Web store, shopping cart, storefront, eStore…so many names representing the same application. It is unfortunate that this industry cannot decide on one name. If “word processor” could become a generic term, then why can’t Web store become one?
This comparison actually answers my own question. If you look at the word processor, only a handful of companies were successful developing one and they all seemed to agree on the generic name early on. And now a single word processor called Word, developed by a company in Seattle, dominates the market. Unlike word processing, there is no dominant Web store platform nor has there ever been one. There are over a dozen recognized brand names, hundreds of obscure brands, and probably thousands more if you count custom developed applications.
Why is this industry so fragmented? Is it because it is so profitable that thousands of players are in it? Not likely. If that were the case then we would see a dominant entity take a majority share of the market and acquire or drive out most of the competition. Google or Microsoft could easily do this but have not. The opposite is most likely one of the main reasons - no single entity is making big money solely developing Web store software.
Just look at the ongoing trends. Miva Corp. is a great example and a company I used to work for back in 2001. When I joined the company it had just raised $2 million dollars, had over fifty employees, claimed over one hundred thousand users, and was valued at over $15 million dollars. Miva Merchant was the most recognized brand of Web store. By 2003 revenue was dwindling and the company was purchased by public company Findwhat.com for only $5.5 million and some debt. Findwhat.com then changed their entire corporate name to Miva, Inc. So just a few days ago, Miva, Inc. announced it is selling their small business division (this is what the original Miva Corp. eventually became) for a mere $200,000. That is a 96% drop in value from just four years prior.
But dropping values aside, another major reason is complexity. Businesses are unique and all require very different features to run a Web-based business. A seller of downloadable MP3 files has very different requirements than a seller of motorcycle parts. It is impossible to address all Web business requirements with one software application.
What does make sense, and has been proven to work, is offering a customizable Web store as an important part of a larger e-commerce strategy. eBay purchasing StoreSense from Kurant Corp., and renaming it ProStores, is a good example. ProStores became a way for eBay to reach more businesses and encourage business usage of the entire eBay platform. ProStores has also allowed eBay to service, and profit from, businesses that may never use the eBay marketplace. Plus they adapted the existing business model (something Findwhat.com failed to do with Miva) to include a mix of selling directly as well as through a small group of highly qualified resellers. In this model, both eBay and the resellers are thriving, the merchants receive the best product plus a wide array of custom services from the resellers, and ProStores has near unlimited reach.
An enterprise example is NetSuite. As the name implies, this is a complete suite of Web-based business software. Within this suite is a Web store application that integrates with all the other services in the suite. It is a one-stop shop for larger businesses with a significant budget. The Web store is simply one of many important services.
So both eBay and NetSuite are doing well and offer a reliable, safe-from-going-out-of-business Web store. It is important to note that the two do not really compete as NetSuite is much more expensive and not truly in the same small-to-medium size business category as ProStores.
I am biased and of course recommend ProStores through Serrahost as the ultimate Web store solution. My general advice, however, is to strongly recommend you choose a customizable platform that easily integrates with other e-commerce services, is auto-upgraded on a regular basis, and is developed by a reputable company that has resources and offers a Web store as part of a comprehensive e-commerce strategy. I can help you find that perfect solution, just ask me…