What ecommerce solution does your business need?
If you really want to grow your business to an enterprise business tier you will find a way. If you don't, you'll find an excuse
We all want to grow our business, but it helps to understand the inception, and the expansion of an online business. It all starts as a roller coaster ride.
If you've ever built a company before and took that roller coaster ride, it won't be as scary or frustrating compared to doing it
for the first time and without a specific roadmap. Most successful businesses take years sometimes even decades to transition between business types when they are doing it for the first time. Now even if you've built a business before chances are you never got to Global business (Otherwise you wouldn't be reading this).
|BUSINESS TYPE||ANNUAL REVENUE|
Commerce Technology Business Type
|TECHNOLOGY TYPE||NAME||SETUP||ANNUAL FEES|
|STARTUP||BIGCOMMERCE||$1000 - $5000||$500 - $3,500|
|STARTUP||YAHOO||$1000 - $3000||$500- $5,000|
|STARTUP||SHOPIFY||$1000 - $3000||$500 - $2,000|
|STARTUP||MAGENTO GO||$1000 - $5000||$1,000 - $5,000|
|SMALL BUSINESS||3DCART||$1000 - $5000||$1,000 - $2,000|
|SMALL BUSINESS||VOLUSION||$1000 - $5000||$1000 - $10,000|
|MID-SIZE BUSINESS||MAGENTO ENTERPRISE||$15K - $40K||$15,000+|
|MID-SIZE BUSINESS||SHOPPING CART ELITE||$6K - $15K||$4,000 - $12,000|
|ENTERPRISE BUSINESS||SAP HYBRIDS||$500,000+||$250,000+|
|GLOBAL BUSINESS||IBM WEBSPHERE||$500,000+||$250,000+|
|GLOBAL BUSINESS||ATG ORACLE||$500,000+||$250,000+|
Based on your current revenue, and your future revenue goals you can see what kind of technology you are using today, or may need to start using. If you are a mid-size business, and you are using Startup technology, you are long overdue for an upgrade. If you are just starting out, read this document carefully, because you do not want to be stuck using Startup technology unless you have no other choice.
Small Business At A Glance
- IDC Defines small businesses as firms with less than 100 employees and midsize businesses as firms with 100 to 999 employees; small and midsize businesses (SMB) are classified as firms with less than 1,000 employees
- Does not include home-based businesses in its definition of small businesses.
- Defines small-office/home-offices (SOHOs) as small businesses with less than
10 employees that have income-generating home offices
Represent more than 97.7% of all employers
Source: SBA, Small Business by the Numbers, June 2004
- Employ half of all private-sector workers and 39% of workers in high-tech jobs
- Provide 60% to 80% of the net new jobs annually
- Pay 44.3% of total U.S. private payroll
- Produce more than 50% of nonfarm private gross domestic product, or a GDP of roughly $6 trillion
- Are 3% franchises
97% of all U.S. exporters of goods are small businesses
Source: SBA, Small Business by the Numbers, June 2004
There are roughly 130 million U.S. workers employed by small businesses
Source: SBA, Small Business Economic Indicators for 2003, August 2004
Large firms 1,000+ employees 8,000
Midsize businesses 100-999 employees 93,000
Small businesses <100 employees 8.1 MM
Small Businesses Account For
- 52.6% of all retail sales
- 46.8% of all wholesale sales
- 24.8% of all manufacturing sales
Source: SBA, Small Business Economic Indicators for 2003, August 2004
Small Businesses Produce
- 13 to 14 more patents per employee than large patenting firms
Source: SBA, Small Business by the Numbers, June 2004 2005 Small Business Breakdown by Numbers of Employees: Source: IDC, U.S. Small Business 2005-2009 Forecast, 2005
- The Average Annual Revenue Of A Small Business Is $3. 6 Million
SMALL BUSINESS ANNUAL REVENUE
Source: IDC, Web Site Development in U.S. Small Businesses, June 2004 More than 48% of small businesses increased their annual revenues in 2003. Source: Article from Entrepreneur
THE AVERAGE ANNUAL REVENUE OF A SMALL BUSINESS WITH A WEBSITE IS
2005 Small Business Breakdown
By Number Of Employees
Source: IDC, U.S. Small Business 2005-2009 Forecast, 2005
- The Average Annual Revenue Of A Small Business Is $3.6 Million
- The Average Annual Revenue Of A Small Business With A Website Is $5.03 Million
Small Business Annual Revenue
Source: IDC, Web Site Development in U.S. Small Businesses, June 2004
More Than 40% Of Small Businesses Increased Their Annual Revenues In 2003
Source: Article From Entrepreneur
Choose Your Business Type
Are You A Startup Or A Small/mid-size Business? How Much Revenue Are You Grossing Per Month
Gross Revenue Last Month X 12 Months = Annual Revenue
|TECHNOLOGY TYPE||ANNUAL REVENUE|
|STARTUP||$0 - $200K|
|SMALL BUSINESS||$200K - $1MM|
|MID-SIZE BUSINESS||$1MM - $20MM|
|ENTERPRISE BUSINESS||$20MM - $100MM|
What Business Type Is Your Ecommerce Solution?
