Month 2000, Technology Corner
by Rob Hirschfeld

Why is eCommerce so hard?

I recently heard that over 80% of all business-to-business (B2B) electronic transactions have at least one manual step. This means that most orders placed electronically are confirmed by fax or invoiced with paper. In other cases, complex orders typically require interactive human configuration or follow-up. Manual steps are not an eCommerce failure, they just illustrate that eCommerce is still hard to do.

The bottom line is that falling short of 100% electronic does ruin eCommerce. Many businesses reap the low hanging fruit of on-line commerce by adjusting their expectations to accept a certain level of manual handling. This means that electronic transactions supplement or enrich traditional business processes rather than eliminate them.

There are a wealth of relatively easy and highly effective eCommerce solutions for businesses that lower their expectations. These solutions for simplified eCommerce focus on the front-end of the transaction and leave all the billing, customers’ service, and fulfillment remain with traditional channels. This approach can apply to both consumer and business markets. The consumer solutions deliver a products mall or shopping cart service and the business solutions provide exchanges or brokerages.

Business to Consumer (B2C) Simplified

These simplified consumer eCommerce services go by names like web store, eCommerce service provider (ESP), shopping cart, or eStorefronts. They make money by either charging a transaction fee (from 3 to 10%) or a monthly rent. Monthly rents are usually based on number of items on the list and range from $50 to $1000. These services are now commodities and widely available from both Internet sources (web hosts and ESPs) and brick-and-mortar sources (banks and phone companies).

A virtual store is a just like a real store. There are places for you to display merchandise, set prices, give shopping carts for customers, and a place to checkout and pay. It can take anywhere from hours to days to setup a store. Naturally, it takes longer to stock stores with more items or with detailed descriptions and pictures for each item.

Each store provider (you could think of them as a landlord) will start you with an empty store (known as a template). Some vendors offer a wide range of templates and options while some offer relatively few. Templates let you get started quickly, but may limit your ability to customize once you are established. Just like in the physical world, you can have multiple stores if you are willing to suffer multi-site management headaches.

Business to Business (B2B) Simplified

The business to business (B2B) side of eCommerce has not progressed as far as the consumer markets because they are more complex. The simple eCommerce solutions for this market fall into some basic categories:

Exchanges where vendors can target specific markets. Exchanges are like virtual malls and many use the same tools as the B2C shopping carts described above. In fact, many several self-proclaimed B2B exchanges are dressed up B2C sites.
Bid sites let buyers post requests for goods and services to a worldwide audience. Some bid sites even let sellers post offers looking for buyers. B2B bid sites often mirror and partner with the large B2C bid sites like eBay.
Brokerages mediate transactions for commodity goods. Some online brokerages have grown from traditional trading markets and work on the same principle as NASDAQ and other electronic market places.
ERP Vendor several software vendors are integrating their products into captive exchanges and bid sites. This approach lets vendors provide online transactions linked to ERP software with minimal impacts to their customers’ operation.

Simplified B2B eCommerce is too complex topic to cover in more detail this month. We will further explore the B2B solutions a future Technology Corner.

Success still takes effort

Even simplified eCommerce still has risks and you must cover the basics in order to succeed. Take time to review some items discussed in April 2000’s Technology Corner. Specifically:

1. Be prepared to respond to orders and requests (especially by email)

2. Market and advertise your site

3. Keep the content up to date

While simpler eCommerce solutions make it easier to step into online transactions than ever before, you still need to make the solutions work for you.

Sidebar: Looking for a B2C starting place?

There are hundreds of options out on the Internet. Try searching for shopping cart, mall, or eCommerce service provider. Here are three in my backyard: www.1esp.com, www.hibernia.com, and www.bellsouth.net/.

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