UC3 News — 21 September 2012

Using The Cloud To Extend Your Online Presence With Merchant Services

Retailers in today’s global, information driven world are often faced with a paradox. They want to reach as many customers as possible, but do it with the least effort and cost to the business. At the same time, they want to retain customers by providing a great customer experience.

Companies often now do online marketing with tools such as Facebook and Twitter, which help provide a visible profile of the organization beyond just the company’s website, but the value these add to customers is somewhat limited because they aren’t directly integrated with the company’s store and don’t tie in the company’s customer data to provide a better online experience. Such tools do help a company increase their online profile and online reputation though, and provide value through this.

One very simple way to increase a company’s exposure to new customers and thus increase revenue is to join an existing online merchant, such as eBay, Amazon, or Google Merchant. By doing this, a company can increase exposure to a tremendous new audience of potential customers, at relatively little cost. There are a number of considerations that must be planned out before undertaking a project like this though.

As an example, let’s consider a company that wants to implement eBay integration with an existing brick and mortar store. eBay offers an online eBay store to paying customers, at relatively low cost. These stores allow an eBay customer (our company) to define their own store name, customize the store look and feel, configure up to 300 store categories, and, most importantly, when items are listed in the eBay store, they are also listed on the eBay auction site in one or two auction categories. This listing of items on the auction site at the same time as listing them in an eBay store significantly increases visibility of your items to new customers. Think about it! eBay has several million people on its online auction site every day.  Amazon and other similar services can offer the same kind of exposure as well.

So why aren’t all stores jumping on the online merchant bandwagon? There are several reasons. First, inventory management can be tough when you are selling the same item from the same warehouse or store in a brick and mortar store and online.

Also, order fulfillment can be more complicated. A sale online may or may not need to charge taxes, depending on where the buyer and seller are physically located. Reaching a global market also can introduce currency exchange and export issues that may be challenging to overcome. Lastly, shipping costs may be an issue with online selling, whereas in a traditional brick and mortar store shipping is typically a non-issue. A company must also be careful to manage its online reputation, and with a bigger online presence, this becomes a bigger issue.

Generally, there are two ways a company can achieve this integration with the big online merchant sites. The simplest method to start out is to dedicate some inventory just to the online merchant store, and hire or reassign one or more employees to manage it manually. This is quick to get started, but doesn’t scale well if your online presence grows. The better method is to use cloud-based integration that can communicate directly with the online merchant’s systems to post items and adjust inventory, and bring orders from the merchant system to your standard store system for order fulfillment. Not only does using cloud integration make growing pains easier to overcome, it tends to be faster, much more scalable, and future proof. Also, by integrating with your existing online or point of sale systems, you can still take advantage of other integration you are already using, such as exporting data to your accounting system.

By Charles Almond

Charles Almond is a software developer for nChannel, and an Associate Professor of Computer and Information Technology at West Virginia University at Parkersburg.

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