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Building an E-Commerce Platform

After putting some thought in to setting up an e-commerce website I decided it was time to look in to researching the different options available to aspiring e-commerce entrepreneurs like myself. Unfortunately for the general inquirer the top google searches offer guidance on theory, design, or approach planning. However it’s tough to come by a guide that illustrates the actual steps necessary for signing up with a payment accepting service. I hope this article proves to be a useful aggregate of some of the best sources I was able to find.

Overview

Today e-commerce takes on several different forms across the web. The average merchant has a variety of services to choose from that range in cost from free to large, noticeably profit-eating subscription costs. Upon observation it seems the most popular options available are as follows:

  1. Dedicated E-commerce Platform
  2. E-commerce through plugins on Blogging Platforms
  3. Affiliate programs through affiliate aggregators or directly

I’d also like to point out that I will be leaving out the well known solutions such as Ebay.com, Etsy.com, Amazon.com and similar popular websites with very little customization options. I wanted to focus on the routes that are a little harder to take, that offer a more personalized experience for the seller. Generally I think these avenues tend to be some of the most profitable considering the saturation of the mega online retailers have made profit margins thinner, and fees constant and unavoidable.

Dedicated E-Commerce Platforms

It is of course always an option to write the code for your own e-commerce platform. However if you are anything like me code isn’t necessarily your strong point. I have on occasion found the motivation to look through basic coding rules in the hopes that I could save significant costs by doing it myself. This is an admirable venture and I don’t discourage anyone from giving it a try, but personally I always find myself giving up once the basic code is in place and I’m left with the monumental task of really understanding the programming language I’m using.

An alternative solution to coding the website yourself is to use a service offered by one of the many out-of-the-box E-Commerce solutions. The most popular E-Commerce solutions I have stumbled across include:

  • Shopify
  • Magento
  • OSCommerce
  • Volusion

Shopify

The first point, Shopify seems to be one of the most popular. They offer a 14 day free trial in which a user can log in and start building the E-commerce platform they have been dreaming of. With endorsement from names such as The Wallstreet Journal, USA Today, TechCrunch, Entrepreneur, and Mashable Shopify seems to be making a good reputation for itself.

Additionally Shopify offers an affiliate program and freelancing jobs for developers to get paid for building apps that work with the shpify API. The affiliate program offers the chance to share a Shopify link that when clicked, the referrer can choose to receive either 25% of each referred buyer’s monthly bill, or 200% of each referred merchant’s sale.

Shopify offers a variety of features for your E-Commerce platform including over 100 pre-made professional themes, analytics through Shopify reports, a full service blogging platform to complement your E-Commerce website, and SEO tools along with support making it easy to get your platform visible to the right customers.

Look closely and you’ll see Bitpay as one of the payment processors offered!

Pricing for Shopify can look a bit steep for the first time seller though. I would highly recommend trying out the free trial only after a business and marketing plan are set in place to execute once the trial begins. Pricing is as follows:

Basic Professional Unlimited
Monthly Price $29.00 $79 $179
Online Credit Card Rate 2.9% + $0.30 2.5% + $0.30 2.25% + $0.30
Credit Swipe Rate 2.7% 2.4% 2.15%

Shopify also offers features for merchants to offer incentive to customers through gift cards and promotional codes. All while making shipping less of a hassle through standard shopify negotiated pricing and easy to use calculators. The support and features offered by Shopify do solve a variety of challenges E-Commerce entrepreneurs face, but as mentioned before it does have it’s price.

Magento

The next option listed is Magento which proves to be equally visually appealing and easy to navigate much like Shopify. The only clear cut warning sign that can be seen right from the start in the statement following the Magento logo on the homepage which reads: “an ebay inc company”. Though I have not had personal experience with Magento I have worked extensively for many years on the ebay platform and have nothing but warning to offer for those getting started.

If ebay and Magento work anything like each other the buyer is almost always favored over the seller making it nearly impossible for sellers to dispute fraud claims and charges. The seemingly inaccessible customer service based in India is no help with these selling issues either, so please be cautious when listing on this website and do your research.

Aside from the preliminary disclaimer Magento offers much more attractive pricing relative to the Shopify options when considering the lower end options. In addition they too have a developers program that allows freelance workers to develop application for the platform.

Get Going Going Places Go Beyond Go Anywhere
Monthly Price $15.00 $25.00 $65.00 $125.00
Transaction Fees 0% 0% 0% 0%
Setup Fees 0% 0% 0% 0%

Keep in mind that the transaction fees listed in the table above refer specifically to transaction fees paid to Magento. While Magento does not take any percentage of sale for transaction fees, the processors that have partnered with the platform for accepting payment absolutely DO charge transaction fees. After signing up merchant’s are given a choice of which processor they want to use. From the forum posts I looked over many merchants have suggested using authorize.net

Magento features seem to be following the same path as those mentioned in the Shopify section. They offer solutions for things like Search Engine Optimization, customizable templates and designs, loyalty programs offering gift cards and coupons/store credit, and customer wish lists that help the seller to engage with customers and offer products targeted to them individually.

