Website design/build for large retail company - advice needed

13 replies
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This request is on behalf of my husband who is a financial consultant for a large retail food chain. Unfortunately the info he needs is totally out of my league and I am hoping someone here will be able to help.

The company concerned has been contacted with regard to upgrading their current website and which includes setting up an online shopping facility. Some very high figures have been quoted, some of which appear to be a thumbsuck.

Advice is desperately needed - I will obviously be happy to share the figures with whoever has dealt with a similar chain of stores.

#advice #company #design or build #large #needed #retail #website
  • Profile picture of the author Carlo Manf
    Hi Sandy? Are you concerned that the quotes are too high? I think if it's a large retail food chain, it will be worth the price.
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    • Profile picture of the author SandyDuPlessis
      Hi Carlo,

      The various figures and calculations provided don't seem to make sense - thats the first problem.

      The second problem is ascertaining a ballpark figure for setting up an ecommerce website for a chain with 30 outlets. From there my husband needs to try and figure out where the heck the various figures and calculations come from in order to ascertain whether they are accurate or not.

      By the looks of it, there is no figure given for the actual building/ugrading of the current site, but they want want to charge $1M per year for adding in the ecommerce portion including SEO and advertising on Google, Facebook etc.
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  • Profile picture of the author Carlo Manf
    What kind of calculations? Usually, it's somewhat fuzzy because it's about how much the developers value their time.
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  • Profile picture of the author BarbaraP
    Hi Sandy,
    It seems to me that the retail chain should pause and do its own research before negotiating with a firm that came to them, unsolicited, and is now quoting a $1mm/yr price tag.
    The best thing for the the retail chain to do is to step back and do its own research and document its needs. They should not be at the mercy of a marketing firm who is seeking their business "out of the blue."
    With 30 retail outlets, do they need 30 separate ecommerce sites or one "mothership" ecommerce site to sell online for the entire chain and a brand website with the 30 local site's pages to showcase the local community services, involvement, and have local search boost? There is a big difference in the build-out process and maintenance cost for those 2 types of systems. And the ongoing marketing mentioned is a separate issue entirely.
    Knowing their needs and goals should determine what kind of ecommerce and other online marketing is needed, not "we'll build this for you for $$$$$$$$."
    They might solicit proposals from other firms and watch how the original firm reacts (and re-prices their services.) Internal review and research of what is really needed to meet the company's goals, (even if they hire an outside objective consultant who's not seeking the contract) issuing requests for proposals to select firms with a scope of work outlined, and competition for the contract will educate and benefit the retail chain and probably save them a hundred thousand or more a year, and have a much better result in every way.
    My corporate background included serving on the management committee of a very large corporation so I understand the ins-and-outs of such decision-making and budgeting for these types of projects. It sounds like the discussions are very far along if dollars are being discussed.
    If this is the result of an unsolicited proposal, it seems that pausing to do this internal assessment and issue a call for proposals from a few select firms OR retain an objective, qualified consultant to advise for a short period, might be wise.
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    • Profile picture of the author SandyDuPlessis
      @Barbara, as I understand it, they are offering a single branded website which will allow online purchases for delivery to various areas as well as online purchases for customer collection at individual stores.

      At this stage even though specific values have been mentioned, there has been no or very little discussion about anything. A spread sheet related to the figures and a mockup of the website was sent to the owner of the company and he in turn sent it all on to my husband for his opinion.

      Needless to say, the figures shown make no sense. They purport to show what will be done and the profit that will be made over a year, though month by month there is no "system" to the figures, nor is the cost of setting up i.e. delivery vehicles, warehousing, refrigeration etc taken into account.

      From what I have since found out, the prime movers (2 gentlemen who have created a food magazine for the company) are not involved in web design at all. In fact I suspect that they have simply approached such a company, used what they have been told, along with a mock up of the website, boosted the price and then simply thumb-sucked possible profit margins and then presented it to the owner of the company.

      Thank you all for your input. Along with his report on what will physically be needed to set up such a facility, my husband will be advising against the quote until such time as at least 2 other independent quotes have been provided.
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  • Profile picture of the author Ron Killian
    I don't know what corporate sites cost, but that sounds ridiculous.

