The Impact Web Hosting Services Has On E-Commerce Profits

2017-11-27 by James Cummings

Since the dot-com era of the late 90s and early 2000s, many Ecommerce websites have sprung up. The extreme growth of the internet has led to the formation of many internet-based companies who compete for consumer attention.

In such a competitive market it is no surprise that many of these so-called dot.com companies failed to keep up with the dynamic pace of the online market. Some failed due to the “growth over profits” strategy, and others failed because of poor management. The bubble burst and many businesses were left penniless or in debt. Brands like Webvan and Pets.com collapsed, and Cisco experienced an 86% decline in their stock but remained firm. The winners like Amazon.com and eBay stood their ground and went on to surpass their stock price peaks.

Seventeen years after the initial explosion a lot has changed. Lessons have been learned and the online commerce industry is growing again. While some companies focus on things like online consumer behaviour, website design, and customer engagement they fail to acknowledge the importance of a quality hosting service provider. This factor accounts for a significant amount of business losses.

The impact of web hosting on your business

A good number of small and medium scale businesses are finding profitable opportunities in Ecommerce stores. It is more than uploading images of your goods and waiting for people to order.  There is a lot more a business has to learn and understand to generate a high amount of sales.

What makes an online store successful is an aggregate of multiple factors such as increasing web traffic with ability to scale, to good website speed and a secure payment gateway. There is a lot to consider. Even preservation of customers’ identity, having an efficient data backup system and upgrade functions- so many of these are influenced by having a reliable hosting service provider.

Consider a scenario where a budding online shoe company launches its E-commerce store with a shared hosting plan. Over time, the size of the business will grow and the volume of web traffic will increase. Now, without a proper scaling strategy in place, they will struggle, especially if the hosting partner is inexperienced in migrating expanding websites. Shared plans are also prone to crashes because of the load on the servers. It is not an advisable option for heavy-activity websites.

Another common issue is having a poor plan for data backup and security. You don’t want your business on a hosting platform with insufficient back-up options or a vulnerable server. Companies that lose their data or fall victim to hackers almost never recover. And when they do it  incurs a huge cost. It is important to select a competent hosting provider from the start.

Qualities of a good web hosting provider

An Ecommerce website can be a very lucrative business, if you have a quality hosting provider. Be wary of going for a cheap option simply because you want to lower costs. The consequences could be worse. Remember the saying, “You get what you pay for.”

The following are qualities of a good hosting provider:

1.   High availability and scalability


When managing an Ecommerce store, ensure you go for a hosting provider with 24-hour availability and capacity to scale anytime. Choosing a shared hosting plan is not a bad thing, especially if you are only just starting. It saves unnecessary costs and you don’t have to worry about technicalities.

However, you should select a vendor that is scalable. Your website can grow anytime and when this happens you want to be prepared with a plan to migrate onto a more accommodating service.

2.   Security


Running an online business is a big responsibility, considering you will be receiving sensitive information like credit card details, house addresses and so on. It is your responsibility to protect your clients’ confidential information from hackers.

If your host provider has an outdated or vulnerable security system, you could be exposing yourself to untold data breach. The consequences are grave. For one, you risk being fined in accordance to the Data Protection Law (totalled £3 million last year). It can also damage a business’ reputation and the the trust people put in it. Choose a hosting partner with a robust security system and ensure it is updated from time to time.

3.   24-hour customer support


One of the best ways to tell a reliable hosting partner is the availability of their technical support service. Can you reach them any time- even at two in the morning? As an online service, you could have people shopping late into the night. If the server your business is hosted on goes down, there should be a support system ready to bring it back online.

Failure to restore a faulty server in a timely fashion results in a bad customer experience. Regaining consumer confidence is expensive and you may never get them to return to your website. Ask the potential provider if they have such support. Ensure you can call and speak to a ‘human’ on the other end who can resolve your problem.

4.   Backup and storage options


There is a popular saying in data processing, “Always prepare for a data loss because it will happen someday.” This is a good mindset to have because it prepares you for the worst. Your customer information, business data, and administrative logins are critical to business continuity. With sufficient onsite and offsite cloud backup systems and protection, you can survive any accident, from a fire to a virus corruption.

For Brendan Wilde, marketing manager at Domains 4 Less, “Businesses need to question the integrity of their potential cloud storage company: are they using the latest cloud storage techniques? How often do they backup their data? Is there enough space on the server RAM? Are their programs up to date? What is the server uptime frequency? And do they user-friendly control panels?”

Questions like these give an idea of how reliable the hosting provider is, and how safe your data will be.

When you choose the right hosting partner, you will have peace of mind knowing your business hosting solution is secure. Then you can proceed to dealing with other issues such as customer service, conversion optimisation and product development.

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James Cummings

Daily Posts I am a Business Psychologist and CEO of Daily Posts. I write a lot on technology topics and have extensive experience in marketing for hosting companies around the world. View James Cummings`s profile for more

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