Setting Up Shop Online
It seems like nearly everybody has an idea for an online shop these days, and why not? Internet shopping has become part of our daily lives and is an easy and effective way to sell. The trouble is that it’s not always as easy as it should be to get started.
Online Shops Have Three Walls
...and no ceiling!
What I mean is that there are three sides to this venture you need to put in place before you’re ready to start taking money from online customers. First we’ll take a look at them individually so that you know what they are and why you need them. Can you guess what the first one is?
A Website
Sorry, no prizes if you guessed right on that one. You’re going to need some sort of website to ply your wares. People want to see what you’re selling and they need to give you their payment details. It’s pretty essential in terms of an e-commerce site.
image courtesy of Foxtongue
Internet Merchant Account
It seems as though nobody has anything nice to say about banks at the moment. Well if you’re serious about your online shop then you had better find something nice to say because you might just need one. If you want to sell stuff online you need an Internet Merchant Account so that you can take credit and debit card payments from customers. You can apply for one from your bank (or another bank) as well as a few specialist providers as long as you meet their requirements.
Charges for IMAs vary between providers and payment can be monthly, per transaction or a combination so shop around for your best option. Even if you already have an account for face-to-face transactions you still need to get an IMA in addition to your other account.
Payment Gateway
You’re going to be taking private information from customers including their card details and you need to process this information in transactions. Your Payment Gateway bridges the gap between your website and your merchant account and keeps all the information safe. Once again, there are plenty of companies around that will provide this service, but they don’t do it for the good of humanity. They’re going to want a piece of the pie every time they process a payment for you.
image courtesy of Wsssst
Isn’t There a Simpler Option?
Getting an IMA and Payment Gateway Provider in place takes a certain amount of effort and money to set up, but is generally a more cost-effective option when dealing with a lot of transactions. On the other hand, taking payments this way is likely to be expensive for low numbers of sales. If you need an alternative then there’s still plenty of choice available.
If you’re not expecting the money to come rolling in straight away then it’s worth considering using a payment processing company. One of the best known is PayPal, but there are a number of other competitive providers in the market. They effectively remove the need for an IMA and generally charge a monthly fee plus a percentage of each transaction. This is likely to be a cheaper option for low volumes, but you might feel like you’re getting stung if you start taking lots of orders.
One-Stop Shop
Last of all, if money’s a particular issue then there are alternatives to building an e-commerce site from scratch. There are a few off-the-shelf e-commerce systems out there on the web that do pretty much everything for you from website to payment processing. These are generally the cheapest to set up, but the most expensive per transaction, making them best suited for new starters and low volumes. They can help shortcut development time and therefore cost initially, but you may have to compromise on certain aspects of the site design. Not the right answer for everyone, but it’s an option worth exploring.