If there’s one thing your ecommerce operations can’t do without, it’s infrastructure. This could be anything from the end-to-end ecommerce technology solutions to the services offered by third-party partners.
As your business grows, your ecommerce infrastructure should be able to grow with you and continue to support your scaling operations.
In this post, we’ll explore how you can build ecommerce infrastructure that scales. Let’s get started.
What is ecommerce infrastructure?
Ecommerce infrastructure refers to all the facilities and tools needed to run your ecommerce business. This includes the hardware, software, network, and services that support your operations from start to finish. With the right ecommerce infrastructure, you can not only optimize your performance but also prepare your business to scale.
Elements of ecommerce infrastructure
Ecommerce infrastructure is comprised of multiple elements that often have to work together to solve major ecommerce pain points. Here are the different types of ecommerce infrastructure that you’ll need for your business:
More than any other retail business, ecommerce businesses rely heavily on technological infrastructure. An ecommerce platform would be the first and most important consideration as this is where your entire website will rest, providing a digital storefront for your customers.
There are many elements involved in setting up your ecommerce website – website design and development, hosting, ecommerce website maintenance, and content management. In addition to these, you’ll also need to consider various integrations such as payment processing gateways, multichannel retailing, and inventory management.
As such, the cost of setting up your ecommerce website can add up significantly. You may also need to make additional investments depending on the size and scale of your operations. For example, if you’re selling across multiple sales platforms, solid inventory management software is necessary for accurate catalog management. Once your website is up and running, you may also need further adjustments according to how consumers behave on your website.
Sales & marketing
The sales and marketing aspects of your ecommerce operations are another major consideration. Without effective marketing, you won’t be able to attract enough customers to your online store. That means you can’t make enough sales to drive profits for your business. This makes it crucial to ramp up your sales and marketing infrastructure.
On the marketing front, you’ll need to think about infrastructure to support different channels like email, social media, and search engines as well as paid advertising. You may even need a complete website teardown to make your ecommerce store more enticing to shoppers.
For example, is your value proposition prominently displayed above the fold? Are annoying popups disrupting the shopping experience? Do you have social proof displayed on relevant product/landing pages?
Additionally, you’ll also need to consider whether your pricing strategy is optimized to entice shoppers into buying your products. And look for product bundling options to increase your average order value.
On the selling front, you’ll have to make it as easy as possible for customers to buy your products, which is why investing in infrastructure for omnichannel retail is an important consideration. Can your customers enjoy a unified and seamless experience regardless of where they interact with your business?
To deliver exceptional customer service, your ecommerce business should be equipped with the right tools. While email may be sufficient to provide basic customer service both during and after sales, you’ll need to make it more robust with phone support. In addition, live chat and social media support are important considerations so your customers can reach you anywhere.
As your business scales, you’ll also need a robust customer relationship management system to easily manage hundreds of thousands of interactions. Such a tool is essential to improve customer satisfaction which will lead to a more profitable sales cycle. While you can handle many of these activities in-house, you may also consider outsourcing to relevant third parties.
After enhancing their ecommerce customer service using live chat and macros, Marine Layer, a San Francisco-based lifestyle company, was able to increase online orders by 75%.
Fulfillment is one of the areas in which you need robust infrastructure as it involves everything from warehousing and inventory management to shipping and delivery. So you can end up spending quite a bit on warehouse space, fulfillment staff, and logistics fleet if you choose to manage everything on your own.
Fortunately, this is also an area that you can effectively outsource to a partner that provides ecommerce fulfillment services.
As your ecommerce business scales, you’ll also need infrastructure that can support your increasing financial transactions. Besides your sales and payments from alternative channels, make sure you can closely track applicable vendor fees, subscription fees, and taxes. You should also accurately record any ecommerce financing options that you may have availed such as loans or inventory financing.
An accounting and bookkeeping system that’s closely integrated with your ecommerce platform can significantly streamline your efforts while minimizing the need for an in-house bookkeeper. You could also consider outsourcing this aspect of your business and let a third-party manage your payroll, payments, and accounting activities.
Computer-based ecommerce infrastructure
Scaling your ecommerce infrastructure involves investing in good hardware and software solutions to support your operations. These can include:
If you’re hosting your ecommerce website yourself, you need to invest in robust physical servers that are capable of processing and storing large amounts of data. That means you also have to consider physical space dedicated for those servers in your premises. In addition to your main web server, application servers and proxy servers should also be considered.
Alternatively, you don’t necessarily need server hardware if you’re outsourcing to ecommerce hosting providers with their own servers. There are plenty of options like A2 Hosting, HostGator, and SiteGround. Costs vary depending on the provider and your unique business needs but typically start from as low as $75 per year.
Security should be a priority for ecommerce businesses as you have to safeguard your customers’ personal and financial information. As such, you need to invest in strong firewalls to ensure that your networks are protected from outside attackers. This adds a layer of security so that only certain kinds of traffic are permitted to access your site.
