- 1 1. Maintaining product catalog in less time.
- 2 2. Integrated payments for improved conversion rates.
- 3 3. Know more about our customers…. And target them!
- 4 Conclusion
In this article Nicolai from Refurb.dk share with us his experience from building an e-commerce platform from scratch.
It all started back in 2012. As many others in the e-commerce business, we were heading towards a huge problem with our existing platform. You all have heard this sentence and in almost any cases this is in fact not true.
But we were not fit for a one-size fits all solution. So what could we do about it? Of course we would just create our own platform!
We sell used IT-equipment and our primary business goal has been making this process smooth as with all the automation that is possible for a relatively new startup company. Keeping the website up to date with the latest products in stock and a typical problem. What we purchase is not always what we get. It did make it even more difficult to run an e-commerce store; to both double check the website and double check the final product.
So we had to find some goals for our project. I have picked 3 of them and maybe you can get something useful out of it.
1. Maintaining product catalog in less time.
Everyone knows how much time it really takes to do this. It is a nightmare if you would like multilingual support, unique texts for SEO and customer satisfaction and also keep the prices up to date. For most big companies this is done from an expensive ERP-system which as just as big overhead like a simple Magento, Nopcommerce or WooCommerce system. This problem doesn’t tent to be less problematic when you add 20 products that are close to 90% identical.
Let’s just face it. The fundamental data is still the most important part of a great shopping experience. We decided to take this to a whole new level. Every single laptop or desktop PC was processed by a custom designed application. This software would get all the specific data about the product including input from our warehouse employee who would check the product for any defective components. We then defined a so-called “bare bone” to be the center of the product to ensure correct images, texts and base pricing for the PC unit. Other attributes, as how fast the pc was would then be calculated into the base price and defines the final price for the product.
If the bare bone already exists when the product is getting in stock, then we could automatically push the product to our website.
But hey! You just set unique texts? What happened to that?
By using Canonicalization (https://moz.com/learn/seo/canonicalization), all products now derive from a bare bone so we created landing pages based on the bare bone instead of the products. This is a tip that can be used in many other industries. When you have a lot of products that are closely related to each other in specification, name or usage then stop and consider if canonicalization can solve your problem before you go create a bazillion products manually.
2. Integrated payments for improved conversion rates.
We all wants this for Christmas. One of the main goals was to make our customers feel even more safe on the website. We would try to put the Payment part directly into our website without leaving the page. And we did this!
If you read about Internet security for online payment and processing you have seen the name PCI DSS Compliance before. This is a tremendous and time consuming process if you would like to process the payment yourself. We would not like to use more time than we had to, so we decided to go on a different approach: THE IFRAME.
The customer would face the payment directly inside our website and would never leave our checkout flow. We did get the Checkout flow perfectly as we wanted.
Waoo! But what about the conversion rate?
We really wanted this to be a great success but in our experience the checkout flow did not help that much on the conversion rate. Was it worth it? It is really difficult to say that it was. The shopping cart and checkout flow is one of the most demanding and time consuming parts of building an e-commerce from scratch. So be aware of the fact that your checkout flow can always be changed on your existing platform as long as you got great developers in hands.
3. Know more about our customers…. And target them!
Every single day we talk about this. Getting as much data as possible. There are a lot of articles on the great world wide web not just to “get data for data’s sake”. But this is for most e-commerce businesses the most important subject of all. We did already have the fundamental google analytics up and running but how could we get even more information? E.g. on how to optimize our customers spend on our website. Bigger Revenue is always nice but our main target was better overall profit.
We did a lot of different things to help our customers spend more. Retargeting, Facebook, LinkedIn and google AdWords spending through multiple optimization-solutions. We still use a lot of these products but here is some of the most interesting ways we did make some extra profit on the bottom line.
Shopping Cart Abandonment
We moved the shopping cart “Terms and conditions” check box to the first page in the shopping cart. Why did we do this? To get full Acceptance and allowing us to contact the person even though we only got his e-mail or phone number. Every month these text messages and e-mails generates more than 2% of our total revenue.
Sell the products that gives you profit
Younger people like Apple laptops and a nerd like myself also like the sleek and perfect design. But do you make money on it? A lot of the price-comparison services that we spend ad money on each and every day really like you to spend money on popular products. On multiple of our networks we provided differential pricing based on our calculated profit and RMA statistics. Take all your losses into your calculation when you look at your marketing spend on services like Adwords.
Gather data from your earlier experience both Google and internal systems.
How much does it cost to mess up a delivery? How many defective products comes from manufacturer A? You have to be able to answer these kind of questions to run an optimized and successful business. We always though that apple computers did have some hurdles after a couple of years in use. It turned out Apple Macbook White is one of the most durable laptops that we have ever sold! Even though the profit wasn’t that high it was still a great product to sell overall.
It really sounds like it takes a great amount of effort?
It sure does! We spend literally thousands of hours on getting this kind of data up and running and make it available for our employees. It costs a lot of money but remember the fact that if you don’t do this, then you most likely end up taking bad decision on an almost nonexistent basis knowledge.
What did we learn in the first 4 years? A lot! That is for sure.
We went from a small company with four employees to nearly forty employees today. The most important thing for us today is to focus on optimization. Not just in our production facility but in the whole workflow from purchase and finance to selling and after sales. We did create all software from scratch to ensure the workflow was as perfect as possible. We have created handheld scanning software, internal ERP software and an e-commerce platform. All tightly coupled together to ensure that we are in control and capable of making the best solutions. And we own our data and it is structured perfectly to be available for any business intelligence consultants.
But it took 4 years to get to this point… I would lie if I said we didn’t face any major issues during the process. It has been tough to design a production-site work in a new industry without any standards. Before you start designing your own e-commerce platform you have to ask yourself 2 important questions.
- Do I have any needs that existing e-commerce platforms cannot meet? Is it close to impossible to make the necessary changes to an existing platform?
- Will data integration between the warehouse management, finance and product information management be impossible? or does it take to much effort?
If you can say yes to these questions or maybe just one of them, then you might have a case. But be sure that your main target is to provide a better product than the existing market can deliver for your business.