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Ecommerce Shopping Cart and Payment Options
There are roughly 3 ways to manage the sale of goods and services on an ecommerce
web site. They break down as follows:
1.Embeding Links to an External Payment Service such as paypal
2.Shopping Cart Web Service providers like ebay or yahoo store
3.Shopping Cart Software customized and installed on your web site
Embedding Links to External Payment Services
Paypal and other services like it have become very popular. They give you a very
easy way to sell your goods and collect payment. They don’t require a merchant
account but they do require that you register with their service. This entails
having a valid checking account and credit card. Once your account has been approved
you will be able to embed ‘pay now’ links on your web site. When these links
are clicked, the buyer is transported off of your site and onto paypal’s web
site to make the purchase. They are transported back to your web site upon success.
The process sounds easy, but there are disadvantages. The biggest is that your
buyer will have to create a paypal account if they don’t already have one. This
is a hassle for your buyer because it is an extra step that you are required
they perform before purchase. You will also have to manage your own product stock
levels because there is no link between the purchase and the product, other than
through an email. Since this service is a pay for use service their fees are
typically higher than most merchant accounts.
The biggest advantage of this method however, is how fast you will be able to
sell products on your web site. The biggest disadvantages is the buyer must have
create a paypal account to complete the transaction and they are no longer at
your web site during the transaction. It adds complexity and creates the opportunity
for lost sales.
This option is most powerful for small shops with a small amount of products or a set of products that do not change over time.
Shopping Cart Web Service Providers
The next step up is to use a service like Yahoo Stores. Here you can purchase
a fully functioning shopping cart for a monthly fee. A merchant account is not
required if using paypal or the service providers own payment processing service.
If you do have a merchant account it most likely can integrated into this shopping
cart system. The shopping cart provided typically is template based which will
give you some flexibility in the look and feel of your web site. They offer a
lot of features both to assist in selling your products and also to manage
the sale. These come standard with most packages.
The biggest advantage of this service is it is practically hands free. The web
hosting, the shopping cart, the merchant account and the tools are all included
in the monthly fee. The biggest disadvantage is that there is no ability to customize
the software, add or modify the features, or create a unique and custom web site
that will differentiate you from your competitor using the same or like service.
This service is a great solution for anyone that has had success with paypal
or wants to try out a shopping cart without making a big up front investment.
Shopping Cart Software
The last option is the most complex. This option offers the
most flexibility in creating a unique shopping experience for your buyer. In
this case you will need to acquire a web host your web site. Establish credit,
open a merchant account, and purchase a digital certificate to ensure encrypted
transactions for your buyers. Lastly you will need to contract out an experienced
ecommerce development firm to create a custom shopping cart for your exact needs.
This shopping cart will have custom graphics, and text that will create a
polished look to your product line. Any custom services your require can be
programmed in to deliver the most convenient service for your buyers and separate
you from the crowd.
The biggest disadvantage in this case is the up front cost. These costs can range
from several thousands for small ecommerce sites all the way up to hundred’s
of thousands for professional retail stores with thousands of products. The biggest
advantage however, which often outweighs the other choices is the clean, polished,
unique look and feel. The creation of a unique shopping experience that
rivals the large retail stores and that of your competitors.
This option is best for the serious retailer or the small shop looking to create a strong name for themselves in the market place.
Next, let’s get a deeper understanding of what a merchant account is.
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