The fact that the cost of entry for e-commerce has steadily declined over the past 10 years is likely to help reduce Quebec companies’ laggard performance in this area.  Of course, this gap is far from being an insurmountable obstacle and there are a few new twists that make matters a little more complex, such as the advent of social networks and the rise of mobile commerce. The fact remains nonetheless that the same dollar invested in e-commerce today will provide two or three times more than it would have had in 2000.

SMBs have no more financial excuses for remaining on the sidelines when it comes to e-commerce. E-commerce tools have become increasingly sophisticated and acquisition costs are going down or disappearing altogether. What is more, there are now plenty of Quebec-based e-commerce consultants that can provide assistance with just about any service.

For smaller budgets

While tools such as Google AdWords have lowered the cost of payment systems and online marketing, the most remarkable development has surely been the falling cost of an effective web presence. There are now several options that will fill this need quickly and cheaply.

At the start of the Internet era, even a relatively simple website would cost $30,000 or more. For this sum of money, clients had to be content with a static site that likely could only be updated by its supplier at significant cost as coding was typically done by hand. The earliest content management systems (CMSs) on the market were beyond the reach of SMBs—not only because they exceeded their needs, but also because they cost upwards of $1 million.

Today there is no shortage of options and their costs vary according to the desired degree of professionalism and control. The least costly solutions may be perfectly suited for small shops with lower volumes and limited technical expertise.

Companies that want to deal with a single supplier and avoid having to take care of technical details can use a specialized service that allows them to create an online store using generic templates that they can tailor as they wish. This approach provides the benefit of very low start-up costs and clients are able to focus on their business thanks to a turnkey solution that includes all of the components required for a transaction website, such as credit card payment acceptance.

There are dozens of services like this in the US Amazon WebStore, Yahoo Merchant. BigCommerce and Volusion are some of the best known of these. In Quebec, ClicShop and K-eCommerce use pretty much the same approach.

These services often operate as Software as a Service (SaaS) which enables use of the same infrastructure while spreading costs among all clients. This explains how they can offer rock-bottom fees ranging from $25 to $100 and up per month (and a low per-transaction percentage) depending on the number of products listed in the catalogue and the amount of bandwidth required to support site traffic.

Their main drawback is that they impose a rigid “one-size-fits-all” framework that everyone must follow and no exceptions are possible. This is a proven approach, however, and some of these services—such as Amazon WebStore and Yahoo Merchant—are even used by major brands attracted by the potential volume these highly popular portals can offer. Some companies use several of these services in order to multiply their sales opportunities.

Preferred local supplier

Going further requires implementation of specialized software that is hosted on the client’s server, that of its agent, or even the product supplier’s server. Available as proprietary software, and increasingly as open-source solutions, these tools can be modified to individual needs and come with a set of modules to integrate online activities with all of a company’s processes. This latter feature is indispensable for synchronizing sales and inventory updates across several distribution channels.

Premium proprietary software is better suited to large companies. According to an evaluation completed in October by Forrester Research, there is one product that stands out among the five leading products and which has the additional advantage of offering a cost structure that is suited to medium-sized businesses—and it comes from a Quebec-based supplier. In addition to major clients such as Reebok, The Wall Street Journal and The Bay, iCongo is the choice of local medium-sized businesses such as La Cordée, Lise Watier and Tanguay.

The second option for mastering your digital destiny consists of opting for an open-source solution. The cost of acquisition and licence renewals is usually zero. In cases where there may be a fee to access an added-value version, the cost will rarely exceed 10% of that for equivalent proprietary software. While more flexible than proprietary software because the source code can be accessed, open-source software requires that clients have the internal skills to adapt it to their needs.

Some serious freeware contenders

Some open-source software that is primarily intended for creating websites or blogs offer e-commerce extensions. These include Joomla, Drupal and WordPress, the easiest to use. They are best suited to sites that are not primarily focused on e-commerce. As these are mainly content management systems, e-commerce support from the developer community may be lacking. Discussions are usually about content rather than e-commerce.

The good news is that there is now an impressive range of open-source e-commerce software available, from simple to highly sophisticated.

Available solely as a hosted software service, Shopify is considered the easiest to use. The product was launched in 2006 by Ottawa-based Shopify. In less than three years, Magento has garnered interest from some of the biggest names in e-commerce, such as Lenovo and Samsung. Forrester Research considers this to be the only open-source e-commerce solution that approaches the major proprietary offerings in functionality.

Naturally, acquisition costs are not the only considerations to take into account when setting up an e-commerce site. Many companies do not have the required in-house skills to implement their site or even to write texts to highlight their business and their product. If they do possess these skills in-house, they will still have to pay for the time taken by their employees to work on this project. Other specialties required to ensure success, such as natural search engine optimization or site visit analysis, is beyond the scope of most SMBs.

It would thus be wrong to assume that e-commerce is less expensive that it was a decade ago. Savings in start-up costs will have to be funnelled into increasing site traffic. This is a significant improvement nevertheless as companies have more latitude to succeed for the same amount of money, as it was not unusual in the early days of the Internet for companies to have no budget to publicize their site once it was up.