My Comprehensive Guide to Ecommerce

Table of Contents

As a consultant in the web and application space, I am often approached by clients who want to sell on the web, but need advice as to how to go about it.

They often assume that e-commerce is a purely web design or development task, but aren’€™t aware of the responsibilities and decisions that they will need to make that will impact their business.

Further, they are often unaware of the risks that processing credit cards bring, even if they are already doing so in a physical store.

To start with, I try to give my clients a few different approaches to help them decide how to proceed and what to expect when they enter the marketplace. What follows is a overview of some of the options that I will discuss with my client.

Primary Objectives

I see three primary objectives for a business pursuing e-commerce:

  1. Get qualified visitors, meaning those interested in your product or service, not just any visitors, such as those directed by overly aggressive SEO.
  2. Sell those qualified visitors your product (retail and wholesale if it applies).
  3. Convert the visitors who didn’€™t buy anything and continue to sell your product to current customers.

Without the satisfying the first objective the other two are going to be close to impossible to attain.

So how do we get there? What follows are some implementation options for each of the objectives described above.

Objective 1 – Get Qualified Visitors

Get qualified visitors to the website, i.e. display your products on a website that has a lot of traffic.

The “œPartnering”€ Approach

Start by selling your product through third party websites like Amazon, Barnes & Noble, eBay or vertical specific sites Etsy. Think of these sites as your sales arm or selling partner. Yes, you are not selling on your website, but think of the traffic that these websites get!  It would be very expensive or time consuming to drive even a fraction of the traffic that those established sites get on your own website.

Using this approach, your website will be used as a feeder site that captures incoming traffic and pushes those visitors out to the third party site. Your site should be content managed so that your can change it often to highlight popular or new items, and to give less weight to items that are not selling as well. Your website should also be will gathering contact information to build your mailing list.

Pros

  • Inexpensive
  • Qualified traffic already exists
  • There are no PCI compliance1 worries
  • There is no payment gateway2 (Authorize.Net, PayPal, WorldPay) relationship to maintain

Cons

  • Not the most fluid user experience
  • There is more than one administrative interface to learn
  • Lack of control over purchasing experience for your users

The “œSelf Hosted” Approach

Using this approach, you do sell your products or services from your own website. This requires some type of shopping cart software connected to a payment gateway, i.e. a service that processes credit card transactions. Traffic would be generated by seeking reciprocal links, using Google Adwords and keyword stuffing of content to push organic search results. Weâ’ll cover this option in more detail when we deal with the second objective (by my definition anyway!) of e-commerce.

Pros

  • Total control over your user’s experience
  • More profitable at volume, since turnkey vendors tend to charge a percentage on each transaction to cover their costs

Cons

  • Higher start up cost
  • Maintaining a Google Adwords account is time consuming
  • Must maintain a relationship with a payment gateway
  • You’€™ll need to purchase a license from the e-commerce software vendor (ongoing cost)
  • You’€™ll need to purchase an SSL certificate (ongoing cost)
  • You will be subject to PCI Compliance1 rules

Objective 2 – Sell

Sell those qualified visitors your product (retail and wholesale if it applies).

If you are selling via partner site, this objective is quite well covered, since the partner’€™s primary business objective is to do just that. However, if you are taking the second approach as detailed in Objective 1, read on….

Quite simply, you€’ll need to create a means for your visitors to easily purchase from your website, and to provide a friction free experience while doing so.

There are roughly three ways to sell through your own website. I am listing them here in order of cost and complexity. There are some subtle differences in the following approaches, but read carefully and ask the right questions, you will be able to provide the experience that you intend with a minimum of cost and expense.

  1. Complete e-commerce
    The user browses pages and purchases items on your server. Aside from template restrictions the purchasing experience can be refined to provide the absolute best experience for your customers.
  2. Partial e-commerce
    In this scenario, the user browses items on your website, and adds them to a shopping cart, but the actual financial transaction takes place on another server, typically the payment gateway’s server. The experience is okay, but can be a little clunky. The advantage, however, is that by pushing the actual transaction of to a hosted solution, your business is absolved from PCI Compliance concerns, since no credit card numbers information is entered at your website.
  3. Hosted e-commerce
    This is a relatively new (and growing) model. In this case, the entire website is hosted for a monthly fee by the third party. This vendor provides both the content managed pages and the product or transactional pages. The website, however, is branded as your company, which is distinct from the “€œpartnering” approach as discussed previously. This is a turnkey system, but will be more slightly restrictive in terms of content management and product options. However, total cost is lower because there is only one vendor handling hosting, payments, content management, and security.

Objective 3 – Convert

Convert the visitors who didn’€™t buy anything and continue to sell your product to current customers.

Getting the consent of your visitors to be contacted by you via marketing email is critical to your website’s (and by extension your business’s) success.

I have had so many clients tell me that, yes, they want to eventually publish a marketing newsletter, but are not ready to do that just yet. Thus, they want to wait before setting up a mechanism to gather email addresses.

Don€’t wait! Build a mailing list, whether you intend to use it or not. Your visitors’€™ interest in your product or service is pure gold – don’€™t waste any opportunity to allow them to express that interest.

Services line AWeber, MailChimp and Constant Contact will provide an opt-in form that you can easily add to your site. When you have a critical mass of interested customers and something to announce, these services will allow you to craft and send your message. Once it is delivered, you can track how many recipients opened the message, and how many clicked links back to your site.

You will want to contact your mailing list members on a regular basis with product information, offers and news about your company.

Final Word

The web is rife with explanations of e-commerce. Unfortunately, most of them are over-simplified and lack detail about the options and pitfalls that exist. I’ve tried to provide a brief but inclusive look into some of the options available. However, this is just an overview. I encourage you to contact us to talk about your particular needs.

References

1PCI Compliance

Your business is responsible for the credit card information that is provided to your website. Security breaches will result in fines.

“The Payment Card Industry Data Security Standard (PCI DSS) is an information security standard for organizations that handle cardholder information for the major debit, credit, prepaid, e-purse, ATM, and POS cards.€

Courtesy Wikipedia – http://en.wikipedia.org/wiki/Pci_compliance

More Information
http://www.pcicomplianceguide.org/pcifaqs.php#1

2Payment Gateway

A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor.€

Courtesy Wikipedia – http://en.wikipedia.org/wiki/Payment_gateway

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