Magento offers a slight advantage over Shopify on the lower end of the pricing spectrum, though their services appear to be slightly less in-depth compared with Shopify. When considering Magento I would encourage trying the free trial as well and doing a bit of research on which payment processor will take the smallest transaction fees from your sale while still providing connivence and ease-of-use.

OSCommerce

Taking a look at OSCommerce it appears to display it’s downfalls from the get-go. The website itself is much less aesthetically pleasing than the Magento or Shopify websites and takes getting used to in terms of navigation. Creating an E-Commerce platform with OSCommerce however does have it’s advantages.

Strong point number one is the open-source nature of OSCommerce. As a Bitcoin enthusiast I find great pleasure in stumbling across open-source solutions to any type of service or problem that an entrepreneur is faced with. Not only does this allow the user a much greater sense of freedom but I can only imagine that the merchant community behind the OSCommerce platform is much more knowledgable and supportive when it comes to building your E-Commerce website. The downfall with OSCommerce is simply the amount of work required on the seller end. Your website, when using OSCommerce, would require that you download the open source package containing both front-end manipulation as well as back-end administrative manipulation of the site. This means that the customization and building is essentially up to you, though they do offer solutions for hiring web developers through the website.

Best of all it appears that OSCommerce documentation is free for use! You don’t need to pay a monthly subscription to use their services, the only fees on the seller end appear to be from the payment processors. Though the list is much smaller than the previously mentioned platforms with OSCommerce, there are several different payment processing options which should be able to handle the job without problems.

Volusion

Next Volusion offers a solution that feels very similar to Magento and Shopify. Though, I couldn’t help but notice that they mentioned the same features several times over as I was flipping through the page-by-page navigation of the features tab. As you read the different SEO optimized captions it feels repetitive, or fluffed almost, as if they are trying to outperform their competitors while offering equal (or maybe even less) features for relatively the same price. Pricing is a bit less expensive than Shopify but it does appear to be more expensive than Magento. The professionalism matches that of Magento or Shopify as well but they are a bit more cryptic about the pricing structure. This is what I was able to find searching through google a few times.

Mini Plus Pro Premium
Monthly Price $15.00 $35.00 $75.00 $135.00
Transaction Fees 0% 0% 0% 0%
PayPal Fees 2.9% 2.9% 2.9% 2.9%

Furthermore I was unimpressed with the pricing structure for the services offered by Volusion. Take a look at the E-Commerce Services section of the website and you are linked endlessly to template designers, SEO services, and other optimization services that are normally packaged in with the monthly subscription as we see with Shopify and Magento. When payment processors comes in to question it looks like you are being pushed towards using PayPal. If that is the case not only are we indirectly interacting with ebay once again, but the fees associated with such transactions can mean a much smaller profit margin. This platform just downright doesn’t feel good to me, the sense that you are being nickeled and dimed is one I can’t shake in this case.

Though it’s still important to note that I have not yet begun setting up an e-commerce platform through Volusion so I don’t know how the functionality or accessibility matches up with it’s competitors. They claim to have the best traffic of all the platforms, and if it’s true, then it could be worth considering. Additionally you won’t be at the grips of ebay or paying quite as much as you would with Shopify so there are benefits to be had.

Freewebstore

Lastly, freewebstore.com offers the solution I think Volusion is similarly offering, but much more direct. They show clearly the features available (limited in comparison to the paid platforms) and setup is simple enough. It offers many of the services that are found in competitor platforms as light versions that can buy expanded on via a la carte purchases.

Despite being the free lighter platform it does show many promising features and I appreciate how easy it is to navigate and understand the website. You can view a Demo page that shows the admin side of your potential E-Commerce and though slightly cluttered it appears simple enough and has everything I can imagine I would need visible.

It seems there is a very limited supply of payment processors available to this platform though, which could definitely prove a disadvantage when catering to customers who prefer direct credit card transaction over PayPal transactions. Much like the Volusion, freewebstore.com offering limited payment options restricts merchants to payment processors who might be taking away precious profits in transaction fees.

Wordpress E-Commerce Solutions

If you’d rather build something a little more personal, Wordpress offers a wide variety of options in terms of what type of website you can create. Most commonly associated with blogging, Wordpress can be used to create full websites and successful E-Commerce businesses alike.

