7 Questions Before You Buy Software or Services
Ecommerce entrepreneurs and managers have many options for software, marketing toolkits, and any number of retail- and marketing-related services, each of which promises to improve business operations and sales. While every business will have its own criteria for choosing software and service vendors, there are some basic questions to ask before making a purchasing decision.
Ecommerce platforms, accounting suites, product review systems, live chat solutions, email marketing providers, search engine optimization agencies, fulfillment and logistics specialists, and contract customer service centers are just a few examples of the software or services that an online retail business can lease, license, buy, or otherwise acquire. Here is what to ask yourself or, perhaps, even ask the person trying to sell you something.
Will It Make You More Money?
There are many amazing new software solutions and services available, but anything a merchant invests in should have an expected return.
Frequently, ecommerce businesses will want to improve sales or conversion rates, but even a service that reduces the cost of doing business can make you more money.
Here is a geeky example. Many online merchants pay monthly hosting fees that are, in part, based on the amount of memory and storage allotted to the server. If you use an ecommerce platform like Magento that relies on InnoDB database tables and a server that is using a version of MySQL before 5.6, you could be using more storage than necessary, since the single InnoDB data file can grow but not shrink with the size of your data. Paying to have a developer to update MySQL and set InnoDB tables to create one file per table rather than one file for all tables may save money long term on hosting, potentially making a business more money overall.
Always know how new software or services will ultimately make you more money.
Is It Best of Breed or Fully Integrated?
Best of breed software or services typically focus on one task, aiming to do that one thing very well. Fully integrated software or services seek to provide a package of tools or offerings that allow a merchant to get everything required in a single solution.
As a real world example, consider AdSerts, a Wisconson-based design agency that specializes in producing retail sales circulars. The company doesn’t do everything, but what it does, it does very well. It is a best of breed approach.
Likewise, NetSuite offers an integrated web business software suite. It can provide a business with an ecommerce solution, back-office software, and an enterprise resource planning (ERP) system that is known to work together and work well enterprise wide. It is an example of a fully integrated approach.
When selecting software or a service provider, think about what approach they are taking to solve a problem or boost profit, and ask if that approach makes the most sense for the situation.
How Will It Interact with Current Systems?
It is possible to have the best payment processing system in the world and the best shopping cart software in the world, and still have a hard time getting them to work together.
Most retail businesses are built brick-on-brick, so to speak, with one new system added on top of and integrated with existing solutions.
Before contracting for a new software solution, ensure that it can be integrated with the system you already use.
How Will You Pay?
Software and services can have any number of payment models ranging from utility-like pay per usage to flat annual rates or one-time payments.
Advertising agencies, for example, will sometimes take “agency commission,” which may mean that you won’t pay anything additional, rather they could receive a commission from the publications whose advertising you buy.
Understanding how you pay for software or services will help you determine how it impacts cash flow and business success.
Is It Guaranteed?
Software, surprisingly, doesn’t always include guarantees. Sometimes, you might just be out of luck.
As an example, imagine a company that sells pricing software. The company’s solution monitors competitive pricing and makes certain that you always have the lowest price online within some parameters. But if the software doesn’t work for your business, the company might argue that you didn’t provide proper product information, didn’t properly specify competitors, or something similar.
As another example, Mike Monteiro, who is the co-founder of an excellent agency, Mule Design, famously delivered a presentation at the March 25, 2011 Typekit Creative Morning in San Francisco named, “F*ck You. Pay Me.” The presentation was aimed at encouraging creative design agencies not to get pushed around. But it is worth noting that some service providers will want to be paid whether or not you’re happy with the result of the work.
Be certain you understand what is guaranteed and what is not.
What Happens When it Breaks?
A related question has to do with up time. Even if a supplier is willing guarantee some software or service, it is important to understand how that supplier will react when something breaks and your site is down or you suddenly cannot process orders.
Firehost, which is a secure hosting company, offers 24-hour, seven day a week support. If your site goes down on a Saturday, there will be someone willing and able to help you get it back up and running, provided Firehost itself is not down.
Know how the supplier will handle business emergencies.
How Will You Update It?
Software is often updated. Perhaps there is a security patch that must be added or a new feature to be distributed. Although this sounds simple, an update can be a system crushing change that will grind an ecommerce business to a halt.
As an example, the United States Postal Service recently made a change to its application programming interface (API) that would effectively break systems using the older version of the API. Software makers using the Postal Service API had to quickly roll out updates to their system. But what if you had a custom module involved? Would the software or API changes impact it? If you’re not certain, you would want to make the software update in a text environment, ensuring that it worked properly before it was distributed to your production systems.
Before you get new software, understand how updates and upgrades will work.