E-commerce technology has come a long way from the bare-bones Web sites that were common a few
years ago. Today one of the biggest challenges entrepreneurs face is how to choose from so many
e-commerce packages, which range from free do-it-yourself solutions to custom storefronts costing
thousands of dollars.
Fortunately, it's possible to narrow your choices and figure out what works best for your business.
Keep in mind that unless you're a technical whiz or expect to launch the next Amazon.com, it's
better to start with a simple and inexpensive online store that can grow with your business. Before
you get started, ask yourself these important questions:
Who will run your site?
Although some businesses operate and maintain their own Web sites, this can be an expensive and
difficult process. You'll need to invest in hardware, a dedicated Internet connection and software,
along with a Webmaster and programmers to maintain your site. This is an expensive process, and
you can't cut corners - customers won't tolerate a buggy, unreliable online store.
There are two alternatives: hire a Web developer to build and host your site, or use an online
hosting service that provides everything you need to build and maintain your own store.
A Web developer can build and maintain a deluxe, fully customized online store, but you'll pay
dearly for the service. Do-it-yourself services, on the other hand, usually offer everything you
need to launch a basic online store, and most charge either a small monthly fee or nothing at all.
Many of these services are quite reputable, and they're a great way to get started in e-commerce
without investing a huge amount of money up front.
Who will build your online store?
Even a simple online store relies on complex, behind-the-scenes technology. You can choose from
a variety of "storefront" software to maintain your product catalog, track inventory, calculate
sales tax and shipping charges, and perform other vital tasks. This software often costs thousands
of dollars, however, and requires a great deal of technical expertise to operate and maintain.
In most cases you're much better off using a service that operates and hosts your e-commerce software,
usually for a small monthly fee. Even if you operate your own Web site, you can build a storefront
by linking to the service's e-commerce software. And as far as your customers are concerned, they're
still dealing only with your business.
How do you collect your money?
Most storefront software doesn't allow you to collect money from customers. Instead you need to
create an account with a transaction processing service. This service accepts a customer's credit
card or other form of payment, debits the customer's account and transfers the funds to your bank
or merchant account.
Whether you're building your own storefront or using a third-party service, you'll need a transaction
processing service. These companies usually charge a per-transaction fee and take a percentage
of each transaction. In some cases you'll have a choice of transaction processing services, although
if you're building a site with a do-it-yourself service, you might have to use that service's preferred processor.
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