e-commerce – living the online dream
Article Date: Jun 20 2005
A professional shop window
In setting up a transactional website, there is normally an enormous difference between expectations and budgets, says Paul Godfrey at Delphi Creative, who specialises in building e-commerce sites for companies like BT and Tiscali. ‘Smaller companies always know someone who can do it on a shoestring, but they often forget that the web is a serious shop window. It is worth the commitment to making it work.
‘There are off-the-shelf packages for £400-£500, which allow you to set up a basic shop. The advantage is that the template is designed to interface with major payment service providers. The downside is that it can easily end up looking messy. Even if it means spending £1,000 more, a professional design will give you a shop window to win some respect, giving you a template for the layout and letting you look after the content yourself. It is harder to muck it up then.’
For any serious e-commerce project, Godfrey recommends creating your own system with an initial set-up fee of £4,000 to £10,000.
‘You can then create multiple points of access. You can’t assume that your logic for organising the shop will suit everybody. Your customers may well take a completely different approach. But the more value you give people, the better. Give links to similar items that other people have bought and promote any offers on which you are beating your competitors.’
The downside of e-commerce is the delivery of items. ‘People are used to websites, where goods are only sourced once you place an order, so they arrive late. Try to show your stock quantities. It shows that you are in control.’
Charlie Crow
For kids wanting to dress up as knights or furry animals, Charlie Crow is the site to visit. It has over 300 costumes, all designed and made by Sue Crowder and her team in Stoke.
She began 16 years ago by supplying Toys’r’us with outfits for carnivals and for Christmas, but found herself being squeezed by low-cost production in China. Half of her £500,000 turnover is still through wholesalers and distributors in the UK, but they only take six of her designs at a time. Five years ago, she set up Charlie Crow on the web as a direct way of offering the full range to her audience.
Named after her first son, Charles, she admits that the design of the first website was terrible, even though it was built by professionals. ‘At that time we were making things up as we went along. Finding what you wanted on the site and paying for it was like breaking into a dungeon.’
The site is now so easy to use that Charlie Crow landed a DTI e-commerce award last year. ‘I make sure we answer the questions that people want to ask,’ says Crowder. ‘We bring strangers in off the street to see whether they can find their way round. What is obvious to us might not be to anyone else.’
Charlie Crow online currently has sales of £250,000 a year, with a healthy sideline in accessories such as swords and wands. Payments are made via encrypted e-mails. Credit card details are then entered separately into a sales order, although Crowder is hoping to switch to online payments soon.
Fully automated
‘Most businesses don’t have a clue about how their shopping carts should work,’ says Paul Martin, creative director of Wizbit Internet Services, who works with growing companies designing and building sites. ‘You might get by with a simple PayPal extension or sign up with a full blown provider like World Pay, depending on who you are selling to and in what numbers. And you might incorporate everything into your site or switch across to the payments server, which doesn’t look so professional, but is easier to set up.’
In terms of security, banks do not like you to hold credit card information, he says. ’They prefer you to send the final stage of the payment process to them, so it is never stored on your end server, although you might hold the last four digits. The usual mistake for smaller companies is not to have proper certification or a firewall, which makes it easy to hack into a database.’
The main challenge in e-commerce now, he believes, is fully automating the processing of orders. ‘Goods can be sent direct from the supplier to the customer’s home address without the web company having to hold any stock or get involved with the packaging or delivery of the product. Minimal supervision by the site owner is required. It might be beyond the needs of many internet businesses, but it shows just much you can do.’
No great mystery
If you do automate your sales process, you might end up with a different business. It happened to Ben Caldwell. His family had been selling nuts and bolts to ICI for seven generations, but Caldwell recognised that he had to offer more to engineering departments and set himself up as an outsourced purchaser, buying all non-production items.
‘It only took off when we started to use front end technology, particularly the internet. The difference was that, instead of using it as a glorified catalogue, we used it as a way to communicate between IT systems, so we could run the customer’s business for them on our system. They can see where all their stock is and order parts. It saves a lot of time and money.
‘The site itself is just a promotional page saying how wonderful we are. The clever bit is buried behind where we run all the stores and catalogues. We discovered that, by using XML, we could pull in data from our customers and send back all their financial information. Everything can be allocated to cost centres and reports can be run at any time in the day. We have totally transformed the business. Our merchanting days really are over.’
In the last five years, Caldwell’s direct sales have risen from £2 million to £30 million. It also processes another £55 million through its system. Business is currently growing at 100 per cent and Caldwell expects that rate to continue next year.
‘There is nothing mysterious about the web,’ he says. ’It’s just a language to communicate more effectively. The great thing with the internet is that you can do it yourself. We have probably spent less than £20,000 on software for the internet. We started off on a PC and an 18-year-old from college on his summer holiday. It has all grown from there.’
