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I stopped counting the number of times où I'm asked if the choice should be Amazon, Shopify or Magento...I don't learns I'm not teaching anyone anything by saying that many conversations about e-commerce start with the tools still today, before even understanding or explaining the business model. It seems so counter intuitive and yet. I don't blame anyone, it happens very often in the digital world, where theit seems that the notion of "running a business" is just another considerationand that everything starts with technology.

Now that everyone from large multinationals to local SMEs are sellingdirectly online, let's take a look at to an aspect that I believe is the great neglect of e-commerce: finance.

Case study: building an e-commerce without anticipating the budget

I'll tell you a little anecdote if I may. I was in Jakarta, Indonesia for IBM, and one of our clients, a large car distributor wanted to set up a platform to sell their second-hand cars. Market leader, the client has the brandthe network, the customer base and over 200 points of sale across the country to leverage.

In short, everything is in place to make it a success, with a dedicated IT team to boot.

What was our mission?

Our mandate is to do a series of workshops to prepare the team for the arrival of e-commerce, and therefore do a small course of "e-commerce 101". We don't question the strategy or the roadmap of the the roadmap. Nothing transcendent or controversial!

The budgetary framework quickly became a problem...

After some timethe manager proudly tells us that they expect to have 4,000 vehicles on the platform at launch. We are impressed that they were able to create so much content so quickly. Content? Yes, 4,000 products is at least 3-4 beautiful photos per vehicle, plus textstexts, the specifications... it's huge. And that's when the workshop changed completely. The customer realized that not only was it not ready, but it hadn't considered the budgets and considered the budgets and production time required.

The consequences of an unanticipated budget

Long story short, the launch was delayed by 6 months. The project had been seen as a sales channel, a marketing channel - never as an entity in itself with its own operating budget. (The site has since been successfully launched).

They took the time to build a financial model, to make scenarios, ROI hypotheses, in short to build a real case and present it to the management and thus obtain the budgetary approval but especially the strategic support. Then the design of the logo could begin.

E-commerce is an undeniable source of income. So please, take the time to set up a sensible and well financed project, supported by dedicated and motivated teams. And the benefits will be there.

Written by Pierre-Yves Tournier

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