Finding the right software for your online business can be complicated when you first start to look for the right solution. There are many different solutions that are available and all will work but in different way.
For a small to medium sized business the solution will generally be implemented using standard "out-of-the-box" software with no need for major development or customisation in which case the costs can be easily summarised. These costs do not include cost of goods, shipping costs, credit card and bank fee, tax & GST, accountants, salaries and other administrative costs. We are just dealing with the online store.
You might need to connect your online store to your financial system such as Xero or MYOB and if you have a bricks and mortar store you might want to make sure that stock on hand is up to date or connected to your Point of Sale (POS) system.
So what is included in the hosted online shop package (or hosted eCommerce solution) and what price do you pay?
This is sometimes a very difficult question to answer as you get assailed with feature lists and jargon that don't really mean that much. Most people never look at the Terms and Conditions that control what you get and how you can use it. These can often make what seems to be great deal taste sour. Reality is that most of the major online shop solutions all have the same or very similar feature sets. So in general you should spend more time on how it will work for your business rather than what it does.
"How it works for your business" might be the difference between success and failure. If you find that you cannot use the back end administration system easily then you might be better off going elsewhere. So always insist on a Free Trial Period so that you can use the system without paying for it.
The price that you pay will in general be determined by what category of business you fit into i.e. small, medium or large SME as above.
At eCorner our prices start at $29 per month including GST for an eCommerce enabled store and then increase based on the size and options required. There is a growth path for your business which is very important. Many open source solutions look attractive but once set up they can only be upgraded or maintained by a developer. But this is not the case with a fully hosted solution that is sometime called SaaS - Software as a Service or Cloud-based solution.
If you are a large enterprise business then eCommerce costs can become very high and very quickly. Cloud based or SaaS based solutions will still work for an enterprise but the implementation and infrastructure may be very different. The enterprise level customers may want to have a dedicated solution that is more customised and integrated to other administraive systems like Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM). Integration costs can get expensive unless there is some "out-of-the-box" solution like our solution for SAP Business One or Xero.
From an eCorner perspective our software costs along with all the infrastructure required to host it starts at $899/month, though we also have options for enterprises looking to host the software themselves.
You need to have some ideas about what you will be doing online so that you can select the solution or package that will best suit your business. Following are a list of questions that you can start with. To get to the best result you need to have thought through the answers to these questions.
|What type of products are you selling?||
You can sell anything online but the functionality required may change with the types of products that you sell. If they are physical products like clothes or toys then most systems will be OK. But if it is perishible items like food you might need special pricing. Or virtual items like software or music that needs to be downloaded then you need to ensure the store can support those.
|How many products (SKUs) will you have online?||
The size of the online store and issues like compare and search are affected by the number of products which will also impact cost. There are a number of aspects to package sizes like the number of products, number of categories, how much storage space and how much internet data capacity.
|Do you need product variations?||
Will your products be offered in different colours or sizes. Variations means that you have a master product but then variation products based on an attribute like size as an example. Are there limits on the number of variations and/or are variations are counted as products (SKUs).
|Where will you sell to (countries, currencies and languages)?||
If the online store is mainly focused on Australia then you need just support English and Australian dollars. But if you are selling overseas then there are issues like currency, shipping, tax, language and payment to consider.
|How will you collect payment?||
Most online stores accept credit cards and PayPal. You may need to have setup accounts with a bank (merchant facility), payment provider/gateway and PayPal. If you want to sell overseas or accept foreign currency then that needs to be considered during setup, as certain payment methods may not be available.
|How will you calculate shipping cost?||
During checkout your online store adds a shipping cost to the order. Some stores use free shipping and absorb the cost. But it is not unusual to calculate the cost and add it. Australia is complex due to the size. Australia Post is the normal shipping method but supports up to 20KG only. If you are selling internationally you may need multiple shipping methods based on country.
|Do you want to list on eBay, Facebook shop and other portals?||
Using a multi-channel approach can greatly improve your chance of success. Some online stores can seamlessly interface to other systems like eBay.
