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Everything
you need to know about electronic-commerce in 5 minutes.
Necessary Components.
(In order of importance.)
Shopping Cart: The shopping cart interacts with
your customer as they make a decision to buy.
A good Domain Name (see below) is cool but it will not have much
influence over the customers purchase decision. Your customer
does not care where you got your Merchant Account or where your
site is hosted . (See below)
The shopping cart is where
you and your customer come to terms.
When choosing a shopping cart you should keep the following in
mind.
1. Is the cart easy for your customer to use. We have
all been at websites filled with too much information screaming
for attention. KEEP IT SIMPLE! When the customer gets to the
buy decision they need to feel calm and assured. The Wall Street
Journal emphasizes this repeatedly in it's Ecomerce section.
(You are not going to hypnotize people into purchasing more than
they want. Either you have something at a price they are willing
to pay or you don't.) Many Dot Coms forgot that and failed.
2. Ease of product entry. Is there is a free demo you
can try? Read and follow the directions. If directions are well
written it will soon become apparent. You do not need the headaches
that can accumulate when building a shopping cart.
3. Customer support. Typically you will want some support
setting up your ecommerce site; a few calls should have you up
and going. You do not want to be frustrated during that time.
Call the cart company to get a feel for how they treat customers.
Will you be assigned one contact person who becomes familiar
with you? Or will you have to talk to someone different each
time? It is also a good idea to send an email to their customer
support. How soon do they reply? Is the response "canned"
or specific to you.
4. How long have they been in business? A company still
in business after several years has probably earned their spurs.
5. How many features do you need? As with most software,
Shopping Carts can have many bells and whistles that you will
not use. Be sure the cart you choose has the features YOU need
and you understand how to use them. A good shopping cart company
should listen to you to understand your situation and have suggestions
to help you. ( If they have experience they have "been there"
before.
IMPORTANT - Be sure you do not enter your
products onto your pages before you get a shopping cart. The
products go into the cart not onto your regular Domain Name pages.
Two shopping carts we like.
A. Easycart.com You can enter as many products
as you like. (from 1 to...) We were most impressed with the knowledge
of the sales staff. They actually took an interest in our business,
making suggestions that we had not considered. You may also enjoy
that a real person answers the phone. Easycart is the only shopping
cart that we found offering different layouts at the click of
a button. This definitely won us over.
B. If you have a large database (thousands) of products
we recommend Nexternal.com.
They also offer
great telephone support and can answer your questions. If you
do have a large database and are reading this site you probably
need help. Nexteral can help. One of your primary questions is
"how fast" will the database load. This is important
because the database will compile your shopping cart "on
the fly" and the computations can slow down the process.
This has been a problem with many database carts.
800-914-6161
Domain Name You need to have your own Domain
Name. Your Domain Name is your Internet address. At one time
"The Internic" was the sole registrar of Domain Names.
When the Internet exploded in the mid to late 90's it was determined
that no one could have such a monopoly and "the nic"
was spun off to Network Solutions. The Internic is still the
clearing house to keep all records straight so that no two addresses
are alike.
You can get a domain name from NetworkSolutions.com or at discounts
through other registrars. Domain Names used to be limited to
.com (commerce), .org (organizations), .net (network), .gov (government)
and .edu (education). New suffixes are continually being added
such as .biz, .tv, etc.
Expect to pay from about $12 per year to $50 per year. A complete
list of Registrars can be found at the link below.
http://www.internic.net
Hosting Now that you have a Domain Name
it needs to be hosted somewhere. That "somewhere" is
called a "Server". The server is a computer that is
connected to the Internet. Your computer is called a "client".
Your computer links to the Internet via your telephone line,
cable, satellite or DSL to a server that is connected to the
whole Internet. The server is on 24 hours a day so other clients
can connect to it. The server is also used to host your Domain
Name and all your Domain Name pages ( your site) so that other
internet clients can connect to it.
When choosing a hosting
company you will also want to follow the recommendations above
(in the shopping cart section) to get a feel for their customer
support. Also a good indicator of service is how fast does their
site load onto your page. If it is 'slow' you may want to look
elsewhere because speed is of the essence.
You need to contract with
a web hosting provider to host your site. Costs can be anywhere
from $5.95 per month up to hundreds or even thousands of dollars
depending on your needs.
Hosting costs are predicated
on two things; How much space you use and how much bandwidth
you use. The bandwidth is the most costly. Bandwidth is how much
traffic comes to your site. The more visitors you have the more
bandwidth you use.
Merchant Account
If yours is an ongoing
business and you already take credit cards you may not need a
new merchant account, just use your current transaction device.
You do need a Merchant Account to conduct business over the Internet.
A Merchant Account gives you the privilege of accepting credit
cards for purchase of your products or services. There are hundreds,
if not thousands, of Merchant Account providers on the Internet.
It is a very competitive market with not much price variation
because competition has depressed prices to within a few hundredths
of a percentage point.
Many Merchant Account's
come with "free" shopping carts as if the cart is only
an afterthought. If the shopping cart is "free" you
can be sure it also comes with NO SERVICE. A "free"
cart can be a very expensive mistake.
