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This has to be the most-frequently asked question I receive from newbie clients.
They know people are buying online and they know they have to accept credit
cards if they want to stand a chance in all the net-based competition, but beyond
that realization, most are clueless as to how it all works.
I can't blame them, really. It's a confusing online world out there and a lot
of people who are trying to tell them how it works are really just trying to
sell them their own solution. It's kinda hard to trust the validity of what
they say when profit is a huge motivating force behind their persuasive suggestions.
And to be sure, there is profit in this Ecommerce game! Money is to be made
at many steps along the Ecommerce path. With that in mind, let's take a walk
along the path to Ecommerce, and take a look at the signs--or components--that
are necessary to take part in the Ecommerce excitement and potential profits.
1. The Merchant Account:
This really is your first step towards Ecommerce, unless you have chosen to
go through a payment facility and are willing to give up a rather large portion
of your sales in fees. The up-front costs of a merchant account can be hefty
for a small business, but the long-term savings can be substantial.
This is especially true if you are selling big ticket items. For instance,
on the sale of a $300 product/service through a payment facility you could pay
between $20-$45 dollars or more in fees. With your own merchant account it will
probably cost you about $9. With the typical fees and equipment for a merchant
account startup costing about $1,500, you can recoup that cost rather quickly.
A merchant account comes with a merchant identification number. That is about
all it gets you. In order to process transactions you need either a terminal
(the little box that you swipe your credit card through at retail outlets) or
software that runs on your PC and will dial up the merchant via your modem,
and then process the transaction and deposit the money into your bank account.
2. The Shopping Cart:
If you are selling just one or two items on your site you won't have much need
for a shopping cart. A site with a variety of products should use the shopping
cart system because it's the easiest way for your customers to shop. The easier
it is to shop, the more they will spend, which is exactly the psychology supermarkets
use, and exactly how shoppers are similar whether in a supermarket or scanning
through your website. And the nice thing about electronic shopping carts is
that the wheels never go square, and you don't have to send a clerk out after
the store closes to round up all the carts that have been left scattered around
the neighborhood. So shopping carts are good. But how will they work with your
merchant account and the all-important ordering process?
If the orders placed on your site are to be processed with the customer's credit
card as a sale through your PC or swipe erminal, then there doesn't have to
be any compatibility between your cart and your merchant account. The two will
work completely independently, each doing their part of the job.
If, on the other hand, you would like all of your incoming orders to be automatically
processed for you as the customer hits the submit button, you will need what
is called "real time processing."
3. Real-Time Processing - Almost every website company I talk to would like
to have their orders processed for them (the vision of the owner of a website
company turning on the PC and then stretching out in a hammock, watching the
orders get processed on the screen, comes to mind). However, most web company
people, upon learning the cost involved, take my advice to wait until they have
a steady flow of orders coming in before they use real-time processing. If you're
on a tight budget the extra fees involved in real-time processing might be better
used to aggressively advertise and drive customer traffic to your site. Processing
a few orders per day doesn't take very long and until you find it to be more
time-consuming to process the orders yourself than you like, you are probably
better off processing such orders manually.
If you are starting with a healthy budget and an aggressive promotion plan
you will probably be better off implementing real-time processing right from
the start. Changing order-processing methods can sometimes result in system
hiccups and you don't want anything to slow down your momentum once you've started.
You'll also save money, not having to set up your ordering system twice.
4. Web Hosting - The web host who is hosting your site can sometimes make a
difference in how compatible your entire site and ordering system are with each
other. I say "sometimes" because for those of us not using real-time
processing, it doesn't matter who your host is or where your merchant account
is located. They are independent of each other. Orders arrive and you process
them. No interaction between the two is needed.
Problems can arise when you bring a shopping cart AND real-time processing
into the picture. A shopping cart alone won't cause problems but the cart you
choose to use must be compatible with your web host. Some carts are designed
to run on certain types of servers, so when choosing one be cautious to make
absolutely sure you can use it with your current host. Otherwise you had better
be prepared to find a new one.
If you want a shopping cart AND real-time processing the three (cart, processing,
and host) must work together well. Your shopping cart must be compatible with
your host and the cart must be compatible with your payment processor. With
all the different shopping carts, hosts and payment facilities out there, putting
together the right team can be a real challenge. This is especially true for
the newbie who doesn't understand how it all works and how it all has to work
together, or understands imperfectly but thinks he or she has it all under control
when the decisions are finally made.
One Stop Shops -
The easiest way to find a compatible solution is to choose a provider who offers
all you need under one roof. This is what I have done by partnering with Virtualis
Systems. I am able to offer a great hosting solution along with a compatible
shopping cart that works with almost any real time processor. I have even taken
this a step further by partnering with a rock-solid merchant account provider,
E-Commerce Exchange. Now I don't want to force MY "solution of choice"
on you in this article so I have set up an autoresponder with details on the
Ecommerce solution I recommend to all my clients. Please email our autoresponder
at ecommerce@lrsmarketing.com for details.
Your Website Designer:
Asking your website designer to recommend a compatible solution is also a good
idea. Most likely, he or she has successfully set up shopping carts and payment
systems that have worked together for other clients and with that experience
can confidently recommend one that will be right for your specific needs. There
is also the added benefit that your designer is comfortable and familiar with
the cart payment processing configuration. This will result in less time spent
setting up your site, thus saving you money in design costs.
Who to Choose?
Choosing the right person for this task is perhaps the most important decision
you can make (in Ecommerce, that is. Choosing a dentist, a pet, and which TV
show to watch also rank high in importance). Nobody is an expert in all areas
of Ecommerce because there are so many variables, depending on which configurations
of hosts, carts, and merchants you choose. Find someone with whom you can talk
to and who will listen to YOUR needs with understanding. A web designer who
has created sites selling one product through mail order is NOT the best person
to go to for Ecommerce advice. Just like a web designer trying to create a site
that will sell and not just look good, with no marketing experience, a designer
who doesn't know Ecommerce is going to be hard-pressed to juggle all the components
that must fit together seamlessly and attractively to construct a truly effective
Ecommerce site.
The Most Common Mistakes?
I've had clients come to me who have been provided a shopping cart by their
web host but who then have purchased another cart, not realizing they already
have one. They've set themselves up with real time processing and then purchased
a terminal even though they will never swipe one card. They've had SSL enabled
on their web host server even though it's provided at their payment gateway.
I have been on the sympathetic end of many, many more sad tales from earnest
folks who have told me their own personal accounts of throwing hard-earned money
away on these kinds of mistakes.
Why? Cutting through all the technical jargon, it's all because they simply
didn't understand how each component can, should, and must work in conjunction
with one another.
Ecommerce can appear simple (well, almost) once you understand how all the
components work together. A merchant account allows you to accept credit cards,
your web host shows your website to the world, your shopping cart helps your
customers order easily and real-time processing processes the orders in real-time
and approved transactions are credited to your merchant account. All are independent
components but they all function together to make Ecommerce work. Find a designer
or webmaster who can bring all these elements together on your site & watch
Ecommerce work for you.
About the Author:
Lisa Schmeckpeper of LRS Marketing and published in their free newsletter, Website
Success Monthly. To receive a free copy of this informative e-zine just send
email to subscribe@websitesuccessmonthly.com or visit their website at www.lrsmarketing.com.
Copyright © 2000 [LRS Marketing]. |
