If You Build It They Will Come – Not Unless You Work On It
I often see posts on forums from optimists who want to set up a web site and make money. They seem to have that great optimism that any Ecommerce web site will be a success and save their business, or make them lots and lots of money.
The sad fact is that the vast majority of new web sites fail. By failing, I mean that they cost more to run than they make in profit. A successful web site should not only cover its costs, but also pay back the investment needed to create it. This success does not come overnight, and it certainly does not come without hard work, research and planning. Some luck is also needed.
So what makes a successful website, and how do you ensure that yours can be successful? Even if you hire a professional to design and create your site, how do you know if they have done a good job?
In simple terms a successful website sells things that customers want, are not too expensive, look trustworthy to the customer so they are assured that their money is safe and you will deliver, and come up on Google when the customer searches for what they want to buy. Successful websites also do not cost more to run than they make in profit.
If you are creating a website to add an extra revenue stream for your shop, the temptation is to list everything in your shop. This can be many thousands of products and might be a waste of time. Clearly it is better to sell what you know. What you have an interest in. It depends on what your niche is and who you are targeting, but sometimes it is better to restrict your inventory to the items most likely to sell online. It is much cheaper to list and maintain 1,000 products rather than100,000. That said in some markets it is better to list absolutely everything to give the impression that you are the place to go for anything in that niche. Although your designer can advise (and should) you are the expert as it is your chosen marketplace.
By having an over-large inventory you create several problems. First the category structure needs considerable thought so that visitors can easily find what they want rather than having to trawl through dozens of pages. Second the cart's search needs to be very very good to ensure that the right items come up and not hundreds or thousands of close but unwanted matches. Third the site will cost more to host.
There is nothing wrong in having a site with a few products. If they are the right ones it can be more profitable. One of my favourite examples is http://www.thebrowncorporation.com/ which has a massive inventory of 6 items.
If however you have the wrong inventory, no amount of great design will save your site.
With your competitors only a Google search away, the prices on your site have to be correct. They do not have to be cheapest, but they have to be within reach of what your visitors expect to pay on the internet for the goods. If your site looks the part, then visitors will buy from you rather than keep on searching to shave off a few pence.
Look and Feel
An Ecommerce site exists to make money. Its main purpose is to encourage visitors to buy the products. It is much easier to get visitors to convert to customers and part with their money if they believe that this is a genuine store, which looks professional, will keep their information safe, and will deliver their order promptly. Whilst all design is subjective there are some fundamentals that should be present on any Ecommerce site. Again I will use the Brown Corporation as an example (I have no connection with them)
In this design, it is very clear what is being sold, how much it is, and how to buy it. The postage costs are clearly displayed on every page, and a sense of humour is used throughout the site.
Moving down the page
Under the professional looking diagrams there is a customer service section that includes
- Delivery information
- Terms and Conditions
- Returns Policy
- Contact us
These are essential sections and you should have a link to such sections on every page. Many savvy shoppers will look at these before deciding to risk their money with you. You should never forget to have these information pages.
Search Engine Optimisation
There are thousands of sites and resources dedicated to this subject. I have also covered this in my blog http://www.practicalecommerce.com/blogs/post/949-SEO-and-Selecting-a-Magento-Theme.
Basically it is how you get your site to appear near the top of the search results when people search for things you sell. Again this is not an exact science and if you have two experts in the room you will get at least three opinions. There are some basics that a site should have.
Page titles should be relevant and different for each page. Do not be lazy and have the same page title site wide. For example product pages should have the product name in the page title. Images should all have alt text, i.e. an image title. Pages should have proper structure with headings, and sub headings. Product descriptions should be well written, not copied from the standard manufacturers blurb, and include the key words and phrases that the customers may use to search.
There is no point having an Ecommerce site which costs more to run it than you make in sales. Now any designer will tell you that it takes time to build up custom and sales. That you should not expect to break even straight away. This is undoubtably true, but you need to ensure that progress is being made. There are some essential metrics that you need to collect on a regular basis to ensure that your site performance is improving. For most sites this should be weekly.
