Ordoro Blog

This morning, Jonathan of 37signals posted an example of a follow-up email from an e-commerce merchant after the order has been shipped. Please read the reader comments on that article for more ideas.

According to this McKinsey report on multi-channel retailing

consumers who shop across a number of channels—physical stores, the Internet, and catalogs—spend about four times more annually than those who shop in just one. Companies that get multichannel retailing right can enjoy larger profit margins and yearly revenue growth more than 100 basis points higher than companies that don’t.

The chart below (from the article) shows an example of apparel industry.

The article also emphasizes that multi-channel retailing is not just about opening a web-site or mailing your catalogs. All the different channels (your websites and your brick-and-mortar stores) should work well together in sync. If they don’t work in sync, you will end up dealing with nightmares around order fulfillment and order management.

The challenge is that while making sales through a number of independent (or, at best, loosely connected) channels is relatively easy, capturing the full benefits of multichannel retailing in its true form involves much more than simply publishing a catalog or replicating an in-store product assortment online and assuming that consumers will click and buy. The kind of multichannel retailing that fuels sustainable growth and margin expansion requires a tightly integrated strategy across all channels, including physical stores, catalogs, the Internet, and mobile—and even homes, in the case of certain service offerings. Each channel needs to play a clear (and often quite distinct) role in supporting and reinforcing a retailer’s overall brand equity.

Just like everything else with the IRS, sales tax calculation can be a nightmare, particularly for ecommerce merchants. Sales tax numbers vary by zip code and change frequently.

Fortunately, most shopping cart packages already have built-in sales tax calculators. When the customer places an order on your website, based on their zipcode, the shopping cart will automatically do the math for you.

However, if you want to do your own lookup on sales tax by zipcode, here are two easy tools.

Disclaimer: I have not used either of these tools for any serious calculation. I have only played around with them and the answers seem right to me. So this is not an endorsement of any sort.

1. Zip2Tax – These guys offer a web-lookup service for a monthly fee, and they also sell Sales Tax Tables for a one-time fee. They claim that -

Every month each state is analyzed carefully by our tax experts for changes to both the tax rates and the ZIP codes. Our data is updated and provided to our subscribers on the first of every month. Tax table Updates are provided to subscribers a couple of days before the beginning of the month to allow time for implementation.

2. Here is another way to lookup sales tax percentages. Use the Wolfram Alpha search engine. Type in your Zipcode followed by the phrase “sales tax” and it will show you the answer. For example.

I found this cool website today. Unsuck It. It converts corporate speak into plain English.

Here are a few gems -

1. Blue-Sky Thinking : Using your imagination
2. Boil the Ocean : Waste time
3. We can’t boil the ocean, so let’s start by bucketizing the deliverables and picking the low-hanging fruit : Categorize

Related Posts:

1. Why simplicity matters?
2. Warren Buffet’s advice for small business owners

The Ordoro features page is now live! Please visit the page to see the list of features that we offer in our beta version. The page also has a 60-second overview of how Ordoro can help ecommerce businesses.

The current page layout has four sections (one for each functionality module) -

1. Order management
2. Inventory management
3. Purchasing management
4. Web-based

In our mind, that is a logical way to split the functionality of Ordoro. We also highlight the benefits and features within each sub module.

We would love to hear your feedback regarding the features page. What do you love? What do you not love? Please share your thoughts by commenting on this blog post.

Guest article by Mark Baartse of TheHolisticWeb

Doing split tests on your online shop is one of the best ways to increase your profitability. If you’re not familiar with split testing, there’s two basic types of tests.

A/B test – this is when you make two different versions of a page. Half the visitors randomly see one version, and half see the other version. The two versions have differences such as different layouts, colors, copy, etc. You set a goal for the test, what it is you want to improve. Usually this goal is pretty obvious – completing a sale! You then run the test. The software sends half the people to one version, half the the other, and measures which half buy more. Often small changes can make huge differences in sales.

The other type of test is a multivariate test. This is when you have a few “zones” on one page and test different content in those zones. For example, you might have an Add to Cart button zone and a Headline zone. In the Add to Cart zone, you are testing 3 different “Add to Cart” buttons and in the headline zone you are testing two different headlines. The software randomly rotates all combinations of the different content in each zone and tells you which combination results in the most sales.

The goal of testing is to improve your conversion rate. Most shops are converting around 2% of their visitors. If you can increase this to just 2.1%, your revenue has gone up 5% – without any increase in marketing spend! It’s not hard to increase your conversion rate 5%, 10%, even 20% by running a few well planned tests. The testing professionals sometimes see improvements of over 100%!

While there’s lots of software to run tests with, the most popular is Google Website Optimizer which is powerful and free.