Many successful E-Commerce Wordpress businesses use the Wordpress plugin called Marketpress. Marketpress offers thousands of plugins, non-coder friendly setup, and a busy support forum with a ton of useful information. The Payment processing options includes all of the major names you would expect from Paypal, to Google Wallet, to authorize.net. Though I think with some digging it wouldn’t be tough to find other options as the developers that create for wordpress keep busy. Additionally there is complementing your Marketpress E-Commerce platform with a Wordpress blog, or even selling your products through the blog. Using the payment widgets on the Wordpress blogging platform it’s simple to sell individual products. Perhaps a business with smaller inventory could benefit from this as they won’t be cluttering the blog with desperate ads for sales and can make the product description more personal.

Blogger E-Commerce Solutions

Blogger E-Commerce works in much the same way as Wordpress Blogs do. The blogs themselves are painless to setup and have an array of options for free templates and designs. The payment processors are again the expected major gateways, and are available through buttons and widgets scattered throughout the blog. These blogging solutions do most likely take way from the professionalism of the business, however not all goods need to be marketed professionally. Consider hand-made crafts or clothing, these products have a backstory, they have a passionate artist behind them who adds sentimental value to the product.

If your product aligns with that example, a blog can be a great way of getting the story of your product out with pictures and stories. Buyer’s will appreciate a home-made product and feel good about having a one of a kind product. Look at Etsy.com, they have a bustling economy of hand-made products from all over the world.

One major advantage is the availability of E-Commerce blogger templates that integrate easily to allow your blog to function much more like a website. Though personalization is unlikely without prior knowledge of code, these templates get the job done and provide the solution almost effortlessly.

E-Commerce Through Affiliate Marketing

Affiliate Marketing is tailored to a special kind of E-Commerce entrepreneur. The options available are almost endless considering that thousands of online business run referral programs that pay percentages of sales or reward with points and gift cards.

Setting up an account is simple and many E-Commerce articles recommend using Amazon.com’s affiliate program for making some extra cash. The likelihood of making more money than a dedicated successful E-Commerce website is probably slim. However there are some selling geniuses that have been able to tweak and fine tune their affiliate businesses to generate a very healthy income.

Plain and simple:

  1. They are easy to set up
  2. They cost you nothing but a small amount of time for posting links
  3. Inventory and shipping are not even a concern when selling as a referrer
  4. You can manage your affiliate links on a free blog, no cost at all
  5. Success is based not necessarily on the product, but the selling strategy

Closing Thoughts

With a product that is either capable of medium-large scale production or easily accessible at wholesale prices I would personally choose to go with one of the solutions like Shopify or Magento. Though they are both the most expensive route that I have detailed, the cost would be worth the easy-to-use platform and SEO advantages that wouldn't necessarily come organically with the cheaper options.

However if you are like me and have a product that is handmade and not produced in large numbers (I make paintings from hand-cut stencils) the more logical route would seem to be setting up a blog or Wordpress website that takes advantage of the payment processing widgets. Though it might require a little bit more work there is much less capital needed up front in case you have trouble targeting your market or getting in the top results on search engines.

For those more inclined to code it seems the open source developer platform route would be the way to go. Nothing beats having full control over not just your product, but every aspect of it's delivery as well. Making your own e-commerce website is probably no easy task, but with minimal costs and full knowledge of the code that is interacting with your customers it's easy to see the potential for efficiency and better cost basis.

What seemed to be most important in building a successful E-Commerce website was ironically not the platform though. To explain, I decided to detail what I saw from exploring each platform because I rarely see this kind of thing when looking up how-to’s. Generally when you look up how to run a successful business, you get hundreds of articles claiming to find your passion, or get organized, rather than information on the actual steps needed to begin building.

That being said, the general characteristics many of the articles I came across claimed were the most valuable when starting an E-Commerce business were:

  • Consistency - Find a platform and stick to it, if you switch from platform to platform trying to get a feel for which is best you’ll end up with headaches trying to migrate.
  • Target Market - Know the exact niche you intend on selling too. If your product description is too broad or tailored to the wrong people you won’t get the site visitors you want.
  • Take Advantage of SEO - Whether getting services through a platform or learning SEO yourself, this tool was essential for generating the traffic needed for a successful business.
  • Engage With Customers - Almost every article stated that joining relevant forums and engaging with the community was one of the most important things you could do to generate traffic to your website. When you’re selling to a niche market, the majority of your sales could very likely be coming from past buyers and referrals.
  • Engage Customers Through Email Subscriptions - No pesky newsletters, I’m talking emails that proclaim the exciting new promotion tailored specifically for your one-and-only-very-favorite-customer. Knowing your niche you can target promotions to your past buyers, which are now your best leads.
  • Make Yourself an Expert, Make Your Words Valuable - Assuming by now you know your niche, you need to be passionate about your business and the product. Research the field in which your product is used, use your product, and most importantly start and share useful conversation among your buyers. Keep a blog or detailed descriptions for items that have identity.

Sources


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