Describe Capital Cost

Capital Costs – How much funding is the organization willing to put into e-commerce activities? E-commerce platforms can be high priced, depending on the level of sophistication. A development organization undertaking e-commerce activities should consider whether it wants to incur higher costs, with the possibility of cost recovery from an expected higher level of sales. What are the possibilities of receiving financial assistance from donor agencies or partner organizations for this activity? Development organizations pursuing e-commerce activities may have to decide between varieties of options for their online selling activities, depending on their financial capacities. These options can be divided into 1) technical hardware and 2) site design and maintenance. The organization will have to decide whether it wants to invest in setting up its own in-house server, depending on the organization's size and computing requirements, or find a third party that is willing to host the site on its server. Is the third party another development-focused organization, or is it a private company/ISP? Regarding design and maintenance of the e-commerce site, is the organization able to hire in-house technical personnel to handle design, development, and maintenance, or is it more cost effective to hire an outside party to handle these tasks? Developing an e-commerce site that generates high levels of revenue will have to respond to the changes in e-commerce platforms in the commercial sector. The development organization may want to consider using security encryption software for credit card payment, increasing costs to an extent yet benefiting from increasing customer confidence in the transaction process. Will the site be eye-catching, with the hope of attracting customers, possibly increasing site development costs for higher level graphics and design? Pan Partners currently do not have to bear all of the above-mentioned capital costs, but may one day have to consider them when they initiate an e-commerce site on their own.

Marketing – As evident from the discussion above, a good marketing strategy forms the basis of the operational strategy, in order to attract customers to the e-commerce site and ensure a steady pattern of sales. Development organizations often need not employ capital-intensive marketing programs in order to have a successful marketing campaign. The marketing strategy can be divided into two main categories: 1) online markets and 2) offline markets.