An online store platform development and implementation must be considered as an integral part of your company and business model. Two means to the same end. No channel should be valued more than the other. They are all part of the company and all strategic decisions should contemplate all sales channels.
It’s only natural that a company wants to test an online e-commerce platform to have some actual data about the cost/benefit that adding another channel will bring to the company. But creating an e-commerce platform for test purposes is of a high sensitivity when it comes to getting numbers for a “green light” from the accounting department.
Companies tend to make experiments by allocating the minimum amount of binational and human resources possible, trying to collect precise and accurate data to be used in the future.
This type of action has some serious risks. The services being offered are not as high-quality as expected by the customer, there will be no structure capable of solving problems that weren’t predicted, and they happen every time, and because there is no real structure in the company, there will simply be no way of measuring the real costs of an operation at this level.
That’s why it’s inadvisable for a company to go to market without a structure internal/ subcontractor capable of solving a variety of situations that will occur. And they will occur.
The company will have higher operating costs in this testing phase while it does not become definitive, but since we know how to account them, we can take those into consideration when making the decision.
To properly consider data from a test platform as reliable as possible, we must adjust the products we sell online to the range of products the company wants to sell. It will be a very high temptation to sell only the bestsellers and use the data gathered from those sales to prove the e-commerce can be a profitable solution. This can bring a lot of problems, including very high Customer Equity values, and also a very high LTV.
We will soon realize that selling only our bestselling products online our costs will drop considerably at various levels: Marketing campaigns will have a very good Click-To-Conversion ratio. We will have constant stock movements, thus allowing us to keep it as low as possible. We will be able to solve most customer requests very fast (since we are only selling a hand-full of products we know the most questions will be about). We will have very little need of store updates since we only sell what the customers buy frequently.
Simple things as the mentioned above will be easily deconstructed with the addition of new products, products with lower margins, less known markets, bigger re-order periods, among others. It is critical for a company to know the market it’s entering and the products it wants to sell. If possible, test the higher number of products and services you wish to offer when compared to the “live” store. If this is not possible, it’s critical to calculate the cost/benefit taking in consideration the wide range of situations that weren’t tested and that will probably bring down the profit margin for the online store.