If you’re an e-commerce retailer in the process of building a new online shop, you’ve got a lot of important decisions to make. To begin with, you have to choose a legal representative for your shop and decide which systems you’ll need to sell your products and services online. This article will guide you through the process and show you exactly which tools you need to get your online shop up and running.
What is the e-commerce ecosystem?
The term ‘e-commerce ecosystem’ refers to all the inner workings of an online shop. That means all the components your company needs to be able to sell your products and services online. Depending on the size of your e-commerce business and the industry you’re working in, your ecosystem might include a wide range of elements. The following are the most important elements, which virtually every online shop needs:
- e-commerce platform
- inventory management system
- ERP system
- logistics software
- payment gateway
Building your online shop the right way: Why is an effective e-commerce ecosystem so important?
When you’re building your online shop, you can choose from many software solutions from all kinds of providers. The main thing to remember is to always start by weighing the pros and cons of these options. This will help you avoid pitfalls that could slow down the growth of your online business.
For example, select software that has all the options you need, right out of the box. When you’re just starting out, you might be focused on simply making sales as quickly as possible. Yet, it’s important to think about the future. If you’re planning to grow your business over time, remember that you’ll eventually need a specialised system that is capable of handling larger order volumes.
From a strategic point of view, it’s smart to choose the right software partner from day one so you’ll be ready to expand in the future. Your software must allow your business to grow without slowing you down. But how can you choose the right software partners? In the next section, we’ll show you what to keep in mind when building your online shop.
Choosing the right partners for your online shop: Where to begin?
Achieving sustainable, exponential growth for your online business starts with building your shop the right way from day one. Start by asking yourself these questions:
- How large is my customer base right now?
- How many employees do I have working in the departments dedicated to each software component?
- How fast do I expect my company to grow?
- Do we plan to expand internationally?
Developing your online shop
If you expect a high compound annual growth rate (CAGR), then more and more people will be accessing your online shop. That means you’ll need to have plenty of products in stock, which also affects your inventory management and logistics. It’s a good idea to choose shop systems and integrations that are suitable for handling large volumes. Look for software that also allows for a simple migration to larger systems at a later time. The API integration must also be stable enough to connect a large number of functional units. If you want to build your online shop the right way, you’ll need multiple components that can work seamlessly together. Trying to do everything with just one system almost never works, and it will only slow down your growth in the end.
Checklist for choosing the right partners for your online shop: Asking the right questions
The checklist below specifies the online shop components you need to consider when choosing the right partners:
|Data security||Where is the data stored?|
|Data security||How is it protected?|
|Data security||Does the software provider have access to the stored data?|
|Data security||Do they comply with the data protection guidelines established in the GDPR?|
|Product life cycle||How often does the software provider release new products?|
|Product life cycle||When was the last time they released a new product or expanded into a new region?|
|Reputation||Who are the provider’s current partners and customers?|
|Reputation||Are there any success stories that illustrate the relationship between the provider and their customers?|
|Company health||Is the software provider a publicly traded company?|
|Company health||How has their share price been performing?|
|Public presence||How has the provider been portrayed in the media?|
|Customer support||Is there a demo version available for you to try?|
|Customer support||Does the provider offer local support in case you have any problems?|
|Customer support||How smoothly does the communication flow (for example, with the sales team)?|
|Pricing||Are there any hidden costs?|
|Pricing||Will you be tied to a fixed contract or is the contract period open ended?|
|Usability||How easy is it to migrate?|
|Usability||Can the software be integrated into your existing systems without any problems?|
|Usability||Can you change the product’s features any time (for example, expanding it to include new features without any problems)?|
Building your e-commerce ecosystem: What do you need for your online shop?
Next, let’s look at what you need to set up your online shop.
In general, there are three types of shop systems you can choose from as an online retailer:
- Modular SaaS solutions: With a modular SaaS solution, you rent a fully functional shop system with ready-made design templates. This enables you to easily build an online shop without any prior experience. Web hosting is usually included, as well as the most important interfaces. This is an easy all-in-one solution, and the monthly price usually ranges from £10 to £200.
- Open-source shop systems: These are professional shop systems. They’re usually available in a free community edition that gives you a strong foundation for customisation and expansion. However, setting up your shop will generally require some programming experience or a budget that enables you to hire a web designer, programmer or agency. Depending on your requirements, it will usually cost at least £5,000 to set up your online shop using an open-source system.
- In-house development: Large companies with big budgets often program their own custom-built shop system designed to meet their own specifications. In that case, the online shop is individually built from the ground up. The development costs for this type of solution can easily run into five or six digits.
Here are some of the most common providers of the first two categories of shop systems:
|SaaS solution||Open-source program|
Although a SaaS system allows you to get started quickly for a minimal cost, its functionalities are generally limited. This is why open-source systems are the best choice for running a professional online shop in the long term. Some of the advantages of open-source shop systems include:
- Few limitations in terms of technical possibilities
- High flexibility and scalability
- Better customisation in terms of design, functions, etc.
