eCommerce Platforms for Small Businesses
Over the last 2-3 years a small revolution has gone on in the options for eCommerce for small businesses with the advent of hosted ecommerce platforms which take away many of the headaches in setting up an online retail presence for a small business.
Two platforms in particular have caught our eye as possible options for small businesses.
Shopify - a very simple and clean looking solution which also has the ability to quickly implement very attractive designs through it's template 'Liquid' template language. Shopify works well for small brands with a limited number of lines, but a high quality design requirement.
BigCommerce - a hosted version of the Interspire Shopping Cart software. This carries a lot more features out of the box than Shopify, but requires more skill to adapt the designs to your needs. BigCommerce works best for stores with large numbers of products, where unique branding is less of an issue. We have delivered small stores built on this technology in sectors like electronics.
These two services have largely taken the place of software such as Actinic Catalogue and OS Commerce by taking away the need to understand hosting, web software installation and maintenance.
eCommerce software vs skills and knowledge
So much for the tools, what about the skills you need to run them.
To get a store up and running you will still need to set up the following:
- Tax rules for the markets you are selling to
- Shipping prices based on whatever fulfilment partner you are using and how much of the P&P costs you want to pass on to the customer
- A payment gateway which may be a simple as Paypal or a more complex gateway which can be branded to match your store.
- Terms & Conditions, Delivery details, Returns policies
These are all 'one time' decisions and you can find a small business solution providers, or even just a freelancer to help you do this at the outset.
Your next set of skills are ones you will need more regularly in adding and editing product in your store.
- Photography and image manipulation (cropping & resizing)
- Pricing
- Copywriting
- Inventory management
The work involved in the above should not be underestimated, but once you have each of these pieces of information for each product you are ready to open the doors to your shop.
Simple. In fact this IS simple, if you have done this before and understand the steps. To see how quickly this could be done, last year we set up a sim free mobile store. This used some mobile product data from an affiliate network. About 8 hours work to get the store up and running using 100% out-of-the-box settings and design and the site was ready to trade. Another couple of hours work and the site was found by Google and made our first sale in under 48 hours.
This was certainly an interesting excercise, and along with trying to sell a product on eBay, is a useful excercise for a start-up business wanting to uncover all the steps needed to sell a product online, but it is a long way from actually building a business.
We're not the only people to have tried this approach as an experiment. Jonathan Briggs, professor of ecommerce at Kingston University has written this blog post about budgeting for an ecommerce site. The end of the post has an example of costs for Market Quarter, a shopify store that he has set up as an experimental project and that trades on an ongoing basis. He counts 13 man-days, excluding marketing, for a small store with bespoke design.
Interestingly, the project misses many of the steps listed in higher up on the post, but has still managed to trade around £10,000 turnover in its first year after another 20 days spent on marketing and a budget for PPC of a couple of hundred pounds a month.
What's needed next
I said above that setting up a store online and selling your product does not mean you have an eCommerce business in place. An ecommerce business needs to generate sales, and cope with the scale of profitable sales needed to cover the staff costs and overheads.
A 2009 survey by BigCommerce shows that users of these small systems rarely commit the sort of marketing budgets needed to acheive this scale. Either that or their efforts are driven entirely by tactics like SEO or PR which require no media budget, and the store manager is valuing their time at nothing.
Bringing an ecommerce store to the scale needed for consistent profitability brings about needs for the following capabilities:
- Branding
- Design
- Merchandising
- Decision support (tools like image zooming or reviews that help a customer decide to purchase)
- Copywriting
- Photography
- Search optimisation
- Email Marketing
- Partner & affiliate management
- PR
- Promotions management
- Social media strategy and implementation
- 3rd party catalogue integration (e.g. Ebay, Amazon marketplace, Kelkoo or Google base)
- Web analytics
- A/B Testing
- Multi-language and multi-currency management
- Content management (non product, e.g. blogs)
- Product design or procurement
- Supply chain management
- Warehouse logistics
- Inventory management
- Customer services
The tools to support these activities are simply not available in smaller platforms like Shopify and BigCommerce, or would require large amounts of bespoke development to either build or even integrate with other existing systems. This is why we now develop even our SME sites on the Magento eCommerce platform.
Whilst this is somewhat overkill for small projects, and is more costly to implement truly bespoke designs on, the platform has the ability to grow at a much lower ongoing cost, and to a much higher level. The Magento Showcase shows some of the global-scale businesses that are using the system at the top end. At the smaller end we've delivered sites similar to Jonathan's Market Quarter site in around 15 man-days effort.
So, whilst we thoroughly recommend any small start up has a look at tools like Shopify or BigCommerce, we also recommend that they look at their business plan and be realistic about how far a tool like this can take them. For the sake of cashflow, a hosted option may well be a great first step to get you through your first year or two of trading, but for growth to even a relatively small business capable of supporting a handful of employees, a more scalable platform such as Magento would definitely be our tool of choice.
