Merchant Account Services

Ecommerce 101

Everything You Need to Know to Get Your Online Store to be Sccessful


Author: Jim Conners ()

Rating: 10.0

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Shopping Cart and Order Management

Probably the most technical issue associated with running an ecommerce store is how you you manage your products and handle your customers' orders. Countless solutions exist with each offering a variety of features and functionality. How you choose which one is right for your business will depend on a variety of factors that reflect your store's needs and environment.

Before you can get down to the specific features and functionality necessary to meet your requirements you need to determine what kind of solution will best suit your needs. There are three basic categories that all ecommerce solutions fall into each with their own pros and cons:

  1. Hosted Solutions
  2. Existing Scripts
  3. Custom Solutions

Hosted Solutions

A hosted solution basically is another company providing everything you need to run your ecommerce store with the exception of products. The handle the webhosting, the shopping cart, and order management. In general all you need to do is provide the specifics for your business (i.e. site name, refund policy, etc.) and the products (which you add through and administrative control panel they provide) and you are up and ready to go. 1

Naturally there are pros and cons to using a hosted solution including:

  • Quicker set up

    Using an out of the box solution means everything is set up for you before you even start using the solution. All of the programming and integrating that needs to be done has already been done for you. You only need to customize the solution for your store and add your products.

  • Technical issues handled by the solution provider

    Browser compatibility, gateway integration, database connectivity: all handled for you. Knowledge in web programming or other technical skills are not required as this is all handled by the solutions provider.

  • Less overall maintenance

    Since the hardware and software that powers the solution is all managed by the solutions provider, all you need to do is manage your products and your orders.

  • Possibly better security

    Naturally the security of the data each merchant stores on the provider's servers is very valuable not only to the merchant but to hackers as well. Normally the security of this information requires constant checking and upgrading to make sure no new security vulnerabilities arise that may allow this data to be compromised. Fortunately the provider handles all of this.

  • Higher costs

    Naturally the provider is not going to offer their services for free. Not coincidentally they will not offer it at cost either. You will have the same costs as you would if you attempted to establish the service yourself plus the mark up of the provider.

  • Less control

    Since you do not own or control the software offered by the provider you are limited to whatever the provider will allow you to do. This means you cannot customize the software to fit your needs. You can only do what they decide their software will allow you to do. Additionally, this solutions typically do not allow you full customization of the appearance of your store. This means your store either won't match the rest of your website or, even worse, will look just like every other store hosted by the provider.

An example of a hosted solution is Yahoo! Stores.

Existing Scripts

Existing scripts are pre-written shopping cart software that you install on your webhost's server. They can be seen as a blend of a hosted solution (most of the work is already done for you) and a custom solution (you have more flexibility versus a hosted solution).

The pros and cons to using an existing script are:

  • More choice over functionality

    These are very similar to hosted solutions except you have a choice over which software you use. Each offer different functionality and you can choose one that best suits your needs. You are not limited to the features offered by hosted solution providers. You can also edit many of these scripts to better customize them to suit your needs.

  • Lower costs

    Because you are free to shop around for the software your store will use it is likely that you will find a solution that is well-priced. In fact, there are many free offerings for ecommerce solutions available. You also will be able to sign up for a merchant account that costs less to use then what most third party processors offer.

  • Medium flexibility

    Although you have a lot of choice over which script you use and can even edit them to better suit your needs, you still are stuck within a framework designed by the script's author(s). This means you may still be stuck with features you don't want and even if you can avoid using them they are still always in your face when you use your software.

  • Your store looks like their store

    Even with the flexibility offered by existing scripts you still are using the same script used by countless other stores. This means your store will look a lot like their stores unless you spend a lot of time and/or money to hack the script enough to look unique (or at least more so). If you are trying to stand out from the crowd you will be hard pressed to do so when you look just like hundreds or thousands of other websites.

  • You are now a security expert

    Without a dedicated team minding the security of your storefront you take on the responsibility of ensuring your storefront and your data is safe and secure. You have to keep up with security updates for your software otherwise you risk exposing sensitive data. One occurrence of this can mean the end of your business.

Custom Solutions

In a perfect world every ecommerce store would have a truly custom and powerful solution driving it and making your business look like a Fortunate 500 company. Who wouldn't want an ecommerce store that was unique in every way and did everything you wanted exactly how you wanted? 2

A custom solution can do this for you. The pros and cons of them are:

  • More control

    Because you control every aspect of your solution you can be sure it meets your exacting specifications. Your storefront and checkout will seamlessly integrate into your website and provide your customers with a professional shopping experience. You will have all of the features you want and none of the ones you don't want. You can expand and alter your storefront whenever your business demands it.

  • Higher up front costs

    Developing a system to manage orders, products and payment (and more) is going to be complex in scope and take time and expertise to develop. This means your solution will come with a price tag equal to its power. Although you will have the ultimate ecommerce solution for your store, you will also be "in the hole" quite a bit of money before you even sold one product.

  • Longer ramp up time

    Due to the complexity of developing an ecommerce solution it can take weeks, and more likely, months to develop a custom solution as each piece has to be created from scratch. Even using existing code the unique portions of your store will require time to write, debug, and test thoroughly before your store can go live.

Single Item Stores

Single item stores are the only real exception to the rule when choosing a solution. Because there is not any real choice in products and very little information to keep track of how you approach a store like this is different then from a store with multiple products. Hosted solutions are not designed to handle them as are most existing scripts. And even if they were since there is so little information to keep track of developing a custom solution is so simple and cost effective to do that you might as well take advantage of the benefits a custom solution offers and you can do so without the delay in development.

1 Hosted Solutions versus Do It Yourself
2 Hosted Solutions versus Do It Yourself

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