Not offering the right level of security can have a devastating effect on your company’s reputation, as well as high financial costs. That’s why it’s important to always choose a shop system that complies with the latest security standards. These include measures such as two-factor authentication and SSL certificates. Secure shop systems encrypt the data that is transferred from your customers’ device to your server and keep it safe from unauthorised access. To learn more about the latest security standards and how to keep your online shop safe, be sure to check out our article on Online Shop Security.
Online shops that do business in the UK must adhere to specific legal requirements. For instance, your website may need to include information such as:
- Publishing information (the name and address of the website publisher)
- General terms and conditions
- Returns/cancellation policy (right of withdrawal)
If you fail to comply with these legal requirements, you may face expensive fines. That’s why it’s important to familiarise yourself with all the legal requirements when setting up your website. Consult a legal specialist for the details that apply to your situation.
When you first start out, you’ll probably only have a few orders and transactions to handle. Bookkeeping, inventory management and CRM will still be relatively easy to manage at that stage. But as your sales increase, details will become harder to keep track of. That’s the point when many online shops run into difficulties with maintaining proper bookkeeping and inventory management.
That’s why it’s crucial to work with proper inventory management software from the very beginning. Above all, your inventory management software must be integrated directly into your online shop, in order to avoid double bookkeeping.
The payment methods that you offer your customers are another important aspect to consider. Different target groups expect to be able to pay using their preferred payment methods. This is why it’s best to offer a mix of payment options. Especially when shopping on a site for the first time, customers prefer to use a payment method that they already know. With Mollie, you can easily incorporate all common payment methods into any online shop—all with just one single integration. That means you spend less time working on integrations and still enjoy maximum payment security.
It’s important to give your online shop a user-friendly design from the very beginning. This includes:
- Thoughtful website navigation
- Attractive design
- Customer-focused usability
- Optimised mobile display
- Fast checkout process
You can use A/B testing to quickly find out which design features work best for your target groups. It’s also important to remember that your load time has an important influence on the user’s experience. You should choose a shop system that’s powerful enough to ensure a smooth process, even as your online shop grows. If your load speed begins to deteriorate, visitors are likely to ‘bounce’ (leave your site immediately without making a purchase).
Checklist for your online shop: Did you remember everything?
Here are the most important software solutions for helping you as an e-commerce retailer to build an online shop that’s ready for growth:
1. Do you have an accounting program?
Accounting software is an important tool for running your business properly and avoiding tax errors. It must be capable of processing tons of orders quickly, securely and reliably. Automation features are also useful because they help you work more efficiently.
2. What about customer support?
Satisfied customers are crucial to the success of your online shop. It’s important that your customer support department is easy for customers to reach when they have questions or need help. As your business grows, you may struggle to keep up with the high volume of customer queries. Be sure to plan for how your customer support department will grow to handle this volume.
3. Are you using CRM software?
A customer relationship management system is an important investment for e-commerce retailers to consider when setting up an online shop. This type of system includes various functions for maintaining and building relationships with new and existing customers. It helps you to grow your business quickly and operate your online shop successfully.
4. What about shipping and logistics?
Well-organised e-commerce logistics are crucial to your online shop’s success. This includes warehouse management, order picking & packing and shipping, including returns. There are many options for managing your online shop’s logistics.
- With dropshipping, the manufacturer ships the merchandise directly to the customer, which means the retailer doesn’t have to keep products in stock themselves. You don’t need a warehouse, but you’re also unable to check the quality of the product.
- Another option is to work with a fulfilment partner who takes care of the entire logistics process for you. These partners have the necessary technologies and expertise, as well as the tools needed for quality control. However, they are sometimes expensive to work with.
- If you choose to set up your own logistics system, it can increase your profit margin and give you full control over your shipping processes. To keep the time investment to a minimum, it’s a good idea to use professional logistics software.
- It’s also possible to work directly with shipping partners such as DHL or UPS. There are also various shipping platforms available that enable you to ship your products using a wider range of companies.
5. Do you have a plan for handling returns?
Return shipping is a major expense for many online retailers. That’s why it’s important to think in advance about how you want to handle returns and who will be responsible for the costs.
6. Are you using ERP software?
An enterprise resource planning (ERP) program helps streamline processes within your organisation, from online orders to processing to shipping. By integrating your ERP into your shop system, you can ensure smooth communications and more efficient processes.
Summary: Building your online shop the right way
If you want to set up an online shop ecosystem that’s built for success, there are a few things to keep in mind. An all-in-one solution is a good choice for small online shops that have a limited budget and an easily manageable product range. Yet, if you are planning on growing your business, these solutions often lack all the features you’ll need. You won’t be able to customise them to meet your exact needs and this can slow down your growth, which is the last thing you want as an online retailer.
That’s why it’s wise to look for a specialised solution that is suitable for handling larger order volumes. When searching for software partners, make sure to choose partners who offer a high-performance API and allow for simple integration into larger systems later. This will ensure that nothing stands in the way of your online shop’s growth.