Read this before you build an e-commerce site

So, you want to sell stuff online? Excellent. Before you dive into the process of building an e-commerce site there are a few things you should consider.

We've all read the rags to riches stories and seen the TV show about work-from-home mums turning over millions of dollars in online sales. Like any business, there are a few that achieve extraordinary success, some that achieve some level of success and the vast majority that will be gone within a few years.

Mentioning the word "e-commerce" to a web developer is like mentioning the word "wedding" to a photographer. The price goes up. Why? Because, for both the web geek and and the photographer, the planning is huge, and the execution needs to be perfect. If not, nobody will be happy. And when Nobody is happy, the rest of us aren't.

Anyway... On to the meaty stuff...

Delivery / Shipping

How do you intend to deliver your items? Australia Post? Private courier? Do you know how postage is to be calculated? Can you provide a formula or a price list for delivery based on weight?

This is important. You will need to work this out before it can be developed for your shopping cart. Australia Post have an online script which calculates parcel delivery rates based on the size and weight of your items. The script can be called by the shopping cart and it only takes a second to get a price back from Australia Post and display it in your cart. If you are using a different carrier they may or may not have an automated online service to calculate delivery charges.

Perhaps you can offer free shipping and absorb the cost in your pricing. It amazes me that more E-commerce sites don't do this as there are many costs involved in getting a product to market yet shipping charges seem to be singled out and added at the end of the process. It's a very unfriendly user experience and one that causes many online transactions to be aborted.

Administration

Your "automated" e-commerce site will take an order and payment but it's up to you to follow it through. Having an e-commerce site will add another administrative function to your busy day. You will need to process new orders - a notification will be sent to your email. You will need to verify payment has been received. When you've finished processing the order you will need to log into your site, update the status of the order and notify the customer. You will need to ensure backups are taken regularly and the content of your store is up to date.

Who will do the updates, add new products, etc. Images are extremely important. Will your suppliers provide adequate imagery for you? Will you be taking photos yourself? Do you have the technical know-how and time to take quality photos, resize and upload them to the site, write description, etc? Will you outsource this?

Payment Gateways.

There are many options for payment. You don't necessarily need a merchant account at a bank. If you do have one there are some ongoing costs involved. Some of the payment options you should consider are...

  • Paypal. Without a doubt a must have. Some people hate it but love it or hate it you will find a large proportion of your sales will come via paypal. Great thing about paypal is all the credit card security and processing issues are taken from you. They handle it and they provide certain guarantees against fraud.They also provide instant payment notification which tells your e-commerce site payment has been received and orders can be updated automatically.
  • Credit Card. If you want to take credit cards directly on your site you will need SSL security on your server and preferably an internet enabled merchant account at your bank. If you plan to store credit card information you need to ensure your internal processes protect customers private information. You could be held liable if they fall into the wrong hands.
    • Live credit card processing. Using a service like EWAY, credit cards are processed in real time by providing a link between your site and your merchant account. An XML transaction verifies the customers credit card details and available balance with their bank. If all is fine, the funds are transferred to your bank. A success message is sent back to your site, the order status is updated and a confirmation is displayed on screen. The process is a little more complicated than this but it only takes about 3 seconds. There is usually a setup cost with EWAY, ongoing yearly charges and a cost per transation. This is on top of merchant fees charged by your bank.
    • Offline credit card processing. This is where the credit card numbers are recorded during checkout and processed manually. Usually, a portion of the number is stored by your e-commerce application. The other portion of the credit card number is emailed to a specified address. So, two logins to different systems are required to get all the credit card info. Once you have the required information, you enter the details into your EFTPOS machine as a manual transaction. Usually, when the customer completes the checkout the payment will be "Pending". It will only be a confirmed transaction when you process the payment and manually change the status of the order.
  • Cheque, EFT, Money Order. Usually provided as offline payment methods for those without credit cards. You will have to wait for the payment and manually update the system when the payment has been confirmed.

