Minimize risk, expand capacity and reduce operational costs through advance planning
Often when we think about E-Commerce, we think about selling, advertising, marketing and design. While these are all critical to your E-Commerce success, equally important is getting your operations structure ready during your shopping cart development. Before you start your shopping cart project, consider the operational impact. Plan your Web store in a way that will fit within your business objectives and operational capacity.
Many times, the marketing team develops the Web store with no consideration for the business process. It is, after all, marketing and sales, isn’t it? We frequently get a call after the Web store is developed. The caller (either the Web developer or the person in charge of the Web store) wants to integrate the orders into NAV. Typically, the Web developer has told them how easy it is to integrate shopping carts into an ERP system.
Generally, “Easy” is easy to say, but can be difficult to do. Integration is easy if everyone is on the same page, but “the devil is in the details.” Web sites and stores tend to be tinker toys with any outcome possible, given enough time, money and talent. ERP systems are written and used by tens of thousands of businesses and have strict reporting guidelines. The meshing of the two can be challenging, but not as challenging as mixing your Web orders into your traditional orders. The new operational mix can be seriously challenging.
Customer Expectations Change
Many times E-Commerce success results in unintended consequences. For example, if you are an industrial products supplier, you may be familiar with the pallet or case level requirements of your customers. You have prearranged terms, freight, delivery schedules and order processing. Your typical sale may be multiple pallets of cases with a week lead-time for delivery with a price of multiple thousands of dollars. With a successful web store, your typical sale may be for one or two eaches of several products with a sale price of less than $100.00. Sure, your margin percentage is much higher, but so are your costs. Consider that it will take the same or more time to pick eaches of two products than to pick one pallet of two products. Your material handling equipment is different. Your shipping will be parcel rather than LTL or delivery. The customer’s expectations are different too. Web customers expect quick turn-around, perhaps next day or two-day delivery and are expecting the picking to occur today, not on your normal order turn around.
Do you have enough warehouse space to deal with the changes in order fulfillment? Perhaps you only sell Case lots to your regular customers. If your Web store sells eaches, you will have to have product in two different type pick faces. You will have to institute a break-bulk, replenishment system for the eaches. Do you have the warehouse staff and equipment to handle higher transaction volume and still maintain the customer service level your traditional customers require? Can they handle the higher expectations of the Web customer?
You are used to customers paying invoices within terms by ACH, check or credit card. Now, you will be accepting credit cards for much smaller transactions. Depending on your credit card setup (remember PCI compliance), you may have an issue when a Web customer returns product and you have to issue a credit for the return. How will you issue the credit if the credit card information is separate from your NAV system?
You are used to working with customers who know your products and will have technical questions related to commercial or industrial use. Are you prepared to answer phone, email or chat questions from hobbyists and do-it-yourself homeowners? Do you have the necessary staff? Does your staff have the technical skill, time, patience and attention to deal with chat and email responses? Web buyers tend to be impatient and have no loyalty to keep them waiting for answers. Are you prepared for the legal liability or reputation damage from improper use of your product? There are a myriad of technical and budgetary issues.
Integration & Control
Okay, you have thought about all the operation issues. What about integrating your Web store into NAV (remember, it’s Easy?). Most Web developers consider their Web store to be the business driver. What they haven’t discussed in the sales process is which product is the master and which is the subsidiary. Of course, their thought is that the Web store is the master. I am certain your CFO, warehouse staff and others will have a different opinion. This is the start of some difficult issues and questions that you should answer before you negotiate the Web store contract. Here is a partial list.
There are integrated shopping carts already working with NAV that can minimize the questions and issues you have to resolve. Some work with popular shopping carts like Magento or Big Commerce, others have proprietary shopping carts. Some offer ties to Amazon and EBay. These range in price from relatively inexpensive to pricy – but of course pricy is a relative term.
Look at the pre-integrated Web stores available for NAV to minimize risk, expand capacity and reduce operational costs. Finally, I hope that your success doesn’t out-pace your capacity. Best of Luck in your Web business.
By Ron Ketterling
President and Founder,
Business Automation Specialists
of Minnesota, Inc.
NAV User Group Magazine