 Ecommerce
The basic ideas
- You need a catalog that your user can view to see
your offering of products.
- You need a way to allow your customer to place an order
and to have a record of the order. This is considered the "shopping
cart" portion of your site.
- Finally, you need a way to get your customer's money.
Option 1 - PayPal (third party processor)
-
www.paypal.com
For people who are just starting out and aren't selling
hundreds of products, we usually recommend PayPal. It's free to
set up, and then they take a small percentage of each sale. We
recommend PayPal because they help to protect you against fraud
(a growing concern, especially if your product is downloadable).
One drawback is that your customers will have to register as
PayPal members, but we've found that the process isn't any
different than inputting information for any other major site.
If you'll be selling lots of products, PayPal may not be the
best option for you. See below for the other option.
- Catalog - You can build your catalog within your
web editor and use PayPal's "add to cart" form button code.
PayPal has a lot of documentation to help you do this and
even provides some default "button" images for you to use.
- Shopping cart - By using PayPal's "add to cart"
code, you can link directly into PayPal's shopping cart. You
don't need to set anything up on your site other than the
add-to-cart button - PayPal does it all for you, allowing
your user to add multiple items to their cart and check out.
- Payment processing - As your customer checks out
using PayPal's shopping cart, they'll submit payment via
PayPal by credit card or with their PayPal checking account.
The money will be stored in your PayPal account. You can
easily move it into your checking account and access it once
the sale is made. Remember, PayPal will take a small
percentage of each sale.
There are other third-party services available, including
ClickBank, 2CheckOut, iBill, and more.
http://www.working-at-home-business.com/articles/thirdparty.shtml
has a nice comparison chart, but you can also type "third party
credit card processing" in a search engine and browse through
the articles that come up.
Option 2 - Set up your own merchant account
If you don't want to go through a third-party processor, but
want to be able to accept credit cards yourself, you'll have to
set up a merchant account. At that point, you'll probably
want a gateway (often included with merchant accounts) to
be able to process credit card transactions from your web site.
You'll then need to either build your own shopping cart
(hard!) or find a third-party shopping cart to process the
customer's orders that can connect to the gateway.
- A merchant account approves you to put credit
card funds directly into your bank account. There is usually
an application fee, and you'll need a business banking
account, and you should expect to pay around $40 in monthly
fees. They also run a credit check, which may affect the
level of your fees. Please note that you are responsible
for the validity of all orders. You'll get penalized for
fraudulent orders that result in chargebacks. Read the fine
print carefully to figure out what fees will apply to you!
There are many merchant accounts available. We know
people who use:
- Your merchant account allows you to accept credit cards,
but now you need a way to process the credit cards - by
phone, with a machine... or, if you want to process them
immediately online, through a gateway. Most merchant
accounts include a gateway for a monthly fee (from
$10-$40/month), so you'll want to look into this when you
select your merchant account. If you have a downloadable
product and credit card fraud is a major concern, you may
choose to go with a company such as
Cybersource. They act as the gateway and also provide a
fraud scoring system.
- Gateways process the charge, but they don't do math
(calculating order totals, shipping costs, etc.) and they
don't keep a record of your orders, so you'll need a
shopping cart. While it's possible to build your own, it
requires a lot of programming knowledge. You'd probably be
better off using a third-party product. There are many
available, but it's hard to sort through the options. You'll
find sites that advertise "shopping carts" but really
require you to build your site according to their specs, or
that require you to host with them, etc. There are a few
shopping cart programs that we know of that can integrate
into your web site, but we aren't experts in this area, so
be sure to do your own research:
- Most shopping cart programs will either integrate into
your web site or provide some kind of "add to cart" code for
your web site. Some of them do not actually "build" your
product catalog for you - you will have to look into
this as you research shopping carts. You'll find that you
will have to either 1) build your catalog page-by-page or 2)
find out how to add a database to your web site. If you have
over 75 products, you may want to consider the database
option. (Note: Cactushop and the CyberStrong E-shop come
with a product database and "admin" pages that make it easy
for you to administer product information.)
Credit Card Fraud
Credit card fraud (and identity theft) is a growing issue,
and one that you should be particularly aware of if you have a
downloadable product, or even if you're just processing orders
online. Apart from having to refund the money to the card, you
may be hit with several types of fees including a "chargeback"
fee. These fees can add up, and not only that, if you're
consistently hit with fraudulent orders that go through, your
own fees may go up!
If you think that this may be an issue for you, you'll want
to take steps to protect yourself. If you're a small business
owner and won't be running too many orders, we advise that you
go with PayPal.
Otherwise, you may want to check out
Cybersource
or a similar company (look up "credit card fraud protection
merchants" in a search engine).
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