Many ecommerce website security providers like Sucuri and Cloudflare offer PCI compliant firewall solutions in addition to other security services. The cost of these services is minimal, especially considering the high price of network security breaches. Depending on your needs and the service you choose, you can expect to pay anywhere between $200 and $2,400 per year.
For an added layer of security, data encryption is also vital to ensure that information can be securely transmitted through the internet. This makes it more challenging for third parties and malicious attackers to recover the original data – whether it’s login details or credit card info. So your website needs SSL encryption and continuing support for the same.
Some ecommerce website security providers also offer SSL support in addition to firewall solutions. That means you typically won’t have to pay separately for data encryption. Plans that include SSL support typically start from around $300 per year.
In order to find improvement opportunities, you need to constantly monitor your performance data. Some of the essential ecommerce KPIs to track include conversion rate, customer acquisition cost, churn rate, return on ad spend, cart abandonment rate, and inventory levels to name a few. You need infrastructure that is capable of accurately monitoring and analyzing all these data points.
Many ecommerce platforms come with built-in analytics that tracks some of these important details like visitor behavior, cart abandonment rate, etc. So you typically won’t need to invest in a separate data analytics tool unless you need something more robust. Moreover, 3PLs like ShipBob even offers a built-in analytics reporting tool that will let you track the inventory and fulfillment end of your ecommerce performance.
Order management software
Order management is a crucial factor in ensuring that your ecommerce business functions smoothly, which makes order management software a vital investment. ShipBob offers a powerful order management system that integrates with leading order management solutions and enables you to process, fulfill, and track orders in one place.
From the ShipBob dashboard, you can easily monitor order status, update or cancel orders, and determine your fulfillment costs. It also comes with comprehensive inventory management features, providing you with real-time insights into your inventory counts.
“I love that you can view orders based on when they are processing, completed, on hold, and in other stages. It is super helpful for us to have that and track the order every step of the way.”
Ines Guien, Vice President of Operations at Dossier
Ecommerce infrastructure challenges
Ecommerce businesses experience many challenges related to infrastructure, which becomes prominent during peak sale season and in international ecommerce selling. Most of these challenges revolve around technology and fulfillment.
In a survey of 350 ecommerce professionals, Webscale found that many ecommerce retailers struggled with site availability and slow page loads. Security incidents and hosting challenges were also common. Choosing the right hosting and security provider can alleviate most of these major challenges.
As for fulfillment, ecommerce businesses may experience challenges due to poor inventory management and warehousing. Smaller businesses working out of small spaces, for example, may run out of storage space. This will obviously impact fulfillment as workers struggle to find the items they need to pick and cannot move freely inside the warehouse.
“Before ShipBob I would have been terrified if an influencer posted about our product, and an instantaneous 1,000 orders came in, I would have had no way to handle that.
Now I am totally ready for that. I think the biggest benefit and joy of working with ShipBob is the blocks of uninterrupted time I have back. I feel so free today. It really takes the stress out as a lone wolf entrepreneur.”
Leonie Lynch, Founder & CEO of Juspy
Additionally, they may lack the infrastructure to accurately forecast demand and, as a result, order too much inventory or not enough. This can result in financial loss from overstocking and negative customer experiences from stockouts.
Poor collaboration with third-party shipping carriers adds to the challenge as retailers are often left in the dark even in case of delivery delays or capacity restrictions.
ShipBob helps you scale your ecommerce infrastructure
ShipBob is a tech-focused 3PL that takes care of the entire order fulfillment process for you, alleviating infrastructure challenges related to fulfillment and technology. This makes it much easier to scale your ecommerce infrastructure without significant financial investment.
With the ability to store your inventory strategically at ShipBob’s fulfillment centers, you’ll never have to worry about warehouse space or inventory management. Besides storing your inventory, ShipBob delivers efficient fulfillment and affordable 2-day shipping so you can keep your customers happy and your operations running smoothly even as you scale.
On the tech side, ShipBob gives you a free analytics tool that comes with robust features to solve many of your tech-related infrastructure challenges. The tool offers inventory management features to help you with better inventory allocation and monitoring. It lets you accurately forecast demand based on historical purchase data, allowing you to make informed decisions on inventory reorders.
“ShipBob’s analytics tool is really cool. It helps us a lot with planning inventory reorders, seeing when SKUs are going to run out, and we can even set up email notifications so that we’re alerted when a SKU has less than a certain quantity left. There is a lot of value in their technology.”
Oded Harth, CEO & Co-Founder of MDacne
Ecommerce infrastructure FAQs
Here are answers to the top questions about ecommerce infrastructure.
What are the components of ecommerce infrastructure?
Some of the main components of ecommerce infrastructure include website development, security, web server maintenance, and database management to name a few.
What are the objectives of ecommerce infrastructure?
Ecommerce infrastructure aims to support different functionalities and processes in an ecommerce operation, allowing the business to function smoothly.
What infrastructure is required for ecommerce?
Ecommerce businesses typically need infrastructure related to technology, sales and marketing, customer service, fulfillment, and finance and administration.