(If you are a Startup / Small business you may need to answer these questions after you finish reading the document)
- For example if you are doing $200,000 per year, you should be using Small business ecommerce technology, if you are doing $1,000,000 per year and want to grow you should be considering mid-size business technology.
- If you feel your software is holding you back from growing, chances are you are using Startup or Small business technology because Mid-size business technology will have more than enough tools in place for you to grow to $20,000,000 per year and you will know it.
Startup Journey $0 - $200K Annual Sales
Assuming you never went through all the business types, getting into a Startup is simple, all you have to do is say yes and start your online business. However, ninety percent of businesses fail to get past the Startup stage. In fact if you ever get to Small business for the first time you can consider yourself successful because there are hundreds of thousands of businesses that didn't make it that far.
Getting past Startup to Small business is VERY HARD because when you've got 10,000 people trying to do the same thing, you need to make sure you are not 10,001. Some people get to Small business by luck because they were in the right place at the right time, and some planned it all out. If you are a Startup right now, we recommend that before you try to get any bigger to embrace the following books and courses
These books will help you get into the right mindset to help you speed your way through Startup and into Small business. Don't be afraid to fail, if you have to fail do it fast and move on to the next project. If you are not failing, than you are not working.
It is crucial to learn everything about moving through the business types regardless of which business type you are in today because it only gets harder as you go up in business types, and you have less and less time to sit and learn. If you're prepared and you know what it takes, you will not need to take risks. You just have to figure out how to get there, there is always a way to get there. As Thomas Edison said, I have not failed. I've just found 10,000 ways that won't work.
Trying to grow to Small business using Startup technology is as painful as watching paint dry. It's hard as is to get your business into Small business, but with Startup technology your business will grow slower than a herd of snails traveling through peanut butter, that is honestly how it will feel.
If you are comparing Startup and Small business technology you will notice that they all have similar core features (at least on paper). If you never used Startup, you will not know all the pain points because you haven't experienced them, but believe me they are THERE! You will start noticing all of them once you actually start running your business.
Bottom line is Startup technology just doesn't work, you will experience a roller coaster ride downhill at 90 degrees, and you will want to quit. Typical experiences that you will have is little to no sales, no marketing automation, poor integrations between software that you need to use daily (Ex: UPS shipping), wrong reports, checkout failing, unnecessary refunds, wrong inventory, overselling, underselling, customers complaining due to technology, manual data entry, manual inventory loading, manual tracking entry, manual EVERYTHING, etc.
We call this the LABOR INTENSIVE, SLEEP DEPRIVING, DAILY GRIND, and it will be full of NON-SENSE MANUAL TASKS which will take 110% of your time away from growing your business, and you will be stuck running it at below minimum wage.
We personally recommend that you stay away from startup technology unless you have no other choice. Also keep in mind that we are not saying you can't succeed with startup technology, there are hundreds of companies who have succeeded, but these hundreds of successful companies is a total sum from tens of thousands of companies that failed, and chances are not in your favor, so why take this risk?
