How Much Infrastructure Does Your Store Need

in·fra·struc·ture n (1927) the underlying foundation or basic framework (as of a system or organization)

A lady who wants to sell rocks, fossils, and jewelry over the Internet sent me this e-mail. She is balking at development prices.

"I have been talking to G___ I___, a Web design company that works with rock, fossil and mineral dealers. They have given me a breakdown of prices, which frankly, looks better.... I don't think their service includes a software program or shopping cart. The customer would simply e mail or call our 800 number. I realize that may not be as good, but could I start out without it?"

She raises the three important questions about infrastructure:

1. How much infrastructure do I need now?
2. How much infrastructure do I need to do the job right?
3. How much can I afford to spend on infrastructure?

I like to think of infrastructure in the sense of systems. What systems are necessary to keep a person alive in a vegetative state? We think immediately of heart and lungs (circulatory and pulmonary systems) and a brain (nervous system). What about the ability to rid the body of toxins (excretory system)? However, to get up and do something useful and productive, and to sustain life indefinitely, you need functional skeletal, muscular, digestive, and reproductive systems, and many others.

Let's look at some of the systems needed to operate an online store:

Setting up an overall system to sell products directly over the Internet is considerably more difficult than developing Web pages which tell about your business and its products.

At the very minimum you need to develop a marketing plan to bring people to your store, a merchant credit card account (for US merchants), an SSL secure server, Web pages displaying your products, a shopping cart system, a secure ordering system, and a secure order retrieval system.

Most of the systems listed above you'll need, but you don't necessarily need them automated. The smallest stores can get away with simple manual systems for order tracking, packing, shipping, purchasing, and accounting.

No, not unless you are selling products which you can deliver instantly, such as entertainment, information, or software. For our Web Commerce Today Research Room, for example, you want to find out answers to your information questions now, so we've implemented a real-time credit card authorization system. For hard products, such as clothing or CDs you can process the credit card when you're ready to ship. Though it's now getting easier, setting up real-time credit card authorization still involves a level of expense and hassle that you want to avoid, if possible. Unless you can guarantee immediate shipping from inventory, you may not want to process your customer's card until you're ready to ship. The US Department of Commerce has rather strict laws on these matters.

If so, then you probably have many of these systems set up already. How easy will it be to integrate your Web order-taking system with these existing systems? If you don't have the systems set up, you'll need many of them to operate your business. Carefully plan these systems to be able to integrate (either immediately or eventually) with your Web order-taking system.

If you are just starting up a business, or currently have a rather small business, it might be a good idea to put off spending a great deal of money setting up all of the systems right away. Rather, plan to reinvest the income that your store generates into developing and gradually automating the additional systems. Some online stores struggle from having invested more than is justified by the resulting sales.

However, if you plan to spend a significant amount of money promoting your online store with banner ads, affiliate programs, and the like, then you'll need to build these systems ahead of time so you'll be ready to handle a larger volume of sales.

In the spring of 1998, many of the online store technologies are new and will be evolving rapidly over the next couple of years. To implement some systems today you'll need to have a programmer write custom code to integrate your order-taking system with others. If you can, it might be a good idea to put off integrating all your systems until you can get a better feel for precisely what you'll need. Large, existing mail order businesses will need to plan integration carefully and implement a good bit of it up front. Smaller businesses can afford to wait on some of those decisions.

But as you are choosing a store-building system, make sure you ask the software developers how to integrate the systems most important to your business. Plan ahead, since selecting the right store-building software for your business is one of your most vital decisions, and one of the most expensive to undo if you made a mistake.

Affiliate Systems. Amazon.com has had a well-designed affiliate program for the last year, only in the last few months have such systems been available "off-the-shelf." Some are now being built in to the store-building software itself for no extra charge (e.g., ShopSite Pro 3.3+ and ViaWeb 4.0+). It can cost in the range of $2,500 to $25,000 to have third party vendors set up an affiliate system for you.

Real-Time Credit Card Authorization. Once you have a merchant credit card account expect to spend $500 to $1,000 or more to implement real-time authorization on your site.

Accounting Systems. If you use a popular accounting system, some third party company may have already written a program to patch it to your order taking system. Otherwise, you'll have to do this yourself. Some order-taking systems allow you to download a tab-delimited order file. For smaller companies it may be relatively easy and inexpensive to have a programmer write a simple macro file in Microsoft Excel which will convert the data to a format that you can import into your accounting system. You might also contact the accounting software developers and ask them if they have any conversion programs available.

Inventory Systems. Inventory systems may or may not be part of your accounting system. But automating your inventory with your online catalog, so that out-of-stock items are clearly marked or removed from view, is pretty tricky, and expensive. Higher end store building software such as IBM, Pandesic, iCat and others allow you ways to do this, but it may involve a real-time link to your inventory data, or daily updating of an online inventory file to make this work well.

Intershop Online has an inventory system built into its database structure, but you may have to do some customization to make it fit your own needs. One very attractive package for smaller businesses that integrates nearly all necessary systems is Dydacomp's Mail Order Manager which now has a Web store module which can help you synchronize your online catalog with your in-house inventory files. (Read our brief review in Web Commerce Today, Issue 7, February 15, 1998.) http://www.wilsonweb.com/wct1/issue7.htm

Integrating all your systems with you online order-taking system can be expensive.

1. Research your store-building software very carefully to see how you can integrate systems in the future.
2. Unless you are a large company, begin with the basic systems, and then begin to integrate other systems as your store revenues warrant it.