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So Why Become a Reseller?

Below is a case study to help explain and justify the commercial benefits to your company in becoming a reseller of e-Trade Pro ecommerce software. It also relates to the comparison of e-Trade Pro ecommerce software vs. a bespoke solution.

 

Industry Statistics

  • Demand for ecommerce technology / software in UK is increasing every year and is predicted to be worth £500M in 2008.
  • 90%+ of UK web designers turnover less than £100K per annum yet are producing more projects on a year-by-year basis with the same resource. 
  • Between 2006 and 2007 the average price for an ecommerce website fell 28% from £4,600 to £3,300. It is predicted to fall by at least 25% in 2008.
  • In 2007, on average a UK web design company produced 30 projects per annum – in 2006 it was 22. 

This would indicate that despite significant growth in the ecommerce technology market, competition is ultimately making the production of bespoke ecommerce websites less and less economically viable for the typical UK web design company.

For the owner of a typical UK web design company it is clear that every year the margins on bespoke built ecommerce have been eaten away and the only way in which to sustain growth in their business is to become more efficient and produce more projects. This ultimately has a limit based on costly human resource.

 

Prepare for the Future…

e-Trade Pro ecommerce software offers web companies the ability to protect profit margins through fixed agreement licensing, reduce costs through employing less production staff, reduce time to market as the software is ready to use unlike bespoke and allows the company to focus its attention on selling into profitable areas / services (design, online marketing).

 

Case Study for an Average UK Web Company

Assumptions

  • Average ecommerce price falls by 25% in 2008 to £2,475
  • 253 working days in 2008
  • Web Developer @ £20,000 p.a. = £79 p/d
  • Project / Account Manager @ £20,000 p.a. = £79 p/d
  • Graphic Designer @ £20,000 p.a. = £79 p/d 

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Bespoke eCommerce Solution: 4 week build time

  • Development: 20 days @ £79 p/d = £1580
  • Project Manager / Account Manager: 4 days @ £79 p/d = £316
  • Graphic Designer: 4 days @ £79 p/d = £316
  • Hosting: £50 p.a.

Total Cost: £2,212
Client Billed: £2,475

Total Profit:  £292 = 10.62% margin

VS.

e-Trade Pro eCommerce Software: 2 day project

  • Development: 1 days @ £79 p/d = £79
  • Project Manager / Account Manager: 2 days @ £79 p/d = £158
  • Graphic Designer: 1 days @ £79 p/d = £79
  • Software Cost: £600p.a.

Total Cost: £916 over 12 months

Total Billed to Client:

  • 12 month software licence: £1,188
  • Design: £500
  • Shop set-up (developer): £500
  • Project Management: £250 

Client Billed: £2,438

Total Profit:  £1,522 = 62.5% margin 

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Key Points

  • On-demand software can increase typical web companies profit margin per ecommerce project by over 600%.
  • Margin in bespoke is reducing annually.
  • Business running costs are rising (energy bills, salaries, fuel, etc).
  • Bespoke offers higher financial risk due to actual time investment.
  • On-demand means on-going £600 p.a. profit from customer – customer gets free hosting and upgrades increasing satisfaction.
  • Easier to up sell more profitable services (support, design, online marketing).
  • On-demand model means a company can deliver 10:1 ratio over bespoke and therefore significantly improve its turnover and profit.
  • Reduced costs in support, design, training etc as software brings unity to product delivery.

 

So there you have it... e-Trade Pro ecommerce software not only increases profit for its shop owners, but also increases profit for its resellers.