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HOW TO AVOID ECOMMERCE STICKER SHOCK
By Marc Kramer
"Web Sight"
marc@kramercommunications.com
Last week, I wrote about the importance of seeking out small quality service providers over large companies who provide inadequate and impersonal service. Today, I am again promoting the use of small companies over large when it comes to developing an e-commerce web site for small to medium size businesses.
Because the Internet has become so popular and the demand for technology development skills is so great, you have to spend a lot of time researching and interviewing developers. If you don't do that you will probably give up on your idea or pay out a lot of money unnecessarily. Here are some of the responses you are going to get when you go shopping from firms that have 100 or more employees.
A large national company received a respond to proposal (RFP) inquiry from one of my clients. The company was told that the business was a startup funded by a group of private investors. The RFP laid out the number of pages and functionality the client wanted on the site. The reader was briefed on what type of software and hardware the client owned and the businesses marketing strategy.
One company's response was that my client would have to pay $25,000 to $50,000 for a one to two day seminar to discuss how the web site would be developed, marketed and launched.
A large regional company told us that if they had to develop the web site at their offices they would charge an additional 13 percent on top of the project price. This is something I have never heard of before and I have been dealing with IT companies for 10 years.
Another company said they would only take the assignment on if they could send three people for two weeks at a cost of $10,000 to $15,000 to study the project. My client declined these offers.
To be fair using a smaller developer isn't right for everyone. If you are Wall Mart, the Gap or Macys you need a large company that has tremendous computer programming depth and experience. The linking together warehouses and distribution centers spread out all over the United States and tying them in with elaborate accounting systems that are housed on mainframe computers is a massive undertaking. If you don't know what I am talking about then you don't need a large developer.
The problem with large firms is that their overhead is so great and the cost of their personnel so high that they can't afford to work with small companies. When I was a partner at USWeb, a worldwide Internet developer, the policy was not to take any projects that were less an $200,000 and would grow to a least $1 million over the course of 12 to 18 months. This was a radical change for me from running a small 25 person company that was happy to get $50,000 to $100,000 projects that would grow to $500,000 or more over the course of a year.
Before you develop an electronic commerce web site I would suggest reading "Net Success" by Christina Ford Haylock and Len Muscarella and published by Adams Media is the best book I have read on what it takes to develop a successful electronic commerce business. The authors walk a novice through the need to develop and implement both a technology and marketing plan and to how to outsource the various functions of development. The book is easy to read and the writers are experienced practitioners.
When evaluating a developer ask them how many electronic commerce sites they have developed and visit those sites. Don't use anyone who hasn't been involved in at least three e-commerce sites and make sure you visit and use those sites.
Finally, you should be able to get a quality site developed for $35,000 to $150,000 depending on the number of products and functionality you are looking for.