E-commerce, online shops, WooCommerce: E-commerce is constantly on the rise. Small to medium-sized shops - and their agencies or freelancers - are also benefiting from this. Are you thinking about jumping on this bandwagon? But what knowledge do you need? An overview.
Services for WordPress or WooCommerce, Shopware or Magento are lucrative. And this despite cloud providers such as Shopify or Wix Stores pushing into the market. Special customer requests for design, logistics, shipping or payment interfaces ensure that agencies and freelancers are well utilised. See our article on opportunities and business models for service providers.
At WordCamps, I regularly talk to WP professionals and agencies who have so far avoided the online shop business. They only become active when their regular customers ask for WooCommerce & Co. - more and more companies rely on a shop as a supplement to the corporate website. This reluctance on the part of service providers is quite justified. After all, e-commerce projects have completely different requirements, some of which are much more complex and multi-layered. More on this in a moment.
But first: What makes the market for online shopping so attractive? Why will it continue to grow in Germany and Europe? And why do many shop operators leave the technical operation to a service provider?
Advantages of e-commerce
Sales through e-commerce continue to rise rapidly. In Germany alone, these are estimated at around 58 billion euros for 2019 (source: Statista). Shops such as Amazon, Otto or Zalando account for the majority of this. But smaller and medium-sized webshops are catching up, as we can see from our own user figures.
What can be observed very well in the smaller shops: Most of them start with a manageable number of products. However, many of them significantly expand their portfolio within a few months. Accordingly, more and more agencies are adding technical and consulting services to their portfolio. It is not just a matter of setting up a webshop once. Most shop owners initially take on the maintenance of their portal themselves. But many are quickly overwhelmed by this - then service providers or freelancers come into play.
Promotion days like Black Friday ensure that more and more consumers place their orders online. And that even in market segments that were long considered unsuitable for e-commerce.
Increasingly, online channels are being used for purchases that used to take place locally. This is a very difficult trend, as it is leaving many city centres deserted. Local traders who do not belong to a large chain can often only react as follows: They set up their own online shop, parallel to the retail shop. The same applies to small manufactories, medium-sized production companies, etc.
Do you offer web design or development? Then ask your classic portal customers who sell products. Sooner or later they will also think about an online shop. This is your chance - before others take over the project. Here lies the advantage of systems like WooCommerce for WordPress. They enable you or your customers to realise a flexible online shop with manageable costs.
Requirements for freelancers and agencies
You don't just implement online stores "on the side". Even if you have implemented numerous content portals, this does not mean that you are fit for e-commerce projects. The effort required to set up and maintain a webshop is easily underestimated.
Taking WooCommerce as an example: Behind inconspicuous sub-menu items in its backend, functions are hidden that quickly cause hardly recognisable errors. For example, an incorrect calculation of taxes. If this only becomes apparent after countless invoices have already been sent, then your customers have a big problem. And so do you.
Running an online shop by no means only requires technical knowledge, but above all sound knowledge in the areas:
- Online and tax laws
- Logistics and accounting
- Requirements specifically for e-commerce, for example the European Payment Services Directive PSD2 or tax obligations for cross-border shipping
- Development of interfaces for merchandise management systems or payment service providers
- Usability (user-friendliness) in e-commerce, for example in the case of shopping cart cancellations
- Online and content marketing, search engine optimization (SEO) especially for shops
E-commerce requires extensive knowledge
Your customers will therefore confront you with very different questions as soon as you mention "e-commerce" as a possible service package. And in case of doubt, they will also hold you liable - make sure you are contractually protected accordingly. Here are a few examples of such questions:
- Can I connect my POS (Point of Sale) systems to the online shop? And how can several warehouses be mapped in the system so that the correct stock level/availability is always displayed online?
- How can the VAT identification number be checked in B2B shops? What processes does a mixed online shop (B2C & B2B) need?
- PayPal payments keep being cancelled. Where is the problem? With the provider, the interface or the plugin?
- How can I implement the topic of split tax in order to calculate taxes proportionally to the shopping basket items?
With questions like the last one, you'll quickly find yourself pulling out your calculator and poring over tax tables. But also:
- Is the checkbox for forwarding customer data to my shipping service provider GDPR-compliant? What exact designation is permitted for the buy button? How can I make the webshop as legally compliant as possible?
- How and where in the system do I have to declare products that fall under the Food Information Regulation (LMIV)?
- What exceptions do I need to set up when caching the shop and what of these does your WordPress hosting support so that the shopping cart works properly?
All this sounds very strange to you? Then you should ask yourself whether you are really enthusiastic about the topic. My recommendation: First set up one or more online shops of your own - regardless of whether you actually sell the products they contain or whether it's just a demo.
The best way to get to know the peculiarities of a shop system is to use it. And you will be confronted with the typical questions yourself - without the pressure of having to offer a solution very quickly. If you don't know the underlying processes, you can't offer a corresponding service. And you can't develop plugins or themes for shop systems like WooCommerce .
Challenges in e-commerce
The next step is to first take over the maintenance of a smaller shop - including entering products. This way you will quickly learn more about related functions such as order processing, shipping, payment or checkout.
Traders face some specific challenges on the web that you should address as soon as you take on a project:
- Warning letters: Some online traders - even small ones - complain that they are being warned more and more often. The legal pitfalls must be taken into account in planning and in ongoing operations.
- Data security: Every CMS or portal must be protected against hacker attacks. An attack on an online shop with customer data is particularly tragic. Securing the shop will also be one of your tasks. Are you unsure about this? Then you should definitely work with freelancers or agencies that are more experienced in the field of security.
