The whole cost of the wine eCommerce process.
In previous posts I’ve looked at the process of a wine retailer selling wine online. From getting a customer’s attention through to initial purchase and repeat custom.
I’ve shown that most attention is given to only one part – the design – yet there are many other parts that need to be done well to make a profitable online wine business.
So when I talk about the cost I’ll look at the cost of the whole process not just the website.
Traditional wine eCommerce website cost
About US$5-10,000 depending on your local website developer. For that price it should look good, have a catalog and a shopping cart.
Payment is probably by PayPal and hopefully not unsecure credit card.
There is absolutely nothing wrong with using your local website developer. Indeed you didn’t have many options until recently, and going further back still you were probably paying $50,000 for a website!
Then things changed
Specifically the internet stockmarket bubble burst in 2001 leaving many extremely talented web developers without capital. Forced to find ways to make web sites cheaply various very innovative ways sprung up.
We’re seeing the fruits of that now. For example
- cloud computing – the software resides in a hosted web server not on your PC
- Open Source – a large community of programmers make the core of a particular software program available for free to everyone
- this website is written using both of these – a web server in Michigan and some Open Source software called WordPress.
IBM might have dropped the hardware crown in the 1990s but they become experts at pulling together disparate systems, many of which were based on cloud computing & Open Source software, in the new millennium.
Others continued with developing proprietary software successfully. Most of them now offer that software via cloud computing so you don’t need to purchase a CD and install it yourself (like you might with Microsoft Office).
Another big thing that changed the internet was Google
You’ve seen how important Google (or Yahoo) has become in your own life in finding information and products on the web.
But you probably haven’t realised how big an effect Google has had.
They provide some superb tools to help you get onto the first page of key consumer searches. As far as wine retailers are concerned all bar Adwords are provided for free.
Free but highly effective!
So with pricing we have parts of the solution that can cost $0 – or $10,000!
Let’s focus on the wine eCommerce website
There are some basic small business eCommerce systems that work just fine from, for example, Yahoo and Volusion (plus scores of others). They cost US$50 to set up and $40 per month + 1.5% of sales to run in the case of Yahoo, and $129 to set up and $50 per month for Volusion (in Nov-09).
Alternatively you could pay Miva Merchant (or similar others) $995 to set up and $129 per month for a service with more features (I’ll talk about features in another post). Most expensively, and more for medium to large businesses is IBM’s Webscope and Varien’s Magento Enterprise edition (or similar others).
There are 100s of different ecommerce systems so this is just illustrative of pricing levels for the eCommerce site alone.
There are a number of specialist wine eCommerce development companies (e.g. InteriaBev, eVineyards and winezap). I haven’t been able to track down a confirmed price but am reading in forums that they charge about $500 per month (winezap is probably $1500 set up and $99 pm).
Note I’m not an affiliate for any of this software.
Build it and they will come
Yeah right. Build it and they have no idea you exist.
About 90% of websites are said to be spam which is why Google is so important. Google has successfully reduced your exposure to spam websites to the 10% of websites that are doing an honest job of it (still hundreds of millions of sites).
They have a number of ways of doing this, most of which we can just infer.
My experience is that it can take 3-6 months before Google trusts you enough to get you on the first page of searches (that are important to you). You can help Google (and Yahoo and bing) to help you by doing the things mentioned in this post – Traffic – but it will still take weeks.
A quicker way to generate traffic is through Adwords. Connect your Adwords account to Analytics and you can track how well you’re doing with various adword searches. Adwords may cost you $1000 per month, or $200, or $2000… – but at least its providing leads not just overhead cost.
Mind you you’ll still need to ensure you set up your site well or you’ll face having a poor Quality Score (QS).
This is where Google takes your bid price for an Adwords search term and multiplies it by a Quality Score factor. The QS factor depends on the relevance of your landing page and website. Then it compares it to all other bids quality scores and ranks them. Those ranked the highest get the higher positions. The higher your position the more likely you are to be clicked. Confused, don’t worry most of Adwords customers are as well 😉
It can be a frustrating experience when you know you should have a good QS but Google doesn’t agree!
Back to my original point
There are many parts that need to be done well to make a profitable online wine business.
Yet most of an online budget is spend on making a website look good.
I’m not convinced this is the right approach. What do you think?