E-commerce Website Development — to Outsource or not to Outsource?

The global retail e-commerce and e-commerce software development markets are showing a steady growth over the last years.

More than 1,300 million consumers made purchases via the Internet in 2015 and the number of online shoppers is expected to grow over 1,700 million by 2018.

New businesses are entering the e-commerce space every day, established companies continue to incorporate e-commerce solutions in their business workflows and e-commerce software development market is booming respectively. The Global Digital Commerce Software Market (2015–2020) report says that e-commerce software is one of the hottest parts of the overall enterprise applications software market. It is estimated to reach $4 billion in 2015 and is projected to double by 2020. Isn’t it a great time to start a new e-commerce website?

Where to start?

First of all, it is necessary to keep in mind that running an e-commerce business means more than selling something online. It involves fund transfers, supply management, data collection, online marketing and many other things. It covers not only the Web, but also mobile, e-mail and other technologies, requires integration with various external services and, moreover, the e-commerce environment is continuously changing and evolving. How to not get lost? Here are are some tips:

  • Start small. Build a simple version of your website with the most important features first and then expand it gradually. This way, you will enter the market earlier and will be able to take into account the latest market trends for the future growth.
  • Focus. Concentrate on the development and polishing the core functionality that provides the greatest value to your clients and differentiates you from competitors. All the rest can be added later.
  • Listen. Target your efforts to the actual needs of your customers. Learn which features your clients like or dislike, what they really want to get from your site and make corresponding improvements.
  • Right tools. Select technologies and tools that can serve the current needs of your website and provide enough space for the future development.
  • Follow important market trends. The e-commerce space is highly dynamic and it is hardly possible to adopt all new trends. Pick only ones which are truly beneficial for your e-business.

Let’s take a look at some noteworthy e-commerce trends for 2016:

  • Mobile is on the way up. According to survey, the share of e-commerce site traffic and revenues originating from mobile devices are rising. Conversion rates on mobile are also increasing. It is estimated that U.S. mobile retail sales will reach $31B by 2017. However, making a mobile version of your site is not enough. To win the hearts of mobile users, a clear navigation, appealing design and engaging user experience are highly needed.
  • Cross-border e-commerce. The cross-border e-commerce trade is growing enormously and projected to hit $307 billion by 2018. The logistics infrastructure for cross-border trading is already in place and there is an increasing consumer demand for international purchases. So, any e-commerce startup may have aspirations to reach new customers overseas.
  • Videos. Videos and live streams are more personal and informative than photos. They give a better idea of how a product will look like in real life and encourage people to buy online. The modern cameras and web technologies made this achievable. Many large retailers, like Snapchat, are already using live-streams and this practice is gaining traction.

E-commerce platforms vs. custom development

Now, let’s turn to the technical side of building an e-commerce website. What to choose — use an e-commerce platform or build your e-commerce site from scratch? Both variants may be right, depending on situation.

The e-commerce site-building platforms, like Shopify, provide a wide set of features and many customization options. They allow creating websites quickly and assist in handling the tech stuff, e.g. payment gateway integration, hosting, marketing, etc. According to the researches, in 2013 SaaS platforms accounted for 44% of e-commerce software spendings and this share will rise to more than 66% by 2019. So, there is a good chance that you can find an e-commerce platform that will perfectly match your needs.

However, the competition in the e-commerce industry is very high and the customer’s expectations continue to rise. This requires inventing non-trivial business ideas and solutions in order to be noticed, which not always can be implemented by means of e-commerce platforms. Besides, one day your requirements may spread over the limits of selected SaaS solution. You will have to re-create your website from the ground up and the efforts invested in the first site will be lost.

So, if you have an ambitious development plans and want to offer your clients really unique experience, it can make sense to code your website from scratch. Here we come to choosing the programming language. Actually, any language, e.g. PHP, Ruby, Java, Python, may do just fine. However, Ruby on Rails has some nice benefits. Let’s take a closer look.

