Creating an Ecommerce Site

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Creating an Ecommerce Site
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• "A lot of advertisers lined up to throw money at
  this stuff because they were caught up in the
  hysteria about the Web.
• But now they want to know how you make money
  selling a 1.59 bottle of dish detergent on the
  World Wide Web.
• Karen Burka

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Business Basics

• Proof of Concept - look before you leap
• Cost of online presence
• Is your business suited for online?
• Great Job _at_ 80 vs. Poor Job _at_ 100
• Usability - work hard on this one
• Customer Service - anytime, anywhere
• Make your choices carefully and deliberately

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What is Ecommerce?

• Using the Internet to transact business with
  your customers
• Web site must justify costs
• Monitor success from the start
• Competition may influence decisions
• Market share - you need it - study competitors

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Web Storefronts

• Ecommerce and Web storefront - obvious
• Not everything sells on the web
• Significant sales requires aggressive marketing
• Traditional and non-traditional
• 3 elements to storfront
• Catalog
• Order
• Payment

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The Catalog Element

• Displays information about your product or
  services
• Build online catalog two ways
• Individually designed Web pages - static pages
• Pages generated from database by Web Software

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The Order Element

• Keeps track of your customers catalog selections
• Buy Now - straight to payment - one product
• Cardinal rule of ecommerce
• Always make it easy for your customers to BUY
• Multiple purchase with shipping, taxes
• Bring on the Shopping Cart

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The Payment Element

• Lets your customers pay for their orders
• Low tech - phone call - not ideal
• Most people want to purchase on your site
• Third party payment processors - PayPal
• Low end, low cost option
• Basic HTML
• Could cost you in the long run - per transaction
• Web software - high end - payment gateway

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Storefront Options

• Simplify matters
• Do you require a shopping cart?
• How much control do you need over the appearance
  of the storefront?
• Do you want to accept credit card payments over
  the internet?

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How Do You Decide?

• Are you in business to make a profit?
• Estimate the value of a Web storefront and budget
  accordingly - ROI
• If using a shopping cart - get experienced help
• Options, options, options

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The ASP Question

• Application Service Provider - access to
  specialized software that runs on the server
• Storefront services - hosted
• Login to service providers Web site - to edit
• Product Data stored in database on service
  providers network

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The ASP Question

• Host part or all
• Vendor maintains service - advantage
• You do not have 100 control - disadvantage
• With ASP the total cost of your storefront is
  lower

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Shopping Cart Software

• More control over appearance than ASP
• You will need some professional help
• Buy license and avoid monthly fees (ASP)
• More complex - more expensive
• Two distinct elements
• An Administration site - interface to manage
• A public site - the customer side
• Both share a database

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Shopping Cart Software

• Hunting for shopping cart
• Different prices, features, configurations
• Your shopping cart should support your Web site
  goals, Web site plan and storyboard
• Does your Host offer to install?
• Focus on both customer and admin sides
• Shopping cart should make your life easier!

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Shopping Cart Features

• Try before you buy - all carts are not the same

• Categories - Subcategories
• Product Listing and Detail
• Shipping
• Taxes

• Price Levels
• Coupons
• Product Options
• Payment Gateway Support
• Customization

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Understanding Online Payments

• Mind-boggling array of chopping carts
• Complexity is high - easily confused
• Most misunderstood element of ecommerce
• Pay for too much, too little, or wrong things
• Become knowledgeable - your work is not done with
  this class

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Accepting Credit Cards

• Compare payment processing to traditional
  point-of-sale scenario to understand
• Goal - transfer money from customer credit card
  account to your merchant account
• Need to establish merchant account 1st

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What is a Merchant Account?

• A special account you set up with your bank for
  receiving credit card payments
• Where all payments are deposited
• May take a few weeks to setup - Internet Merchant
  services
• Two types of merchant accounts
• Card Present - point of sale card swipe
• Card Not Present - MOTO
• All Internet transactions are Card Not Present

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Understanding HowCredit Card Payments Work

• 3 steps
• Authorization - verifies that the customers card
  is good for transaction
• Capture - collects the transactions you are ready
  to settle into batch
• Settlement - transfers the money from your
  customers credit card account to your merchant
  account
• Purchase - Authorization - Capture - Batch

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Why the Payment Gatewayis Important

• No face-to-face
• Payment Gateway - Internet payment processor
• VeriSign - Authorize.net
• Acquiring Financial Institution - arranged your
  merchant account - may be bank or other
• Economic sense - you may get discount
• Payment Gateway - connects Web site with merchant
  accounts banking network

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How Internet Payment Works

• Getting paid - Authorization and Fulfillment
• Customer enters credit card information
• Shopping cart software process the order
• Payment gateway requests authorization from
  customers financial institution
• Merchant uses admin tools to capture payments
• Payment gateway settles capture payments

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How Internet Payment Works
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Merchant Interface

• Capture, void, and refund charges
• Browser-based from payment gateway
• Login (daily) - review - process
• Settle payments, transfer funds from issuing
  financial institution (customer) to acquiring
  financial institution (your bank)
• Process refunds

