Why not every business needs an ecommerce website

Frank runs a business, and has done for more than 40 years now. It’s neither a glamorous business nor a high tech one – but it is a very successful operation that’s survived all kinds of tough times.

What it doesn’t need is a really expensive website.

Frank sells materials to the building trade. It’s a commodity business and, while Frank is part of various buying groups to keep his prices as low as possible, he can’t match the wafer-thin margins of the very biggest players. What he can do, though, is offer expertise, and convenience, and a bit of trust when it comes to establishing lines of credit for customers whose businesses have had ups and downs.

He’s been talking to web designers, and those web designers have been quite delighted to talk to him. They’re talking a full ecommerce presence, an online catalogue integrated with his office systems to deliver real-time stock availability. It’ll be beautiful, and powerful, and wonderful, and just as good as the very biggest players.

It’ll cost a fortune and put him out of business.

Ecommerce isn't the answer

The problem with Frank’s business is that no ecommerce site can replicate the things that make his business work. When a builder has miscalculated how much cement or quartz or facing he needs, he doesn’t go online to order something for delivery in three to five days, comparing different firms’ websites; he gets one of the guys to jump in the van and get it from Frank, because Frank is nearby and idle men cost money.

When you put a commodity business online, you end up competing on one thing and one thing only: price. And that’s the one thing Frank can’t compete with. Frank can’t sell hammer drills or cement or plasterboard as cheaply as some firms sell online, because in many cases those firms are going for scale: their margins are microscopic and the plan is to make up for that with volume. In some cases the firms are selling items for less money than Frank’s suppliers charge him.

Value isn't added

The value that Frank’s business adds – convenience, expertise, going the extra mile for customers and so on – doesn’t translate online. It’s the same story with small bookshops versus Amazon, or specialist record shops versus iTunes.

Spending thousands and thousands on an all-singing, live-updating ecommerce platform would not only be a waste of money, but it could be damaging: judging by the traffic Frank’s placeholder website gets, 50 per cent of his traffic is from people looking for his phone number, and the other 50 per cent is local rivals wondering if he’s put his prices online so they can undercut him.

The best-case scenario, then, is that Frank spends thousands upon thousands on an all-singing, all-dancing website, plus the ongoing costs of administering and supporting it, and it’s a complete waste of money.

Would you tell him that?

Here’s a genuine question: times are tough, money’s tight and this Frank contract is exactly the sort of contract you need.

Would you turn it down?

Words: Gary Marshall. Photo: Iain MacLean

This article first appeared in issue 241 of .net magazine – the world's best-selling magazine for web designers and developers.

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