Jan 2, 2013

E-commerce requires budget planning

Translating your E-commerce idea from concept into reality requires an investment of time, money and resource. For the small-business entrepreneur, a first-time E-commerce project can generate a few unpleasant budget surprises.

Some of your project’s budget elements may be self-evident, but a few are less obvious. An experienced and reputable E-commerce developer should work through a complete ‘first year’ budget with you before your project begins. In addition to the one-time development costs associated with getting your site built, tested and functioning properly there are continuing costs that should figure into your long-term calculations of profitability.

Here are six of the primary budget elements you need to consider when planning your E-commerce project:

1. Web site design and development. This is the most obvious budget element, and often it’s the only cost item many people are thinking about when they ask “How much will my E-commerce site cost?” Naturally, the development cost of your project will depend upon the scope and complexity of your site. The development cost should also include the cost of your E-commerce engine.

(Please note that I don’t use the term ‘shopping cart software’. If you want your online store to be successful in today’s competitive marketplace, your selected E-commerce application should be much more than a simple ‘shopping cart’. It should include tools that allow you to manage customer loyalty functions, maintain customer relations and share information with all of your online marketing programs.)

2. Photography and other artwork. Your company’s logo and the photos used on your various pages are important pieces of your web site’s graphic appeal. If your company doesn’t yet have a logo, you should strongly consider making the investment in having one created as part of your overall marketing plan.

In addition, note that the photos and images used on your site aren’t necessarily ‘free’. In order to avoid legal issues, most development companies will only use images that are either original images (photos or graphics) provided by the customer or images licensed for a fee from graphic services. If you’re not planning to take your own product photography, then you either need to arrange for approved use of images provided by a manufacturer/distributor or budget to acquire original product images from a professional photographer.

3. Data entry and data management. How many products are you selling online, and who’s going to enter product information into your E-commerce database? While most developers will provide data entry services at additional cost, many will offer you the option of entering production information into your E-commerce database yourself in order to reduce project cost. Entering your own product information is a good way to learn the ropes of your site’s management console, but it can be a bit time-consuming – so be prepared. If your product information is available in an organized electronic format (such as a database or an Excel spreadsheet), your developer may also offer programming services to import the information into your new E-commerce database.

You also need to budget staff time (or developer support time) for continuing maintenance of your product information and customer/sales data. E-commerce engines usually provide you with plenty of tools for maintaining your store; all you have to do is plan for the time you’ll need to keep everything up-to-date.

4. Web site hosting and security. There are a lot of ‘budget hosting’ services that can seem pretty attractive at first blush, but in the world of E-commerce hosting you usually get what you pay for. When your web site IS your business, you need uptime, service and data security and you would do well to pay a premium to get them. Inexpensive hosting services may have good uptime records in general, but E-commerce applications can be pretty demanding. Your best bet is to find a hosting company that successfully hosts other sites running the same E-commerce engine which also offers ‘real’ technical support people (not just a ‘trouble ticket’ system) who are easy to reach. Technical experience and personalized support usually come at a premium hosting rate, but when your business is at stake it’s the only option that makes sense.

5. Web site maintenance and updates. While your E-commerce engine should provide you with the tools you need to manage your products, customer data and marketing you still need to budget for ongoing support from your developer. E-commerce applications are often updated to provide new features and improved security, and those updates typically need to be applied by a knowledgable developer. A continuing partnership with your developer is also useful in maintaining your site’s overall security and in managing your site’s long-term search engine appeal.

6. Marketing. Traffic to your new web site is not going to magically materialize. Search the Internet and you’ll find millions (if not billions) of words devoted to online marketing, but strangely enough marketing is the budget element most frequently overlooked when a business plans a new E-commerce project. There are dozens of marketing options avaialable but they all carry a cost, either in time, money or both. Your E-commerce developer should work with you to develop a marketing plan for your site – just be prepared to devote additional resources to the task of attracting customers to your online store.

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