E-commerce system development
Steps for Growing an E-commerce Site
Using Online Marketplaces
—Using Packaged Software or Custom Development—
Contents
STEP1. Selling through an Online Marketplace
STEP2. Building Your Own E-commerce Site with Packaged Software
STEP3. Building Your Own E-commerce Site through Custom Development
For the steps involved in building a website, see this guide.
Introduction
E-commerce platforms have become essential as business goes digital, and many companies are expanding their online sales channels.
However, e-commerce requires sales expertise different from that used in physical stores. Many companies begin selling online only to find that sales fall short of expectations.
E-commerce also has a different revenue and cost structure from physical retail, so sustained losses are entirely possible unless the business is designed properly.
Companies must therefore consider the steps for growth while establishing their own e-commerce operating expertise.
STEP 1: Sell through an Online Marketplace
Companies that have not yet started e-commerce commonly begin by selling through an online marketplace with strong customer acquisition and comprehensive seller support, such as Rakuten Ichiba or Amazon.
Benefits of Selling through an Online Marketplace
- Comprehensive support: Build sales expertise while receiving consulting services.
- Low initial cost: Begin selling with minimal system implementation and setup.
- Customer acquisition base: Gain access to an established customer acquisition and customer base.
- Compliance: Rely on the platform to provide security management and legal compliance.
- Areas in which the company has not yet established its own operations can also be outsourced.
Disadvantages of Selling through an Online Marketplace
- Even if the software appears to include every function, customization can be expensive when adapting it to a company's preferred operations, and operations may need to conform to the functions of the packaged software. Modifications also tend to increase subsequent maintenance and operating costs.
- These factors may prevent a company from creating its own distinctive storefront and customer service or fully matching the system to its logistics and workflows.
- Several services may need to be combined rather than relying on one software package, and introducing and learning each product creates a considerable burden.
Value of Selling through an Online Marketplace
- Establish Expertise
While operating a store, establish the basic work required for e-commerce, including product photography, measurements and copywriting, B2C delivery, and customer support. - Take on a Challenge
Achieving enough success to reach the top rankings can direct the marketplace's enormous customer traffic toward the company and support claims such as 'Popular on [name] Marketplace.'
STEP 2: Build Your Own E-commerce Site with Packaged Software
Once the company has established expertise by selling through an online marketplace, the next step is to build its own e-commerce site using packaged software.
Benefits of Building Your Own E-commerce Site with Packaged Software
The system has not added enough functions to keep pace with changes in operations and business, and operating within the limitations of the existing system has reached its limit.
Weak external integration, and especially the lack of real-time integration, makes the system poorly suited to operations and businesses such as e-commerce that require immediacy.
Disadvantages of Building Your Own E-commerce Site with Packaged Software
・The functions needed to operate an e-commerce store are included, allowing the company to launch its own site reliably in a short time and at a controlled cost.
• With a SaaS package, the software's functions are expanded over time without investment by the customer.
• No marketplace commission is incurred.
Value of Building Your Own E-commerce Site with Packaged Software
• Operating a company's own e-commerce site requires further operational expertise beyond selling through a marketplace. Packaged software can first be used to establish an operational foundation.
• Launching its own e-commerce site allows a company to design distinctive services for its customers.
STEP 3: Build Your Own E-commerce Site through Custom Development
Once the company has developed greater expertise in selling through its own e-commerce site and is ready for further evolution, it can consider building its own e-commerce site through custom development.
Benefits of Building Your Own E-commerce Site through Custom Development
- Create an e-commerce structure tailored to the company.
- Create storefront and customer service experiences suited to the characteristics of the company's products.
- Build a delivery structure that makes maximum use of inventory across the company's store and logistics networks.
- Deliver products using inventory across the company's store and logistics networks to the fullest extent.
- Match the company's workflows and automate product information preparation as much as possible.
- Freely design services that integrate online and offline channels.
Disadvantages of Building Your Own E-commerce Site through Custom Development
- The company must define its own operations.
- The company becomes responsible for ensuring stable service operation, including security.
- Initial costs are higher than with any other approach.
Value of Building Your Own E-commerce Site through Custom Development
- Bring out the appeal of the company's products and pursue better customer service through its online storefront and service experience.
- Maximize use of the company's own resources.
Conclusion
Custom development, packaged software, and online marketplaces each have advantages and disadvantages.
The key to success is evaluating the business situation, future scale, budget, time, and other factors as a whole, then selecting and combining the best options.
Just as a physical store cannot succeed overnight, an e-commerce site must steadily build operational expertise and systems. Conversely, even custom development, which may initially seem difficult, can be achieved reliably by proceeding through the steps steadily.