Ecommerce that Makes Sense
Posted Saturday, October 30, 2004
We weigh the merits of ready-made and custom solutions to add ecommerce to your site.
In our last Tips we cautioned that just having a shopping cart on your website isn't enough to make ecommerce work. This month we'll weigh the merits of ready-made and custom solutions to set up ecommerce on your site.
IT ISN'T ROCKET SCIENCE ANYMORE
There was a time when selling products online required months of conjuring by highly-paid programmers. Those days are gone. Large companies with complex requirements still need custom programming (to tap a mainframe for inventory information, for example). But for the vast majority of small businesses there's a ready-made solution.
Be wary of web programmers who propose to spend a large number of hours building a shopping cart. Either they've done this before and are trying to charge you full price for something they already developed, or worse, they've been living under a rock for the past five years and have never done an ecommerce site.
ADDING ECOMMERCE TO AN EXISTING SITE
If you already have a website, the first thing you should do is check the ecommerce solutions your web host offers. You may already have a solution available, or you may be able to pay a small upgrade fee to access one.
If you have a website with a list of your products online, you may try a shopping-cart-only service, such as 1ShoppingCart (www.1shoppingcart.com). This type of service lets you add "buy now" buttons to your existing web catalog. When a buyer clicks the button, she's taken from your website to a checkout area on the ecommerce provider's site.
This can be a quick and easy way to set up a shopping cart. A mid-range account with 1ShoppingCart costs $40 per month. The downside is that, although you can add your own logo, the checkout area doesn't look exactly like your site. This may discourage some buyers.
CREATING A NEW SITE WITH ECOMMERCE
There are a variety of web-based services which provide a complete shopping cart and product catalog system. Yahoo Store (store.yahoo.com) is a good example. For $50 per month and 0.5% of each transaction (that's in addition to whatever you pay your credit-card processing company) you get a fairly complete package.
You choose from a variety of templates and then set up your store. It takes about 1/2 hour if you have copy and digital product photos. One benefit of a Yahoo storefront is inclusion in their ecommerce directory. It's like opening a store in a mall that already has good traffic. The downside? Although it is possible to customize a Yahoo store, it may end up looking a bit "cookie-cutter" and unprofessional.
CUSTOMIZING A READY-MADE SOLUTION
For the most professional look and feel you'll want to hire a web development firm to customize a pre-built ecommerce system. Some web firms work with Miva Merchant (www.miva.com). Another example is Resolve Digital's REDiSHOP module. Costs are higher than a Yahoo store: a license is typically $500 - $1,000 and web development can range from around $2,000 to $10,000.
The advantage of this approach is that the firm uses pre-built functionality so you don't pay to reinvent the wheel. Your money will be spent on those aspects of the site which are unique to you-- professional graphics, layout, and branding-- all of which can increase consumer confidence in your site.
SETTING UP A MERCHANT ACCOUNT
A merchant account enables your website to accept credit card orders in real time. Customers enter credit card information and funds are deposited in your account automatically. Firms such as Charge.com provide this service fairly inexpensively.
Your credit must be approved and you have to pay setup, monthly, per-transaction-fixed, and per-transaction-percentage fees. These are generally around $200, $25, $.20, and 2.5% respectively. If you look around you may find a provider running a special and waiving the setup fee.
Most ecommerce systems offer a preferred merchant account vendor. If the prices are within the range noted above you might as well go with that to minimize setup. You can also get a merchant account through your bank, but it'll be more expensive.
If you'd like to test the waters of ecommerce inexpensively, a service like Yahoo may be your best option. If you want to present a more professional face to the public, hire a firm to develop your site by customizing a pre-built ecommerce product. And remember, avoid anyone who wants to build you a shopping cart system from scratch.
About the Author
Barry Harrison and Jim Grady are the co-authors of REDiTIPS. REDiTIPS is a free monthly newsletter that offers simple techniques to market your Web site and grow your business. We provide practical, low-cost ideas to help you promote your small business and reach new potential customers.