Taking the plunge: is your business ready for e-commerce?

Online shopping has shaken many sectors of retail to their core, but builders’ merchants have weathered the storm, with most customers valuing expert knowledge and the ability to see items in person before buying over the speed and convenience of ecommerce.

20th November 2015

Nevertheless, many builders’ merchants have stepped into the world of ecommerce with great success, having taken advantage of the wider customer base that online shopping provides. Adding an e-commerce element to your merchant business is certainly a risk. Before taking the plunge, ask yourself if your business is ready for ecommerce…

#1 What value would an online shop bring to the business?

If you can’t answer this question, then your ecommerce adventures will fail. You must be able to identify the ways in which an online shop will advance your business. Will it open new revenue streams? Help you in your efforts to expand across the country? Diversify and stabilise your business? The answer to this question will give you an objective that can be used to help shape your e-commerce strategy at every stage.

#2 What do customers have to say?

If your customers have mentioned that they’d love to be able to order goods for delivery or collection online, it should give you plenty of confidence that your e-commerce efforts will be appreciated. Ask customers for their reasoning – would they like to order online for convenience, or is it because they’d love to buy from you even when they’re working on a project that’s far from your shop? Gauge customer interest before making the leap. However, remember that you’ll need to gain additional online custom for your venture to work; you probably can’t rely on current customers alone to make e-commerce worthwhile.

#3 How will you measure success?

Choose your key performance indicators before you start planning your online shop. Ensure they align with the objective you set (see #1). You may wish to focus on daily, weekly, monthly or quarterly sales, average order size, new customers, average margin or site traffic. Without knowing which set of figures you’re using to define success and failure, the focus of your online store will be lost – and you might lose track of when to throw the towel in or expand your offerings.

#4 Are you aware of the short term costs of setting up an e-commerce site?

Take a look at our guide to setting up a website for your merchant business to get some idea of the costs involved in setting up an online shop for the first time. You can circumvent many of these fees by listing on eBay rather than on your website, and you’ll also have a huge potential customer base without having to do any marketing. However, price competition on eBay is fierce and you’ll have to pay eBay and PayPal fees (or similar) for every transaction.

#5 Do you have the resources to maintain an e-commerce site in the long term?

Each year you’ll have to pay for hosting services, your domain name, any paid plug-ins you use and your SSL certificate. However, these aren’t the main website costs you’ll face – staff costs will be more significant. You’ll need to take charge of picking, packing, delivery, customer service and updating the website. This might be manageable during slower periods, but if sales suddenly pick up, will your staff be able to cope? Similarly, will you be able to manage stock efficiently enough to cope with demand spikes?

You’ll need to invest significant time and money into your online store. It’s vital that you have cutting edge software in place to help you manage your stock, keep track of your takings and give your business the resilience to flourish in the tricky world of e-commerce. See what Trader software has to offer builders’ merchants and get in touch for further information. 

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