|Would you like to send newsletter?||
Linking your online store to a email newsletter can be great marketing but the system will need to support that.
|Cross sell and up-sell?||
Do you want to be able to cross sell accessories and related products. The online shop system you select should allow you to set products to manually cross-sell. But it is also important to have automatic cross-sell based on what people really buy.
|Social media integration and a Facebook shop?||
Do you want to have links from your products on the store to social media pages like Facebook, Twitter and YouTube. This can greatly improve your presence online.
|Do you want to sell on mobile devices?||
More than 20% of sales online come from a mobile device like a phone. This is also growing rapidly. Your customers should be able to search and buy from a mobile device. Keep an eye out for solutions that are Google Mobile Friendly
|Do you want to be easily found on search engines?||
Search Engine Optimisation (SEO) and Search Engine Marketing (SEM) are important to be competitive online. The online store needs to have smart tools to help you achieve good SEO and SEM built in.
|Do you want blogs and forums?||
If you spend some time creating good content and blogging about the things that you sell it can help get more sales. Blogs and forums should be part of your online store system.
|Do you want to manage your own content and images?||Online stores and websites can be set by developers and only they can add or change content. That is OK if you have the budget. But many online store owners want to be able to add, change and delete their own content to quickly and easily keep the site up to date. Make sure the solution has a comprehensive and easy to use Content Management System (CMS).|
When starting an online business selling products or services there are some costs which you can expect before you make your first sale. Your online store is a sales channel and acts like a sales person for your business. Selling online can be very cost effective as there are less human resource and infrastructure costs unlike a "bricks and mortar" business. But don't be fooled selling online is not free and your results will be directly dependent on your investment, quality of service and products.
There are many costs which will not be covered in this article such as cost of products, warehousing, logistics, traditional marketing, business taxes and accountancy fees. All these traditional costs still exist and don't vanish if you sell online.
If you are reasonably technically capable and don't mind doing some work yourself then the budget can be less than $100 a month for the online store. If you have a professional designer and web developers create a design and add content then your budget will need to start around $2,000 + $100 / month. The more design and functional complexity the more cost and therefore budget required.
But you can start small and add functionality later so the online store and your budget grows with your business. Successful selling online requires as much business acumen and planning (maybe more) as any traditional business. Getting started is not hard but there are so many opinions on the technology that can be confusing to a non-technically minded person. There are also many technical terms and issues which often just confuse.
eCorner and all our partners use ePages which is world leading online shop software with all the features for successful online selling. It is a proprietary solution meaning that you pay a monthly fee to use the software or you can buy a license if you are a larger business with the need for dedicated servers.
The conclusion is that all the actual total monthly costs are very similar when you include transaction fee. The lower priced plans seem to be those that add transaction fees. The lower monthly cost providers become much more expensive as you add in the transaction fees and as your online sales grow.
Although some providers offer very low plans the capabilities and features that are available may not be sufficient to start and run an online business successfully leaving you constantly upgrading. Make sure that the plan that you choose has everything you need to be successful.
The other differentiators are the plan infrastructure, meaning;
Bandwidth - the amount of internet traffic space available to your online store. With more social media, video and rich content and images the bandwidth utilisation of a busy store can be quiet high and can vary.
Storage - as with bandwidth video, larger images and rich content mean that more storage is required for a busy and successful online store.
Hosting location - this is where your website hosting is actually located and where your service providers servers are. They should be in the jurisdiction that your business is based in or is targeting. Although the web has made location less important issues such as security, maintenance windows, support, speed and SEO need to be considered.
If you are targeting multiple countries and international sales then ask about a content delivery network (CDN), multi-currencies and multilingual capabilities.
There are other issues like payment systems that will support local banks and shipping calculators that support local carriers. Make sure everything that you need is available. All in all the final decision is up to you. By making up a simple spreadsheet to ask the relevant questions like we have listed above you can easily compare the real costs. Try the solution before you commit and importantly talk to the people in the company that you choose. Being able to easily communicate and get support in your own timezone can be a factor in your success.