Common e-commerce pitfalls

Mistakes at the planning stage of an e-commerce project can reduce its chances of success. Here are some of the key issues you need to consider when selling online.

Set realistic targets

It's important to set measurable, achievable goals:

• Set clear goals - for example, to bring in new business or cut the cost of each sale.
• Agree specific, measurable objectives such as a percentage increase in sales or new customers.
• Ensure your targets are realistic and achievable.

Have a clear business focus

Make sure your e-commerce strategy is line with your overall business strategy:

• Pursue possibilities offered by e-commerce, but don't lose your focus on what your business is actually about.
• Understand how e-commerce will integrate with your overall business objectives. Will it increase sales or improve margins? Have a clear view on where it will add value.
• If you find that e-commerce is creating conflicts within your operation, re-examine your goals and rethink how e-commerce can best fit into your business.

Don't overlook the hidden costs

Take note of all the costs involved:

• Look at the total cost of ownership, including hardware, software, hosting, training, services, maintenance and support, upgrades, marketing and communications, and administration.
• Understand the effect of increased sales - how are you going to process and dispatch orders? Will you have the capacity if sales take off or will you need to invest in additional resources or staff?
• Understand your postage and shipping costs - identify where you will ship to and where you won't. Have a clear pricing policy for shipping - 'Free postage' is great, but only to certain locations.
• Be realistic about likely costs from the start and ensure you keep your budget under control.
• Understand the cost of customer returns, especially if you are offering free returns.
• Keep a close watch on online marketing costs. Every sale will include some costs from online marketing, monitor these costs to ensure the profitability of each of your product lines,

Consider the site specification

Use a specification to ensure the new system will be fit for purpose:

• Draw up a site specification identifying what you are trying to achieve and how various components of the site contribute to this.
• Build reliability and scalability into the solution from the start to ensure your site can grow in line with your business.
• Make your website simple to update so you can add content quickly and easily.
• Don't view your e-commerce solution in isolation. Ensure you integrate it with your main corporate systems and overall IT strategy.