The Essential E-Commerce Tech Stack

It’s time you heard the truth about your e-commerce business. I know you’re passionate about your products — you spend sleepless nights obsessing about them. You’d rather sit in your warehouse instead of socializing with other humans. Turns out you’re not alone. In fact, soon after opening up shop, most online sellers find themselves in a wasteland of lost perspective. Lured in by the false charm and naive promise of the virtual mom-and-pop world, they become trapped in a universe where the shelves will never be full, the data will never make sense, and the margins will never be enough.

Fortunately I’m here to tell you, no matter what your mother said about hard work and bootstraps, blind doggedness isn't going to keep the online retail lights on. You want to pay the bills and then some? Assemble the ideal e-commerce tech stack, made up of best-of-breed systems and software in each relevant vertical, and soon you’ll employ teams of people whose job is to obsess about your products, data and margins. If you want a retail business that’s sustainable, growable and profitable, start here.

Sales Channels:

Find out how and where you’re going to list, sell and collect payments for your products. This means picking a shopping cart and marketplace — I recommend at least one of both and maybe even a few of each. Since your livelihood is at stake, beware of less established platforms and go for the tried and true. To be specific, Shopify, Magento and BigCommerce are among the most trusted and reputable shopping carts. And the big marketplaces are easy — Amazon.com, eBay, Etsy, and stay tuned for more from Wal-Mart and Jet.com.

And don’t forget a point-of-sale system for selling in person. I like Square and Shopify POS. If you choose selling systems that can handle maximum traffic and offer maximum exposure, you won’t have to switch over as your business grows. Better yet, if you work with selling systems that assume your products are for sale on multiple channels, they’ll be easier to keep in sync. More user-friendly systems take less time to manage and afford you the freedom to experiment with new channels and markets.

Accounting:

In e-commerce you must have a system of record; for most that's accounting. Now that you have products, customers and orders, you need to make sure you’re in compliance with the government. Yes, you need to track how much sales tax you’ve charged and will pay, how much money you made, how much money you spent, and how much profit you’ve claimed. Tracking all of this yourself is a huge waste of your time and, frankly, paying an accountant just to enter data for you is a huge waste of your money.

QuickBooks and Xero can handle accounting for even the most complex e-commerce businesses, so that’s easy. As your business grows, the minutia of sales tax and payroll can be tricky, so be sure to look at add-on offerings. However, don't forget the simple data that you were gathering before was sufficient, but to grow you actually need to have all of your systems working together and giving you some insights on what the heck is going on.

Inventory Management:

You know what you’re going to sell, but you need a way to organize, catalog and track all of your products. If you’re a small seller, you can probably get away with just everything in Excel, but we both know that’s a fool’s game. At the very least, your accounting system can help you manage your inventory, but that’s a topic for another day. For something more robust, use a sophisticated inventory tool that will grow with the complexity of your business. If you’re lucky enough to find yourselves with large or multiple warehouses, I suggest a warehouse management system. It will track what you have, locate it, tell you how big it is, and even tell you how best to store it.

Shipping:

Since you’re selling online, you need a way to deliver orders. In its simplest form, you need to log on to a website to print a label from UPS, FedEx or USPS. Better yet, use a more comprehensive shipping tool that will help you compare carrier rates, standardize packing and fees, generate labels, put it on the package, get it out the door, and inform your customer that it’s on the way.

Now I’ll let you in on a little secret: Profit margins like to hide out in shipping and fulfillment costs, so while using an all-inclusive system like ShippingEasy or ShipStation might seem like an extravagance early on, it will actually mean cost efficiency and workflow streamlining that’s well worth it in the long run. Don’t be shortsighted; realize that as your business grows, your shipping and logistics become more complex. A robust shipping tool will sustain much higher volume and handle far more use cases like drop-shipping, multiple locations and high-volume sales.

Integration:

Hear this: No single-channel, multichannel or omnichannel e-commerce business will last and grow without some way to connect it all together. It’s very simple: You must integrate your systems. Without integration, you have no visibility, no ability to identify problems related to costs and expenses, no insight into inefficiencies, and no actionable ways to increase your margins and profitability. And don't be fooled by the minutes you spend in data entry every day. They all add up to hours and days each month that could be better spent growing your business.

When building a business, even the best tech stack isn't worth a damn if each vertical exists in isolation. Integration is the mortar that holds all of it together and, one could argue, prevents you from losing your mind. Do yourself and all of your loved ones a favor and get yourself an integration tool, ideally one that has analytics built in. See that? You handle the truth.

Parag Mamnani is founder and CEO of Webgility, Inc., a multichannel e-commerce software provider.