How does e-commerce really work and is it
right for me?
In deciding if you want to use e-commerce on your website, answer
these questions first:
Do I offer a service (and not a product) such as carpet cleaning or
lawyering? Do I offer a product which is high-dollar but low in volume?
Am I expecting 1 or 2 sales a month? Do I want to keep my overhead as low as
possible?
If you answered yes to any of these I recommend against e-commerce because of the
overhead required. If you have an inventory of low cost items that you will be
selling in large quantities, such as a flower shop, then I strongly do recommend
e-commerce.
e-commerce makes it incredibly easy for people to click-and-buy and it demonstrates
that you've invested real time into your website. Make your decision based on the
initial setup fees and monthly fees required for e-commerce. Also keep in mind
there are extra complexities in using e-commerce. I will try to explain those
complexities below.
Firstly, you must have a merchant bank account to utilize e-commerce.
There is no way around this (unless you decide to use X.com).
The credit card companies require each vender to have one. (You are the
vendor.) A merchant account is a special kind of bank account which is able to
accept credit card deposits. Whether you use your local bank or an "internet
bank" to hold your merchant account you will have to submit an application, pay a fee
of about $50 (depending on the bank) and wait a few days for approval. This process
is between you and the bank, so, regrettably I cannot help you with this aspect.
This is the case no matter which internet provider you choose. The bank will charge
a small monthly fee and will keep about 2% to 4% of all your credit card sales. This
is universal and unavoidable. Also, what a lot of people may not tell you is that as
a credit card vendor you are responsible for all disputed charges.
Secondly you must have a shopping cart system on your website, a secure
server (called SSL), and a thing called a Gateway. The gateway is a 3rd
party's website that actually grabs the credit card numbers from your website and makes
the deposit into your merchant account directly. (This process can be skipped using
a secure email system I've developed and by calling the orders in over the phone.
Ask me if you're interested.) There are a number of Gateway services and they all
charge a monthly fee, usually around $35.
Finally you need an internet provider who can put your shopping cart on your
website, create a secure server, and tie your secure server to the Gateway. That's
where I come in. I can provide you the Shopping Cart and secure server
for an additional setup fee and a nominal monthly fee, depending on the number of products
you sell and the plan you choose. You will also need to sign a contract with the 3rd
party providing the Gateway. Other than that I can pretty well shield you from all
the tech stuff. So you pay 3 parties monthly: Me, the Gateway provider, and
the bank.
Now, all this is probably not as complicated as it sounds, but you really do
benefit from having someone like me putting it all together for you and explaining it as
you go. I spent a good deal of time myself getting the answers about who charges
what, where the money goes, and what is required from the vendor. (If you want
proof, visit IBM.com and try to figure out what to do; I know I had trouble!)
Hopefully I can translate everything and readily impart it to you. And that is what
I mean by, "You get a person who speaks English" here. Most
companies can provide a shopping cart and even a secure server, but when you need help
with the merchant account or gateway they will literally tell you to call someone else.
There are a few companies that do offer the "whole package" at a premium.
One local company charges $1200 for a "basic" (very basic) shopping cart
website and a $700 nonrefundable Gateway setup fee! My fees are considerably
less.
Though it is complicated to setup e-commerce is an incredibly powerful tool to
generate sales, sales from people you'll never even meet or talk to. Once in place
an online store virtually runs itself -- showing customers your goods, taking their orders
and their money, and thanking them for their patronage. The amount of money
transacted over the internet via e-commerce continues to grow at least 50% per year and is
already in the billions of dollars per year.
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