- Calculation during operation: A simple shop can be implemented quite quickly. WooCommerce , for example, is very easy to use in many areas. But that's just the start of the work: entering or importing product texts and images, creating product variants, categorisation, keywording, SEO metadata... All this takes a lot of time.
- Scalability: After the first version of the shop is up and running, wishes quickly arise that require a lot of resources: For example, the automated transfer of data to the shipping service provider, the integration of the CMS or the development of an inventory management system.
In addition, many new online shops only survive a few months. After that, they stagnate or have to be discontinued. Because in some segments the competition from Amazon & Co. is enormous. In this case, it is worthwhile to try out an e-commerce business idea first. For example, via a marketplace on Amazon or eBay.
Do you proactively mention the points just described when new clients contact you? This shows that you have the necessary expertise. This is the only way you can also estimate how high the effort will be - and whether the project is also financially worthwhile for you.
In most cases, projects in e-commerce are billed on a time and material basis. However, you can also agree on a fixed monthly fee. The first option is very convenient for your customers: high payments are only due if there is a lot of work to be done, which is ideally reflected in higher sales. With the flat rate, as a service provider you should specify in writing exactly which task packages are included and which are not.
Opportunities in e-commerce
It is not only the ongoing online shopping trend that speaks for e-commerce. There are also other good reasons why you should get involved with web shop projects:
- Multichannel marketing: All portals are struggling with increasing content competition. This is known as the "content shock." For many, the only option is to open additional sales channels to respond to falling sales. This includes the company's own online store.
- Voice Search: Whether Google Home, Amazon Echo, Cortana or Siri. We are getting used to doing more and more tasks from our sofa at home. This is also giving the e-commerce market an additional boost. In the future, we will "scan" exciting products with our smartphone and be taken directly to a suitable web store.
- Scalability: Formerly small shops are becoming increasingly professional. This can be seen at WooCommerce - plugins for medium to large projects are increasingly in demand. Your consultancy service or your agency can grow with these requirements.
- Marketing: Webshops need different online marketing measures than classic portals. This starts with the SEO optimization of product pages and ends with services such as Google or Facebook shopping.
- B2B shops: In B2B, online shops are only slowly gaining acceptance, so there is still a lot of potential in this market. B2B shops are aimed at commercial users. Their processes are different compared to sales purely to end customers. This also applies to mixed online shops that cover both target groups.
In this context, also look at your competitors. Other agencies and freelancers who implement and maintain websites. How many of them already have online shops in their portfolio? Clients who need both - content and e-commerce portals - will choose a service provider that covers both areas.
Business models for agencies
There are several areas in e-commerce for which you can offer your services. In addition to the complete set-up of an online shop, this is above all the ongoing maintenance. Most shop owners initially take on the maintenance of their portal themselves. But they quickly reach their limits. Especially when
- you have no technical understanding
- The shop is run in parallel with a retail shop
- The virtual warehouse grows quickly, many goods have to be entered and updated in parallel
- Or when the orders and logistics get out of hand
Then you can take over such sub-areas as a service. Or you can contribute solutions for process automation, which will benefit your customers in the long run.
Typical maintenance packages are the creation or import of products, the selection and installation of suitable extensions (plug-ins), the optimization of the shop design or the updating of the system. But also the optimization of product images and the testing of new functions in a staging environment are included. Including restoring backups in the event of an error.
With all these tasks, you will quickly be confronted with questions that go beyond technical issues. See the section on agency requirements above. Other areas in which you can work with a shop system:
- Establishment of interfaces: Depending on the system landscape, there are only a few ready-made interfaces between the individual tools and databases. Or these have to be adapted in a complex way. For this, however, you need very sound knowledge of software development. And you should have a lot of patience.
- Development of plug-ins: This area also requires some experience. Because the little helpers quickly intervene deeply in the logic of the shop system. One faulty line of code and the checkout does not work as desired.
- Development of designs and templates: At WooCommerce and WordPress there are design templates (so-called "themes") that sell hundreds of thousands of copies. You will hardly manage from the start to launch a template for a store system that will become very popular. Here niche markets are usually more target-oriented. For example, special templates for food stores, online pharmacies, craftsmen, artists, etc.
- Online marketing: Search engines have special rules for listing shops. But the topic of conversion optimization is also becoming more important in e-commerce. You can specialise in SEO audits for online shops.
You can, of course, also offer all the services described above in one. Your main target groups are then:
- Companies that focus on sales but not on technical operations.
- Stationary shops that want to generate additional turnover. But they don't have the necessary expertise or the time.
- Classic portals that already work with a content management system like WordPress and need an additional sales channel. For example, for e-books, webinars, events or vouchers.
Another hint: To be fair, you only offer such complete packages in an agency, not as a lone wolf. And only if you have specialised staff for web design, development, analytics, performance, SEO etc. in your team.
Plugins and Themes
The development of add-ons for up-and-coming shop systems is quite exciting. Depending on the area of application, their market is not as large as it is for add-ons for content management systems. On the other hand, they can usually be sold at a higher price. Or they have to be adapted to the respective shop landscape. Research in advance which services your shop system does not offer as standard and how big the market is for them. You can find out more in our article on the development of plug-ins.
No matter which path you choose: First find out where your strengths lie in e-commerce and what your team is like. Do you like to administer? Do you prefer to develop? Do you love web design? Do you know online law or SEO? Do you see yourself in the planning role of project management?
Each subject area quickly becomes very complex in itself. Your clients notice whether you really know your way around the individual tasks. Or whether you are just skimming the surface. My tip: It's better to specialise in a few selected tasks. Or divide them up in a team.
You can find more tips on project planning for online shops in our 70+ page e-book WooCommerce for professionals. It is aimed at freelancers, agencies and WP professionals. Some parts of it - such as price calculation or business models - are also relevant for other shop systems.