Here are a few articles we wrote about startup vs. Small business technology
Small Business Journey $200K - $1M
Congratulations you made it past Startup and you are about to experience a whole new daily grind that you did not expect. When you are a small business, you will be tested for your leadership skills. You will be experiencing break even to moderate profits, you will be hiring staff to help you, and you will be doing some kind of marketing, and you will be trying to find ways to grow your business. Once you are a small business there are two main factors that will result in your success.
Depending on your profit margins, your prior business experience, your strategic planning and your leadership skills, this will decide how long you will remain a small business. Majority of businesses get stuck as a small business forever for the reasons stated above, others quickly surpass small business and get into mid-size business while still using Startup or Small business technology.
- Market like crazy while staying break even or profitable
- Hire a lot of help while staying break even or profitable
- Help should translate into more revenue, the more people you hire the more revenue you should be making
Small Business Technology:
Small business technology will keep your million dollar business sustained at break-even or slightly profitable point. The problem will occur when you grow your small business into mid-size business. You will risk losing money because you're hiring more people, but it will not translate into more profit. Small business technology is not designed around automation, so instead of getting technology to automate tasks, you will be hiring people to do those manual tasks and it will quickly get out of control.
Small business ecommerce solutions fail to automate, systemize and streamline your marketing and operations. You will need a person to compile inventory daily and merge it (3 hours/day), manually ship (1 hour/ day), manually process orders (1 hour/day), manually audit data entry (full time), manually submit to shopping channels (4 hours/day), etc. Some businesses have 10-20 staff members on the team doing a one person job. If you compare software even at $1,000 per month versus supporting 20 staff members at $50,000 per month payroll, then you will quickly see the value of having Mid-size business technology in place from the beginning.
Small business ecommerce technology will usually refer you to third party software app partners to compensate for the lack of features in their own software. Third party app partners usually lack features due to incompatibility in the infrastructure (Ex: Software A supports discount per line item, while Software B only supports discount per order and not line item). Even if the two softwares are working as you expect, eventually one of the software providers will do an upgrade to their software and it will make the two softwares incompatible.
You need to understand what software is in simple English. Software is an idea that was created by an author, and translated into a story on paper, and then translated by a developer into a language that a computer can understand. If the author and the translator worked together to make it perfect, then you will have a polished piece of software that you can use. If you have the same author working with the same developer (translator) to make two softwares work together then it is possible that both softwares will work well.
What always fails is when you take two software, written by two different authors, translated by two different developers and try to make them work together. This is like taking two finished well written books, and trying to merge them together into one book. Then if you one of the authors (software providers) does a software upgrade, this is like having one of the authors of one of the books decide to rewrite it after the two books are already merged. You are guaranteed to experience a fiasco, this is when you will be playing the cat and mouse game between the two software providers where each software provider will be blaming each other for the reason the integration stopped working. Neither of the software providers will be able to nail down the problem on their side and in most cases you will never get it fixed. So all the time and money invested to make the two software work will go to waste. When comparing the cost of Small business technology plus third party software app partners that you have to buy, versus paying for Mid-size business technology, it will be cheaper to buy Mid-size business technology and not have all the headaches. Another reason Small business ecommerce solutions fail to grow your sales is due to poor marketing tools. For example, if you are a small business, chances are you can submit all your products to eBay, Amazon, Google Shopping, etc. and quadruple your sales overnight. But you will experience three problems that will quickly make your business fail:
- How are you going to handle all these new sales? If you hire more people to manually process the orders, you will risk losing profits because it is not sustainable to keep hiring new staff to do manual labor.
- How are you going to synchronize your inventory between all the shopping channels and your website? If you only have 5 in stock, and you sell four items on eBay, fiver items on Amazon, and two items on your website, which five from inventory are you going to ship? If you keep cancelling orders on eBay or Amazon you will lose your account, if you keep cancelling orders on Google Shopping you will lose the money you spent advertising those items. You will lose payroll from customer support to do the non-sense work, and ultimately fail to grow your customer base as you are guaranteed unhappy customers.
