e-Commerce

E-commerce is the general term for buying and selling processes supported by electronic means, primarily the Internet. It doesn’t necessarily involve shopping carts and card payments, but that has become the generally understood model.

I’m currently building a demo shopping cart on this website to give you a feel of how it can work. It is a “plugin” for the Content Management System I use to drive this and other sites.

Selling online can be an expensive business to set up and run, but the market to provide services to vendors is expanding and cheaper solutions are becoming available.

What do you need to start an e-commerce site?

  • You’ll obviously need a product or service to sell.
  • You’ll need a website. This can either be your own site, or it can be part of a much larger site such as an “Ebay Store“.
  • You’ll need a shopping cart. So that customers can browse and choose the items they want. This can either be wholly located on your own website or the item details (pictures, descriptions) placed on your site and the shopping cart located on a separate site such as Mal’s e-Commerce or Paypal Shopping Cart.
  • You’ll need a payment gateway and merchant account if you are going to validate credit cards and take payment on-line. For security reasons this must be hosted on the website of the payment gateway provider.

More about Payment Gateways

There are many payment gateways. Some examples are Secpay , Worldpay , Netbanx , Protx and Barclays EPDQ and it is important you shop around to find the best service that suits your business and product range. Fees vary considerably. Here are some of the questions you should ask:

  • Is there a set-up fee?
  • What is the set-up time?
  • Is there an annual fee?
  • What is the monthly fee?
  • What is the transaction fee?
  • Is there a minimum transaction value?
  • Who are your transaction partners (banks)?
  • Do you support multiple currencies?
  • Which credit cards do you accept?

What will it cost?

As well as the cost of running the site, there is the additional cost of processing payments. If you intend to accept credit cards you will pay transaction fees to your bank and credit card-processing companies as well as fixed monthly fees. You may end up paying from 2-5% of the sale plus up to 60p for each transaction. (This is why small shops won’t allow payment by card on purchases of less than, say, £5). Yep, banks just love to take our money one way or another…

Fulfillment

So you have attracted shoppers and they browse through a catalogue of products, add products to a shopping cart and check out the items, paying with a credit/debit card. Next, you, the business operator must fulfill the customer’s order.

For the average small business the process is simple - you treat the customers like your livelihood depends on it, and if there is a surge in orders, you just work longer hours. How much longer can depend on whether you have made the right decisions on such basics as:

  • What is the most effective an economic packing method
  • Will you sell just to the UK or further afield?
  • What are the delivery costs to diffferent world zones and the return costs if the item is faulty ?
  • Which carrier should you use?
  • Should items be insured?
  • What happens if an item is lost during delivery?
  • What is you returns policy?
  • What is the best method of record keeping?
  • Should you buy specialist fulfilment software to help track orders?

Finally, the law

Selling over the Internet means you are subject to various lumps of legislation intended to protect consumers.

Don’t panic! There is a useful Beginners Guide to European Law affecting e-Commerce which can be downloaded here (PDF Format).

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