    One thing I can think that could be costly is adding the actual products. If the store have a big inventory, that could be time consuming to add it all. Just a thought.
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  • Profile picture of the author Ron Killian
    Even the smallest of deals should have a detailed account of what would be done. Just amazes me that a price tag like that and not break down or details? Very unprofessional.

    I personally would run. If they are that starting out like this, what could it be like dealing with them later?
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  • Profile picture of the author SandyDuPlessis
    Thanks Ron, My initial reaction was to say "no way", but having never gotten involved with big biz, I also did not entirely trust myself to simply tell my husband that the deal was a total no-no.
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  • Profile picture of the author Ron Killian
    While the price seems way to high, it could very well be worth the price. We don't know.

    But to me, if they are not going to take the time to give every detail, in this very important stage of the business process, it sure makes me wonder how they will be to work with in the future?

    If they can't give details up front, who's to say your going to get the proper reports for SEO or social media, to know they are doing their job and earning their money? From what it looks, you won't get that.

    Even more importantly, will they provide proper support for the system them build and put in place?

    Of course these are my opinions.
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    • Profile picture of the author savidge4
      When looking at any project let alone this one... there is simply no way to make determinations of "Profit" that is short of silly. Sure you can project these things, but setting that within the proposal is probably being used to defer the attention from the cost, and to the profit.

      Something I noticed In one of the posts.. the million a year is for website design, AND advertising? I would send the proposal BACK and get a quote for the BUILD only. I would also send a request to another firm, for the same.

      Keep in mind the likes of Target, Walmart, Home Depot spend in the 10's and 100's of millions in advertising, so web design AND advertising at 1 million is really almost an indicator that this firm is in over their heads.

      Some of the clarification you need to make with your husband... do ALL the stores have the EXACT same inventory.. or does it differ. Is the site intended for online only sales or is there going to be in store pick up. If there is in store pick up does the current offer mention in store inventory systems integration?

      Ultimately you will want to have each part of the project broken down, and priced. The Inventory system coding is going to be down right expensive. ( but this is a one time cost ) There is then going to be an inventory display system. Who has what and what store etc ( Again this will be a one time build ) Then you will have the site that now integrates the data from step 2 and actually displays the product.

      Based on my own personal experience with "Chains" I have worked on WAY smaller projects, and the project price was higher. So unlike some of my counter parts here.. I am going to suggest the number is more than likely on the low side.

      you can contact me if you would like to discuss further.
      Success is an ACT not an idea
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  • Profile picture of the author SandyDuPlessis

    Thanks, I will pass your message on to my hubby this evening. I believe he will be very interested in what you have to say.
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  • Profile picture of the author quadagon
    From what you've said there does appear to be red flags but its hard to judge without seeing the actual proposal.

    There are certain things that a project of this size will need in the back end such as:

    integration with each stores stock inventory system.
    A process for staff to follow when orders received
    Chilled warehousing for deliveries (you may need to take an item off the shelf and deliver it the next day)
    Online delivery tracking
    Customer support and online ticketing
    Contingency measures would be preferred

    So yeah to do it right you can easily burn through the best bit of million.

    With regards to what's been said I second the idea of getting a price broken down so you know how much of it will be spent on advertising and how much will be design development and hosting. If you don't want to seem confrontational just advise them you need to know as part of the money would need to come from the marketing departments budget.

    If the CEO knows similar business he should try and find out who they used. He should definitely shop around.

    You are also going to want a contract with timescales and deadlines with financial punishments for late delivery. guarantees on uptime and workability should also be attached to make sure that the site keeps working after the initial investment you don't want to start paying out Hugh monthly service fees.

    Check for a CMS system so that you can add and remove stock items as and when needed.

    Finally try and get a partially deferred payment for 12 or 18 months so you can see the site works through the different shopping seasons.

    I've got 99 problems but a niche ain't one
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  • Profile picture of the author SandyDuPlessis
    Thanks Eric, Whilst my husband bought the attention of the owner/CEO to some of the factors you mentioned based on his knowledge of how a retail chain functions, due to his lack of knowledge re appropriate websites and online shopping, your post will be a great help.
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