DigitalOcean Blog | How to build and scale eCommerce businesses in the cloud

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2020 was a challenging year across all industries as businesses adjusted to remote working, sectors such as tourism slowed to a halt, and economies worldwide were affected by COVID-19. One of the most impacted sectors was retail, with stores in many regions forced to stop or limit in-person shopping and shift to online shopping. Despite the challenges faced by the retail sector, the rise in eCommerce allowed many businesses to survive and is predicted to continue its growth in 2021

In 2020, according to Retail Dive, at least $1.9B in venture funding went to eCommerce and retail businesses, and some forecasts expect eCommerce to become a $6.5T marketplace. However, there are many industry-specific challenges eCommerce startups must overcome to be successful including pricing, inventory management, high-dimensional data analysis, and shopping cart analysis. These challenges are enough to derail even the most intrepid founders, which is why every eCommerce business born in the cloud needs simple and efficient SaaS solutions. 

DigitalOcean has tens of thousands of customers including JIJI and Centra running eCommerce businesses. In this post, we’ll share how eCommerce businesses are leveraging services such as DigitalOcean Managed Databases, Kubernetes, and Droplets to power their growth. 

The challenge of dynamic pricing

One vital tool for eCommerce businesses is the ability to dynamically price items to account for changes in demand, promotions, and other factors. Dynamic pricing tools make real time price adjustments in order to help consumers. The adjustments need to occur realistically. Changes need to be done at some interval (daily or hourly). For many developers, it’s important to use tools built and deployed in familiar development languages to ensure continuity.

Dynamic pricing applications built in Angular or JavaScript for open source eCommerce frameworks provide some of that longed-for continuity for development teams and ultimately for consumers. Similarly, historical pricing data needs to be maintained for analysis, ideally in a MySQL or PostgreSQL database (you can read our community tutorial on tackling a similar problem). Making life easier for developers is always a good thing for a business and especially true for small businesses trying to manage their data.

On top of data management, any tool for aspiring founders requires the ability to generate actionable insights from historical pricing data. That’s where a real-time competitive intelligence platform like Bungee Tech can be useful. They have helped over 180 customers make near real-time decisions about pricing to ignite sales running on DigitalOcean Droplets. Bungee Tech deals with more than half a billion data points, new data points that are collected on a daily basis. It is a real challenge to be able to get data at scale and to make predictions and analytics on top of all the data. DigitalOcean was able to step up to the challenge and handle all of its workloads at scale.

Managing your retail inventory

To remain in business and keep selling, it is important for retail businesses to know what is in stock and keep their website updated with the latest inventory information—and that makes it crucial for eCommerce startups to adopt an enterprise resource planning (ERP) solution early to help with inventory planning and working with customers. 

A key requirement for inventory management at the small business and startup level is the ability to track external inventory. Many eCommerce businesses get their supply from other places and must track third-party suppliers’ inventory in real time. If the supplier runs out of yellow soccer balls, sellers don’t want to have to sell something that they cannot deliver to the client. While large organizations can afford middleware services that synchronize between the online store and external suppliers, small businesses do not have that luxury. As a result, eCommerce plugins that synchronize between suppliers and sellers can minimize the stress involved for smaller organizations. 

In the past, a robust ERP tool with extensive functionality like this was quite expensive, but services like ZincAPI have made ERP solutions accessible to small businesses. Zinc builds listing creation, inventory management, repricing, and fulfillment software. Their service processes over 5,000 orders per day allowing customers to buy anything from major online retailers like Amazon and Walmart with a single POST request. Startups preferring to host their own ERP tooling can even take advantage of DigitalOcean’s one-click installation of ERPNext

Data Analysis for eCommerce

Knowing which products are or are not selling well can help jumpstart or renew sales. That is where data analysis can inform decision-making for small businesses. Marketing analytics technologies such as web crawlers and scrapers, ad pixels, and more can inform which products web visitors are viewing, whether or not products were added to a shopping cart, or at what point users left the web store. 

eCommerce has an overwhelming selection of hosting providers to choose from for such services, each with its own strengths and weaknesses. Choosing a provider whose strengths play well to your business can make a difference for the team. Turnkey providers like Shopify may serve as an excellent entry point to serving customers via eCommerce, but frequently come with limitations or may require purchasing premium services in order to fully develop a store. More bespoke solutions, such as GoMage’s custom Progressive Web Apps for Magento, can ensure that the store is built both to ensure current needs are being met as well as laying the groundwork for the future growth of your store. 

A key strategy to regenerating sales is enticing customers to return dynamically. eCommerce giants can offer ‘buy it again’ notifications or show recommendations similar to past purchases. More generally, working with sales data is the secret to attracting business.

The power of successfully analyzing sales data is the ability to generate insights that drive additional sales, and then to rinse, repeat, and replicate. This type of analysis can make the difference between hoping for success in eCommerce and growing to a massive scale.

Build your eCommerce business with tools supported by DigitalOcean 

We have supported eCommerce businesses like Bungee Tech, Zinc.io, and GoMage at every stage of their development with DigitalOcean tools including Managed Databases and Droplets. From young students tinkering with ideas during Hacktoberfest, budding technical founders offered admission into our Hatch startup program, social impact tech companies with Hollie’s Hub for Good, and large-scale SaaS providers: we are here for you. Let us know how we can help. You can sign up for a DigitalOcean account here and watch our eCommerce Tech Talk below:

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