E Commerce Not A Big Investment

August 15, 2003
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GRANDVILLE — An expatriate Californian with a modest amount of Silicon Valley in his blood told the Business Journal recently that fear of cost causes many small and mid-sized firms to shun e-commerce.

Tom Van Spronsen, founder of a Web development company named Latest Wave, believes the fear was justified at one point but now is wholly misplaced.

He believes there’s no reason for any company to have to spend huge sums to move into e-commerce. He argues that the cost of Web site development — thoroughly sophisticated Web site development — has gone down by a factor of three since the late ’90s because, in fact, most of the development is long since completed.

“Some owners,” he said, “are still kind of, ‘We’ve been selling widgets for the last 100 years and been doing it this way, so why should we go to e-commerce? We’re just going to spend a lot of money and nobody’s going to buy it anyway.’”

He said other owners may have gotten badly burned or heard of others getting burned by hyper-expensive Web design practices — a perception exacerbated by widespread die-offs in the e-commerce industry two and three years ago.

In fact, during his first years in the business, Van Spronsen himself had a visceral reaction to certain pricing practices. It led the Calvin College graduate to establish Latest Wave in 1999.

“I was dissatisfied with the way the industry was treating clients,” he said. “They were taking advantage because the clients didn’t know what it was supposed to cost.”

He said a client would ask, “‘How much time is involved? We’ve never done this before.’ And they (certain developers) would go: ‘Ha, ha, ha! I see a money avenue here,’ and push the price really high.”

“In the late ’90s,” Van Spronsen added, “e-commerce still was really expensive to do. And that’s the stereotype that’s still out there — that it’s still really expensive.

“But things have changed considerably,” he said. “The evolution of e-commerce, if you will, has gone to the stage where, more or less, the framework is developed and you just fill in the blanks. It’s a much better deal now.

“But not every developer might let you know this,” he added, noting that some people in the industry are a bit like some counterparts in auto service departments: They fix problems that don’t need repair.

“We just have a basic store — an online store — that we can customize to suit any business’s needs.”

The tailoring and customizing, he explained, are largely questions of tweaking front-end graphics.

“The back end does its own thing,” he said, “and you don’t know what’s going on.” He said the “back end” consists of readily available e-commerce programming modules developed in the last decade.

He explained, for instance, that the program to record a shopper’s credit-card order on the Internet was crafted years ago and is on the shelf ready to be plugged in to any e-commerce site.

Because programmers were having to build everything from scratch in the ’90s, he said, “... just setting up a Web site cost no less than $20,000.

“Today,” Van Spronsen asserted, “it costs $500 to have a store running. The work to build a store — an e-commerce store — is pretty much done,” he explained. “The back-end programs are modules sitting on a shelf.” The more sophisticated the store, the higher the cost, he added, but it doesn’t approach $20,000.

That reduced cost is one of the reasons, he said, that if a developer is honest with its clients, it no longer can survive simply by crafting Web sites.

“It’s fair to say that if you’re just making Web sites, you’re not making money,” he said. “That’s why we also provide Web hosting and Internet access.”

He said there still are some firms that take clients through the whole Web development process. “Doing it the old school way means going through the whole process. It takes a lot of time: three months — if you’ve got a good development path, that is.”

Van Spronsen said by using and tweaking off-the-shelf modules, his firm can have a Web store up and running in a week.

“And we don’t beat about the bush,” he said. “We quote a price and if we go overtime, hey, that’s our fault. We don’t come back to you and say, “Well, it took longer than expected. We’re gonna need another $2,000.

“And a lot of clients who come to us have been down that road,” he added, “so they’re really edgy until we can furnish them some references and case studies. Then they feel at ease with us.

“Anybody can develop Web sites,” Van Spronsen added. “Everybody’s doing it, practically.

“But when it gets to a certain level, those people don’t have the skills and experience to give these companies sort of a comfort that, ‘We’ve done this millions of times. This is how it’s gonna work. We’re going to guide you through it. Here’s what you’re going to experience. Here’s what you need to expect during the first six months, the first year, and so on down the line.’”

He explained that Latest Wave has five programmers, all of whom have their degrees with emphasis on programming or graphics design or, in some cases, both.

“One of the things that sets us apart,” he added, “is what you don’t see on the Web.

“It’s the site’s administrative area, where the owner can log in securely and make changes — take out one product, add another; say, add a shipper like Fed Ex, and set up an e-mail to notify the customer when the item is shipped, along with the tracking number. It’s the kind of thing that makes the customer feel warm and fuzzy.”

He said the administrative area is a management program both for the site and the business. It furnishes reports. “The first report that pops up tells you what’s being viewed vs. what’s being purchased.

“You can tell when potential customers are hitting on a product and how many are buying. It’s the kind of thing that can help you with pricing.”

He said that if a firm has an existing database of products, prices and descriptions, then a lot of an e-commerce project’s drudgework is already done.

“We just take that database and just plug it into the e-commerce program. We’re not writing a new store for every client.

“And you can add any bell or whistle you want: inventory control, commission, affiliates, ad referrals, marketing studies, retail, wholesale and member prices. If we don’t have it on the shelf, we can write it and then have it on the shelf for the next client.”

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