E-commerce projects: Is your agency fit for the job?

E-commerce, online shops, WooCommerce: e-commerce is constantly on the rise. Small to medium-sized shops – and their agencies and freelancers – are also benefiting from this. Are you thinking about jumping on this bandwagon? But what knowledge do you need? Here is an overview.

Services for WordPress or WooCommerce, Shopware or Magento are lucrative. This is despite cloud providers such as Shopify or Wix Stores entering the market. Special customer requirements in terms of design, logistics, shipping or payment interfaces ensure that agencies and freelancers are well utilised. See our article on the opportunities and business models for service providers.

I regularly speak at WordCamps with 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 are opting for a shop to complement their corporate website. This reluctance on the part of service providers is entirely 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 of all, 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

Turnover from e-commerce continues to rise rapidly. In Germany alone, these are estimated at around 58 billion euros for 2019 (source: Statista). Shops such as Amazon, Otto and Zalando account for the majority of this. However, smaller and medium-sized online shops are catching up, as we can see from our own user figures.

This can be observed very clearly 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 web shop once. Most shop owners initially take on the maintenance of their portal themselves. However, many are quickly overwhelmed by this – which is when service providers or freelancers come into play.

Promotional days such as Black Friday ensure that more and more consumers place their orders online. Even in market segments that were long considered unsuitable for e-commerce.

Online channels are increasingly being used for purchases that used to be made locally. This is a very difficult trend, as it is leaving many a city centre deserted. Local retailers who are not part of 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 manufacturers, 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 on the project. This is the advantage of systems like WooCommerce for WordPress. They allow you or your customers to realise a flexible online shop with manageable costs.

Requirements for freelancers and agencies

You can’t just implement online shops “on the side”. Even if you have realised numerous content portals, this does not mean that you are fit for e-commerce projects. The effort involved in setting up and maintaining an online shop is easily underestimated.

Taking WooCommerce as an example: Hidden behind inconspicuous sub-menu items in its backend are functions that quickly cause barely recognisable errors. For example, 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.

Operating an online shop requires not only technical knowledge, but above all in-depth knowledge in the following areas:

• Online and tax law
• Logistics, accounting
• Requirements specifically for e-commerce, such as 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 event of shopping basket cancellations
• Online and content marketing, search engine optimisation (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 systems (point of sale) 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?
• I keep cancelling PayPal payments. Where is the problem? Is it the provider, the interface or the plugin?
• How can I implement the topic of split tax in order to calculate taxes proportionally depending on the shopping basket items?

With questions like the last one, you’re quick to pull out your calculator and pore over tax tables. But also:

• Is the checkbox for forwarding customer data to my shipping service provider GDPR-compliant? What exact labelling is permitted for the Buy button? How do I make the online shop as legally compliant as possible?
• How and where in the system do I have to declare products that fall under the Food Information Regulation (FIR)?
• What exceptions do I need to set up when caching the shop and what does your WordPress hosting support so that the shopping basket works correctly?

Does this all sound very strange to you? Then you should ask yourself whether you are really enthusiastic about the topic. My recommendation: Start by setting up one or more of your own online shops – regardless of whether you actually sell the products they contain or whether it’s just a demo.

The best way to familiarise yourself with the peculiarities of a shop system is to use it. And you will be confronted with the typical issues yourself – without the pressure of having to offer a solution very quickly. If you don’t know the underlying processes, then you can’t offer a corresponding service. Nor can you develop plugins or themes for shop systems such as WooCommerce.

Challenges in e-commerce

The next step is to take over the maintenance of a smaller shop – including entering products. This will allow you to quickly learn more about associated functions such as order processing, shipping, payment and checkout.

Retailers face some special challenges online that you should address as soon as you take on a project:

• Warning letters: Some online retailers – even small ones – are complaining that they are being warned more and more frequently. The legal pitfalls must be taken into account during planning and ongoing operations.
• Data security: Every CMS or portal must be protected against hacker attacks. An attack is particularly tragic for an online shop with customer data. Securing the shop will also be one of your tasks. Are you unsure here? Then be sure to 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 of this takes a lot of time.
• Scalability: Once the first version of the shop is up and running, requests 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 a merchandise management system.

