shoppers keep their own lists of favorite items, or previously bought items, on the site? (Shoppers really like this, and it boosts sales.)

Merchant Administration Tool Questions:
What notification system will tell me I've got an order? (Some systems send the merchant an e-mail; others require you to check a Web interface.)
Will the software send the shopper an automatic confirmation e-mail? To what extent can I customize this e-mail?

Database/Inventory Questions:
What databases will run with your platform? Does the software allow my site to be connected to a real time database that reflects constant changes in inventory and prices?
What features does the software have to allow me to update inventory level based on my bricks and mortar in-store inventory?
What file formats does it work with to import and export inventory reports?

E-Commerce Platforms
The list of e-commerce software providers gets longer all the time, but here's a good start:

Yahoo - If there's a default platform for small business e-commerce, it's Yahoo's Small Business platform. Mom and pops flock to Yahoo's e-commerce software because it includes most everything for one low price — it's the no-brainer solution. Some merchants complain, however, that Yahoo doesn't allow them to scale as they grow and the learning curve for its management console can be difficult.

NetSuite - Well respected in the e-commerce industry as an affordable, scalable package. The company gets a lot of buzz.

iCode - Considered easy to use, the company specializes in the small-to-medium e-business all-in-one solution, although there has been rumbling in our forums about poor customer service from them.

MarketLive - A robust solution that has garnered an impressive client list, including Encyclopedia Britannica and Keds shoes.

Venda For a monthly fee of $10,000, Venda handles everything, from deployment to hosting to maintenance.

Actinic - Used by a lot of small-to-medium sized merchants, the Artinic software interfaces with the UPS shipping system and the popular QuickBooks accounting software.

MainStreet Commerce - MainStreet's base cost is $15,000, with an additional ten percent license fee. MainStreet provides a complete e-commerce infrastructure, and its software is known to be highly configurable.

ProStores (formerly Kurant StoreSense) - Geared for the smaller merchant, eBay's ProStores has solutions ranging from $30 to $250 a month.

LaGarde StoreFront - Along the lines of ProStores, LaGarde caters to the small merchant, with an array of low cost pricing options.

Miva Merchant - A popular solution aimed at the small business market, the basic Miva Merchant store building program retails for $1,000.

Websphere - Made by venerable IBM, Websphere is too pricey for a shoestring start-up, but if you have the finances it's a full-service platform will scale as large as you can imagine.

Microsoft Small Business - A similar all-in-one platform to Yahoo's, although a bit more expensive. One advantage: it's good to choose a vendor that's going to be around for a while, and it's safe to assume that Microsoft will be (won't it?).

Again, don't limit your shopping to this list alone. As you shop, you might also look at 1ShoppingCart, Shopsite, Mal's E-commerce, osCommerce, AbleCommerce, and many more.

Adapted from Internetnews.com.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

Comment and Contribute


     

    Get free tips, news and advice on how to make technology work harder for your business.

    Submit
    Learn more
     
    You have successfuly registered to
    Enterprise Apps Daily Newsletter
    Thanks for your registration, follow us on our social networks to keep up-to-date