Madison Reed has raised $32.1 million since launching 15 months ago.
Web hosting is a cornerstone of e-commerce. As such, e-retailers must carefully prepare prior to seeking a host, understanding their needs to ensure a successful marriage.
An e-retailer seeking web hosting services has needs. It needs a technology services company to help operate its business. It needs a place to store its virtual shop. It needs networking power to effectively interact with online shoppers. It needs technical assistance. And it may need more.
When it comes to web hosting, there are many retailers in need. 72.3% of respondents to a July 2007 survey of retailers who are Internet Retailer readers use web hosting services. Monthly costs range from hundreds to thousands of dollars, depending on the size of an e-retailer, sales volume and services, which include data storage, networking bandwidth, e-mail, technical support, e-commerce platform and systems hosting, and others.
The most important aspect of preparation prior to initiating contact with potential web hosting companies is identifying current and future needs based on growth and other calculations in an e-retailer’s strategic business plan, says Marc Heinzer, I.T. project manager at America’s Gardening Resource, which operates Gardeners.com.
In early 2005 America’s Gardening Resource was looking for a web hosting firm to provide services including storage, bandwidth and technical support, and one that offered an e-commerce platform it would host. It decided on Demandware Inc.
“Our experience with our previous site host showed us what services we needed and what it took to run and maintain the site over several years. We used that data as a baseline and went from there,” Heinzer explains.
The first step was to survey anyone in the company with legitimate input into how a site was created and maintained. “We consulted with different stakeholders, including the president, chief technology officer and chief operating officer. On the business side, a lot of it was driven by the director of marketing and the senior electronic marketing manager. We created a list of what everyone needed and then went through an analysis process to figure out in total what we needed, all of which tied to business cases.”
Web hosting is a cornerstone of successful e-commerce operations. Web hosts store and relay data in all its forms, provide support to e-retailers as they navigate the technical realm of their business, and can help maintain and, depending on the breadth of the web host’s offerings, even supply e-commerce systems. For e-retailers that opt not to host their stores themselves and instead seek a third party, knowing what they require from a web host prior to seeking one out is crucial to ensuring they get exactly what they need.
“E-retailers must approach hosting companies with a firm idea of their intended web site functionality. This will enable e-retailers to gauge for themselves such elements as storage space required for a site and have a roadmap for future scalability,” says John Lovett, senior analyst at JupiterResearch.
Retailers’ starting point, he says, is understanding their requirements and what is available in the marketplace. “Much of this information is out there from the hosting providers,” Lovett says. “It is a highly competitive market where there are a lot of companies competing for hosting customers.”
Two important ingredients make up the foundation of a web hosting package: storage space and networking bandwidth. Storage space requirements fluctuate from e-retailer to e-retailer, depending not simply on how much text and how many total pages they have but how many separate sites they operate, how many images-low resolution or high resolution-they feature, if they use online video, and similar factors. Bandwidth requirements depend on the same factors, but are calculated based on how much networking space and speed are needed to quickly send the different types of data to a shopper’s computer.
Storage and bandwidth calculations are pure math. Knowing total data involved and getting the math right is the key.
Kevin Hickey, vice president of marketing at Online Stores Inc., says ultimately the e-retailer’s five shops that operate on the Yahoo Store platform do not need much space. In addition to storage and bandwidth, Online Stores gets e-mail, technical support, shopping cart functionality and credit card processing from Yahoo Store.
Regarding storage space, the company’s five sites-United-States-Flag.com, EnglishTeaStore.com, DiscountSafetyGear.com, DesignerGifts.com and Stroller.com-have up to 10,000 pages each. “We calculated the average page size is about 200 kilobytes. Five sites times 10,000 pages times 200 kilobytes equals 10 gigabytes,” Hickey explains. When Online Stores approached Yahoo Store and found Yahoo offered 20GB per store, it knew it would not only have more than enough space, but more than enough space to grow.
Required bandwidth depends on site traffic. Hickey looked at the average monthly page views Online Stores’ sites received prior to hunting for a web host.
“Our busy sites get about 10,000 visitors per day who average seven page views, at about 200 kilobytes each. Multiply that by 30 days in a month and that equals about 400 gigabytes,” he says. Online Stores found Yahoo provides 500 gigabytes of bandwidth per store as part of the package, enough to ensure a good customer experience.
ArtisanGuitars.com, which launched its site in December 2004 using 1&1 Internet Inc. for web hosting, hit a bump in the mathematics road-at the time it was new and had no experience on which to make calculations. So it turned to others for guidance.
“With the many high resolution images we were planning to use on our site and the number of products, it was quite difficult to imagine what we might need,” says Bill Warmoth, owner of ArtisanGuitars.com. “We were looking to hire a webmaster, so we asked potential webmasters to look at our needs and compare them with sites they designed, which included other music sites and jewelry sites, which also use a lot of high resolution images. The webmasters, who knew what the sites they designed required, then gave us estimates of storage space and bandwidth we would need.”
Just over three years later, the online shop is using 555 megabytes of its total 1,200, leaving more room for growth.
Heinzer at America’s Gardening Resource was not as concerned about data because its two sites do not have that much to begin with.