Online Storefronts Challenge Traditional Web Hosts

[James]

More than two thirds of SME's with web sites now outsource their hosting requirements, but more companies move beyond providing simple company information on their Web sites toward the enablement of e-commerce, the market sees increasing demand for tools such as shopping carts, catalogues, and online payment agents.

Online Storefronts (OSFs) are e-commerce-oriented Web sites for SMEs hosted by branded Internet giants with wide reach to a potential buying audience.

Yahoo! was the first entrant into the OSF sector, having launched its Yahoo! Store in 1998. Today, Amazon, with its year-old zShops, and AOL/Netscape in partnership with Bigstep.com also compete in this space. During the second quarter, eBay is contemplating the launch of a similar product.

Do hosts see this as a threat to their ecommerce business models?

[Jaiem]

I don't for several reasons:

1) No branding - You don't have your own URL to your store front.

2) Less options - You get a standard package. Not easy or cheap to customize

3) Hard to find - Since most are "boiler plate" pages you can't really submit them to search engines etc.

4) From my observations I know few companies that are really doing well with mall-style OSF's.

5) If anything I think the truly serious e-commerce business will learn thet can't do what they want to with a mall store front and will look for their own domain.

ps- James what's an SME??

[James]

Originally posted by Jaiem

ps- James what's an SME??
Sorry, Small & Medium (sized ) Enterprises, probably a UK' ism :)

[yourdomainhost]

If we were worried about competition, we'd have given up a long time ago. The web hosting industry has to be one of the most competitive industries out there. Fortunately, the demand seems to be growing faster than the competitive base.

One thing that I've noticed, with only a few exceptions, is that the "Internet giants" seem to struggle with their customer service levels, and have problems when they try to expand their existing offerings (e.g., Infoseek / Go).

In addition to the excellent points that Jaiem made, we'll beat 'em on service and support, too.

James

[JTY]

I think solutions like Yahoo! Store, will do well in the area of providing basic online store front systems. But, web hosts offer a greater amount of flexability.

[akashik]

Cart software is very cheap and in many cases totally free - The Exchange Project for example. Third party CC billing is also very affordable. With a little time and effort (or the help of a design team), people can get themselves online and trading in a far more professional way than to use a Yahoo! Shop or their ilk. To me, it feel like the store owner isn't ready to put the effort in to do it right the first time.

Starting out is tough I agree, but I think people would find themselves much more profitable, faster if they put that extra little bit in at the start.

Greg Moore

[Tommy]

The Store get's a bit of cred being associated with recognized brands like Yahoo or Amazon. But on the other hand are they a serious business if they haven't commited to a website of their own?

Which do you think gives more consumer confidence?

Tommy

[Jaiem]

I've never seen a well layed out mall-style store front. They usually look thrown together. I would be wary of ordering from one.

And any good host will offer some form of shopping cart script with their service.

[akashik]

this is a little off topic (maybe), but does anyone know much about 'drop shipping'? Where you run an online store and just place the resulting orders with brand name warehouses like Sony and Compaq?

I did a little searching on it a while ago and it amounted to little more than a lot of people saying it's great, and here's the book to do it for $15 or so...

Is there a legitimate way to do this or is it just another just rich thing?

Greg Moore

[Jaiem]

It can work but you loose much control over things like timely shipping, quality of packaging, returns, charges, general QA etc.

Don't know too many companies that use out-sourced drop shipping as their primary source of shipping.

[Chuck Roy]

Greg,

I've been thinking about the drop shipping business for years. In fact, when I reach a point with Roy Services where I'm not working 12-16 hours per day, I will probably pursue it (LOL - the problem with being the top dog).

I had looked into an organization called National Wholesale Company (NWC - http://www.profitbig.com). Their operation is primarily offline although they do have online catalogs. I've been following them for about 5 or 6 years, but never felt I had the time to open another business.

Maybe someday....

[JTY]

A few computer component distributors offer drop shipping. I've ordered stuff that was drop shipped, and it has the distributors shipping label on it, but it does have the online stores invoice inside.

[akashik]

Chuck and John,

That's just what I'm talking about. Being able to set up a cart and order direct from wholesalers, then have them ship directly to the customer - ala Outpost.com

The only problem seems to be it's a 'secret boys club' with enough information out there to know it can be done, but none that actually gives you the right steps to do it *lol*

It'd be pretty nice to order big screen TV's online at wholesale :D

Greg Moore

[Chuck Roy]

Greg,

Take a look at NWC (see previous post for URL). I don't get anything out of it so I don't mind recommending them here. They have several catalogs of electronics stuff.

Plus, they are NOT MLM so you don't feel pressured into recruiting everybody to join.

I get a mailing from them every 3-4 months with a list of the various catalogs and merchandise available. Their wholesale prices seem reasonable. I know that when you sign up with them, you can get some of their catalogs on CD (maybe even online). Plus you get hard copy versions that don't have prices and are generic (ie: no store name; you put your own name, address, etc. on it.) If memory serves me, they also have a hardware and software catalog now.

As I said, I've been looking at them for a long time and if I ever get to the point that I'm tired of technology, they'll be the first people I'll talk to.

Good Luck. Keep us posted what you decide.

[akashik]

Chuck,

Thanks I may just look into them. I suppose I was just waiting for someone to go on ahead of me to see if it was a legitimate proposition or not :)

Greg Moore