How Ecommerce work beginners guide

How Ecommerce work beginners guide

Welcome to How Ecommerce works

" How exactly does Ecommerce work "?

" How Ecommerce work "?

This has to be the most-frequently asked question I receive from newbie clients. They know people are buying online and they know they have to accept credit cards if they want to stand a chance in all the net-based competition, but beyond that realization, most are clue less as to how ecommerce works.
I can't blame them, really. It's a confusing online world out there and a lot of people who are trying to tell them how it works are really just trying to sell them their own solution. It's kind hard to trust the validity of what they say when profit is a huge motivating force behind their persuasive suggestions. Following points will explain exactly how ecommerce work.

1. The Merchant Account:

This really is your first step towards Ecommerce, unless you have chosen to go through a payment facility and are willing to give up a rather large portion of your sales in fees. The up-front costs of a merchant account can be hefty for a small business, but the long-term savings can be substantial.

A merchant account comes with a merchant identification number. That is about all it gets you. In order to process transactions you need either a terminal (the little box that you swipe your credit card through at retail outlets) or software that runs on your PC and will dial up the merchant via your modem, and then process the transaction and deposit the money into your bank account.

Ecommerce guide
2. The Shopping Cart:

If you are selling just one or two items on your site you won't have much need for a shopping cart. A site with a variety of products should use the shopping cart system because it's the easiest way for your customers to shop. The easier it is to shop, the more they will spend, which is exactly the psychology supermarkets use, and exactly how shoppers are similar whether in a supermarket or scanning through your website.

If, on the other hand, you would like all of your incoming orders to be automatically processed for you as the customer hits the submit button, you will need what is called "real time processing."

3. Real-Time Processing - Almost every website company I talk to would like to have their orders processed for them (the vision of the owner of a website company turning on the PC and then stretching out in a hammock, watching the orders get processed on the screen, comes to mind). However, most web company people, upon learning the cost involved, take my advice to wait until they have a steady flow of orders coming in before they use real-time processing.

4. Web Hosting - The web host who is hosting your site can sometimes make a difference in how compatible your entire site and ordering system are with each other. I say "sometimes" because for those of us not using real-time processing, it doesn't matter who your host is or where your merchant account is located. They are independent of each other. Orders arrive and you process them. No interaction between the two is needed.

One Stop Shops -

The easiest way to find a compatible solution is to choose a provider who offers all you need under one roof. This is what I have done by partnering with Virtualis Systems. I am able to offer a great hosting solution along with a compatible shopping cart that works with almost any real time processor. I have even taken this a step further by partnering with a rock-solid merchant account provider, E-Commerce Exchange. Now I don't want to force MY "solution of choice" on you in this article so I have set up an auto responder with details on the Ecommerce solution I recommend to all my clients. Please email our auto responder at for details. Your Website Designer:

Who to Choose?

Choosing the right person for this task is perhaps the most important decision you can make. Nobody is an expert in all areas of Ecommerce because there are so many variables, depending on which configurations of hosts, carts, and merchants you choose. Find someone with whom you can talk to and who will listen to YOUR needs with understanding. Just like a web designer trying to create a site that will sell and not just look good, with no marketing experience, a designer who doesn't know Ecommerce is going to be hard-pressed to juggle all the components that must fit together seamlessly and attractively to construct a truly effective Ecommerce site.

The Most Common Mistakes?

I've had clients come to me who have been provided a shopping cart by their web host but who then have purchased another cart, not realizing they already have one. They've set themselves up with real time processing and then purchased a terminal even though they will never swipe one card. They've had SSL enabled on their web host server even though it's provided at their payment gateway.

Why? Cutting through all the technical jargon, it's all because they simply didn't understand how each component can, should, and must work in conjunction with one another.

Ecommerce can appear simple (well, almost) once you understand how all the components of ecommerce work together. A merchant account allows you to accept credit cards, your web host shows your website to the world, your shopping cart helps your customers order easily and real-time processing processes the orders in real-time and approved transactions are credited to your merchant account. All are independent components but they all function together to make Ecommerce work. Find a designer or webmaster who can bring all these elements together on your site & watch Ecommerce work for you.

It's important to know how ecommerce work to take correct decision before starting online business. The above is extracts taken from 'How exactly does Ecommerce work' written by Lisa Schmeckpeper-
About the Author
Lisa Schmeckpeper of LRS Marketing and published in their free newsletter, Website Success Monthly. To receive a free copy of this informative e-zine just send email to or visit their website at Copyright 2000 [LRS Marketing].
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