A presentation on building an Ecommerce site targeted at MBA students - an overview of the business processes and constituents involved in Ecommerce site development.

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ECOMMERCE
BUILDING E-COMMERCE SITES IN 2013

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LEE DRAKE, CEO, OS-CUBED INC.
• CONTACT INFO: LDRAKE@OS-CUBED.COM ∙ @LEEDRAKE ∙ LINKEDIN.COM/IN/LEEDRAKE
• BUSINESS: OS-CUBED, INC. ( WWW.OS-CUBED.COM )
• THIS PRESENTATION: HTTP://BIT.LY/OS3COMMERCE

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TYPES OF ECOMMERCE SITES
• B2B – BUSINESS TO BUSINESS
• B2C – BUSINESS TO CONSUMER
• B2G – BUSINESS TO GOVERNMENT
• B2D – BUSINESS TO DISTRIBUTION CHANNEL

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B2B – BUSINESS TO BUSINESS SITES
• FOCUSED ON MARKETING AND CUSTOMER SERVICE
• TYPICALLY ENABLED FOR SETTING INDIVIDUAL DISCOUNT LEVELS BY CLIENT
• CREDIT CARD AS WELL AS PO AND NET TERMS
• MAY INTEGRATE DIRECTLY WITH ERP SYSTEM TO ADD ORDERS TO WORKFLOW
• SELLING TO THE BUYER AND TO THE CONSUMER
• PROVIDED AS A CUSTOMER SERVICE OPTION

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B2C SITES
• MUST BE SEO FOCUSED TO DRAW IN CLIENTS FROM SEARCH ENGINES
• GOING FOR VOLUME
• ADD-ON SALES IMPORTANT
• MAY TAKE A LOSS ON ONE PRODUCT LINE AND MAKE UP FOR IT BY SELLING ACCESSORIES,
WARRANTIES AND OTHER PLANS
• ALL ABOUT PRICE

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B2G – BUSINESS TO GOVERNMENT
• CONTRACT ORIENTED
• PROVIDED FOR CORPORATE BUYERS
• TYPICALLY CONCENTRATES ON GOVERNMENT DEBIT CARD SPENDING
• GSA CONTRACTS PREDOMINANTLY
• MAY HANDLE MORE THAN ONE CONTRACT, POTENTIALLY AT DIFFERENT DISCOUNT RATES

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B2D – BUSINESS TO DISTRIBUTION CHANNEL
• 2 SUBTYPES –
• MANUFACTURER TO DISTRIBUTOR OR SALES NETWORK
• DISTRIBUTOR TO RESELLER
• LARGE NUMBERS OF ITEMS IN THE CATALOG – MAY WELL BE COMING FROM MORE THAN ONE
MANUFACTURER
• ORDERS ARE MANY TIMES FOR LARGE QUANTITIES
• MUST BE INTEGRATED WITH STOCK STATUS ON THE BACK END

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B2C E-COMMERCE – THE SERVICE CONTINUUM
ECOMMERCE – FROM DEAD SIMPLE TO DOWNRIGHT COMPLICATED
• BASIC PLATFORMS – YAHOO STORES, EBAY, AMAZON RESELLER, SINGLE ITEM PAYPAL SITES, ETSY, ETC. –
• IMPLEMENTATION COSTS LESS THAN $10,000 (CAN BE LESS THAN $1000)
• LIMITED FUNCTIONALITY, SCALABILITY AND FLEXIBILITY
• CUSTOMIZABLE PLATFORMS USING PLUG-INS – MOST BASED ON A CMS SYSTEM
• MUCH MORE FLEXIBLE, SCALABLE AND FUNCTIONAL
• IMPLEMENTATIONS IN THE $10K - $250K RANGE
• LEVERAGE EXISTING CODE AND SERVICE PROVIDERS
• FULLY CUSTOMIZED ECOMMERCE
• $50,000 AND UP (AND BY UP I MEAN OVER $5M IN COSTS)
• DO WHATEVER YOU WANT
• HUGE INVESTMENT IN INFRASTRUCTURE AND OVERHEAD
• MUCH MORE SCALABLE

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OTHER ECOMMERCE MODELS
• AUCTION (TRADITIONAL BLIND AUCTION – EBAY)
• REVERSE AUCTION (USED BY A VENDOR TO GET THE LOWEST BID)
• QUALIFY AND QUOTE (GATHER INFORMATION NEEDED AND PROVIDE A CUSTOM QUOTE)
• MICRO-TRANSACTIONS (EARNING MONEY A TINY BIT AT A TIME)
• GAMING (USING GAMES TO SELL VIRTUAL AND ACTUAL PRODUCTS)
• SOFTWARE SALES AND LICENSING (SELLING SOFTWARE USING ECOMMERCE)

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WHAT MAKES UP AN ECOMMERCE SITE
• EVERY ECOMMERCE SITE CREATES A SALES FUNNEL
• THE SALES ARE WHAT DRIPS (OR HOPEFULY POURS) FROM THE SPIGOT AT THE BOTTOM OF THE
FUNNEL

