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A primer on e-commerce

by , MBA

Before you jump into e-commerce, you need to understand some basic concepts. If you already made the jump, it's a good idea to review them. Here they are:

1) Your Business Website

This is your online connection to your prospects and customers. The design of your site is critical to the success of your business! If it does not look like a professional, legitimate business, no one will order anything, no matter how great your products or services are. The typical site is not very user-friendly, and lacks focus. Most sites forget their purpose--always keep yours in mind at every step of development and execution.

2) Merchant Account
A merchant account is a bank-authorized account which allows you to accept major credit cards and/or checks through your Website. Many traditional banks will not give you a merchant account if you do business on the Internet because they classify it as high risk. Be careful when looking for a merchant account provider! Watch out for hidden fees, high setup fees, and other unscrupulous business practices.

3) Online Payment Transaction Software
This is the software which automatically processes your customer order information, address, credit card number, etc. It will send these data to a credit card authorization network which verifies that the credit card is valid and verifies that the shipping address matches the billing address. A possible warning sign that the card has been stolen is that the billing and shipping addresses do not match.

4) Secure Server Connection - https://

A secure server is a computer which encrypts confidential ordering data for customer protection. You know you are on a secure server when the URL in your browser says "https://". The "s" stands for "secure." A secure server frustrates the attempts of computer hackers to intercept these data.

5) Shopping Cart
Shopping cart software allows you to accept product orders for multiple products from your Website. This software automatically calculates and totals orders for your customers. Shopping cart software varies from provider to provider, as do the installation requirements. The shopping cart will conduct transactions for you on the secure server which accepts sensitive ordering information.

Why are you in business?

Now, those five basics assume you actually have a reason to be in business. The number one reason e-commerce sites fail is they don't have a real reason to be in business. What exactly do we mean by this?

Put yourself in the mind of the online shopper. This person isn't impressed by your "online mall," superstore, or collection of copy and past affiliate pages. This person needs a reason to buy from you. Actually, this person needs several such reasons. If you don't present these, your business will fail:

  • Unique selling proposition. What differentiates you from everyone else? Simply adding text that makes vague promises or value statements doesn't convey what's different about your business. Think about this concept, research it carefully, and figure out what you can offer to add something valuable to the marketplace.

  • Trust. The security seals do help, but don't stop there. Design your site with trust in mind. That means a professional looking design, well-edited copy, and good navigation. If the site is sloppy, people will not trust you.

  • Content. There's a word that's tossed around these days. Most people tossing it around have no idea what they're talking about. But here's what it means for your Website. Content is the information that helps a buyer decide whether or not to buy what you're selling. Keep it relevant and organized. Write tight, and focus on the needs of the site visitor.

  • Graphics. People like pictures. So add good quality images. If you're a reseller, bug the manufacturer for images beyond what they have on their own Website. Make all of your types of images have standard dimensions. For example, thumbnails might be 150x150 pixels, product page images might be 250x250 pixels, and "Click to enlarge" images might be 400x400 pixels. The exact size for each type of image isn't critical (150x150 or 200x200 isn't a critical decision, usually), but whatever you decide on you make that consistent for that image type.

If you don't have a clear reason your business exists, establish that before doing anything else.


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