Ecommerce for Start-ups
So you’re thinking of developing an ecommerce website for your business, but you don’t know where to start? Are you asking yourself what a SSL or payment gateway is? Which shopping cart should I use? Where should I host the site? These are valid questions, and critical components for your web businesses success.
To simplify your options, I am going to breakdown the different types of ecommerce solutions into 3 categories. Granted, there may be exceptions and variations to each.
Turn-key hosted shopping cart – this is less of a solution, and more of an out-of-box system. This is usually recommended for small start-up businesses. Your system will be hosted on the provider’s servers, and you don’t usually have access to edit or modify the source code (to develop unique features for your business). This is also known as Software-as-a-Service.
Stand-alone shopping carts – these systems can be purchased (in some cases downloaded for free) or built from scratch and hosted on your own server. The software code can usually be modified and customized to meet your business needs. However, in most cases, you will be responsible for the complete oversight of the system (including; design, programming, and server maintenance).
Full-service ecommerce solution provider – generally Software-as-a-Service providers who will use their core ecommerce system as a foundation for your business. Customizations and your unique needs are built into this core system. Dedicated account representatives, well defined design and development methodologies, as well as business consulting are usually standard practice.
If you are a start-up business or a small brick-and-mortar lacking a well defined online business plan (or budget!) seriously consider a turn-key shopping cart. A turn-key cart fits businesses that are new to online selling (ecommerce) and aren’t ready for a stand-alone or full-service solution. A turn-key cart provides all the elements needed to start your website quickly, effortlessly and at a low price point.
With a turn-key cart, we are talking low to no start-up costs, no long-term contracts, and sometimes less than $50 a month in expenses; perfect for businesses that are just getting started! If you already have a thriving brick-and-mortar business, and are looking to expand online, consult with a few full-service development firms. A turn-key cart will limit your scalability, and generally lack the customizations needed to complement your unique business needs.
With that being said, there are many successful online businesses using turn-key carts. However, many bigger brands, and well established companies choose a stand-alone or full service solution provider for their ecommerce systems.
Key benefits of a turn-key cart
- All inclusive – turn-key carts usually provide you with everything you need-from a template design to a payment gateway
- Low cost – some systems start as low as $50 a month (with little to no setup fee!)
- Fast to market – usually the website can be up and running within hours
- Less effort – starting with a turn-key means you don’t need to invest as much time into market research, brand strategy, or advanced feature customizations
Drawbacks of a turn-key website
- Non-original – if you use a pre-made template (rather than hiring a designer), the possibility of another business using this template for their website is high; you will also lose your unique brand appeal
- Lack of customizations – if your business has unique business rules that are not supported by the shopping cart, you will have to find workarounds
- Not scalable – should your business grow, or should you want to grow and develop new features or technology, you will be extremely limited in what you can do
- Support – usually, no dedicated support representatives -they don’t know your business and aren’t familiar with your account-don’t expect business consulting!
- Server uptime – due to their volume of customers, turn-key providers often have difficulty scaling their server infrastructure to support their fast growing customer base (these providers require volume to be profitable) - however, this isn’t the case for every provider-be sure to review your choices carefully!
How do you know if you should start out with a turn-key cart?
Ask yourself how serious and prepared you are to start your online business. If this is a small “side project”, and you do not have a full and detailed business plan, or vision, than start small: with a turn-key. On the other hand, if this project is going to be the lifeline of your business, and you have your business plan and materials prepared, consult with a few professional full-service firms, or explore the use of a stand-alone cart. These solutions will be better suited to adapt to your business: to build your brand, business rules, and needs into a cutting-edge, custom built solution just for you.
How to get started
Before you start comparing providers, make a checklist of the most critical required for your business. For example, special shipping scenarios, wholesale or dealer pricing/ordering, unique taxation needs, product options management (different sizes, colors, or types of products), drop shipping/advanced fulfillment features, etc…
Take the time to visualize how your website will function, and list out the requirements that will make your business successful. Once you have this list, start comparing the different turn-key carts.
If your list contains features and needs beyond the scope of the providers you are comparing, search for a provider who can customize the cart for these needs. Or, turn to a full-service agency that can provide you with a custom built solution.
Get started comparing the different turn-key carts available at: Shopping Cart Reviews
This post is filed under Tips For Newcomers, Mostly and has the following keyword tags: hosted carts, ecommerce start-up, shopping carts.
9 Comments
Ron Robinson says:
Excellent article and well-thought out! One important consideration not mentioned however is the question of security and security compliance. The credit card companies, in recent years, have made it part of every merchant agreement that every merchant is required to comply with PCI (Payment Card Industry) Data Security Standard security requirements.
