Rethinking your SMB e-commerce strategy? Check out these platforms, trends

Rethinking your SMB e-commerce strategy? Check out these platforms, trends

Summary: Forrester Research considers close to 30 SMB e-commerce platforms in a new guide, and 3 common themes emerge.

TOPICS: Browser, E-Commerce, SMBs

Forrester Research has just published a new guide to roughly 30 e-commerce platforms that are relevant for small and midsize businesses.

The services and software considered as part of its report, "SMB E-commerce Solutions 2012, are explicitly focused on businesses with $1 million to $10 million in revenue that are selling direct to consumer online and that are primarily serving North America and Europe (although some of the vendors have a global twist).

As I was combing through the report, three themes popped out:

  1. Many of the larger providers, in particular, are seeking to provide an end-to-end solution that includes catalog features, marketing tools, payment solutions and fulfillment mechanisms. Traditionally, SMB e-commerce solutions have been a conglomeration of different services. While opting for an integrated approach is probably easier from a setup and ongoing operations standpoint, it does carry the possibility for lock-in.
  2. Open source technology ecosystems are flourishing. Forrester points in particular to Magento, Zen Cart and OXID as e-commerce solution providers that have grown substantially over the past several years.
  3. Hosted solutions predominate, another testament to the allure of cloud services for small businesses.

One big consideration that small businesses will need to weigh carefully as they choose an e-commerce platform is how they will pay for it. The list provided by Forrester illustrates that there are a broad range of options including a straight monthly service fee or subscription, revenue sharing models, or fees based on per-order transaction costs.

Forrester suggests that an e-commerce platform choice should be a two- to three-year one, so what you pay at the beginning for your service might not be what you'll pay at that end. That will affect your margins. Based on the information provided, here are platforms that look like they offer relatively fixed licensing, monthly subscription or annual service fees. (I'm not listing those that require transaction fees or revenue shares, nor those that are really broader Web development services with an e-commerce adjunct.)

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Topics: Browser, E-Commerce, SMBs

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  • Solutions that are not integrated are not solutions

    First let me preface my post by acknowledging the fact that I work for Interprise Solutions, a competitor to many of the companies listed in the report.

    The thing these companies are missing is the importance of integration when it comes to having a ecommerce / ebusiness strategy. Any platform that is not fully integrated with ALL of the major processes of your business is a dead end.

    Every day we listen to horror stories from companies that are using one solution for their cart, another for order / inventory management, another for point of sale, another for shipping, another for CRM and yet another for their financial reporting and struggle to make them all work together. A few weeks ago I visited a major etailer that ships 2,000 to 6,000 orders a day. They have 40,000 items and add 500 new items a day. They are using one of the open source carts mentioned in this report along with another order / inventory management system and the ???Enterprise??? version of the leading accounting software. Right now it takes 6-8 hours to fully synchronize their inventory across the three systems. Because of the lag time, their stock is always off on their website so they employ three full time people who are given the task to call customers and tell them their item is out of stock. Because they are unable to take phone orders, their customer service is severely limited and they estimate they are losing 20% of their potential orders. I can go on with the problems they are encountering, but you get the idea (oh yeah - their website goes down twice a day).

    The future is in fully integrated ???real time??? systems that do not require synchronizing in order to work and can provide real time information to both online customers and back office employees, anything else is a compromise.

    Ultimately businesses that are running on a ???compromise??? will not be competitive very long and will eventually fail.
  • Does Outsourcing Fulfillment Make Sense (Option 1)

    Some small e-commerce businesses are disregarding their investment in a warehouse to an outsourced option like suggested in (Option 1). It may make sense after due-diligence to outsource the fulfillment with the software. But, at the least, businesses need to evaluate the cost of upgrading their fulfillment center before agreeing to outsource order fulfillment. You may be missing out on a big opportunity to save money and have more flexibility over your inventory.