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INTERNET commerce has been difficult to achieve for small to
midsize companies, or those with minimal resources, due to the lack of
options available. Many of these companies simply do not have the dedicated
staff and infrastructure necessary for creating and maintaining an I-commerce
site themselves, which is why using a commerce service provider (CSP) is
becoming a desirable alternative to creating a do-it-yourself or
product-based I-commerce solution.
CSPs provide online services that allow a company to easily create an
I-commerce site, eliminating the need for programming skills or added
infrastructure maintenance. And by allowing a CSP to host its site or by
outsourcing many site necessities, such as order fulfillment and customer
service, a company is more free to focus on other key aspects of I-commerce,
such as marketing and product rollout. By contrast, creating a do-it-yourself
solution typically requires a full-time dedicated staff with expertise in
development skills such as Java, and complete management of the whole
enchilada, including fulfillment and legacy integration.
Services can offer the same features as product-based solutions, such as
templates and wizards for store creation and order tracking. In fact, some
CSPs -- MindSpring, for example -- will host your electronic-commerce site
using a software solution, such as Intershop Communications' Intershop.
Typically, these services target small to midsize businesses that have
minimal resources and a smaller product selection. In fact, a company
offering more than 1,000 items would likely outgrow these services quickly.
But higher-end service solutions are available, such as NetSales and iTool,
that allow for greater growth potential.
I tested template-based services offered by iCat, iTool, and Yahoo that
provide the tools needed for building a storefront right on their Web sites.
I also considered NetSales' service solution, which hosts every site
component, from catalog design to transaction processing to fulfillment.
Before you decide whether a service solution is best for you, you must
consider some key factors, include scalability, the number of items you will
sell, the pricing scheme offered by the CSP, marketing, and site control.
Knowing what you need in these areas before evaluating a service-based
solution will significantly impact the success of your I-commerce site.
Determine how many items you will sell on your site and estimate the number
of transactions you will receive. What kind of growth plan do you expect?
Many service-based solutions are targeted at low-volume sites with limited
scalability. For instance, iCat's solution aims at companies selling less
than 3,000 items. If you are launching a small site, this may not be an
issue. But sites that have the potential to grow may require a more scalable
solution.
Consider whether your service offers a good upgrade path. For example, iTool
does not limit the number of items that can be sold, and it offers enterprise
companies the option to host their own sites using its iTool Enterprise Suite
in-house. NetSales targets high-volume Web sites and puts no limit on the
number of items offered or the space required to host the site.
Also consider this: How much of your site do you plan to outsource? For
instance, do you want to handle customer service, development, fulfillment,
and support in-house, or are you looking for a solution that offers these
services in addition to site hosting?
You should also determine how much management and design control over your
site you want to have. For example, iTool and iCat provide template-based
tools that let companies obtain payment processing accounts, design a
storefront, add inventory, and run sales or site reports. Further, iTool
provides advanced toolsets for site enhancement for those who have
programming skills, but iCat is less flexible and does not readily give
customers the ability to customize templates. NetSales will handle all
aspects of your site, from custom design to customer service, integration,
and monitoring.
A service solution initially can be an inexpensive route, but service pricing
should nevertheless be carefully considered. The services we looked at offer
different pricing schemes; for example, iCat calculates price by the number
of items to be sold. Others, such as iTool, charge by the space allotted for
your site; and still others, such as NetSales, employ pricing that is based
on a percentage of each sale. Services can range in price as well. For
instance, iCat costs range from $9 per month for 10 items to $249 for 1,000
items. But iTool charges $99 per month for 200MB of Web space, and NetSales
estimates its cost at 10 percent to 15 percent of each sale.
Additionally, you should consider other cost elements, such as extra
hard-drive space if your site should grow, as well as additional e-mail
accounts, transaction payment-processing accounts, and initial setup fees for
domain names and integration.
Also think about how much of your site you want your commerce service
provider to host; not every CSP handles every aspect of Internet commerce.
You need to know how you want to handle the design, legacy-integration, customization,
payment-processing, and customer service aspects of your site in order to
determine which service will make the most sense for your company.
I found that the services I tested provided the infrastructure necessary to
host a site and offered template-based storefront design capabilities for
increased ease of use. Each service also offered links for setting up a
domain name and an Internet Merchant account, and offered payment-processing
accounts and search-engine registration. Some services will provide you with
a domain name, but if you want a unique domain name, the InterNIC registry
will create one for you at a cost of $70 for the first two years. Merchants
that already have a merchant account may need to set up an Internet Merchant
account to accept Internet transactions.
Another issue to think about is whether you need to integrate your site with
other systems within your organization. If you do, determine whether the
service allows for that and whether system integration is offered through consulting
or additional tools. Also, consider how you will distribute your goods and
handle customer service. For example, NetSales provides a fulfillment service
that ships all goods to customers.
Outsourcing will appeal to small and midsize companies that want to develop
an I-commerce presence without making significant development and training
investments. Enterprise companies, on the other hand, will want to consider a
more comprehensive service, such as NetSales, if they don't want to invest
the time and money necessary to dedicate the appropriate staff and resources.
Lori Mitchell has been reviewing
high-technology products for the past eight years.
I-commerce
services STEP-BY-STEP
· Perform a
needs assessment: Consider how scalable you need your site to be, how many
items you plan to be selling, how much of your site you want to outsource,
and how much control you want to maintain in-house.
· Examine
services (see Resources at
· Sign up
for a service, merchant account, and transaction account (all of which
usually can be done at the service's Web site.)
· Design
the site and enhance it with marketing tools and customization, if they are
available.
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