How to evaluate Ecommerce Vendorsby Capillary Technologies Unlock Growth with Retail CRM, Ecommerce & Loyalty
To have a successful ecommerce business, it is imperative to select the right kind of vendors. This is a decision that needs to be made with care, else it would have a long-term impact on your enterprise. It would make perfect business sense to go with a structured and proven process, rather than making spur-of-the-moment decisions. Asking the right kind of questions, both within your business and to the vendors that are being considered is very important. Understanding your business goals first before having you start evaluating solutions is the key here.
A few questions that you would need to ask yourself would be:
- What is the goal of starting an ecommerce store?
- How would success be measured?
- Do we have a business plan in place?
- Has enough research been done about the venture?
- What are our IT Team’s capabilities and do we need to upgrade, replace or add to our current systems?
- What is the total cost of starting the venture and where is the funding going to come from?
- What does the competition look like? Where are we likely to stand in the market? What kind of a solution is your competitor using?
- What is unique about our business? How would we stand out from the crowd?
- Where do we want to see ourselves one year, two years or five years down the line?
There are hundreds of ecommerce vendors out there in the market providing diverse software solutions. It might seem more like a gamble rather than making an educated decision while selecting solution providers. Here is a framework for evaluating your vendors.
Understanding your vendor
What are your vendor’s strategic plans, short-term and long-term and goals for doing business? Are they aligned with your business? Does it match your business needs and goals? Would a partnership between the two of you work? Is the vendor and their solution capable of executing your plans? Does he or she have a long-term vision? These are some of the questions you need to ask yourself and get answers for, to get you started in your evaluation process. It is critical to understand where the vendor is coming from, what they can bring to the table. Understanding what motivates your potential vendor might go a long way in establishing a favourable relationship.
Establish the vendor’s standing in the market. Talk to their current customers, business associates, and even competitors; to get as much information as possible, before a decision is made. Are they happy? Are they receiving good service and do they get value for their money? What is the vendor’s financial standing, revenues, growth, margins, ability to meet deadlines, R & D capabilities etc.? A positive response is an indicator of a successful vendor.
Visit actual websites that the vendor caters to, to see for yourself the ecommerce platform in action. Check out the vendor on a Google search. If you cannot find any information about the vendor during this search, it might not be a good sign.
How long has the vendor been in business? The answer to this question would establish the stability of the solution. A firm with executives who have been around for a while is a good indication of a stable business.
A vendor’s poor performance might reflect badly on your reputation, especially in the eyes of your customers.
Getting the legalities right
List down your terms and conditions for a business relationship very clearly and find out if the vendor is agreeable to all of them. Some of the points to be considered could be as follows.
- What are the vendor’s plans to adapt to new technology and enhance the product in the future?
- It is important to establish the roles and responsibilities of each person in this partnership, especially during implementation – what you would do and what the vendor would. There should be no room for gaps in the process. Negotiations are possible, but they should be able to answer your needs and work in your favour.
- What are the payment terms? Is there a period for the payment to be made? Is there a discount applicable if the entire amount is paid immediately or in advance?
Other features to consider
- Cost – what is the cost of the software product, its integration and maintenance? What is the kind of impact that it would have on your business and what is the kind of Return-On-Investment (ROI) that it would fetch?
- Design – Does the product have the kind of design that you are looking for? Think like a customer. Would the customer want to shop on your online store? If the answer is no, then this tool might not be the right one for you.
- Is the tool suitable for Mobile?
- Are the features of the product easy to use?
- Does it integrate very well with the other tools – both software and hardware and other ecommerce applications?
- Are the tools able to present your content well?
- Would the tools be able to support various geographical and vertical markets?
- Do they have the scalability to grow along with your business and support different media formats?
- Does the software product have the ability to enhance your security risks?
- How does the vendor treat customers once the product has been sold and payment has been made?
- What is the vendor’s rating on service and support, help desk capabilities, systems integration, business consulting skills and project management?
Insist on a trial period
As the popular saying goes – “the proof of the pudding is in the eating”. Have a trial run with the vendor to assess his or her capabilities and the quality of the product over a period of time. If you are unable to assess your vendor during this period, insist on a longer timeframe, until the proof of expertise is established.
Making an informed decision about choosing the right kind of vendor might take up quite a bit of your time. But it is important to make such an investment because choosing the wrong vendor might make or break your online business. It could turn out to be a costly and painful mistake. Selecting your vendors carefully will be worth it over time, as your business grows and develops.
Created on Nov 15th 2019 06:29. Viewed 654 times.
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