e-ditorials - Issue #5: e-commerce Part 2

How to Start Selling Online

Now that you have developed your e-commerce plan, you are ready to start putting your plan into action.

Basic needs:

• Web site
• Choose to manually process orders or Direct payment using an Internet Merchant account
• Choose a Website hosting provider
• Security

The basic needs for your store will be a web site, a merchant account with a bank to process the credit card transactions, and a website hosting provider that has web site security. If you currently accept credit cards for your business, you may be able to use the same merchant account for your Internet business. You will need to check with the company you used to register your merchant account. You will also need to evaluate whether you are able to manually process online payments or whether your e-commerce volume will necessitate an Internet payment processing system that enables you to focus on your core business not managing credit card orders.

Important E-commerce Terms

Merchant: A business entity, that agrees to accept credit cards, debit cards, or both.

Internet Merchant Account: This account is configured to allow you to accept "card not present" Internet transactions. You may already have this "card-not-present" transaction ability in place if you accept mail, telephone, or business to business orders.

Acquirer: A bank or financial institution that issues merchant accounts for the approval of credit card transactions.

Merchant Identification Number: An exclusive number assigned by the acquiring bank to identify a merchant. You will need this number when you set up your system to accept credit cards on your website.

Secure Sockets Layer (SSL): An encryption system that allows consumers and merchants to securely enter data into a web site form or view data on a web page.

Database: A database stores the order and credit card information for each transaction. (eg. MS ACCESS and ORACLE)

Internet Service Provider (ISP or IAP): A telecommunications company that provides Internet Connectivity and sometimes functions as a web site hosting provider.

Web Site Hosting Provider: The place your web site resides. Their servers and resources are dedicated to delivering your site's content to the Internet.

Possible needs for your e-commerce website and fulfillment plan:

• Pictures/Product Photos. As with your print pieces, it is important to have professional looking art on your web site.
• Product and/or Service Descriptions.
• Shipping information. Show your customers before they buy what your shipping procedures and pricing are.
• Warehouse integration. Make sure your warehouse is ready for orders and that they have the ability to get the orders from the web site.
• Customer Support Plan. Your web site is available 24 hours a day, 7 days a week. Make sure you plan to support your customers during the hours and manner that you state on your web site. For example, an online Frequently Asked Questions page will be available at any time but phone support may be Monday through Friday from 9am to 5pm EST.
• Return Information. What is your policy? Is it clearly posted and available on your web site?
• Warranty Information.
• Privacy Policy. What will you do with the information you collect from online transactions? In general, a customer will feel more comfortable providing information if they know what it is being used for.
• Security Statement. What measures have you taken to ensure your customer's information is safe from prying eyes?
• Legal and accounting support.
• Tax information. Check with an accountant about the current moratorium on Internet taxes.

Solutions

There's a wide range of products and services in various price ranges that are designed to get your e-commerce site up and running quickly and efficiently.

There are 3 e-commerce options that are available to you.

1. Do It Yourself: Use software to create your e-commerce web site and either manually run credit card transactions or use an online transaction company. You will also need a web hosting provider.
2. Template Provider: Use a web browser interface to set up your store and the provider usually includes online transaction processing and web site hosting.
3. Custom Provider: Coordinates all of the components for the e-commerce web site such as web site design, online transaction processing, web site hosting, marketing and e-commerce strategy planning.

Do It Yourself

The "Do It Yourself" option seems appealing with a variety of inexpensive web site and e-commerce software available.

Advantages

• Inexpensive web site and e-commerce software
• This option may provide some control over layout and content of the e-commerce site.

Concerns

• Time to learn the software - Do you need to learn the software to enable you to build your store? If so, how many hours do you have to devote to learning this product?
• Time to build the store - Once you have learned how to use the product, how many hours will you have to build your store?
• Time to integrate manual or online payment processing - Will you be manually processing the transactions or do you have enough volume that you will want automatic processing?
• Availability of Tech support.
• Difficult integration with your offline systems, such as accounting, inventory and fulfillment.
• May be the slowest option.

Budget: Assess the cost of your time, the software and any tech support you might need. Compare this figure to your other options.

Template Provider

The "Template Provider" option is a unique one because they often host your web site. There are many to choose from such as Bigstep.com and Yahoo store. If you choose this method, thoroughly research the product to ensure that it meets your e-commerce requirements.

Advantages

• Can provide complete hosting packages
• Convenient Browser based administrative interface
• Some allow participation in shopping directories (e.g. In the Yahoo! Store plan, users create a storefront through a browser and can then participate in Yahoo! Shopping, which is Yahoo's online shopping portal.)
• Can be a quick option to getting up and running

Concerns

• Limited customization. Limits on how you store looks or how your shopping cart or catalog works
• Maintenance costs. Many providers charge a small fee per transaction, which is in addition to what the credit card company charges.
• May cost more depending on amount of business you do
• Low cost options may have unwanted advertising banners and pop-ups
• Unavailable or slow tech support
• May be difficult to integrate with offline systems

Budget: With any provider, make sure you read your contract and that you are clear on the pricing scheme of the provider.

Custom Provider

A custom provider will set up the e-commerce web site or extend the existing web site, give advice and implement many strategies that do not come with software or template systems.

Advantages

1. Experience
2. Custom approach tailored to your business needs
3. Continuity of corporate image
4. Total integration of your web system and your offline systems, such as accounting, inventory and fulfillment.
5. Maintenance costs may be less
6. As much or as little involvement as you want them to have

Concerns

• Support
• Initial cost may be more

A good custom provider will help you determine your e-commerce strategy and help to fully integrate your business model, marketing strategy and price structure to the web. Sometimes a custom provider will use software or a technique that has already been developed as discussed in the "Do It Yourself" and "Template Providers" but they may advise, assist or fully set up your e-commerce system.

Budget: Sometimes a Custom Provider can save you time and money because they know exactly what needs to be done because they have done it before.

Regardless of which option you choose, you will need an e-commerce action plan to assist you in planning and budgeting for your e-commerce web site. Be prepared and your web site will be successful.

Read the 3rd article in this series: E-commerce site design, development and technology

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