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Survey: Median prices for e-commerce up

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Median prices for providing electronic commerce solutions have risen across the board in the past year, according to the latest NetMarketing Web Price Index.

The median price for adding a simple e-commerce solution to a small marketing site is up 150% from the March 1997 survey, from $10,000 to $25,000. The medians for the medium and large sites are also up, but not quite so drastically.

The cost for the medium-size hypothetical Investments R Us site rose to $33,000 from $21,250, while large-size Blockmonster Entertainment's price increased to $78,000 from $62,500.

Costs might even out

However, these costs might start to even out or perhaps drop as more off-the-shelf solutions come into wider use. Dal Harris, client services manager at Chicago-based Neoglyphics, said that when e-commerce first started up, a lot of time and development dollars had to be spent creating custom solutions.

"There wasn't anything off-the-shelf that could do what we wanted it to," Mr. Harris says. Now, though, he has started to see more of the market using products such as Net.Commerce from IBM, or iCat's e-commerce solutions.

Nathan Foreman, VP of New York's i33 Communications Corp., says he notices a similar trend. "What we're starting to see is [off-the-shelf e-commerce products] coming into the field at a more reasonable price point."

Mr. Harris says that although all his clients aren't taking advantage of e-commerce yet, it should grow significantly this year. "More than any time before, everyone wants to talk about e-commerce," he says.

For b-to-b marketers especially, adding e-commerce can be a way to cut the costs of doing business. Forrester Research, Cambridge, Mass., estimates that b-to-b e-commerce will reach $17 billion across all markets in 1998, with 70% coming in the manufactured durable goods and wholesale business markets. This figure is up from $8 billion in '97.

More efficient

"It's not so much new business," says Steve Bell, an analyst in Forrester's Business Trade and Technologies Division. "It's a more efficient way of serving current customers." He sees this as part of the reason that b-to-b is growing much faster than the consumer market online.

Forrester projects that by 2001, e-commerce will reach $183 billion in the b-to-b markets, but only $17.4 billion in consumer spending.

"Consumers are surfing, but business is buying," says Mr. Bell.

Consumer trust of the technology remains an issue. "B-to-b is hotter [than consumer sales]. Companies have more trust of ordering online."

However business basics still govern in the realm of online transactions. "Your site has to be known somehow," says Mr. Bell.

"[The success of a site has] more to do with good old-fashioned marketing than any new technologies."

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