E-commerce in Australia: Enter the experts

Summary:When setting up an e-commerce function you might want to get some retail therapy from an expert.E-commerce is both an overused word we're all completely sick of and a business channel that isn't going to go away.

Long-term benefits
As far as the cost of outsourcing an e-commerce project goes, Baty believes companies shouldn't expect to save money initially, although long-term benefits may produce savings. "It might cost, say, quarter of a million dollars to implement but the ROI might be 500 percent rather than 150 percent if done in-house," says Baty. "Customers are dealing with a professional management team with a great deal of experience and who can work as a cohesive unit and should be able to produce a better result than an in-house team," he adds.

Debrincat says typically an e-commerce site which is well constructed and based on good back office systems will cost "from AU$10,000 and up." "If it is hosted, or outsourced, it might be as little as AU$150 per month all up," he says. "The cost is based on the expected traffic, the type of systems, the infrastructure and number of products that might be available. A good e-commerce solution provides not just a store front and shopping cart. It has to provide capability to handle inventory, product management, shipping, order management, customer management, purchase management, restocking and stock control, financial transaction management," he adds.

The Sponge's Faccini says that a project can range from AU$5000 for an entry-level site with secure shopping cart functionality, to AU$50,000 sites with full e-commerce facilities and combined marketing campaign. "They can quite easily reach into six figures when you have to integrate with legacy systems and incorporate online advertising campaigns," he says.

Integrating with stock control systems has been the biggest headache for The Sponge, says Faccini. "We've got some companies we partner with for that," he says. "Stock control has been the biggest dilemma as far as we're concerned, if it's a shared ordering system it goes hand in hand with phone sales and warehouse levels and you need to make sure you prevent overselling -- this is the toughest problem," he warns. The Sponge works with stock control specialists to offer a seamless service to the customer.

"If you compare the cost of contracting an expert designer or developer short term or full time you will be looking at a lot of money. You also are limited to the skill set of that one employee," he adds. "When you use a design company you are contracting an experienced design team. The money spent can often seem like a lot in the outset, but compared to a designer's salary it is no question."

Bowen says for successful dotcommers, the lessons have been learnt, the share prices are back up, and successful business models are in place. The biggest challenge is taking place in the boardrooms, he says. "There is still a healthy cynicism, with board members making sure there is a business case and ROI as they can't afford to be throwing millions at e-commerce anymore," he says.

This article was first published in Technology & Business magazine.
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• E-commerce: enter the experts • What's it worth?
• The ghost of dotcom past • Long-term benefits

Topics: E-Commerce

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