|Step #3 -- Create A Budget and Determine How to Measure Success
Creating a budget, and measuring its effectiveness, is
one of the most important stepsin developing a successful Ecommerce site. How much will
your Ecommerce site cost? And howwill you know it was worth the investment?
Here's a chart outlining the major expenses
involved in creating a site:
||Do It Yourself
Services (such as payment transaction fees, secure hosting fees, etc.)
Ecommerce sites vary widely in their size, scope
and complexity. And they are being created by every type of technology professional - from
independent web designers to large corporations - in every price range. The best way to
get a true picture of costs is to talk to an Ecommerce specialist - such as a web hosting
service - who has created sites similar to the one you envision. Meanwhile, here are some
price estimates to give you a rough idea of what to budget: They include all variables and
support personal for maintaining the site.
|Full site monthly costs
||As low as...
||promote & site service
- offering up to ten products
- Hundred of page views per day
||$0 to $100.
- few hundred products
- Thousands of page views per day
- catalog with thousands of products
- Hundreds of thousands of page views per day
The rule of thumb is to spend approximately 10
times more on promotion than you do on development!
Also, once you have fully defined the scope of
your project, you can send out requests for proposals to a number of Ecommerce vendors to
get firmer costs. You will need to evaluate these proposals in-depth -- carefully
reviewing the credentials, experience & expertise strengths, and account services
organizations of each potential vendor. GET REFERENCES! Price is important but not the
only consideration. You will find that no matter what spending level you set, the biggest
cost of the project will be the time you have to spend on getting it done right. Often,
but not always, the more expensive firms will try to make it as easy on you and your
company as possible, but even then you will need to be very involved. After all, your site
will be the only 24 hour per day representation of you that is available! Also remember -
just like in an computer/accounting installation - no vendor will want to take on the task
of entering all your data, photos, prices and qty available.
Measuring Success:The Bottom Line
Ecommerce is an entirely new way of doing
business - creating new opportunities and tapping new markets. Because it is so new and
different, it's especially important to measure Ecommerce returns. You may want to
consider a longer pay-back period than usual. You don't want to abandon your investment
too hastily. Your own learning curve, plus the ratcheting up of consumer expectations, may
require you to invest more before you can truly know if Ecommerce will work for you. For
this reason, it is essential to include in your calculations potential lost
business you may experience by not being on the Internet. Average cost per
page for web sites run min. $100.00 ea.
Be sure to consider all the following:
- Being there first: Will you gain
market leadership by creating a site before your competitors? Or, if your competitors
already offer Ecommerce, can you continue to compete?
- Seizing competitive advantage: Have
you created a revolutionary Ecommerce business that will make you a "category
killer" in your industry?
- Expanding your customer base: Will
you attract a whole new group of customers by offering your product online? Will your
Ecommerce site expand your marketing reach worldwide?
- Encouraging customer loyalty: Will
customers buy more from you based on the convenience or value-added services you offer
- Customer information: Can you find
out more about your customer's buying habits and preferences through online relationships?
Can you transform this information into cross-selling opportunities?
- Profitability: Is it more lucrative
to offer your products online than by retail or mail order?
- Efficiency: Will Ecommerce reduce
your operating expenses and streamline your processes? Will it help you work more
profitably with your suppliers and internal resources?
- Life cycle: Will it take a long
time before you can begin producing enough sales to create a profit? How will you generate
enough capital meanwhile to keep the site going?