Joining the electronic marketplace

In the case of smaller companies, the choice depends on the products you’re selling, how much you expect to sell and where you are in your growth curve. The three major types of platforms are:

1. Online marketplaces

These are platforms like e-Bay and Amazon. They are an easy way to get started, especially for smaller businesses, and you can choose one that provides good international sales support, such as payment options for different currencies. Some specialize in niche markets—Etsy, for example, is designed for arts and crafts companies to sell both locally and across borders. You pay via fees of various kinds.

The major drawback of a marketplace is that your products are included with others offering similar products. If you are selling something both unique and highly desirable, it may be able to stand out.

2. Online template-based storefronts

Here you are provided with templates you can use to build an e-commerce web site. The better companies offer a wide range of template and feature options, from simple to fairly sophisticated. They usually operate on a monthly subscription basis and the price varies according to the features you want, such as third-party payment options or sales analytics.

These platforms can be a cost-effective way of developing an international e-commerce presence if you don’t need a web site that is fully customized to promote your brand, products and marketing strategies. Shopify is a Canadian example.

3. Enterprise platforms

If you need an e-commerce site that is tailored to your business and customers, you can use a platform developer who can develop a custom-built enterprise platform. This approach lets you include e-commerce functions into your existing business environment and can be configured to handle complex, sophisticated needs. This level of customization and integration will be more expensive than the template-based storefront option, but it can give you the exact look, feel and capabilities you want.

You will likely make a better choice if you have a clear view of the relationship between your projected growth curve and what you are trying to achieve with your e-business. It will depend on your size, what products you offer, how they fit into the target market, and the e-commerce capabilities you will need to sell them there.

Having a firm understanding of these factors will help you decide how sophisticated you want your platform to be. If you are selling a few different products in limited quantities, for example, you will have different needs from companies that are farther along in their growth curves and have larger revenues and sales volumes.

Ask yourself these questions:

• What factors influence your potential customers in the target market(s)? How might that influence what platform to choose?
• Do you have people in the company who can work on the platform, not just to implement it but manage and maintain it once it’s operating?
• How much time, effort and money do you need to operate the platform?
• What are your goals and expectations in the short, medium and long terms?
• Given all of the above, how big does your budget need to be?

Questions like this will drive many of your decisions, such as what part of the e-commerce solution you might implement in-house, versus what you could (or should) get from a platform vendor.

Larger companies typically want their e-commerce platforms to provide a range of functions, some of them complex. Even smaller firms, however, can often buy smaller-scale versions of these tools, which may be less feature-rich but still useful.

One looked-for capability, for example, is a content management system that gives you some flexibility in making changes to your online store. Custom-built platforms offer the most leeway here, since the developer can tailor the management system to your needs and budget. Less sophisticated template-driven storefronts may only allow you to make small modifications.

Other questions to ask include:

• What types of goods and/or services can the platform support? There is a difference between selling physical goods, such as home furnishings, and digital services, such as subscriptions.
• Do you have a brick-and-mortar store? If so, the platform has to handle multi-channel sales.
• Does the platform support the languages and currencies that match the markets you want to target?
• Are you selling to other businesses, to consumers, or to both? Business-to-business (B2B) sales have some unique features that not all platforms can support.

This is a checklist of standard capabilities that you are likely to need:

• Good search and navigation tools.
• Include at least a few merchandising and marketing capabilities like cross-selling, upselling, search results merchandising and e-mail marketing.
  
• Handle all the promotion types.
  
• An effective order management system that can handle order fulfilment, returns and refunds.
  
• Effective customer support.
  
• Robust security and privacy features, able to secure both your and your customer’s data against a wide range of threats.
  
• Reports with enough detail to support your operations.
  

Data about sales traffic and customer behaviour can help you not only assess the effectiveness of your site, but help with larger issues of marketing and product development. To get the most from this information, you will need a platform that can provide transactional and financial reports, together with usage statistics.

Reporting can help you uncover some important considerations. On the usage side, it can show you where the traffic is coming from, what is happening on the landing page, how to improve site optimization and make it easier for customers to find the products they want. For example, if the reports show that people are arriving on the landing page but then leaving the site entirely, there may be a problem with the source of the traffic to the site or with the landing page itself.

Transactional and financial reports can also be useful. They will tell you which products are selling fastest, who is buying them and whether you have enough inventory. They can also help analyze cash flow and warn of potential billing and payment problems.

If you intend to use the platform to sell to foreign businesses instead of (or as well as) overseas customers, it will need capabilities over and above those required for online retail sales. Depending on your products, sales volumes and the kinds of business customers you are trying to attract, a B2B platform may need to do some or all of the following:

• Permit your e-commerce operation to be integrated with existing IT systems, such as customer relations management, enterprise resource planning and inventory and manufacturing control systems
• Support the needs of your distributors, resellers, retailers and direct-to-consumer sales channels
  
• Offer strong catalog, promotions, content, and order management
  
• Provide access to information such as order history and approvals, replenishment cycles, contract terms, approved forms of shipment and purchase authorizations
  
• Allow for contract-specific pricing on a per-customer basis, and for bulk buying with price adjustments that this involves
  
• Be able to handle purchase orders, issue quotes and convert accepted quotes into orders
  
• Provide the back-end financial systems to handle the payment methods required by all your e-commerce transactions