Small business e commerce - a quick guide
I have worked as a freelance web developer for almost five years and am now running a small business relating to e commerce and web development. This quick fire guide was originally intended for my e commerce customers. It outlines all your options as a small business, advises suitability, and gives case studies of some of the businesses I have worked with in e. You can email me if you have any questions or use the quick question form opposite.
Costs and set up of an e commerce system
The fundamental cost is that of the website. A reassuring and comprehensive web site will give your customers the confidence to buy from you. Consider a professional design with a prominent telephone number, FAQ page and support section. Cost of a web site varies between £600 and £1500.
Commissioning a developer to maintain the catalogue for you each time your products or prices change is a costly procedure. Consider a developer who is willing to set up a system which allows you to maintain the catalogue yourself. There are many e commerce solutions available which allow you to do that through an easy to use control panel. Suitable software costs as little as £200, although some companies sell at an extortionate £800 +. I see no justification in such prices, as I have effectively used software costing less than £200. The web developer should spend up to two days setting up the system, adding an extra £200 + to the cost. If you are experienced in PHP, with a little persistence you can do it yourself. The software will normally incorporate all the necessary features for postage and packing and will take order details.
The final cost is in the credit and debit card processing facility. Setting up the feature on your web site will require an internet merchant account and secure server, running into hundreds of pounds. A far more efficient option is to use a Payment gateway such as PayPal or World Pay. The Payment gateway company will take the payment on your behalf. The customer is forwarded to the companies secure server to make a payment (rather than on your web site). PayPal charge no standing fees (only a 3.4% + £0.20 commission). Most other gateways charge £300 for an account and an annual fee of approx £120.
Total cost of e commerce system:
- £600 Web site
- £200 E commerce system for your web site
- £800 Total
Remember to add the cost of your payment gateway. World Pay charge approx £300 for the first year bringing the grand total to £1150.
Most common reasons for wanting an e commerce system
These are the most common reasons my clients have requested e commerce systems:
- Shoppers visiting their store are drawn to the products on offer and wish to browse/purchase from home. This is especially true for traders who sell to tourists.
- A trader providing a speciality product which has the potential to cover a wider market than their store alone does.
- An e commerce system has a reasonably fast payback period over catalogue mail order system.
- Traders providing significant numbers of detailed products which customers wish to view in detail.
Some honest advice: Be careful of starting up an e commerce business without a store front. Many clients have good business and product ideas which they wish to sell online to avoid setting up a street store. The reality is that the internet is vast and it can be difficult to draw attention to a web site through the web alone. Capital will need to be invested in marketing your web site. I have some articles on how to market your web site by yourself. Please contact me and I will email them to you.
How will it work?
Customers browse your web site, select products. If a payment gateway is used, the customer is forwarded to the gateway company's web site to make payment and is subsequently returned to your web site.
You can view orders by logging in to a secure area of your web site, or the software can email each order to you.
The software can be set up to add postage and packing costs, or even to accept recurring payments for magazine subscriptions or services. Each product can have multiple prices for size or colour variations.
Products can be added, removed and modified all through your control panel. Each product can have variations (colour, size), a description, picture, and can be categorised into section or pages. A search facility is normally present for customers to use.
Selecting a developer to produce your site
You options are to use a self build system, a freelance developer, or a web design company. Let me describe each option.
Self build systems are ever more advertised on the internet and can potentially offer the cheapest option. I do not worry about any loss of business from self build systems as I can normally offer a corresponding service at only a proportionally higher cost considering the time saved, the professionalism and extra features I offer.
A freelance developer will be the most cost effective option and hopefully the most dedicated service. Ask around to see if other traders can recommend a freelancer. There are issues to consider such as security, updating facilities and whether the freelancer will still be in business when you need him or her next! The primary problem however lies in the diversity of a project: a web site requires graphics and programming. How many programmers do you know with artistic skills? And vice versa. The problem is obvious. Remember to ask for references before taking anyone on.
A web design company is the safest option, but also the most costly. Obtain quotations from several companies and freelancers and compare before making a decision.
What service do I personally offer? I initially operated as a freelancer then gained employment as a web administrator and e marketing consultant for a London company. I now operate as a freelancer but I now administrate a small team of designers and developers to execute projects.
Primary points to note
It is best to expand into e commerce rather than start in e commerce.
Many payment gateways will not protect you against purchases with fraudulent credit cards. Obtain advice when selecting a gateway or payment method.
PayPal may be cheap but they known to operate in an unprincipled manner towards merchants. Again, obtain advice.
Select your developer carefully. Ensure he or she has a broad knowledge of web based systems and not just web design and e commerce. Ask for references and verify them.
I hope that addresses most of your questions. I wrote this as an informal article to keep it short. View my web site for long winded advice! Or contact me by emailing me.
