There’s a thin line between efficiency and deficiency when it comes to top management of an Ecommerce company. Therefore, the bigger and more complex the marketing efforts of an Ecommerce operation are, the harder it will be to channel those efforts through the right filters for optimum results.
The vast amount of technology available can both have positive and negative consequences. One of the positive consequences is selection; a wide variety of options is always good for business. One of the negative consequences is that sometimes business owners or decision makers do not know which solution is the best to use. Let’s create a hypothetical situation where we have an ecommerce operation and our marketing efforts including SEO and Internet Marketing are finally paying off. We have been in business for about two years and we sell brand name electronics on our site. It’s a very saturated market and competition is fierce. We were receiving about 2000 unique visitors per day, which 60% was from organic search, 30% was from our Affiliate Marketing Network (Let’s assume we use Commission Junction) and 10% of traffic was coming from other sources. We had a 2 % conversion rate which means we were getting 40 orders per day.
After the marketing improvements, our traffic has doubled. Now, we get 4000 unique visitors per day. Our conversion rate also increased to 5%, due to all the conversion optimization steps we implemented on the site using split testing on checkout pages. That means we get about 200 orders per day. Our original capacity was only about 50 orders.
Using this scenario, let’s analyze the problems we would run into in application, theory, and shipping operations:
- Bandwidth and Server: This really depends on your hosting company but most of them have a limit on the bandwidth and now that you are getting a significant amount of traffic; you have to be careful and watchful. Also, if your site is not on a dedicated server, the more it’s loaded with extra traffic, the slower your site will get. The slow load time will affect your conversions directly.
Solution: Switch to a dedicated or a semi-dedicated server. This will enable you to have more bandwidth. Talk to your hosting company and they can easily arrange this for you.
- Ecommerce System: There are lots of options in the market to use as an ecommerce system. If you receive 4000 unique visitors per day and 200 orders, most Ecommerce solutions will not be effective for you. They will do the job, but with those numbers, it’s time you switch to a better solution. There are lots of important factors that you should consider.
o URL Forward: You must make sure that your URLs are correctly forwarded in the new Ecommerce System. Try as much as possible not to switch from a Linux Server to a Windows Server. This will get harder if you have a lot of products. (SKU’s)
o CRM: Make sure that the Ecommerce solution you pick has a built-in CRM Module. This will enable you to give the best customer service possible.
o Tracking: Make sure that the Ecommerce System supports conversion and Ecommerce tracking using Google Analytics or Omniture. Since you are getting more sales and traffic now, you have to step up your game and put in place technologies to track all user interaction on your site. You want to know exactly how many cents you are spending to make a dollar. You want your Ecommerce system to know your gross profit on a per product basis. The more involved, informed and aware you get with this information, the more profitable you will be.
Solution: The top 2 Ecommerce solutions we would recommend are Volusion and X-Cart. Of course, setting these up are not enough, you need the right configuration and customization to get the best out of them.
- Shipping Operations and Problems: Our capacity to ship was only 50 a day and now we are getting about 200 orders per day. How can we possibly process that many orders? It’s a great problem to have, but it needs to be fixed fast, as late shipping would yield unhappy customers who will not return to buy from us.
Solution: You cannot really fix this problem by hiring more people in the shipping department; it’s not profitable to do so. You must try to automate the shipping as much as possible. Some of the questions we would ask are;
- Are you using internal accounting / order processing system?
- Do you have a network in your business?
- How do you export / print / migrate the order information?
Let’s assume that we print all labels directly from a thermal printer. Do we know the weights of each package or do they literally need to be weighed individually during the weighing process? Do we need to assign a weight to each product in stock? Does the Ecommerce System support that? As you can see, there are lots of custom questions here unique for each business.
Ideally, we would want each product to be assigned a weight so we do not have to weigh them manually. Since we know which customer purchased which product(s), the system would automatically calculate the weight of the package and we could print the packing slip and shipping label directly from a thermal printer, pass that to the shipping department, they pick the items to be shipped, stick the label on the package and place the packing slip in the box. It all sounds good but what shipping method are we using; UPS, FedEx, DHL, or USPS? How do the tracking numbers get transferred back to the Ecommerce system for the clients to receive a shipment notification?
We could use Endicia for USPS and Worldship for UPS. Both have integration options so it needs a certain level of customization. The good news is it can be done.
It’s essential that a growing Ecommerce company addresses all these problems and make the process as efficient as possible. The less time spent on operations means more time spent on marketing and growth. At Optimum7, we can assist you with all integration problems you might have regarding your Ecommerce Operation. Click Here To Contact Us.
January 13, 2009
