Is Your Shopping Cart Before the Horse?

If launching a new e-commerce site is on your list of New Year’s resolutions for ’09, here’s what you should NOT do first: start hunting for a shopping cart solution.

While most of my clients are established online retailers, recently I have received a number of calls and emails from e-commerce first timers. The recession has prompted some pure brick and mortar retailers to seek growth in the online world. Or, sole proprietors are starting e-commerce businesses with hopes of pursuing a dream and ditching the need for a day job.

Inevitably, the conversation starts with the client inquiring about what e-commerce platform or shopping cart software they should use. There are so many out there, it’s confusing, etc.

Well, it IS confusing. But one of the reasons it’s confusing is that you may be putting the shopping cart before the horse.

If you are looking at e-commerce solutions before planning the kind of business you are going to run and how you are going to run it, odds are that a) your quest for the right software solution will be frustrating and painful and b) you’ll probably pick the wrong one.

Here are ten signs that you’ve put the shopping cart before the horse. If any or many of these describe you, don’t even think about the shopping cart yet.

1. You haven’t decided what you’ll be selling in your online store. The products, how many of them you’ll carry, how frequently they’ll change, how complex they are to sell, all of that stuff really matters.

2. If you have decided what to sell, you haven’t looked at how competitors are doing it , or

3. You aren’t absolutely sure as to why someone would buy from you vs. a competitor. Let’s face it. Just about everything is being sold online already. Chances are a more established player is already a jump or two ahead of you. What will make your e-commerce site a more attractive option to customers?

4. Speaking of customers, you don’t have a clear picture of your target customer or a plan and budget for attracting the right visitors to your site. Don’t think that the search engines will just find you. It takes money and work to get qualified traffic to a website.

5. You’re not sure how you’ll get the photos and product descriptions for the products you’ll be selling, or who will be doing the ongoing merchandising and updates. Doing this part well can mean the difference between a professional site and one that looks and reads like an afterthought. If you’re planning on carrying a wide assortment of products, don’t underestimate the workload here or the tools you’ll need to handle it efficiently.

6. You don’t know how you’ll handle customer service inquiries, who will take the calls and answer emails or how you’ll keep track of them. Many early stage e-commerce efforts overlook the need for human contact with web orders. It happens, so figure out how you will make it easy for customers to contact you and what you will need in terms of resources and infrastructure to deal with it.

7. You’re up in the air about whether you’re going to fulfill orders yourself or outsource the function. If this is you, you may want to skip ahead to point #10 below and let that start your decision making process. Think about the volume you’ll be doing and what you need to be able to manage, process, and fulfill orders, both at the start and as your business grows.

8. You haven’t thought through your polices and cost structure regarding shipping and returns. This is a highly competitive and rapidly evolving area of e-commerce. Flat rate shipping, expedited options, pre-paid returns, shipping promotions, the list of options and logistical issues is significant.

9. You don’t know who will be designing or developing your website, and/or you’re not certain about all of the content and features your site will need. While you’re at it, think about how frequently you plan to make cosmetic and technical changes to your site and how those will get done.

10. Saving the most important for last: You don’t have a plan for how much business you will do, thus you don’t know how much you can afford to spend on your e-commerce site. The key here is to start with a plan. Even if the plan is wrong, you’ll be better off than if you had no plan at all. Start with the fundamental metrics: How much traffic will come to your site? How many of those visitors will place an order? How much money will those visitors spend and how many units will they buy? This should be the basis for answering many of the questions above (like whether or not it will be feasible to handle fulfillment yourself, or what kind of budget you need to attract the right number of visitors to your site).

You’ll probably find that working through these issues will cause your thinking to change regarding what you need in an e-commerce solution and who you need to help you along the way. Chances are, you’ll need more than just a shopping cart behind the horse