It can be daunting to know where to get started if you’ve not worked with or used open source software before.
“Where do I turn when I have questions? How do I go about setting up this software? Who is building it?”
When you’re looking to build a business on top of this software, you want to have confidence that the tools you’re choosing will last, and will be the right fit for your store.
While it may seem like the path towards using open eCommerce platforms is less transparent for a new merchant, open platforms like WooCommerce give merchants unparalleled flexibility, freedom, and sustainability while powering their business.
Let’s take a look at some of the myths of open eCommerce, and its strengths and weaknesses, to learn more about how it can be a huge win for merchants.
But first, a story:
A business squashed by closed commerce
Imagine that you’ve built your own successful business selling laptop stands. It’s taken four years to get here, much of which was spent:
- Designing your laptop stands and building prototypes of the product
- Sourcing production materials and determining manufacturing cost per unit
- Figuring out where and how you’d manufacture your product
- Determining how much inventory you need on hand and replenishment strategies
…all before you could even think about how you’d sell this product and make money from it. Only then you could talk about sales and distribution strategies. You decided to sell via your own online store and Amazon, and now you’ve finally passed a milestone after a year and a half of sales: your company generated $1.5 million in revenue this year.
You’re a model seller on Amazon, with 98% positive feedback, 99% on-time delivery for all orders, and a 0.11% defective product rate. Amazon now generates 80% of your revenue.
However, since you sell laptop stands, your customers are a bit more tech-savvy than most. They know that if they want to try out a different stand, there are two ways to get free return shipping on Amazon: say the product was defective or “not as advertised”, and the seller pays for return shipping. Despite your wonderful track record, it only takes a small amount of negative feedback like this (5-10 instances) to be completely removed from Amazon.
That means that, overnight, your business of nine people must lay off four employees or more, and you have over $350,000 in inventory you can’t sell and are paying to store. Your effective business has been effectively squashed. And by the way, this really happened — you can read about it (different product, same situation).
While we could look at this as a cautionary tale about selling in a marketplace, I see this more as a larger concern: Merchants should evaluate their reliance on a platform that can shut down or remove them at any time in terms of acceptable risk factors for their business.
The beauty of open source eCommerce and WooCommerce is they can empower merchants to start their own businesses without relying on the whims of their platform.