How to Choose the Right E-commerce System

When you decide to open an online store, you face a range

of options, from outsourcing everything to doing it all yourself. Choosing the software that will run your store is a complex process; and even if you don't plan to do it yourself you'll still need enough information to make informed choices. To help make up your mind, run through this summary of your choices, along with their advantages and drawbacks.

Build Your Own System

When you build your own online store, you have full control. You can customize each aspect of the site to optimize performance and to integrate with existing inventory, accounting, and other legacy systems. You can tinker with your store until you get it just the way you want it; and you can quickly change it to take advantage of emerging opportunities.

Several vendors offer tools that help you build a custom online store. Companies such as Microsoft and Adobe offer e-commerce toolkits that provide the technology and the development tools for building an e-commerce site. These toolkits include the basic software components that run an online store, software "hooks" that can link to databases or other back-end systems, and even their own programming languages.

If you plan to build an online store from the ground up, you must be prepared to do some very basic development, using your own code to stitch together the various database, tax, shipping, fulfillment, and page-serving modules that will make up the finished site. These are time-consuming jobs, and your store will take longer to build than an off-the-shelf system. Even a basic custom store will cost you at least $10,000, and many stores cost hundreds of thousands of dollars to build and maintain. The bottom line is that unless you have some very good reasons for building your own system, you're better off using an existing e-commerce tool. (For more, read Why Can't You Build Your Own Web Site?)

Buy an Existing System

Many vendors produce e-commerce packages that are suitable for a variety of business needs. By mixing and matching features within these packages, you can create a sophisticated e-commerce site in fairly short order.

Basic e-commerce systems usually offer prebuilt store templates or "wizards" that guide you through the setup process and help you get your store up and running. They also come with ready-to-use shopping cart software that stores your customers' purchases as they select them, calculates prices, collects a customer's information, and then submits credit card information to your bank. More advanced e-commerce systems let you import and publish existing product catalogs on the Web and tie your online store to a database or other systems.

You do give up some flexibility, both now and in the future, if you choose an off-the-shelf system. Many of these tools place strict limits on how you can customize your shopping cart, your catalog, and even the "look and feel" of your online store. Even so, most businesses find e-commerce software that meets their needs; and the fact that vendors provide service, support, and even systems-integration help is a major advantage. (For a detailed look at such services, read AllBusiness.com's The Scoop on Business Web Site Hosting Services.)

Partner with an E-commerce Provider

The fastest and easiest solution is to sign up with a service that builds and hosts your storefront for you. You don't need any hardware, software, or technical expertise of your own. In fact, all you need is a business name and a list of products. Some storefront providers charge monthly flat rates based on the number of items in your online catalog, while a few take a percentage of your sales. These services offer month-to-month e-commerce leases, and they handle all of the transaction processing, Web serving, backups, and so forth. Some e-commerce services will even set up a merchant account if you don't already have one.

E-commerce providers are the least expensive way to build an online store, but they're also the least flexible. Most providers offer a limited set of options for customizing your store, and you may find that all of the stores on a provider's site share the same basic look and feel. And while most providers are reputable businesses, some services could impose hidden charges or cut corners on security and reliability. Always do your homework, check a provider's background; and above all shop around before you settle on an e-commerce provider.