You may want to talk to a few different providers to see who
you are comfortable with.
Terms you should be familiar
with when discussing Merchant Accounts are:
1. Processing Rate. This is the percentage the bank charges and
subtracts form the transaction. Typically around 2.49% or slightly
less. (For Internet merchants.)
2. Statement Fees. This is the fee that the Merchant Account
provider charges for the monthly statement you get for your records.
Typically from $10 - $20 per month.
3. Monthly Minimum. Most Merchant account providers charge a
minimum of $20 - $25 per month in addition to the statement fee.
If you do zero business you will be charged the full minimum.
The minimum fee is eliminated as your transactions increase.
As an example if you do $1000 worth of transaction at a 2.5%
Processing Rate you would be charged $25, which would eliminate
the minimum.
4. Transaction Charge: This is the set amount charged per transaction.
Typically from 15¢ - 30¢. This is in addition to the
Processing Rate.
Real time credit card
processing. (Gateway)
The "Gateway"
takes the credit card information from your shopping cart, checks
to see if it is valid and has sufficient funds, and transfers
the money to your bank account via your merchant account.
Gateways are usually packaged
with merchant accounts but this is not always the case. If you
need both it is best to get them from the same organization.
Authorizenet is the most commonly used gateway.
You can expect to pay a setup free of from about $199 plus monthly
transaction charges of 20 - 30¢ per transaction
END OF 5
MINUTE COURSE
Advertising
your e-commerce site.
After you have set up your
e-commerce site you are faced with the question; "How do
I get people to come to my site"?
If you are an existing
business that has a client list it is a good idea to let them
know you now have an Internet site to better serve them. You
will want to advertise this fact to your existing clients in
all appropriate ways. (Your customers will be happy to know that
you are now offering this service to them.)
1. Compile an email database
by which you can let them know of any special offerings you may
have. It is very important that you ask permission to add them
to your email list. DO NOT enlist spammers or bulk emailers to
send out email for you. The last thing you need is to get the
anti-spam organizations to blacklist you and cause trouble for
your hosting company.
2. Make sure your web address
is on all your receipts and correspondence.
3. Include your website
on any print advertising you do.
Search engines.
Unfortunately all the major
search engines now operate on what is known as "Pay per
click" advertising. This means that the sites that come
up highest on the listings pay money to be there. The more you
pay the higher you rank. If you go to Yahoo or any of the other
major engines and put in a keyword such as "gifts"
you will see that the first listings to come up have the word
"Sponsored" to the right of the listing. This means
the site is purchasing the top spot.
Most pay per click advertising
is now purchased through Overture.com and Google.com.
Overture is the biggest
because they have agreements with most of the major engines,
including Yahoo, in which they share the profits. Google has
agreements with other large engines also. The Google site itself
is a bit different in that the pay per click advertising is on
the right hand side and the unpaid listing are on the left.
For these reasons and those
outlined below you may just as well face the fact that you will
have to pay for search engine rankings.
This is really not all
bad because in many niche markets the clicks do not cost too
much - from 10¢ per click and up. And even the higher prices
need to be justified in sales so there is an economic limit to
what advertisers will spend.
You need to go to both
Google's and Overture's ad centers and learn how their
programs work to make a decision.
IMPORTANT! There are other
pay per click search engines that our experience has shown to
be dishonest. They charge you per click and then pay people to
make the clicks. (Ever get an email saying "Get paid to
surf the Internet!)
Whenever you set up a pay
per click account you should have that traffic directed to a
site you can monitor via site statistic software to see where
the clicks are coming from. Then watch for any clues that might
indicate what we mentioned in the above paragraph.
A good free statistics
site is http://sitetracker.com/
Brief Search Engine
history:
Yahoo was the first major
search engine on the Internet. When Yahoo first came out it was
a simple process to enter your site and you probably would come
up pretty high. (At the time there were only "thousands"
of sites on the Internet. Now something like 100 or more million
sites are competing to be seen.
So people started looking
for ways to "optimize" their rankings on the search
engines. Many different types of tricks were devised to cheat
the system and and the search engine operators responded by devising
ways to stop this sort of manipulation. Do the wrong thing and
you can be blacklisted. (The search engine operators of that
time were much more idealistic - now they are more profit minded.)
So the cat and mouse game
began between search engine operators and "optimizers".
Because of the sheer volume of current sites and the technology
in use by the operators it is highly unlikely you will be able
to get a very high ranking in competitive markets. Even if you
do serve a relatively small niche market you will usually find
it difficult to reach the top.
To get an idea of how much
competition you have just go to one of the major search engines
and enter some keywords you think your potential customers might
use to find you, then see how many sites come up 'ahead' of you.
IMPORTANT - Do not subscribe to any search
engine placement service to list you on "1,000 search engines".
For the reasons stated above you can do yourself more damage
than good. Usually these "services" are just "harvesting"
machines for spammers. All you will get for your money is a lot
more junk mail.
We hope you found this
information helpful. If you know of someone who might also benefit
from this site please email them our address. Thank you.
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