Читать книгу Cost Accounting For Dummies - Kenneth W. Boyd - Страница 73

First, the good news: You don’t have to pay for a physical store location, and most e-commerce businesses don’t need a warehouse to store inventory. Instead, a supplier packages and ships orders on your behalf and takes a fee.

The e-commerce challenge is getting a consumer’s attention and interest, and creating a smooth process to place an order. How you generate interest determines your marketing costs. E-commerce firms write blog posts, create videos, and run online ads to attract customers.

Here’s an example of what I mean. Every ten years or so, my wife insists on buying me new casual clothes. I prefer the Steve Jobs approach of wearing the same thing every day, but that’s not allowed. All the shirts, pants, and shoes are shipped to the house (who’s gonna pay for all this stuff?!) The seller’s marketing efforts got her attention, and she visited the website.

Once a customer visits the website, the seller has to keep the buyer engaged. The site must be easy to navigate, and should include great images of clothing for sale. In addition, the ordering and payment process must be quick and simple, or the customer will go elsewhere.

E-commerce firms should measure the cost of order abandonment, which occurs when a customer completes an order form online, but does not finish the process and make a payment. The retailer must remove the pending order after some period of time, and you need a system to confirm that the individual doesn’t intend to come back and place the order. The seller must also ensure that inventory levels are not changed, and that no sale is posted. These steps require time and money.

Online retailers spend big on websites, product images, and online checkout integration. They also pay people to write content, and to create videos. That addresses the cost side of things, now what about pricing?

E-commerce businesses often face heavy competition, and that limits the ability to raise prices. My wife, for example, could have bought the same clothes from a number of different websites. The seller’s brand reputation and the high level of customer service ultimately drove her buying decision. (I still don’t think I need the new outfits.)