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THE E-COMMERCE FUNNEL
General interest - contacts
Research and refine
Choose and compare
Shop
Buy
Retain
SEO and Marketing
Managed content
Shopping Cart
Payment solution
Order tracking
Customer service

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WHAT FEEDS THE FUNNEL
• ORGANIC SEARCH ENGINE TRAFFIC
• PAID ADVERTISING
• PAID SEARCH
• PAID CONTENT
• SOCIAL MEDIA
• PUBLIC RELATIONS

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WHAT IS THE ECOMMERCE SITE’S GOAL
• LET AS FEW PEOPLE EXIT THE FUNNEL AS POSSIBLE AT EACH STAGE
• CREATE NEW LEADS TO MARKET TO – NOT JUST SELL – MARKET
• ENGAGE CONSUMERS
• PROVIDE CUSTOMER SERVICE
• INFORM CONSUMERS

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BUDGET ELEMENTS
• SPECIFICATION
• RESEARCH
• PROTOTYPING
• UI SURVEYS
• DESIGN
• PROGRAMMING
• DATABASE WORK
• INTEGRATION
• HOSTING
• CONTENT CREATION
• GRAPHICS
• PHOTOGRAPHY
• MARKETING AND SALES
• CUSTOMER SERVICE
• TESTING
• MULTIPLE PLATFORM INTERFACES

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A TYPICAL BUDGET – LARGE ECOMMERCE SITE

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TASK BREAKOUT FOR ONE TASK

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WHO IS INVOLVED IN BUILDING A SITE
• MARKETING
• SALES
• CUSTOMER SERVICE
• ORDER PROCESSING
• MANUFACTURING
• ENTERPRISE RESOURCE PLANNING
• IT
• SOFTWARE DEVELOPMENT
• SHIPPING AND RECEIVING
• INVENTORY MANAGEMENT AND CONTROL
• HOSTING COMPANY
• MANAGEMENT
• SECURITY ASSESSOR
• INSURANCE AND LIABILITY PROVIDER
• OTHERS AS NEEDED

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MOST COSTLY PARTS OF SITE DEVELOPMENT
• DESIGN CAN BE VERY COSTLY
• CUSTOMIZATION OF UI/CART EXPERIENCE
• CREATION OF INVENTORY AND MAINTENANCE OF SAME
• INTEGRATION WITH BACK END SYSTEMS
• ADMINISTRATIVE, PROJECT MANAGEMENT AND PLANNING COSTS
• MARKET RESEARCH AND DEVELOPMENT
• PAID DEMAND GENERATION ACTIVITIES
• ONGOING MAINTENANCE AND UPDATES

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ECOMMERCE SWOT
• STRENGTHS
• ENGAGES CONSUMERS WITH “INSTANT BUY” CAPABILITIES
• CREATES A STRONG LINK BETWEEN MARKETING AND SALES STATISTICS
• ENABLES PRICING, AVAILABILITY ETC TO RESPOND DIRECTLY AND INSTANTLY TO MARKET PRESSURE
• REDUCES THE COST OF ROLLING OUT NEW PRODUCTS
• INCREASES CUSTOMER ENGAGEMENT
• CREATES STRONG DRIVE FOR ADD-ON SALES

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ECOMMERCE SWOT
• WEAKNESSES
• ENTERING THE ONLINE MARKET REQUIRES YOU TO BE COMPETITIVE GLOBALLY AND HAVE THE HIGHEST
LEVELS OF CUSTOMER SERVICE IN PLACE
• REVIEWS AND NEGATIVE COMMENTS CAN SPREAD QUICKLY AND DAMAGE CUSTOMER BRAND – MUST
STAY ON TOP OF BOTH CUSTOMER SERVICE AND MEDIA RESPONSE
• COST OF ENTRY CAN BE HIGH – YOU MUST SELL A LOT TO RECOVER INITIAL LABOR AND DOLLAR
INVESTMENT
• DOING IT POORLY CAN BE WORSE THAN NOT DOING IT AT ALL
• ONLINE MARKET MAKES IT EASY FOR CUSTOMERS TO COMPARISON SHOP
• REAL-TIME NATURE REQUIRES CONSTANT ATTENTION
• WEB CHANGE (NEW BROWSERS, TECHNOLOGIES, CAPABILITIES, COMPETITIVE ADVANTAGES ETC) REQUIRE
WEB DEVELOPMENT TO BE AN ONGOING NOT ONE-TIME EXPENSE

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ECOMMERCE SWOT
• OPPORTUNITIES
• FIRST TO MARKET ECOMMERCE SITES CAN CAPTURE MARKET SHARE SWIFTLY
• NEW CUSTOMER INFORMATION CAN BE USED TO IDENTIFY AND EXPLOIT NEW MARKETS
• RESPONSIVE MARKETING AND SALES CAN DRIVE NEW SALES OPPORTUNITES
• INTEGRATION WITH BACK END SYSTEMS CAN IMPROVE TRANSACTON TURN AROUND AND INCREASE
PRODUCTIVITY
• AUTOMATED PROCESSING AND SYSTEMS CAN KEEP CUSTOMER WELL INFORMED

