Promote Your Website > Website Promotion & Internet Marketing Information > E-commerce

What is E-Commerce and How Does It Work?

If you’ve ever bought or sold anything online, you’ve used e-commerce. Electronic commerce, when properly implemented, is very seamless and user friendly for customers. Merchants, on the other hand, often find the web to be confusing and a little overwhelming.

Web Design

The first thing your customers will see when they visit your site is the design of your website. You need to tell your website designer all of the plans you have for your site. Will you use plug-in shopping cart software and merchant accounts? Will you do your own processing? Or, will you go with a simpler, though more expensive, all-in-one service like PayPal?

A reputable designer will know of and be able to recommend a compatible solution for your business. When interviewing a designer, make sure you inquire about setting up shopping carts and payment systems. Whichever solution you use – the module based or all-in-one system – your customers shouldn’t notice a difference in colors, buttons or texts when they move from your site to the shopping cart to the payment system.

Web Host

Your web host, the place where your website really resides, can make a big difference in how compatible your payment and ordering systems are with each other. This is most important if you are using real-time processing. If you will be doing the processing yourself, this is much less crucial.

When shopping for a web host, find out which shopping cart packages are, and are not, compatible. If you already have a web host, make sure your shopping cart software is compatible before buying it.

All-in-One Solutions

There are a great number of providers that offer a shopping cart, payment processing, and merchant accounts as a package. This is the easiest way to find and use a compatible check out system. This is also more expensive than the piece-by-piece method because of the convenience it offers. Once again, you’ll have to confirm that the web host you’ve chosen can successfully host your one stop shopping solution.

Shopping Cart

Users will see this as the buttons “Add to Cart” or “Buy Now” or similar. The shopping cart also includes the page with confirmation of order, which is where the customer enters in his or her credit card information and shipping address. Your shopping cart needs to be as simple as possible. After all, you don’t want your customers to be frustrated with the check out process and choose another merchant to do their business with. The easier it is to shop, the more your customers will likely spend.

If you opt to purchase shopping cart software, it must work well with real-time processing software (if you’ll use that) and your web host. If you will be processing the sales through a merchant account or terminal, the only compatibility to worry about is the web host.

Payment Processing

Payment processors are great for real-time, automated processing. Merchants that might use this type of service are companies with a high volume of sales per day. Or, they may have time sensitive services or products, or they just don’t want to be bothered with manual processing. Be aware that processors do cost money and must be compatible with your shopping cart.

If you choose not to use a payment processing company, you’ll have to process the payments yourself. That means entering the credit card payment information into your merchant account.

Merchant Accounts

You can certainly get by in ecommerce business without a payment processor and even without a shopping cart. Every business that accepts credit cards, however, will require a merchant account. Some merchant accounts take a few cents plus a percentage of each sale as a fee, others charge an annual fee and lower percentage. Shop around for a merchant account that fits your needs.

Merchant accounts are usually accessed by visiting the merchant’s website, logging in with your merchant ID, and then entering the customer credit card information and total of sale. The merchant account company then collects from the customer’s credit card company and they credit your bank account.

Final Words

Ecommerce offers your customers the ability to shop 24/7 and for you to receive payment quickly – much faster than waiting for a check in the mail. While setting up an ecommerce site may seem confusing and tremendous at first, once it’s up and running you can expect very little upkeep.