How can I sell our goods & services online?

This FAQ aims to cover the some of the issues involved in selling goods and services online (eCommerce).

If you are reading this, you are probably already half-sold on the idea of extending your business online. Online sales for the UK in the coming year are expected to reach £42.7bn in 2010 (£38bn online in 2009, or an average of £1,102 per shopper, according to the Centre for Retail Research (CRR)), and that's a conservative estimate; as more people world-wide gain access to the Internet, eCommerce and online shopping will become second nature to consumers and businesses alike.

What is "eCommerce"?

eCommerce is the term used to describe the selling of goods and services over the Internet. In the most general sense, simply creating a Web site that advertises and promotes your products can be considered "eCommerce." In recent years, however, ecommerce has become much more sophisticated.

eCommerce businesses now offer elaborate online stores where customers can browse thousands of products, place an order, select the desired shipping method and pay for their purchases using their credit cards.

Why should I consider selling goods online?

Many see e-commerce as the internet's 'killer application' and envision all business being conducted this way in the near future. There are many advantages of selling goods and services online:

  • You can reach a global audience.
  • You can receive payment instantly through credit-card transactions.
  • Your business can be open 24 hours a day, 7 days a week.
  • You can manage customer accounts and data easily.

What are our options for handling transactions?

You have a number of options for handling transactions. The most basic approach is to handle all of your transactions offline. For example, you could publish your address and have your customers send their orders along with a check or money order directly to you. You could also collect your customers' credit card information via email or phone and then process the credit card transactions offline using your retail merchant account.

These are probably not the best approaches, though, because one the main reasons customers shop at an online store is for the speed and convenience it provides.

To increase the chances that customers will want to shop at your online store, it should be able to accept and process credit card transactions online and in "real time." You can handle your own online transactions or outsource them to a third-party credit card processor .

What are third-party online credit card processors?

If you want to be able to accept credit cards but do not want to handle these yourself, you can use a third-party online credit card processor. When your customers want to purchase a product, they click a link that takes them to the third-party's Web site. There, they will submit their order and credit card information, which is then processed by the third-party processor. Essentially, these processors act as resellers. They may charge you a variety of fees for this service, including an initial set up fee, monthly fees and/or per-transaction fees.

While outsourcing your online transactions may seem appealing, you should consider the fact that it will be obvious to your customers that their transactions are being handled not by your company but by a third-party.

What do I need to handle "real time" online credit card transactions ourself?

If you want to handle online credit card transactions yourself, you will need an Internet-ready merchant account , a payment gateway service and an SSL certificate .

What is a merchant account? How do I get one?

A merchant account enables you to accept credit cards as payment for the purchase of goods and services. There are different types of merchant accounts. For example, if you have a traditional "brick and mortar" store, you can get a retail merchant account. If you want to accept credit cards on your Web site, however, you need a specialise type of merchant account known as an "Internet-ready" merchant account.

Internet-ready merchant accounts enable you to handle Internet transactions in "real time" without any human intervention. Because the risk of credit card fraud is greater when you are accepting credit cards over the Internet, these specialised merchant accounts also provide additional checks that can significantly reduce the chance of credit card fraud. Once the transactions are processed, the merchant account provider transfers the funds received from the credit card transactions from your merchant account to your bank account.

A number of companies offer Internet-ready merchant accounts. You are free to choose any merchant account provider, as long as they support one of the following payment methods:

  • SagePay (Formaly Protx)
  • CyberSource
  • Authorize.Net
  • LinkPoint/Cardservice
  • VeriSign (PaymentNet)

What is a payment gateway? How do I find one?

A payment gateway is a service that connects your online store with your merchant account provider. This service reads the information from the order forms and translates that information for the merchant account. The payment gateway also verifies that the customer's credit card account has the necessary credit available for the purchase.

You can obtain a payment gateway separately from your merchant account; however you may find it simpler to choose a merchant account provider that also offers a payment gateway.

How can I assure our customers that their transactions are secure?

Obviously, if your customers will be submitting their credit card information to you online they will want to know that this information is safe. If they are not comfortable with the security your site offers, they will probably not buy products from you.

The best way to alleviate your customers' concerns is to secure your site using SSL (Secure Sockets Layer) . When a site is secured with SSL-the standard form of encryption currently used on the Web-visitors will see a special symbol in their browser window that indicates the site is secure. Visitors can also tell that a page is secured by looking at the URL. A secure page's URL begins with the letters "HTTPS" instead of the standard "HTTP."

What is SSL?

SSL (Secure Sockets Layer) is a method of ensuring that information submitted through your Web site is secure and cannot be accessed by unauthorised users. When a site offers an SSL-secured form, the information submitted via that form (typically credit card information) is encrypted using a special "certificate key" and then decrypted with another key after it has been transmitted.

When users access a site secured with SSL using either Netscape or Internet Explorer, a symbol displays in their browser windows indicating that the site is secure.

What is an SSL Certificate? How do I get one?

An SSL Certificate, or a digital certificate, is an electronic document that contains the information necessary to establish a secure SSL connection. When used in credit card transactions, the Web site collecting the credit card information and the site to which the information is being transmitted must both have an SSL Certificate.

Hostway can provide both the secure server and secure server certificate needed to support SSL. Shared SSL certificates are free with the Gold Plan and above.

What pitfalls should I be aware of?

There are a number of measures you should take to ensure your online shop succeeds. Most are common-sense and not specific just to the internet e.g.:

  • Provide good customer support & service.
  • Provide clear and concise information about goods, delivery.
  • Ensure prompt delivery of goods.
  • Provide a friendly and easy means to browse and purchase goods.
  • Ensure all product information is kept up to date.
  • Provide refunds and/or guarantees.
  • Confirm orders promptly.

This list is by no means exhaustive. The best way to approach the situation would be to put yourself in the position of a customer - what would you expect from an online store?


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