Thinking about e-commerce? 5 gotchas to avoid

Clint Parr

This year, online sales of products and services will continue to increase at a 20 percent growth rate; U.S. e-commerce sales are forecast to reach $483 billion. There are three major factors contributing to these figures. Selling online has become more convenient for the consumer; the cost justification for building an e-commerce site has become easier when considering potential reach in the United States and around the world; and yes, the required technology is becoming affordable to even the smallest businesses.

Before calling consultants or hiring a team of developers, there are some gotchas you should be aware of. Here are the top five observations:

1. CMS

The CMS, or content management system, is the application that allows the website operator to make changes with minimal or no technical assistance. When evaluating the cost of building and maintaining your website, realize a good CMS is designed to be intuitive to users with basic Word skills. Your website also needs to scale along with the growth and complexities of databases and content. In many cases, the CMS will need to be flexible enough to integrate with office management systems, so both the CMS and management systems should be evaluated at the same time.

2. ROI Calculation

While evaluating the investment in e-commerce, analyze the full range of costs and benefits, versus the simple formula of sales and margin growth. There are usually hidden benefits, including the streamlining of processes (overhead), direct sales resource reductions, customer satisfaction and inventory management.

3. Taxes

When selling across state lines and into other countries, government tax collection at billing and payment is complex and dynamic, which could put you into an underpayment situation.

4. Payment processing and fulfillment

There is an abundance of online payment options for your customer, including credit cards, gift cards, lines of credit, and third-party vendors such as PayPal and Google Checkout. This, coupled with maintaining PCI compliance, can create complications and costs as well. The same can be said for shipping and handling. Functionality can be built into the site using UPS, FedEx and other services, which can minimize logistics issues but after careful evaluation and process reviews.

5. User experience

The UX, or user experience, is the secret sauce behind all of the underlying technology. If your customer is driven to your site and it is difficult to discover, compare, purchase and ship with relative ease, you will undoubtedly have to undergo an expensive site redesign. For example, in the U.S., the average number of people who visit a site from their desktop computer and purchase online hovers at 3.78 percent. In contrast, this conversion rate drops to 1 percent for visitors using a smartphone. Designing for the best UX includes device types but also hundreds of other variables.

About the Tech Translator

Clint Parr has lived in the digital communications industry for more than 20 years as a tech CEO, COO, marketer, salesman, consultant and entrepreneur. He currently is a Partner and CMO at liquidfish, a leading digital marketing and custom development company. He recognizes that technology can be overwhelmingly complicated, especially in the website and mobile applications industry, and someone needs to simplify it for decision makers.