E-commerce Tools to Help You Grow
The first wave of start-up e-commerce companies in the late 1990's often invested their capital in proprietary software on the assumption that this was a vital competitive advantage.
More often than not, similar functionality was available to license from third parties at a tiny fraction of the cost. When these start-ups ran out of money, as most of them did, the proprietary software was valueless.
Today, nearly every software tool necessary to form and grow an e-commerce company is available for license. Typically, there are competitive packages available from multiple vendors. Small companies enjoy attractive license pricing.
These tools have been developed with substantial investment and have been beta tested by the giants of the target industry. These tools were built for the giant players, since those players are the ones who can make the tool providers successful. The tools which are built for the giants are probably precisely the tools you need to compete successfully with the giants. Consider these examples from the e-publishing industry:
Digitization--to publish electronic books, they must be in multiple digital formats. Over the past ten years, more and more companies have launched digitization units, quality of performance has dramatically improved and costs have dramatically decreased. The biggest publishers use third parties for this purpose.
Maintaining files and file distribution--files have to be “housed” somewhere. Each e-tailer has its own requirements for loading files, incorporating metadata (product descriptions, territory, price) and making changes (like pricing). Large print distributors like Ingram have built e-book distribution equivalent services that are far more cost-effective and reliable than doing it yourself. Other companies are building out data asset management systems which would be prohibitively expensive to build internally.
Royalty tracking--the myriad of e-tailers each report sales in different formats at different times from different sources. Publishers need to account to authors. A licensed royalty package like MetaComet can be the difference between a team of back-office people not getting the work done accurately or on time and a streamlined team producing accurate and timely reporting.
Piracy--enforcement against digital pirates is a huge problem in e-publishing, getting bigger by the quarter. Traditional techniques--including specialized lawyers--are wildly expensive and not particularly effective. Digital services like Attributor are both affordable and highly effective.
As a small company growing rapidly, you may not recognize the internal inefficiency of “do it yourself” until you start to enjoy the benefits of licensing these software tools. You will also never grow to your potential without the assistance of these tools.
Every time someone suggests you “build this capability,” stop and consider whether a comparable capability is already available in the marketplace.
Chances are that it will cost less than 10% the price of doing it yourself, will integrate into your current business practices much faster, will perform much better, will make you fully competitive with the giants in your field, and will be upgraded continuously by the vendor at its expense - not yours.
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