Spending Your Money Effectively in Ecommerce
Developing an ecommerce website can be expensive, no doubt. Knowing how to spend your money effectively is essential to maximizing your operational efficiency while minimizing wasted financial resources. So, how do you spend your money effectively? Here are some tips to do just that, broken down into 3 streams; new ecommerce website build, ecommerce replatforming, existing commerce site enhancements.
New ecommerce website build
Approaching a new website build can quickly become overwhelming when trying to decide on a platform. After all, there are hundreds of platforms available all advertising a robust set of features. Without being hands-on in the industry, it’s easy to start comparing features in order to try and pick the best platform.
However, comparing features is actually detrimental when evaluating your platform. Before even looking at platforms, you should really be considering what your overall commerce architecture should look like. Your digital operations will be made up of various software tools other than your ecommerce platform, so it’s important to consider how they fit together for maximum efficiency. We sum it up nicely on our website with this sentence:
“The right architecture for your business, aligns all of these disparate components, to create a cohesive system capable of sharing, aggregating and disseminating the right data, to the right systems.”
The ecommerce platform, while essential to the mix, is simply a single component of your overall architecture. If you don’t know how your ecommerce platform will fit in with your other departments and systems, you may end up with a platform that looks perfect right now but has limitations that will affect your operations in the future. We typically see businesses go through a replatforming cycle every 3-5 years, meaning that they’ve hit limitations with their current platform and are now seeking ways to overcome these limitations. The solution for these clients is to change platforms which is why they’re talking to us. Replatforming is an expensive undertaking but something that they weren’t able to avoid.
Seeking out the right architecture for your business will not only help you understand what you need in a platform right now as a minimum viable product, but also how that platform will allow you to scale in the future. The goal is to build an architecture which avoids dependency on any one system or platform in your ecosystem, allowing your business to evolve and scale going forward. All of your software tools don’t need to integrate and communicate with one another right away, but as revenue comes in and it makes sense to do so, you can reinvest in your platform and start streamlining your data and operational efficiencies through technical automation. This is how you can avoid replatforming and effectively spend your money on your ecommerce operations.
Replatforming is an exercise that typically happens when a business has outgrown its current platform or has hit platform limitations that affect operations that cannot be resolved. As mentioned in the new ecommerce website build section, replatforming tends to happen in a 3-5 year cycle. Replatforming is expensive, but it’s also a great opportunity for positive change that will stop the cycle and put you in a better position for the future. If you skipped the “new ecommerce website build section” above, consider going back and reading it now since the same tips apply to replatforming, too.
You do have advantages when replatforming over your very first build. You already have positive income, you understand what your current limitations are, you have a good idea of the pain points that you want to change, you have already established additional software other than your ecommerce platform that are essential for your business operations, and you’re now open to the idea of change. You can further understand the state of your digital commerce operations by completing this digital commerce assessment. Overall, you’re actually in a really great position to step back, forget about the current platform, and begin to determine exactly what type of commerce architecture is best suited to your business.
You’ll notice an emphasis on commerce architecture in this post because it’s a relatively new concept that is still finding its way into common knowledge. By understanding the argument for developing a commerce architecture instead of simply just changing platforms, you can properly plan for and implement a strong case moving forward. Ideally, your commerce architecture will be considered in all operational discussions going forward.
We recently held a short webinar on how to plan for an open source commerce architecture that would be a good first step in your understanding of architecture types. Talking to a consultant about commerce architecture is another beneficial first step. A consultant will have expertise in the different architecture types, how they work with your current software ecosystem and business model, and can help you to understand meaningful next steps. Like starting a new website project, a consultant can help you plan your minimum viable product on a new platform that you can continue to invest in and scale up, without the fear of replatforming. Consultants work with you from a human perspective. Their goal is to understand the physical business operations and translate those to the web securely and automated wherever possible.
Existing ecommerce site enhancements
You have an existing ecommerce website and are looking at ways to enhance it in the most effective way. There are any number of ways that you can spend your money, be it advertising, website features, promotions, etc. Consider taking a look at your overall operations and try to understand what processes can be made more efficient and automated. Start this exercise by listing out all of the departments involved in executing an order, name the software tools each team uses and then draw out this setup in your “ideal” scenario.
For example, if you’re entering data manually into multiple places (also known as swivel chair processes), draw out how you’d automate that task and let your software systems talk to each other automatically. These are the areas you should consider investing in. This is beneficial in many ways; Automation is near-instant, reduces input errors and frees up time and resources for more meaningful tasks such as planning, marketing, customer service and market research.
The more you can automate and streamline, the lower daily operational costs will be in the long run. You’ll be setup for scale instead of growth, which is very important to effectively operating a successful online business and maximizing profit.
Of course, knowing what to tackle first might not be so easy to find out. Lucky for you, we’ve created a digital commerce assessment tool that will help you pinpoint the problematic areas of your backend operations, and deliver valuable diagnostics to help you understand the root cause of your pains. With this knowledge you are able to move towards creating streamlined workflows for effective operations and scalable growth that ultimately increases your bottom line.