The good news is, as the Internet has grown so has the options for e-commerce. The downside is that the more choices the more research you have to do to make sure you’re getting the solution that’s right for you. Make sure your do your homework. Never just sign up the first time you visit a site. Send at least an e-mail making sure you understand exactly what you’re receiving and exactly what you’re paying for. List of things needed for e-commerce:
- Web host
- Shopping cart
- Merchant account
- Payment processor
Types of E-commerce Providers
1. Web Hosting Companies
This is the company that will host your website. Most hosting companies provide secure servers (SSL) for their clients and if you are going to have your store on your website then you should only choose a host company who does this, some do this for free others charge a minimal monthly fee.
Some web hosting companies now offer e-commerce solutions as well. These normally provide you with your shopping cart software and some provide the payment processor as well, but you have to get your own merchant account. Many of these companies the hosting company has partnered with a merchant account provider but you will be responsible to apply to this provider as well for the extra fees incurred. You should also be aware that many merchant account providers are based around serving US customers. Even if they say they accept international accounts some insist that you have an account with a US bank before you will be accepted. Prices vary anywhere from $35 for a site hosted with SSL to over $500 plus merchant account fees. Make sure you find out how flexible the hosting company is. If they provide their own e-commerce solutions will they still support other shopping carts and merchant accounts if you decide not to use theirs?
2. Store Front Providers
These companies allow you to build your own store and host it on their server, such as Yahoo Stores. There are actually companies who provide this service for free but they lack in functionality compared to the paid providers. They will provide you the shopping cart software for your site and your SSL. With most you can set up your store online, using their templates. However these stores do not cover accepting payments, you will still need to apply for a merchant account. Also be careful, not all of these stores are international friendly and insist you have a US business to join. Also if you have a web site already you will not be able to host your store on your site. For example if you have a web site, yoursite.com you will need to put a link on your site taking your customers to your store which would be located at storefrontprovider/yourname.com .
3. Non Merchant Accounts
At the time this was written there is one company, CCnow, who does not require that you have a merchant account. They provide you with everything and handle all the orders and take a commission, currently 9%. The limitations are that they all your products must be in US dollars and you must be able to accept payment in US dollars. Also, as with most free storefront providers your store will be on CCnow’s server.
Merchant Accounts / Payment Processors
Your first step should be talking to your bank where your business account is located. If you don’t have a business account, get one, you need it in order to get a merchant account. When you talk to your bank ask them about what payment processing services they offer. You have to make a deposit and pay the usual fees. If your bank turns you down because they feel you are too high risk, there are online merchant account providers who are more lenient than the bank, most of these merchant providers also provide payment processing but still make sure you ask, never assume. You will still be required to pay and it will be a higher rate than the bank charges. If you are going to use an online merchant account provider make sure they are available to the country you operate in. Many of these businesses require you have an US bank account.
Payment Processing Options
There are 2 different ways of processing payments. You can either have real time payment processing or you can process the payments manually. With real time payment processing the credit card is processed electronically as soon as the customer places an order. Manual processing is when you retrieve the order with the credit card number, which is stored in your own log files on a secure server, then contact the payment processing company yourself to verify the credit card. Both require a merchant account and both require using a processing company however manual processing is normally cheaper than real time and may be an option if you expect to have a low volume of sales.