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Potential Payment Trouble Spots

• Not to complicated is it?
• Easy process - logistics of implementing process
  that causes all the problems
• Forewarned is Forearmed

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Potential Trouble Spot 1

• Your Customer and Your
• Shopping Cart Dont Get Along
• Which credit cards do you accept?
• Communication problem not technology
• Visa, MasterCard - for sure
• American Express, Discover - maybe
• Shopping cart designed for optimum usability

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Potential Trouble Spot 2

• Your Shopping Cart Software WontWork With Your
  Payment Gateway
• Not all shopping carts support all gateways
• VeriSign vs. Authorize.net
• Each payment gateway has its own rules for how
  transactions must be formatted

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Potential Trouble Spot 3

• Your Merchant Account Doesnt Accept Online
  Payments
• Must be able to accept Internet payments
• Internet transactions considered more risky than
  tradition point-of-sale transactions
• Financial institutions use different fee
  schedules to accommodate the risk

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Potential Trouble Spot 4

• Your Payment Gateway Wont WorkWith Your
  Merchant Account
• Question Will my payment gateway communicate
  with my financial institutional banking network?
• Ask before your purchase - move forward

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Small Budget Payment Alternatives

• Setup charges and monthly fees with merchant
  account may be too steep
• Cheapest method? - dont do transactions over the
  net - phone, store, mail
• Manual labor has its cost!
• Internet shoppers participate in Web Culture
• Solutions exist to suit your needs

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The PayPal Alternative

• PayPal is the third most popular third-party
  Internet payment processor (no setup fees,
  monthly charges)
• eBay liked it so much they bought it!

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The PayPal Alternative

• How it works
• PayPal establishes account for you
• Customer get directed to PayPal with special code
• Customer pays - PayPal deducts service charge and
  deposits the payment into your PayPal account
• Your request payment from PayPal - check, deposit

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PayPal IPN

• IPN - Instant Payment Notification
• Used for delivering electronic payload (eBooks,
  files, etc)
• Secure way to guarantee that customers paid for
  your product before they received access to a
  download
• Shopping cart will need to support IPN
• Use of gateway page to deliver product

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Payment Security

• Internet is a global network of computers with a
  large community of hackers
• Hackers have all the latest toys and tools
• Dont use email to send critical passwords or any
  other confidential information
• Online protection for yourself, and your
  customers, is as important as offline security

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SSL and Digital Certificate

• Secured Sockets Layer (SSL) - exists to take
  normal online forms and make them secure
• To apply SSL to Web site you must acquire a
  digital certificate authority
• Unique key that your Web host installs on server

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SSL and Digital Certificate

• Encryption of data - hard to crack
• 40-bit - Shopping sites use (most browsers
  support
• 128-bit- Banks may use - (older browsers my not
  support
• Your shopping cart host may provide a common
  checkout facility for all vendors
• 50 - 350 a year (multiple-year/renewal discount

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Understand Customer Concerns

• Hackers
• Spam
• Upfront about security and privacy with customers
• Allow your customers to feel comfortable as
  quickly and easily as possible by addressing
  issues

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How Secure is mycredit card information?

• Provide easily accessible security link that
  explains your why your site is secure
• Explain the techniques you use such as SSL
• Display logo of authority digital certificate
• Make sure site switches to secure mode before
  information is sent
• Liability - dont store credit card numbers -
  customers will reenter - and feel safe

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What do you do withmy personal information?

• Write and provide your privacy policy
• Dons share customer information with others
• Dont use email address for others to see
• Opt-in approach to electronic communications
• Opt-out approach - customer must do something
• Most customers see something they didnt ask for
  as junk

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How long will it takefor my order to arrive?

• Customers expect quick order fulfillment
• Tell your customers upfront how long it will take
  to process and ship the order
• Ideally you should ship in 24 hours
• Rapid delivery choice
• Charging credit card

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What is happening with my order?

• Let customers know you have received order
• Let customers know you have shipped order
• Email will work for this
• If you offer custom merchandise maybe you should
  allow customers to check on order through your
  Web site

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Am I really gettinga good deal here?

• Price is not only concern to customers
• Give your customers information that explains why
  buying from you is better than buying from your
  competition
• I offer only the highest quality merchandise!
• Remind customers of excellent return policy, free
  shipping, or whatever else makes your product or
  service superior - be creative!

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What if there is somethingwrong with my order?

• Online purchasing doesnt allow for your customer
  to touch, feel, and see your product before they
  purchase
• Make your return policy very clear - and be
  generous - You want customers to purchase again
• Comfortable customers comeback for more
• First impressions work on the Internet

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• "If anything, e-commerce will cause
  mom-and-pop-like businesses to proliferate.
  E-commerce redefines the neighborhood, the
  community, and the customer relationship. Instead
  of creating limits, it creates access to
  opportunities."
• "Mark," Decatur, Illinois, Fast Company,
  September 1999