In total, more than 800,000 live websites are currently using Ruby on Rails and it is widely used in e-commerce. Some popular e-commerce sites built with Ruby on Rails are Groupon, Airbnb, Shopify and Yellow pages. Many e-commerce startup companies choose this technology too. Well, here are some points that make Ruby on Rails a good choice for building an e-commerce website:

  • Speed. Many things, e.g. authentication, forms and payment methods can be implemented in Ruby on Rails by installing existing plugins (gems). It is also highly automated which allows developers to save time on routine tasks. This greatly simplifies and speeds up the development.
  • Reliability. Ruby on Rails and automated testing go hand in hand. This helps to make sure that everything works fine and build reliable applications. It is an important consideration for e-commerce, where financial transactions and revenue are always on the line.
  • Flexibility. The DRY and modular practices, used in Ruby on Rails, reduce the amount of code and ease making changes. The flexible nature of Rails is very helpful for the future modifications and makes it easy to integrate e-commerce apps with various third-party services.
  • Cost-effectiveness. Ruby on Rails works perfect for fast prototyping and checking the feasibility of an idea without committing too much on it. The faster development process and easy modifications lead to low up-front investments and overall cost savings.

Being quick, agile and with lowered costs is something the majority of businesses are looking for and this is where Ruby on Rails comes in handy.

Outsourcing: to be or not to be?

When you have selected the technology for your e-commerce site and if you do not have strong technical skills by yourself, you have to find a good custom web development company. The expertise of the development team in great extent defines the pace of development and quality of the delivered web application. It may not be easy to find suitable developers locally and having an in-house development team is associated with considerable financial overheads. That’s why it may be a good option to outsource the development of your websites to a third-party service provider.

Pros of outsourcing an e-commerce site development:

  • Access to expertise. You can choose developers with a proven track record in creating e-commerce solutions and take the benefit of their past experience.
  • All-round service. A full-stack development company can take care of all tech stuff, including design, integration with your existing business management tools, deploying to server, etc.
  • Pricing options. You may pay to your offshore team on hourly basis or request a fixed cost estimate for a certain amount of work. The payment schedule and rates can be negotiated before the project start.
  • Dedicated team. The outsource service providers can create a dedicated team for you. You will get full-time devs working on your project almost like your own employees. You can pause the work at any time without need to pay full-time salaries during the breaks.
  • Lifetime support. When you hire a reliable software outsourcing company, you do not have to worry that your employee may resign and leave you with no one supporting your website.

Cons of outsourcing an e-commerce site development:

  • Communications. Different time zones, language and cultural barriers may cause difficulties in interpretation and scheduling real-time meetings.
  • Quality. If you work with a overseas service provider for the first time, there is a risk to get the website which do not meet your quality expectations.
  • Timing. A good offshore development company may have a busy schedule and when you come up with new updates for your site, it may take some time before they get to them.

The best way to find a good outsource development team is to ask people you know who already outsourced someone. You also can search web development companies with the proper specialization on Google or freelance marketplaces, e.g. Upwork.

Choosing and managing offshore development team

When choosing an outsourcing service provider, pay attention to the following:

  • Portfolio. Browsing examples of live websites delivered by web development companies is a great way to check their skills and level of expertise.
  • References. You can find testimonials in the profiles of service providers on freelance marketplace websites or you may contact some of their former clients.
  • Honesty. Beware of over-promising and under-delivering. Choose developers who are honest with you and insist on realistic work schedule and budget estimates.
  • Negotiation. Clearly state your expectations and make sure that your idea of all collaboration terms (planning principles, reporting rules, payment terms, approach to communication, project management, etc.) are agreed and accepted by your dev team.
  • Сonfidentiality. If your have a unique business idea, protect it by signing a confidentiality agreement with the offshore development company.

Here are also some tips for an efficient managing the outsourced team:

  • Constant involvement. Do not expect that the developers will simply take your specifications and turn them into a website of your dream. No one knows your business better than you and no specs can reflect your full vision of how everything should work. Stay involved with your team on a daily basis and require regular updates from them.
  • Effective communication. Set up an efficient communication workflow with your offshore team. Make active use of Skype or other IM services, give preference to video conferences over voice chats and require the devs to be quick with the email responses. Choosing a convenient project management tool is also vital for smooth communication process.
  • Be agile. Start from building a MVP with the most important features first and then plan frequent releases (even if only internal ones). Constantly review the work done by the developers, provide feedback, address problems early and ask for insights form the team on how to solve them.

Final notes

Like any business venture, outsourcing e-commerce website development is challenging. It requires being careful in selecting partners, thorough planning, constant monitoring and a lot of hard work before you get your website up and running exactly as you want. Hopefully, this article has provided some useful insights on this matter.