And those security requirements are tough and getting tougher. Many small merchants are seeing these PCI DSS requirements today as a requirement from their card processor that they pay for a service to have their web sites scanned for outward-facing online vulnerabilities. But it's not going to end there. Later this year, PCI DSS regulations will go into effect that require site visits and extensive log reviews for ecommerce merchants who have direct control of their databases (the database itself is the part of ecommerce that the PCI DSS folks are most concerned with).
Even right now, if you are not performing daily reviews of your server logs (unavailable to most hosted ecommerce solutions) and documenting those log reviews in yet another log, then you are already out of compliance and can be fined for that non-compliance. Also, if you have employees handling orders with access to credit card info who have not passed a criminal background check, you are out of compliance.
The best compliance posture to be in is to use a "Turn Key Hosted' solution - the first option above. When you use this type of solution, then your cart provider carries most of the burden of security compliance.
If you use a stand-alone solution, then you own the database and are responsible for server security, log review (which you probably will not have access too), background checks and the cost of proving compliance to your card processor becomes very, very high.
Louis Camassa says:
Hi Ron,
You bring up a good point. PCI compliance is a hot topic, and certainly worthy of consideration. The benefit of going with a turn-key cart, or a full-service solution provider, is that the responsibility for maintaining the PCI compliancy and security of the servers lay within the providers realm. This will be the case for any Software-as-a-Service provider.
However, if you have a stand-alone cart, and it is hosted on your server, the odds are you have access to server log files. I don’t know the minute details of this practice, but I will say that log files are difficult to traverse through and extremely large in size. That being said, there are methods to automate this process.
Important note here is that there are levels of compliancy based upon your sales revenue. Some levels are more stringent than others.
tuke says:
Now that you've divided the carts into three segments (turn-key, stand-alone, SAAS e-commerce), you need to split up your cart reviews accordingly.
Seriously.
Is "CoreCommerce" turn-key, standalone, or SAAS? There is no tag, and it isn't obvious from reading the first paragraph. Someone wanting a quick start after reading this article wants to situate themselves, and then go to your list to look at exactly the carts that might suit their requirements. Similar issues for "LemonStand" and many others.
Help out the harried startup customer by segmenting your reviews.
bobmain says:
Thanks for the article. I am exactly what you describe - a start up web site and I used a hosted full service solution (Volusion.com). I have 35 years experience in optical but little experience in e commerce. We sell eyeglasses online and it is a complicated (not off the shelf) checkout process with the addition of the eyeglass prescription. I was able to modify the software to fit my needs by integrating another hosted company (Formspring.com) to solve the eyeglass prescription challenge.
For an online rookie like myself, using a full service hosted solution was the prefect solution. I can use the software as is or they have additional design and support solutions if I need them (I did pay extra to get a customized template so no one else would have the same template). They have an SSL that seems to comply with all the industry criteria. They also have online support that I can get answers to if I need help, but they also have this huge database of on-line documentation.
For me, this solution has been a great way to start up (low cost with the flexibility I need). I would highly recommend this type of solution for any start up web business.
My site may not be the most professional, but for now, it is a good start. Check it out. www.halfpriceeyeglasses.com
Thanks Bob
Alex Mulin says:
In order to decrease your expenses on getting PCI-DSS compliance use a hosted payment gateway page instead of taking credit card details on your own web-site. This is the best result2investment IMO
Louis Camassa says:
@tuke - good point, maybe the next article will be comparing the different turn-key, stand-alone, and full-service systems!
@bobmain - very glad to hear about your positive experience. I have heard some good things about Volusion. Please make sure to test your site in IE 7, it seems that layout is broken on all pages! See: http://img67.yfrog.com/img67/7052/thumbs.png
@Alex Mulin - many of the turn-key carts these days are in PCI compliance. So, you don't have to turn to a hosted payment gateway like Paypal or Google checkout.
clicknmortar says:
thanks for the info
i have been looking for some information regarding a physical bricks & mortar POS system that can be integrated into/with an e-commerce website.
doesn't seem to be a lot of info online regarding this topic & this site seems to be the most informative so far.
I've done a bit of research & haven't actually found many solutions.
any input would be appreciated...
Louis Camassa says:
@clicknmortar - there are a couple of ways to go about this:
Choose a system that includes a POS and ecommerce application all in one. These tend to be pricey, but fully comprehensive. For example, check out: http://www.netsuite.com and http://www.infor.com/
Many of my clients and other ecommerce/brick-and-mortar companies create a software interface to connect their in-house POS with their website, so inventory, sales, customers and other such data is synchronized.
It depends on what your budget is, and how often/how much data you want synchronized(inventory, customers, etc…).
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