World’s e-commerce turnover in 2010 reached USD 570 bn and the estimated rise of this number in the next year is 19%. The market is growing dynamically, which makes more and more entrepreneurs start thinking about entering e-commerce.
In order to take a decision about starting an online shop, we have to consider – apart from purely business elements (product, providers, logistics, marketing etc.) – technological conditions, i.e. options, costs and the implementation time of the shop itself.
Engines and prices
The fundamental decision you have to take while choosing an online shop provider is the decision about its engine, i.e. a ready-made mechanism supporting typical e-commerce functionalities. In the case of online shops, there is no point in building a solution from scratch because a completely new website like that would involve the necessity to independently go through all the problems, which the creators of ready-made engines have learnt for years.
There are three main groups of e-commerce engines:
- free packages,
- commercial packages,
- agency engines.
An idea for the fastest and probably the cheapest start of an online shop is to use one of the free packages available on the Internet and to hire someone to install and configure it. Such packages are created and developed on an Open Source basis, i.e. there are many programmers from all over the world working on them and sharing code improvements made during their own implementations.
Unfortunately, such free packages have three main drawbacks:
- because of their popularity, hackers’ actions focus on free packages, which is why they are exposed to continual attacks
- they are very overdeveloped and thus not easy to configure and handle and very often they are bloated (they require a larger hosting package)
- adaptation to the needs of specific implementations is very limited, which can be seen in that almost all shops based on a given engine look more or less the same.
A very good option for online shops having relatively typical selling processes and quite standard layouts. Books, DVDs or perfumes are the kind of simple products which can be easily sold with the use of a good commercial package.
The main advantage of the commercial package over the free one is that there is a specific company which is responsible for the product. The company ensures technical support, warranty and updates.
There are two models of commercial engines offered:
- software to be downloaded and installed onto your own hosting (providers usually offer extra services such as shop installation and configuration);
- a subscription service of starting and maintaining a shop on the provider’s server (also includes one-off installation charge).
The prices of programs in their downloadable versions range from circa 100 to 1,000 dollars. Of course you have to add the costs of implementation which may easily be twice as expensive.
The subscription in the case of a shop being a service usually ranges from a hundred to several hundred dollars a month. Additionally, almost every provider offers several packages which are diverse in terms of functions and enable you to offer different numbers of products (limits).
Popular commercial packages:
Interactive agencies decide to develop their own e-commerce engines which is less often the case than with CMS. But only one client with untypical demands is enough to prove that adjusting ready-made packages, be they free or commercial, is very difficult and sometimes even impossible (due to, say, licence limitations).
In the case of an online shop which is to be 100% adjusted to the client’s business processes and their demands as to the appearance of the shop, the only sensible way out is to entrust an agency having its own e-commerce engine with the carrying out of the project.
An online shop built like that will contain shop mechanisms tried out during previous implementations as well as new elements tailor-made for the client.
The cost of such a solution ranges widely from several to several dozen thousand dollars.
The time needed to start an online shop is of course directly proportional to its complexity. The simplest shop, offered as part of the subscription model, can be made available to a client within 1 day (the appearance according to a standard template). On the other hand, a website handling complicated processes may even be built up to 6 or 8 months.