Starting an E-commerce Website

This article was originally written for ArrowQuick Solutions, a technology consultancy for small businesses.

Posted on September 21, 2010

Setting up an e-commerce site is much like starting a regular website, but requires some additional considerations.

General Operations

First, make sure you have the non-technical aspects of your business nailed down. Until you have these basic questions answered, you won’t be able to do any commerce (internet or otherwise).

  • What is your expected monthly volume and average order size?
  • How will orders be fulfilled?
  • How do you track inventory?
  • How will your orders get entered into your accounting books?
  • Where will you ship — world, US, regional?
  • Which shipping services will you use — UPS, FedEx, etc?
  • How will you calculate shipping and handling costs?
  • What taxes do you need to charge?
  • What are your policies on returns and refunds?
  • Who will handle customer service? How will customers contact you if they have a question or complaint?

If you already have an established business, then these questions can easily be answered. If you’re a new business, you’ll want to carefully consider them. Your website can make certain aspects of commerce easier, and it can expand your market reach, but you’ll still need people to fulfill the orders and respond to customers.

Merchant Account

In order to accept payments from your website, you’ll need a type of bank account called a merchant account. This is different from your business’ bank account, although your bank may be able to provide you with a merchant account as well. (Note that most local banks don’t provide this service, or they outsource it to a nationwide company.)

Make sure that you get an internet merchant account, as these have different rules and fees from normal retail merchant accounts.

You’ll want to do some research to find the best merchant account for your business. Compare fees, look into their customer service, and read over their policies.

Payment Gateway

A payment gateway is a service that processes payments and deposits the money into your merchant account. It does the same thing as a point-of-sale (POS) terminal at a brick-and-mortar retailer.

Many merchant accounts also come with a payment gateway, so checking with the bank that provides your merchant account is a good starting point. Again, you’ll want to do some research to find out which service has the best fees and support for your needs.

I would also recommend running your choice past your website developer since the payment gateway will have to be supported by the shopping cart and other software used by the site — you don’t want to choose a cheap payment gateway that ends up costing more in integration costs.

Security

Consumers want to be re-assured that their credit card and personal information is kept safe and secure. The minimum requirement is to encrypt this sensitive information sent to your website using an SSL certificate.

Installing an SSL certificate requires technical knowledge. Luckily, your hosting provider should be able to provide you with a certificate, either as part of your hosting plan or at additional cost. If you’re a bit tech savvy, you can also purchase your own certificate and give it to your host to install.

Your payment gateway will handle the security of processing and storing payments behind the scenes. I recommend not storing any credit card or payment data on your website itself, as this requires additional security precautions that you don’t want to get into. This way the only personal data you need to worry about are the orders themselves.

Shopping Cart

If you’d like customers to be able to purchase multiple items at a time, then you’ll need a shopping cart on your site.

Some payment gateways offer shopping cart solutions, hosted through their own websites. If you don’t need any fancy features, or only have a few products, then this might be good enough for you. However, there are many excellent choices of shopping cart software that you can get for under $200. These software come with a host of features, such as coupons, customer reviews, and gift certificates. Another benefit of self-hosted shopping carts is that you have full control over how the cart looks and acts.

Check with your website developer for their recommendation and costs for integrating a shopping cart into your website.

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