There is no doubt that if you own a business you have heard about e-commerce. There are a lot of benefits to participating in the e-commerce market. It evens the playing field a bit and allows a small business to compete with the giants and reach a global market. One of the problems is that e-commerce can be hard to define. Cisco defines e-commerce as when a person or company uses the internet as a part of its business model.
So, you know a little about e-commerce and you realize that it can benefit your business but how does it all work? E-commerce has five main components, the merchant account, the shopping system, the payment gateway, the hosting service, and the security system.
A merchant account is basically a bank account that is used to hold the funds that are charged to credit cards for the sales that you make. When someone makes an online purchase the money needs to go somewhere, it needs to be deposited. The bank account that it is deposited in is referred to as a merchant account. A merchant account can have a hefty upfront cost, but in the long term the savings can be significant.
Your merchant account will come with a merchant identification number. You will also need a way to process the transactions manually for orders that are phoned in, emailed in, faxed or mailed in. This could be a point of sale terminal, a virtual terminal software that runs on your PC, or a credit terminal.
The shopping system you use will be determined by the number of different products that you sell. Most e-commerce websites use a shopping cart system which allows customers to shop easily. Your shopping cart is important, the easier it is for a customer to shop and add things to their cart, the more they are likely to buy and the more likely it is that they will be a repeat customer.
The shopping cart will keep track of the products that a customer wants to purchase and then it will calculate the total that the customer needs to pay. Once the shopping cart has added up the total it needs to send the information somewhere so the credit card, or payment method can be processed. This brings us to the third component of an e-commerce website, the payment gateway.
When credit card information is submitted to a shopping cart the shopping cart encrypts the credit card number as well as the order details and sends them to the payment gateway to be processed. The payment gateway then electronically contacts the credit card holders bank to verify sufficient credit and then authorizes the funds and debits the credit card holder’s balance. Then those funds are sent to the merchant’s account.
The fourth component of e-commerce is web hosting. Some shopping carts have specific web servers that they are hosted on and other shopping carts can function on a number of different web hosting servers. The web hosting service that you choose will be determined by the technical support that they provide, the reliability, the bandwidth, features, and cost. You need to use diligence when selecting your web host as you want one that is secure and reliable.
Finally, you will need to consider the security of your e-commerce site. You should purchase a SSL certificate that will provide security for all of the credit card information traveling from the user’s browser to your website and into the gateway. You can use your website’s hosting service’s SSL certificate, if they offer it as a service, or you can purchase your own. Many online consumers will not make purchases from sites that do not have a SSL certificate with a secure site. Without the security in place valuable information can be stolen.
The above are just a few of the more important elements of an e-commerce website. There are a number of different options when it comes to setting up your online business and it can be a daunting task to do all of the research and make all of the decisions on your own. If you own a Florida business, a Miami e-commerce web design company can help you create a custom website that will be perfect for your online business. Don’t wait to contact a Miami web designer and get your e-commerce site up and running soon.
