Internet Commerce is Like Planning a Wedding
By Cliff Conneighton
CEO, ICOMS Inc.
When it comes to getting up and running with an Internet store, businesses have a big question to answer right out of the gate – should I do it myself, or should I call in the experts? Building an Internet store isn’t that much different than any other big task you may be faced with, like catering a large event, perhaps a wedding. You certainly could do it yourself, and there probably are a few advantages to doing so, but the disadvantages far outweigh them. What if more people arrive than anticipated, and you don’t have enough food? A caterer plans for such things and would have enough extra food on hand to handle the additional guests. What if you burn the main course? The same fate is unlikely to happen to the caterer you hire, who has proven experience in creating large-scale delicious meals. What if your stove stops working while your boneless breast of chicken is roasting? Your caterer will have his own equipment, assuring that your guests will receive a hot meal. Who is going to serve the hors d’oeuvres? Your caterer will have a wait staff to handle the task. In the end, by allowing the caterer to focus on these details, you can spend your time choosing the venue, the decorations and the attire, things that are certainly more fun.
It is the same with building an Internet store. You can build the infrastructure yourself, but the advantages of outsourcing the task can’t be ignored. You don’t have to worry if your store receives more visitors than anticipated or if some of the equipment isn’t working quite right. The company to which you outsource this task will take care of such matters, keeping your store up and running 24 hours a day, seven days a week. Your time is better served focusing on how you are marketing your site to generate revenue.
Most in IT have learned the same lesson. You can buy payroll software off the shelf for as little as $99, yet most companies, even those steeped in technology, turn to services like ADP to print their checks and keep their books. Why? Because hardware and software is only a fraction of the total cost, and the cost of getting it wrong can be enormous. Similarly, most beginners and serious Web sites alike now outsource to Web hosting specialists. Employers rely on Fidelity to run their 401Ks, banks rely on First Data or National Data to do their credit card processing, IT groups outsource desktop maintenance and help desks. The lesson they have all learned is to spend intellectual energy and capital investment on efforts that will yield strategic advantage and let specialists do that which is complex but routine.
Companies selling on the Web must make the same build vs. buy decisions for the front-end and back-end of their on-line store. They will win by offering the right products, creating a great Web store that makes it easy for the buyer, and running a marketing campaign that drives traffic to their site.
By the way, they also need to capture orders; process electronic coupons for percent off, dollars off, “buy two get one free” or any other promotion that works; calculate taxes for every state and country where they operate; get credit card authorizations on line; deter fraud; calculate shipping based on pieces, weight, price or location; send receipts to buyers; report order status to buyers; link with warehouses and shippers; integrate with legacy systems; issue credits, partial credits and rebates; do tax and sales reporting; maintain databases of registered and repeat buyers; process recurring orders and subscriptions; limit shipments to certain countries; limit quantities on loss leaders; reconcile statements; authorize download of electronic goods; and hold orders until they’ve shipped before processing credit card payments.
That’s a huge list of details. On top of that, they also need to make sure they are up 24 hours a day 365 days a year, even if their Internet connection fails or their credit card processor goes down at 2 a.m. They need to fix payment batches that abort on Sunday. They won’t win just by doing all this right, but they’ll certainly lose by doing it wrong.
Some will follow the siren song of packaged software. Like those who build houses and run payroll, they’ll learn the hard way that software and hardware are only the beginning of the skills and expense required.
Those who value hot profits more than cool technology will turn to a new breed of Commerce Service Providers. The best of this breed will allow complete flexibility and creativity on the front-end, where it belongs. They’ll support store sites built by anyone, using any tools or technology and hosted anywhere. Then they’ll provide full-featured, industrial strength order management and payment processing on the back-end, delivered as a service over the network. The merchants will realize three huge benefits:
* Cost savings. Because they don’t have to buy and maintain hardware and software and operate the system 21 shifts a week, they’ll have more functionality and better reliability for 90 percent less cost.
* Rapid time-to-market. Because there is nothing to install or learn, they can turn a marketing site into a selling site literally in less than an hour.
* Reduced risk. They won’t have to store credit cards on their site, and because they rely on experts who serve hundreds of merchants, they won’t have to worry about their technology choice becoming obsolete, their site not working properly, their developer getting a better offer or their success exceeding the scale of their installation.
In the end, it comes down to focusing your attention on winning business instead of worrying about crashing servers. It’s kind of like greeting your guests instead of cooking the crab puffs.
Cliff Conneighton is CEO of Internet Commerce Services Corporation (www.icoms.com), which helps large and small companies alike sell over the web, and helps banks, ISPs and web developers deliver e-commerce to their customers.
