To Build or Buy?

This is a question I have struggled with a lot. When examining/planning the backend of an e-commerce operations (included their front end website) this is the first fundamental question. And, I must admit, I struggle with this one probably because I’ve seen too often what a few great programmers can accomplish.

First, I look at companies that I admire. Did Amazon start out buying a system to do what they needed to do? How about Backcountry? Last time I checked, Zappos (found by a very smart engineer) is climbing to a billion dollars in sales based on proprietary systems.

I know this is speaking in general terms, but here is a guideline I use…besides budget constraints (which are always considered first). I’ll also assume that you aren’t selling a commodity. Again, this is vetted with small/med retailers in mind (because if you are that big…you’ve already made your decision….which is usually a little of bothJ).

What stage is your business in?

1. BUY: Typically, if you’re a less than million dollar business and/or just starting out, then an Ebay, Yahoo Merchant store or Amazon Seller should suffice. If you are mainly a manufacturer, high a good design company and build a very nice “looking site” that will clearly point customers towards your other retail channels. This will allow you to “learn” the business without the high front-end step up costs. Plus, do you really at this point know how you want to sell online and to whom? If so, go to point #2.

2. BUILD: Have you been online for more than a year? Do you have the analytics data and customer knowledge to clearly have a plan on how you need to connect with “loyal” customers? If so, I’d ask the following:

a. Does connecting mean making the online experience unique? Yes, lean towards build.

b. Do you want to do more than just sell online? If yes, lean towards build.

c. Are you willing to maintain and hire the technical expertise “in-house”? And/or, will you have a “project manager” on-site to do the planning and trouble shooting needed onsite for systems decision?

d. Are you willing to take a risk in people and process or $$? Noting that every great business separates itself from the good companies by placing bets on their people and process…not just spending money at problems.

Systems – It appears that the further the system is away from customer facing, the easier it is to buy a well established package tied into the front end.

Content Mgmt System – Build?

CRM – Build or Buy?

OMS – Buy or Build?

WHS – Buy?

I’m omitting plug-ins and apps such as email marketing tools, intelligent search, security seals, etc. These are usually a buy decision.

What are you selling? Leans towards build.

Do your products have special display requirements?

Are you adding new product often?

Is site navigation & unique filtration important?

Does your product and service need to be seen as a unique experience?

How important is customization and unique look and feel?

If you want to look like everyone else, then “buying” a system will definitely do this. Ever wonder why so many retailers look the same. Besides the fact that retailers are great thieves of other retailers (why think when competitor Y is doing this)….buy decisions usually ensure a “off the shelf” look and feel that fits 90% of the “peoples’” needs. If you are one of the 90%, you’re in luck! Easy decision.

If you need to convey a high-end experience and you want to make “custom” changes to your site….you may be very frustrated with a “Buy” solution…even though if all else is even, the “Buy” decision will allow you to BLAME the software and not YOURSELF.