From CEO to order taker

For many small merchants this scenario is very familiar. Not the physical condition, of course, but in a business sense where practically one more order coming their way will implode their business, or explode, depending on your perspective.

For smaller merchants, the path to the promised land of online retail success typically starts with a strong focus on their e-commerce Web site. Resources translate into money and time, and are often limited for the smaller merchant. In most cases, the already constrained resources are spent building an appealing e-commerce Web site, and also ensuring that prospective customers find their way to the site. This can be quite difficult in the cluttered online marketplace, even with online advertising and search services.

If a small business is successful at attracting customers, like the Monty-Python character and the morsel, small merchants may soon find themselves exploding from the volume of their own success. Often times the processes, commonly known as "everything behind the buy button" or "back-office operations," happen after the prospective customer has first found the Web site and then decided to make a purchase. These back-office services never receive the same level of attention as the front-end customer-facing Web sites. However, the steps after the purchase are the real points that can make or break a small business.

For small business owners it is critical to provide a seamless and secure purchasing experience and to ensure that products and services are delivered quickly, while interacting and keeping customers informed. In addition, managing inventory levels to ensure that desired and listed products are in stock and being able to capitalize on the loyalty of existing customers are both critical to the growth of an online business. Far too often the back-office operations are either pieced together or developed on the fly as the business dictates.

What transpires next for many small online merchants is an infrastructural nightmare and a scenario in which once online orders are received they are not able to seamlessly process those orders or respond to customer inquiries in an effective and timely manner.

In typical dealings with small business owners, we often see merchants with multiple systems that do not interact and customer service inquiries that do not get addressed in a timely manner. As a result merchants are manually managing orders based on shaky, piecemeal business processes. Now add the complexity of a multi-brand online approach and it's obvious to see how merchants' time goes from building a business to keeping their chin above water trying to just manage the business; again, drowning in their own success.

Enter an innovative back-office system that can truly facilitate a growing company to catapult it beyond its breaking point. Ideally, this should be an on-demand, Software-as-a Service (SaaS) order management, customer service and fulfillment solution that can provide merchants with the tools needed to automate their businesses. It should provide that elusive 360-degree view of the health of the business in real-time and be accessible from anywhere using any Internet browser.

The advantage of an online hosted solution is that merchants receive the benefits of outsourcing their infrastructure costs and give up the headaches of managing and maintaining software and hardware, while ensuring the ability to do business in a top-tier secure environment.

This includes the expensive PCI credit card security standards compliance that many merchants will likely be required to have in the near future. Further, solution service providers that can offer a best-of-breed approach to their own solution are able to create numerous “connectors” to other complimentary solutions and services for seamless integration, including front-end e-commerce (shopping carts) providers, payment processors and financial applications. This allows the merchant to work with solutions that best fit their business needs while giving them the enhanced capability of a robust demand management tool. A robust automated, on-demand solution also helps merchants grow their business by providing reporting tools that can track return on investment on marketing campaigns, customer shopping behavior and inventory management, which should be fundamental functionality available through the provider.

The good news is there are affordable solutions on the market that address the particular needs of the smaller merchant. For most SaaS solutions, small business owners should expect a minor upfront implementation fee of approximately $1,500 to $5,000. The reason the implementation fee can be kept so low is that unlike other solutions, the on-demand SaaS solution does not require additional investment in costly hardware or software. Most solutions will charge a monthly hosting fee that depending on the amounts of data being hosted typically will range between $350 and $2000 per month. In addition, some companies charge a per user license fee, while other on-demand solutions base their pricing on a per transaction model ranging anywhere from $0.20-$0.50 per transaction.

In addition to "Best Practices," a company should also make sure next-generation direct-to-consumer business processes are embedded into the functionality of a strong back-office solution and should be the result of experience gained in working closely with existing client communities in combination with the experiences gained from the market.

With the right system in place, small businesses will be able to sustain growing order volumes, many times over 100 percent a year. And, if the solution is priced properly, aligned with the stage and the growth of the retail business, incorporating transaction and infrastructure costs in one simple value package, the merchant can focus 110 percent on earning the business of its clients each and every day.

Growth has always been the mantra for small businesses, but few dare to mention the pain that comes with a growing, often teetering on imploding, business. Before your business reaches that critical mass, it is time to plan and seek-out an automated back-office solution that can handle the heavy lifting associated with order management, customer service and fulfillment while keeping infrastructure costs at a bare minimum, aligned with the stage and growth of the business.

Now go ahead, take a bite, with the right automated system in place, every order placed will be “wafer thin” and easy to digest for your growing business.

The Top ten indicators your business will implode

10. Focusing too much time on a great e-commerce front-end and not enough time on what happens to orders and customers afterwards--too much on customer acquisition and not enough on customer retention and satisfaction

9. Failure to recognize the profitability of repeat customers

8. Failure to research shipping/carrier options and picking the one that is most in line with your volume and your products

7. Failure to seamlessly integrate, in real-time, your e-commerce engine and your back-office operation

6. Failure to closely track the financial well-being of your company through integrated, GAAP compliant general ledger and financial reporting

5. Failure to insure that all e-commerce infrastructure pieces "talk to" one another to insure a 360 degree view of your business

4. Spending the time and effort (and money) of maintaining an in-house created computer infrastructure to support your on-premise software solutions

3. Failure to invest in ROI reporting tools to determine where you are successful in attracting new customers

2. Failure to implement responsive and automated customer service tools and processes

1. Failure to plan adequately, in advance, for growth (don't let your business start to manage you)

biography
Donny Askin is CEO of OrderMotion.