The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
The company for caregivers uses in-house resources to relaunch site, CEO says.
Build or buy is a decision every e-retailer has to make when venturing into e-commerce. When Keith Maddox, CEO of Parentgiving.com, had to make that decision for the recent relaunch of his company's site, he chose to build the platform in-house. Maddox explained why he chose the homegrown route Tuesday at the Internet Retailer Conference & Exhibition in Chicago.
The self-funded start-up, which provides advice and products that help adults care for aging parents, was looking to expand its basic site from little more than a shopping cart. It had looked solely at managed software providers and was about to commit to a contract with a vendor that would cost the company $300,000 over the next two years. Then Maddox had a change of heart.
"I decided our money would be better spent building up awareness and on marketing," Maddox said, adding he was looking at e-commerce platform vendors that charged $125,000 to $175,000 for implementation alone.
And so, Parentgiving decided to build on its existing Shop-Script e-commerce shopping cart platform, which uses the open source programming language PHP, to restructure the site. The cost of the platform is essentially the salaries for a front-end developer and a back-end programmer plus an additional $2,000 monthly to Rackspace U.S. Inc. for hosting. Having the site managed and run in-house gives Parentgiving more flexibility to make changes, Maddox says. Parentgiving also doesn't have to wait in line for help when it wants to make a change, he added.
For example, Parentgiving cut its checkout process from five steps to two in less than a week, a task Maddox estimates would have taken a vendor at least two to five weeks. When the retailer recently decided to add a graphic at the top of each page to promote its money-back guarantee, staff completed the project in two days, Maddox said.
But he added that the process wasn't easy. "The first few months were tough," Maddox said. "I hired the wrong guy." Finding and hiring a replacement took about two months. On the second attempt, Parentgiving conducted several rounds of interviews, checked references more thoroughly and found a winner.
He also noted other hurdles, including lack of access to the knowledge a vendor has gathered from working with many e-retailers. Parentgiving also has to build from scratch whatever it wants to add. Additionally, with two developers constantly customizing the code to tweak the site, there could potentially be some big problems if one of them decided to leave. And lastly, as Parentgiving grows, it's uncertain just how much traffic the customized site can handle. "Scalability has been a big question mark," Maddox said.
Still, despite some downsides, in the end, the significant cost savings and ability to customize made managing its platform in-house, at least for now, a better option for Parentgiving, Maddox said.