Selling Online?
Give Your Customers What They Want

More and more, people and businesses are turning to the internet to find and buy the products, services and information they need. If you decide to sell online and create your own web store, in addition to a basic website you will need to incorporate a Shopping Cart and a method of Processing Online Credit Card Payments.

Shopping Carts

When selling online you need a shopping cart for your website. An shopping cart is software used as part of an ecommerce site. It presents the products your business has available for sale and allows customers to select, view, add/delete, and purchase items for sale. It is the online store’s product catalog. Once customers have added all the items he/she wants to purchase, it tallies the total purchase price, calculates shipping charges, adds any applicable taxes and then allows the shopper to pay for the whole order online.

Shopping carts can be sold as separate software (licensed) which enables businesses to integrate them into their own online stores, or they are offered as a component from a service that will create and host a company's ecommerce site.

The most basic shopping carts simply allow for an item to be added to a cart or basket to begin the checkout procedure. An example of this is the free version of the PayPal shopping cart. However, most software provides added features that an ecommerce site uses to manage the site’s products. This would include customer lists, orders, product categories, sales and discounts, etc. that could be accessed in real time.

License It or have it Hosted?

There are basically two ways to obtain shopping cart software for your business website.

a. License It: If you license the software, most often it will be downloaded online and installed on your web server (the computer that hosts your website). In addition, the computer program can often be edited to customize it to your business. Generally, a license is paid for with a one-time fee.

b. Have it Hosted: In this case, the software is maintained “hosted”on the computer of the company providing the software, that is, the hosted service provider. Although there is somewhat less flexibility to customize the software, there are often templates to choose from. Because it is hosted on the providers (vendors) own computer servers it can be constantly updated for the latest security patches and software upgrades. For most small businesses, the hosted solution is usually the best. This service is usually paid for on a monthly, quarterly or annual basis.

Payment Processing

If you’re selling online, most likely you’ll want to be able to accept credit cards since it is the most common means of online payment. In order to do this you need a merchant account and a payment gateway. A merchant account sets up the account that allows you to accept credit cards and have the payments deposited into your bank account. A payment gateway is an e-commerce service provider that authorizes payments for ecommerce websites, that is, any business selling online. It is similar to the terminals that are used to swipe credit cards at most retail outlets.

A payment gateway protects credit cards details by encrypting sensitive information, such as credit card numbers, to ensure that information passes securely through the system. A connection service can provide the gateway, or you can purchase and install the software on your web server. Many of the shopping cart providers partner with or have preferred merchant account and payment gateway providers.

What Does All this Cost?

You need to have a merchant account and a payment gateway account when selling online, and the costs for each vary by provider. Generally speaking, there is a one-time setup fee for each account, a discount rate applied to each transaction, and a minimal per-transaction fee. The discount rate is a percent of each sale, usually between 2% and 3%.

To summarize: To sell online, you need to integrate a shopping cart and credit card payment system into your website. Credit Card processing requires a number of steps, and several different companies are involved, such as your online store, your payment gateway, your merchant account provider (credit card account), and the bank that issued the customer's credit card.

Because of the complexity of incorporating a shopping cart and payment system, many business owners outsource this task. They can take care of all the behind to scene details that ultimately end up with the payment being deposited into your bank account.

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