When Milsom inherited the Soho shop, which sells pens, scissors, golf clubs and other merchandise tailored to the needs of left-handers, he decided to turn it into an online business. He set up a website using Actinic software, which he maintained and designed himself. The overall budget was around £2,000 (AU$4,845).
By 2003, the maintenance requirements of the site had become so onerous that he decided to commission an external company to design, build and host the site, in a £30,000 (AU$72,700) project.
The site they built "halved our orders at once", he said. After a disastrous debut, he decided to take the project back in-house. He designed and built a new site, using a new version of Actinic software, for £4,000 (AU$9,690).
Despite one small company's bad experience, outsourcing ecommerce is an increasingly popular way to take a business online - from a major brand running ecommerce as a sideline, to a sole trader selling goods on eBay. The number of options for doing so is increasing. So who does it work for and why?
The simplest way to set up and run an outsourced ecommerce business - and one chosen by many small organisations - is to run a stall on one of the web's giant virtual marketplaces, such as Amazon.com or eBay. For a fee or a slice of turnover, all hosting and payment issues are looked after.
Being part of a huge online marketplace guarantees that a large pool of shoppers will walk past your virtual shopfront door every day. All a merchant has to look after is sourcing stock, posting information and fulfilling orders.
This option already counts for a substantial proportion of businesses trading on the web. At the end of 2004, eBay was hosting 254,000 stores worldwide, of which 63 per cent were outside the US.
For the slightly larger business, providers are gearing up to supply the full range of services on an outsourced basis, from fulfilment to site design and hosting. Companies can either use hosted versions of ecommerce software such as Actinic, or hosted suites such as NetSuite, Maginus or Digital River.
Companies are also increasingly exploring the possibility of outsourcing their order fulfilment - either to the suppliers themselves or to a third party logistics provider such as Prolog Logistics.
WStore, a business with 70 UK employees, supplies office products to other small businesses. Their fulfilment and warehousing are all supplied directly from the companies which supply their products. The company then arranges for deliveries to be made straight from their supplier to the customer.
Tony Price, managing director of WStore, says: "We do have a warehouse - but all it's got in it is table football and a pool table.
"This business is all about cost and holding stock is not cost-efficient," he continued. "[Outsourcing] allows us to bring our costs down to eight per cent of turnover, while our competitors are around 12 to13 per cent."