- Number of unique visitors – the number of people who have visited your site
- Bounce Rate – the percentage who leave straight away
- Conversion Rate – the percentage of unique visitors who place an order
- Average order profit – the amount of profit you make from an order
This is the very minimum you collect. You should monitor these to ensure that they increase. (not the bounce rate!). Ignoring the bounce rate, these figures tell you on average how much money your site earns per thousand visitors. If you want to do an advertising campaign then you know not to spend more than this to get your thousand visitors. If you start a campaign you need to monitor the figures closely to see if the bounce rate goes up or the conversion rate goes down. These are indicators that you are targeting the wrong people.
Your web designer should provide you with these figures or show you how to get them yourself. Do not think of running an Ecommerce site without them.
There is no guarantee that your site will be a success, but there is no excuse for not learning about Ecommerce and helping your site along. A lazy owner, who relies on their designer, will only have themselves to blame when the site fails. As a retailer, it is your responsibility to market your site. Your responsibility to ensure that you are selling the right inventory at the right price. It is your responsibility to ensure that the site is fit for purpose. It is too easy to blame the designer, or the state of the marketplace or the competition.
Great Article! This puts into perspective why I try to learn as much as possible (and it mutates constantly) .
Richard Stubbings says:
Thank you, I was prompted by learning of a local UK store that got screwed over by their designer and took less than one order a month for 18 months before they gave up. I will not give their URL because one of the things their designer did was to use photos taken from the internet and I am not convinced that permission was obtained/paid for.
Corey Philipski says:
Good post. It seems most people, myself included when I first started, overlook the marketing aspect. People simply think they are going to be bombarded with traffic, which is not the case. Design obviously plays a huge role, but it my opinion getting the traffic is much harder.
Derek Bacharach says:
I smile every time I see a get-rich-quick TV ad showing how easy it is to start your own website. It's even better when they show a woman in a bikini on the beach in a lounge chair holding a laptop as if she's on vacation while running a successful website.
Richard Stubbings says:
It is easy to create a web site. Its like building a shop in the middle of the desert. No one visits. No one knows you are there. No one passes by. Nobody would dream of building such a shop. They just do not realise that's what they are doing with the web site.
John Lindberg says:
This an excellent article and loaded with sound advice. The only thing that I can add is new e-merchants should also consider the product revenue or gross profit per shipping pound of the merchandise they are considering.
Selling diamonds online is one thing, but selling coal is something very different--when taking shipping cost into account.
The fact is that not all product lines lend themselves to the B2C model and a key factor is product gross profit (revenue less cost of goods sold) per shipping pound. Too low a margin when measured in those terms could make the viability of a new webstore suspect. At the very least, product margin per pound and the economics of delivery costs need to be addressed early on in the business plan development process.
John Lindberg - President
EFULFILLMENT SERVICE INC
Richard Stubbings says:
Thank you. I have never before considered the metric of profit per shipping pound (or kilo). Its interesting. Clearly one mistake many Ecommerce sites make is forgetting the shipping cost. Either by adding some or all into the product cost or by having a separate shipping cost. I guess that it is harder to sell a low value item where the shipping is the same or more than the cost of the item. This would be reflected somewhat by this metric.
Web sites are a dime a dozen. Just look on Flippa at all the web sites for sale, or auction. Many or most of them never make a dime, yet there owners are trying to pass losing sites on to others. Not to say you can/t make them work, I guess if you liked them enough you could make a go of it. I believe a Web Site from scratch, from the entrepreneurs own ambition and skill is the best way to go. Still yet there are so many Web Sites and the only ones that do well and are on the top 30 or 40 ever get any sales.
Richard Stubbings says:
Before starting any new website you need to do research. You need to find the competition and see how many there are and their prices. You need to believe that you can do better, that you can provide customers with a reason to use you and not the competition. There is simply no point being a clone of 1,000 other web sites all selling the same thing.