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Setting up your on-line shop: the options, costs and recommendations

There are three typical options for setting up an on-line shop.

One: On-line Mall

The cheapest and simplest option, using the services of an on-line mall, is suitable if you want to test your concept before investing too much money or for people with a limited product range. The best known on-line malls are probably Yahoo Shopping and Amazon's zShops, although there are many others.

The on-line mall normally includes all the tools that you need to create an on-line catalogue as well as a simple shopping cart system that allows users to put products in a virtual shopping cart before paying for them. Most also offer a system for submitting secure payments. Some even handle payment on your behalf - although you need to check their commission rates for this service - some charge painfully high commissions.

On-line malls generally charge a monthly fee and/or a commission on sales. Clearly if you expect lots of sales, you should try and pay a fee only. If you do not expect many sales, a commission system may be preferable. Some Malls also provide some marketing support - which can help drive customers to your shop.

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In any event, the before signing any agreement with an on-line mall, visit some of the shops, try out their shopping carts and contact shop owners to find out if they are happy with the mall and its service. Also be sure to check the terms of your agreement very carefully.

Two: Application Hosting

An application hosting service provider is like a web hosting company, but instead of just hosting your web site, they host your entire e-commerce system. Often, your site will be hosted on a dedicated server (a server, connected directly to the Internet, which hosts only your e-shop).

Normally, an application hosting service will have databases to develop on-line catalogues; shopping cart systems, secure payments systems and other tools necessary for developing an on-line shop. In addition, the hosting service will have specialist technicians to support you in setting up and maintaining your shop as well as for trouble-shooting later.

If your shop grows quickly or draws a lot of traffic, your application host can add an additional server to handle the traffic.

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Contact clients of hosting service, ask them about hosting service,
check their web sites for speed of download, convenience of tools etc. Check the terms of the agreement and also check on what kind of support, guarantees of downtime, etc are offered.

Three: Be your own host

For really big on-line shops, the only real choice is to be your own host, with an Internet server on your premises, customised software for your on-line catalogue and other tools. Likely you will also have customer relationship management (CRM) tools and database tools to analyse customer behaviour in order to increase sales.

Very likely you will need a programmer to implement and integrate everything and possibly you will need a full time programmer to maintain it - depending on how elaborate your on-line shop is. For a really big shop, you will probably need a technical team to keep things going.

Although hosting your own shop allows considerable freedom to do everything the way you want - the costs are considerable. Expect at least 50,000 Euro to get started and another 20,000 to 30,000 or more per year for maintenance. (Although that may seem a lot, it's a fraction of what you would pay for a large bricks and mortar shop in a good location, isn't it). Huge on-line shops spend millions of Euro on their web sites and software.

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