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ECOMMMERCE SWOT
• THREATS
• BEING 2ND OR LATER TO MARKET REQUIRES SIGNIFICANT DIFFERENCE OR IMPROVEMENT FROM
EXISTING SITES TO OVERCOME FIRST-TO-MARKET
• LEARNING WEB TECHNOLOGIES AND HOW TO LEVERAGE THEM CAN BE DAUNTING – NOT KNOWING
THEM CAN BE DISASTROUS
• BIG PLAYERS CAN BE ALMOST IMPOSSIBLE TO COMPETE WITH (EVEN BY OTHER BIG PLAYERS) – YOU
ARE UNLIKELY TO BE THE NEXT E-BAY, THE NEXT AMAZON, THE NEXT STEAM
• COPY AND REFINE IS A NORMAL DEVELOPMENT STRATEGY
• YOUR BACKEND SYSTEMS MUST BE ABLE TO HANDLE THE FRONT END TRAFFIC, AND BE INTEGRATED

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GENERATING DEMAND
• PAID ADVERTISING
• PPC
• SYNDICATED CONTENT
• SEARCH
• PPI
• PLACEMENT ADS
• PARTNER ADVERTISING

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GENERATING DEMAND
• WORD OF MOUTH
• SOCIAL MEDIA
• BLOGGING FOR WORD OF MOUTH
• GENERATING WORD OF MOUTH REFERRALS THROUGH SALES PROCESSES
• TESTIMONIALS AND REVIEWS

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GENERATING DEMAND
• DRIP MARKETING – GENERATING NEW DEMAND FROM EXISTING CUSTOMERS
• TIMED SALES – CREATING EVENT DRIVEN SALES MECHANISMS
• CUSTOMER SERVICE DRIVEN SALES OPPORTUNITIES
• IMPROVEMENTS AND UPGRADES
• SERVICE RENEWALS

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CREATING ADD-ON SALES OPPORTUNITIES
• RELATED PRODUCTS
• RECOMMENDED PRODUCTS
• ACCESSORIES
• WARRANTIES AND SERVICE CONTRACTS
• EXPEDITED SHIPPING
• ADDITIONAL SERVICES OR CUSTOMIZATION
• TEND TO BE HIGHER MARGIN, NOT COMPARISON SHOPPED AS MAIN ITEM WILL BE

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SECURITY
• PCI COMPLIANCE
• IF YOU STORE, PROCESS OR TRANSMIT CARDHOLDER DATA YOU MUST BE PCI COMPLIANT
• PCI LEVEL 1 AUDIT REQUIRED
• DIFFERENCE BETWEEN AUDITS AND FIXES
• IMPORTANCE OF CARRYING ELECTRONIC LIABILITY INSURANCE
• REGULAR SCANNING AND AUDITING REQUIRED FOR ONGOING ASSURANCE

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SECURITY
• HIPAA COMPLIANCE
• ANY WEBSITE THAT STORES, TRANSMITS, OR COLLECTS PERSONALLY IDENTIFIABLE MEDICAL
INFORMATION
• STANDARDS ARE INCLUSIVE OF PRACTICES FOR PCI BUT HIGHER THAN PCI
• MUST CONTROL WHO HAS ACCESS AND RECORD/MAINTAIN RECORDS AND LOGS
• MUST RECEIVE HIPAA INFORMATION RELEASE FROM CLIENT
• MINIMIZING RISK IS ESSENTIAL AS PER-INCIDENT/PER-REVELATION FINES CAN BE ASTRONOMICAL

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ANALYTICS
MEASURING THE FUNNEL – YOU NEED TO UNDERSTAND THE TERMS
• VISITS
• PAGE VIEWS
• PAGES/VISIT
• BOUNCES
• UNIQUE VISITORS
• VISIT DURATION
• PERCENT NEW
• TRAFFIC SOURCES
• CONTENT AND SITE SPEED
• FREQUENCY, RECENCY, ENGAGEMENT
• TECH FACTORS:
PLATFORM, BROWSER, DEMOGRAPHICS, GEOGRAPHY
• MOBILE
• DESIGNING AND MONITORING ANALYTICS PIPELINES
• ANALYTICS FOR ADVERTISING RETURN ON INVESTMENT

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SOME LINKS
• WWW.OS-CUBED.COM
• WWW.TMTSAFETYPRODUCTS.COM
• HTTP://ENTREPRENEUR-BLOG.OS-CUBED.COM
• WWW.DOTNETNUKE.COM
• WWW.GOOGLE.COM/ANALYTICS
• WWW.GVCSHRM.ORG
• WWW.SPECTRACOMCORP.COM

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LEE DRAKE, CEO, OS-CUBED INC.
• CONTACT INFO: LDRAKE@OS-CUBED.COM ∙ @LEEDRAKE ∙ LINKEDIN.COM/IN/LEEDRAKE
• BUSINESS: OS-CUBED, INC. ( WWW.OS-CUBED.COM )
• THIS PRESENTATION: HTTP://BIT.LY/OS3COMMERCE