Ever made money off of an ecommerce website?

Posted by BG on March 31, 2008, 5:19 pm

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Hey all:

Just curious if anyone out there has created an ecommerce website for
someone else on a commission basis and actually made money off of it?
Reason I'm asking is that a friend has a music store and has been after me
for some time to implement ecommerce into a website I built for him earlier.
He said he would pay me commissions off of everything he sells online. I've
looked at a bunch of ecommerce packages and have settled on an open source
program (ZenCart) which seems to fit this situation. I've already pumped a
bunch of time into this and am very skeptical that there will be any real
return for the time it's cost me. Don't get me wrong, I'm not whining. On
this project I'm essentially donating the time in exchange for the learning
experience. If I ever see any commissions, it will be icing on the cake.
Any thoughts, ideas, warnings or pointers as this ecommerce newbee heads
down this path would be greatly appreciated. Are there any best practices
to insure from the start that my commissions will always and automatically
be paid? What about contracts - any good examples of ironclad contracts?
TIA

BG

Posted by John Bokma on March 31, 2008, 5:32 pm

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Ask your friend to pay 50% now, and 50% out of the commisions, I mean,
he's sure to get that money anyway, so there is no risk for him, no?

--
John Bokma http://johnbokma.com/

Posted by BG on April 1, 2008, 9:35 am

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Sounds pretty reasonable to me.

Posted by \(not quite so\) Fat Sam on March 31, 2008, 5:42 pm

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BG wrote:
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I've built plenty of lucrative ecommerce sites, but I've never done one
where I get paid as a percentage of each sale. I've always got paid a fee
for my work, and then handed the site over to the store owner.
In theory, this could be a very lucrative way to get paid for the site...If
his sales are good, then yuo have a regular income from one single
website...

Potential problems to be aware of may include, but may not be limited to...

You're at the mercy of the store owners marketing skills.
In my experience, a lot of store owners seem to think that all they need is
a website and it will magically attract traffic and sales. They think it
will somehow promote itself...Not all store owners think this way, but a lot
seem to...
They refuse to promote or advertise their website. They won't even put the
URL on their stationery.
If he's this sort of guy, you may find your return quite low.
Make sure you push the concept of web promotion to him...Draw up some
spreadhseets to convince him that marketing and advertising is as profitable
in the cyber-world as it is in the real world.

Check out his sales figures before you agree to accepting these terms...
See how much business he's doing, and what his markup is on the items he's
selling, then from that, work out how much your cut of the profits is
worth....
He might be working to such tight margins that it's not financially viable
for you....
If he's already doing mail-order, ask to see the books for his mail order
sales, as these are likely to reflect the online sales somewhat.

Make sure he's not going to offset the shipping costs and payment gateway
transaction fees by dipping them into your cut of the profits.

Make sure he's not imposing a time limit on your share of the profits...For
example, a 5% share for the first 6 months, or the first 6000 sales etc...

Keep a close eye on the efficiency of his mail order customer service
procedures....These are likely to have an impact on your earnings from his
site....

Make sure he's advertising and marketing the site in appropriate places...I
know I've already mentioned this, but it's important enough to repeat.

These are the first half a dozen or so concerns I could think of off the top
of my head....

Posted by John Bokma on March 31, 2008, 6:58 pm

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Small wonder there, because they also are not paying the developer...

--
John Bokma http://johnbokma.com/