In addition, many new online shops only survive for a few months. After that, they stagnate or have to be shut down. This is because competition from Amazon & Co. is huge in some segments. It is then worth testing 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 customers contact you? This shows that you have the necessary expertise. This is the only way you can also estimate how much effort is involved – and whether the project is also financially worthwhile for you.

E-commerce projects are usually invoiced on a time and material basis. However, you can also agree a fixed monthly flat rate. 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, you as a service provider should specify in writing exactly which task packages are included and which are not.

Opportunities in e-commerce

It’s not just the ongoing online shopping trend that speaks in favour of e-commerce. There are also other good reasons why you should look into projects for web shops:

• 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 up additional sales channels in response to falling sales. This also includes their own online shop.
• 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 fuelling the e-commerce market. In future, we will “scan” exciting products with our smartphones and be forwarded directly to a suitable online shop.
• Scalability: Formerly small shops are becoming increasingly professionalised. This can be clearly seen with WooCommerce – plugins for medium-sized to larger projects are increasingly in demand. Your consulting services or your agency can grow with these requirements.
• Marketing: Webshops require different online marketing measures than traditional portals. This starts with the SEO optimisation of product pages and ends with services such as Google or Facebook shopping.
• B2B shops: Online shops are only slowly becoming established in B2B, 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 take a look at your competitors. In other words, other agencies and freelancers who implement and maintain websites. How many of them already have online shops in their portfolio? Customers who need both – content and e-commerce portals – will opt for 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 primarily involves ongoing maintenance. Most shop owners initially take on the maintenance of their portal themselves. However, they quickly reach their limits. Especially when

• you have no technical understanding
• The shop is run parallel to a retail shop
• The virtual warehouse is growing rapidly and 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 term.

Typical maintenance packages include creating or importing products, selecting and setting up suitable extensions (plugins), optimising the shop design or updating the system. But the optimisation of product images and testing new functions in a staging environment are also included. Including restoring backups in the event of errors.

With all these tasks, you will quickly be confronted with questions that go beyond technical issues. See the section on the requirements for agencies above. Other areas in which you can work with a shop system:

• Development 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 customised at great expense. To do this, however, you need very sound knowledge of software development. And you should have a lot of patience.
• Development of plugins: This area also requires some experience. This is because the little helpers quickly intervene deeply in the logic of the shop system. One faulty line of code and the checkout doesn’t work as desired.
• Development of designs and templates: WooCommerce and WordPress have design templates (so-called “themes”) that sell hundreds of thousands of copies. You will hardly manage to launch a template for a shop system that becomes very popular right from the start. Niche markets are usually more effective here. For example, special templates for food shops, online pharmacies, craftsmen, artists, etc.
• Online marketing: Search engines have special rules for the listing of shops. But the topic of conversion optimisation is also becoming more important in e-commerce. You can specialise in SEO audits for online shops, for example.

Of course, you can also offer all the services described above in one. The main target groups are then

• Companies that concentrate on sales, but not on technical operations.
• Stationary shops that want to generate additional sales. But who do not have the necessary expertise or the time to do so.
• Classic portals that already work with a content management system such as WordPress and require an additional sales channel. For e-books, webinars, events or vouchers, for example.

Another note: To be fair, however, you only offer such complete packages in an agency, not as a lone fighter. And only if you have specialised employees for web design, development, analytics, performance, SEO, etc. in your team.

Plugins and themes

The development of extensions for up-and-coming shop systems is very exciting. Depending on the area of application, their market is not as large as it is for add-ons for content management systems. However, 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 these. You can find out more in our article on developing plugins.

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 administration? Do you prefer development? Do you love web design? Do you know anything about 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 customers will notice whether you really know your way around the individual tasks. Or whether you’re 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.