Here’s where it gets a bit tricky. Most web pages which talk about testing use landings pages as their example – a single page with a single purpose. These pages are easy to test. You create two versions, and you’re done. In an online shop, you often get more value by testing templates, such as your product page template. But how do you do this?

It’s not as hard as it sounds. It will require some basic technical skills, but you don’t need to be a hard core programmer. If you are scared of code, a programmer should be able to help you set it up in no more than an hour or two.

Let’s say you want to test a different “Add to Cart” button – a green one and a blue one. Creating a second template and running an A/B test is very difficult in most shopping carts. The simpler alternative is to use a multivariate test. Since you are just testing one section of the page, then it’s in practice much like an A/B test. However, in a template, a multivariate test is technically much simpler.

All you need to do is sign up for Google Website Optimizer. Create a new multivariate test. You’ll need to go through the various steps (Google Website Optimizer has some good help files if you get stuck). Once you have the code that Google Website Optimizer provides, you need to insert the code into your actual template file. While Google Website Optimizer looks like it is geared up for just one page, it works totally fine when the same code appears in a template which can make up 100s or 1000s of pages, no problem. Put the goal completion script in your checkout’s “thank you” page, and then you’re running!

Typically you’ll need to wait a few weeks or more till you get meaningful results depending on how drastic the change is. If the test is only improving things by 1%, it might take months before you have an answer as to which is the better version, but a change of 10% could be a week or two, depending how many sales you have.

An alternative is a few shopping carts such as BigCommerce now have support for Google Website Optimizer without having to mess around. This really encourages testing and should help you improve your conversion rate even faster.

I strongly encourage you to experiment with split testing as a great and cheap way to improve your store’s conversion rate. If you aren’t sure what to test, a good book is the aptly name “Always Be Testing” which has some great examples of tests to run.

What is PCI (PCI_DSS) compliance?

PCI stands for Payment Card Industry (Amex, Visa, Mastercard, Discover, etc). PCI_DSS stands for Payment Card Industry Data Security Standard.

The payment card industry requires anyone who deals with payment card information to be compliant. That is, the industry requires people who handle the customers’ credit card information to be responsible for the security of that information thus preventing credit card fraud. Sort of like how Sarbanes Oxley compliance makes big companies responsible for their accounting thus preventing white-collar fraud (Enron et al).

Who needs to be PCI_DSS compliant?

Any merchant who stores, processes or transmits credit card information needs to be compliant.

Why should I care about it?

How would you feel if you used your credit card to make an online purchase and your credit card information was stolen because the online vendor was careless in handling your credit card information? You would want any fraudulent transactions on your credit card to be removed right?

If you as a vendor are not PCI_DSS compliant then you have not done enough to be responsible for any customer credit card information you may have stored, processed or transmitted. And if some miscreant steals this information to make fraudulent transaction then:

• You lose the goodwill of that customer (not to mention a really pissed off customer may go viral with the experience, causing much more damage)
• The credit card company can hold you liable for all these fraudulent transactions (If several credit cards have been breached, this liability can add up and drive your company bankrupt)

You may be tempted to think that the likelihood for this theft from your web-store is low given that it has not happened before. But this scenario is comparable to identity theft: May not have happened to you yet, but when it does it is extremely frustrating and time consuming to secure it again. Not to mention that hackers are getting increasingly efficient in writing malicious code that automatically scans the internet for such vulnerabilities and attacks them.

When do I need to be compliant?

Compliance in general requires two activities:

• Quarterly: Getting a vulnerability scan from an Approved Scan Vendor (ASV)
• Annual: Self Audit or external audit by a QSA

Where do I go to get more info?

https://www.pcisecuritystandards.org/

How can I be compliant? (OR How to avoid it altogether!)

Let look at the easier way out first. If you wash your hands off (outsource) all credit card storing, processing and transmitting activities you can be spared of all this!

There are multiple services that will do this for you:

• Checkout services: Google checkout, paypal, et al
• Shopping carts: Yahoo Stores, Shopsite, volusion, bigcommerce are some service providers who manage the credit card transactions for you

Of course there is no such thing as free lunch. You may have to give up on some user experience and/or incur some cost. For example sending your customer to another website, unable to offer one click checkout or simply paying the outsourcing service a cut of your revenues.

If you don’t want to make these trade-offs then here’s a cheat sheet to help you understand what “merchant level” you are and what you need to do to be compliant:

*In addition, the credit card issuer/processor of “level 4 merchants” may ask for a summary compliance plan; which, in-turn will have to be consolidated by the issuer/processor and sent to the PCI.

Why this extra burden on low transaction merchants?

Apparently these merchants account for 99% of all credit card transactions and at the same time are the most vulnerable to hackers due to lack of IT security expertise. Credit card companies report

Jargon

This is what the compliance is trying to achieve: (Of course if you love pdfs here’s the detailed version)