- How much time and money are you going to spend on third party software app partners to address the two problems above? Sure you can sign up for a Mid-size business technology such as channel advisor that integrates with your Small business ecommerce solution, but the integrations is not compatible, and you will have to keep doing inventory synchronization manually between the two systems. Not only will you pay thousands of dollars for this technology and payroll to support it, but it will not scale your business to mid-size business.
Trying to using Small business technology to become a sustainable Mid-size business is painful and not practical. In addition, trying to take shortcuts by doing incompatible integrations between Small business technology and Mid-size business technology always fails, and you will quickly fnd yourself wasting time and money trying to make it work.
Usually the startup price difference between Small business and Mid-size business technology is substantial, but fortunately Shopping Cart Elite has created Enterprise business technology at Small Business pricing so you can have the best of all worlds.
Mid-size / Enterprise Business Journey $1M - $100M
If you have the drive to succeed, getting passed through Small business and into the Mid-Size Business is a breeze. However, getting into Midsize business is not that simple as it requires the right kind of technology which is usually not within your fnancial reach. In addition, it requires marketing knowledge, business planning, leadership, automated operations, and understanding how to use the technology in order surpass to Mid-size business.
If you try to enter Mid-size business without being prepared you will quickly find yourself making more sales, but losing all the profits to operations and marketing.
Many businesses who get lured by open source software that claim to be Enterprise business Technology (Ex: Magento) fail to realize the true cost of Mid-size business technology.
For example, Magento advertises to be free, but if you want the enterprise version they will charge $12,000 the first year, and $6,000 thereafter. In addition, Magento requires a developer to upkeep it costing another $60,000 per year in upkeep fees. What's worse is Magento Enterprise is not a true Mid-size business technology it is Small business technology at best. Enterprise business, Midsize Business and Small Business technology software vendors all integrate with Magento Enterprise, therefore Magento claims to have Enterprise business Technology, but be ready to pay the cost. If you are looking for Mid-size business software and you pick Magento, you will easily exceed $400,000+ in fees per year for all the technology and third party software app partners that you will need.
You can read more about one businessman's experience with Magento Enterprise, Shopping Cart Fail .
Expanding to Mid-size business is easy the first half of the way. You simply have to take your store and start synchronizing all the inventory and products across every shopping channel such as eBay, Amazon and Google. You can quadruple your website sales within several months by doing that. However, getting past the second half of Mid-size business you will need to get creative with your brand, remarketing, banner advertisements, etc.
You will need to use tools like TEA Software to get to those results. (TEA Software is integrated into Shopping Cart Elite as a native application.)
Mid Size Business Vs. Enterprise Business Technology
The main difference between Mid-size business and Enterprise business technology are intelligence tools. Enterprise business is simply Mid-size business on steroids, you will have more people, more marketing budget that is executed against the same processes that were working for you to get past the first half of a mid-size business. The technology more or less stays the same except you need to make sure that other enterprise business technology can be easily integrated via API.
The goal of Mid-size business is to systemize the marketing and operations, and then supercharge them to get to Enterprise business.
Mid-size business technology is all about 100% automation, intelligence, and systematization. Everything has to turn into a system or an automated process for this to work. Good articles you can read about some examples are on the side:
Setuno is the parent company of shopping cart elite, and it also operates other software companies that work together with shopping cart elite:
- TEA Software Marketing Intelligence
- Easy Data Feed Automation of any online process (including data feeds, software bridges, repricing, etc.)
- Omni Channel Hub Shopping Channel Management that is directly integrated into Shopping Cart Elite
- GRO Project Marketing consulting and implementation of all software and processes for marketing and operations
Shopping Cart Elite together with all the other integrated software partners brings a Enterprise business ecommerce solution to your table at Small Business pricing. There is no other software company in the world that does the same thing. If you want your business to succeed and become a Mid-size business then Shopping Cart Elite is the right partner for you.
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