Security

If you want to take credit card information through your site, you must use a Secure Socket Layer (SSL). Costs vary but you can usually purchase an SSL certificate for around $100 plus the cost to set it up on the server. SSL costs and setup vary from server to server.

SEO

Ok, you've got an e-commerce site online. It looks terrific. Product descriptions are great. Photos are bright and detailed. Payment gateways are in place. Hmmmm... What now?

Your site is like the proverbial needle in a haystack. In fact, no. It's more like a needle in a giant stack of needles. What most first time website owners don't realise is that Search Engine Optimisation is vital to any web project and it's NOT something that is done once and never thought about again.

Most successful sites spend many times their original development costs on SEO every year. In fact, I have clients who employ full-time staff who do nothing but work on their SEO.

It's a common misconception that if you build a site selling widgets then you will be found by Google when you search for widgets. After all when you do a search yourself you find many sites selling widgets and most will be worse sites than yours. What's up with that?

SEO is a complicated business. There are many factors influencing SEO which are out of the scope of this article. One of the factors that I will mention here is age. The longer a site has been on the web the better it will rank. Of course this is just one factor. But, you cannot expect a brand new site to hit the top ten results within a month of launch without some serious SEO. In fact, even with some serious SEO it could take 3 to 6 months. It all depends on your market and competition.

Be prepared to spend money on SEO.

SEM

The other side of SEO is SEM. It's not such a buzz word and a lot of people don't know what it means.

SEM stands for Search Engine Marketing. This is different to SEO in that top results are purchased and are not based on your site's content. These are the results that appear on the right hand side and often on a yellow background at the top of search results in Google. You will pay anywhere from 5c to $10 per click depending on your budget and the popularity of your keywords.

It's important to allocate a certain amount of time each month to analyse your web traffic and your conversion of hits into sales. By calculating your conversion rate of hits into sales and working out the average dollar value of each sale, we can determine a dollar value of each hit on the site and work out what you can afford to pay for clicks to generate a profitable result from your SEM investment.

One of the benefits of SEM over SEO is that results are instantly achievable. By investing money into Adwords and similar services you can start seeing results within 24 hours.

Hang on folks. We're just scratching the surface.

Will you need to provide discounts to certain users? Wholesale rates perhaps? What about coupons and gift vouchers? Will the price of an item vary based on the amount ordered? There may also be a need to consider product attributes and child products. Do your products come in different sizes or colours? Do the prices vary based on the size selected? Will the products be categorised by brand or by type? Do you need to offer downloadable products or virtual products? What is your returns/refund policy? How will you handle warranty claims with purchasers on the other side of the country?

Do you really need an e-commerce site?

There's many ways to market and sell a product. In theory, selling online is a great marketing strategy. But, you don't need a shiny and expensive new site to sell something on the web. It may make more sense to sell your goods on Ebay or Oztion or the like. Sites like this invest lots of capital in SEO, affiliate programs and other forms of promotion which means they have a huge market of buyers looking to spend their money online.

If you already run a business off line, you need to carefully consider whether your customers will be comfortable buying your products online and whether it will increase your business enough to make it worthwhile. For many, it may be better to use the web for promotion only. Consider the power of mailing lists, newsletters, online video demonstrations, etc. The web is used more for research than it is for actual purchases. Even if people don't buy products online they do use the web to make decisions about what they will eventually buy.

 

Hopefully, this article will have given you a little insight into the planning that needs to go into an e-commerce project. I've built many e-commerce sites using Joomla and Virtuemart. Virtuemart is the most extensive, reliable and secure e-commerce plugin available for Joomla. Read more about Joomla and Virtuemart here.

john-pitchers-avatar smAbout John Pitchers

John Pitchers is co-founder and lead developer at Joomstore where his primary role is the design and development of Joomla websites. He is also the developer of the FocalPoint maps extension for Joomla. John has been building CMS based web sites since 2004, originally working with Mambo before it forked into Joomla. When not writing PHP, Javascript or CSS you'll find John carving up the hills around Baldivis on his longboard (long before Walter Mitty made it famous).

Find out more about John on his About.me page and . Follow John on Twitter.

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