3 Ways NOT to Scale Your Multi-Channel Ecommerce Business

The 3 ways not to scale your ecommerce business.jpg

When most merchants hit their growth ceiling they know they need to do something to break through it – even though they aren’t always exactly sure what that something is. So they set out to discover exactly what is necessary to overcome their growth barriers. Some eventually find a solution – but not before wasting a lot of time and money.

There are 3 main ways merchants like you try to solve the operational problems that are preventing them from scaling their businesses:

  • Hiring employees
  • Enterprise Resource Planning (ERP) systems
  • Custom software

Maybe you think that having another person, or more people, is what it takes. Have you looked into how much this will actually cost you beyond an hourly rate?

Valid employees get a pay check which includes Social Security contributions as well as deductions of Medicare Tax, Federal Unemployment Tax, State Unemployment Tax, and Worker’s Comp Insurance. On top
The true costs of hiring an employee.jpg of that, you may need to tempt the more qualified ones with paid sick days and holidays, time off, health insurance, and a retirement plan.

But there’s something else to consider if you choose to hire employees.

There’s the effort spent to find qualified employees in the first place. It takes time and money to see if they actually work out. They’ll have access to historical knowledge and key information to do their job properly, so if and when they walk out that knowledge and information walks with them. As if that isn’t bad enough, you’ll have to start all over again to find someone to take their place.

You could look into Enterprise Resource Planning (ERP) systems like Netsuite, Infor, or Microsoft Dynamics. However, these systems weren’t built to handle online multi-channel selling. They require customized integrations and additional bolt-on solutions in order to do this. Not only that, you’ll have to spend lot of money and a lot of time to maintain these customizations.

Finally, you and I both know as soon as you hear the word “custom” you can start adding digits beside that dollar sign. But we’ll look into it anyway.

Why the massive price tag on custom built software? Programmers. The ones with the rare skill set to get the job done right the first time command the most money. They’ve earned it and they’re worth it. The money you spend also pays for: technical experts, database analysts, graphic designers, UX experts, usability testers – and that’s just for starters.

Also, you rarely hear stories about custom software delivered ahead of time – it’s more like projects that go over time and over budget, and disappointed online sellers who don’t receive what was promised. You’re never really sure what you’ll end up with.

Here are some ballpark numbers and schedules for common projects:

  • The research, design, and planning phase alone could cost anywhere between $15k to $75k and take from 2 to 6 weeks.
  • Creating a proof of concept, prototype, or demo software ranges from $35k to $70k and takes between 1 to 2 months.
  • Building a complex, multi-platform product in multiple phases could cost anywhere between $100k to $3M+ and take anywhere between 6 to 12 months.

Many merchants consider custom software but know they can’t afford it. They don’t give up, however. Eventually they find the solution to their problems. You will too.

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