Tuesday, September 18, 2007

Diabetic Corner

eCommerce. You hear it everywhere, every time you turn around. It certainly is one of the "buzz words" on the internet right now and for good reason. eCommerce is an excellent additional avenue to sell your products and services, and for many companies it is the only avenue. We're not saying that every business should consider an eCommerce website, because in many cases it would just not be advantageous for certain companies to do so. However, if you have a product or service that is easily shipped or sold over the internet, whether it be business to business, retail or wholesale, you may want to consider an eCommerce website, Intranet or Extranet. "How exactly does eCommerce work"? This has to be the most frequently asked question we get. 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 internet-based competition. Beyond that realization, most are uncertain as to how it all works. There are actually many ways to do eCommerce, since eCommerce means different things to many people. Some people feel that by having just an online order form makes a site an eCommerce one. This is not the whole picture though. We will explain your options and let you decide what "eCommerce" means to you and your business. There are five major components of eCommerce, the Merchant Account, the Shopping System, the Payment Gateway (for real-time-processing), the Hosting Service and the Security System. Before you even start thinking about all the orders that you are going to be bringing in, you need to make some very important decisions up front. You need to decide how you are going to process orders and how you are going to accept payments. There are a variety of ways. Processing orders. Simple non-secure order form sent to your email. Secure order form sent to your email. Shopping Cart System with database (Recommended) Using a 3rd party Shopping Cart Service. (NOT RECOMMENDED) Accepting Payments Checks, COD's and Bank Drafts only. (Don't expect a lot of orders) Manual Credit Card processing. Real Time Credit Card Authorizations (Recommended) Third Party Merchant Account (Shared Account) (NOT RECOMMENDED) Depending on what you decide, you are going to need different tools to set up your Order Processing and Payment System. 1. The Merchant Account Any type of real eCommerce requires a Merchant Account and this really is your first step toward eCommerce, unless of course you have chosen to go through a 3rd party like RegSoft, PayPal or ClickBank and are willing to give up a rather large portion of your profits. These companies can take up to 15% of your sales to process your orders for you, PayPal being one of the lowest! Depending on what company you go through, the up-front costs of a merchant account can be hefty for a small business, but the long-term savings can be substantial. i4Market highly recommends Millennium Bank Card systems. The best part about Millennium is it's free to setup. Your cost are just 2.25% of what you sell and 29 cents per transaction with a $10.00 monthly Statement/Customer service fee. You can also obtain a Gateway Account with Authorize.net at the same time for an additional $20.00 per month. (Talk to Kent and tell him i4Market sent you)! - Note: we will explain the Gateway Account Below. A merchant account comes with a merchant identification number. That is about all it gets you. In order to process transactions manually you'll also need either a POS (Point Of Sale) terminal (the little box that you swipe your credit card through at retail outlets), a Virtual Terminal software that runs on your PC and will dial up the bank via your modem or a credit terminal. Even if you decide to go with Real Time Credit Card Processing you will still need some type of terminal to process orders that are called-in, faxed in and/or mailed in, also for any returns or credits. Please note: Authorize.net and most other gateway systems usually provide a Web-Based terminal for your use within your account. 2. The Shopping System 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. So shopping carts are good. But how will they work with your merchant account and the all-important payment system (or gateway)? If the orders placed on your site are to be processed manually with the customer's credit card as a sale through your PC, Web or POS terminal, then there doesn't have to be any compatibility between your shop-cart and your merchant account. The two will work completely independent of each other, each doing its part of the job but with your help. 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 "real time processing with a gateway account. By doing this the only thing you have to do is fulfill the customer's order. There are many choices when selecting a Shopping System but some of the most important should be functionality, (does it do what you need it to do), ease of use, and compatibility. Shopping systems like anything else now days can be purchased or leased, and both ways have their advantages and disadvantages. However, i4Market highly recommends purchasing your own to maintain control and your user's financial and order information and your database - Don't trust this to a 3rd party Shop-Cart since all your customers data and your entire product database will reside on their server, not yours! 3. SSL Certificate i4Market also highly recommends the purchase of an SSL Site Certificate. This Certificate provides security for the credit card information from the user's browser through your website and then into the Gateway. Again you have two choices; 1- you can use your Hosting Service's SSL certificate (if they provide this service), however the secure address will not be https://www.yourdomain.com but would look more like https://webp1.yourhost.com/your-account-name/. We suggest you purchase a site certificate in order to keep the SSL with-in your domain. Notice the addition of the "s" on the end of https in the URLs above - this is usually one way to insure the page is secured. The other way is the indication of a Lock in the lower part of your browser which will look something like this FPRIVATE. For Microsoft Internet Explorer users the lock will be on the lower right side of your browser window and on the lower left side for Netscape users. A site certificate usually ranges from USD $99.00 to $800.00 depending on the vendor and level of security and must be renewed every year. Certificates can be purchased from companies like GeoTrust, VeriSign and a handful of others. Please note; a Secure Socket Layer (SSL) is not an absolute requirement since everything will work without it, however many people will not purchase from websites that do not have SSL. You also run the risk of data-jacking if you do not have a Site Certificate installed, data-jacking is when a hacker actually intercepts the data while it is being transferred. 4. Gateway Account We mentioned the Gateway many times in the above article and here's how it works. Once the user sends his order it is transferred from his machine (or more specifically, his browser) to the Shop-Cart and is protected by the Secure Socket Layer (SSL), the server then hands off the data to the Payment Gateway. Gateways are services like Authorize.net™, CyberCash™, iBill™ and a host of others and is the actual link between your website and the banking networks. These services usually offer both the Gateway and the Processor. The Gateway is simply the door into the ATM banking network, and the Processor is what actually handles the Financial data and must be able to communicate with your Shop-Cart. The processor accepts the data from the shop-cart and brings it in to the ATM network, where it is now just like any other credit card transaction. Once in the ATM network, it connects to the Customers Credit Card Issuer, it then submits the data and waits for a Yes or No answer as to whether the transaction is approved or declined. After this, the whole process starts again in reverse order to give the user feedback as to the status of their transaction. If the order is accepted, it will then charge the order amount to the customer's account and sends the Gateway an authorization code. The Customers Bank will then settle the remainder of the transaction at a later time when they do their batch settlement processing, this is usually at the end of each business day. But for now, the user has his authorization and you have your order! When the bank performs it settlements, the sale amount will then be deposit into your bank account, minus any fees that that may apply to the sale. For this reason, the funds may not show up in your account for 24 - 48 hours after the actually sale has been completed. All that is required of you, is to fulfill the customer's order.

Payment Diagram
1. Consumer places an order with the merchant through any number of sales channels: Web Site, Call Center, Retail, Wireless or Broadband. 2. Authorize.Net detects an order has been placed, securely encrypts and forwards the Authorization Request to the Consumer's Credit Card Issuer to verify the consumer's credit card account and funds availability. 3. The Authorization (or Decline) Response is returned via Authorize.Net to the Merchant. Round trip this process averages less than 3 seconds. 4. Upon approval, the Merchant fulfills the consumer's order. 5. Authorize.Net sends the settlement request to the Merchant Account Provider. 6. The Merchant Account Provider deposits transaction funds into the Merchant's Checking Account.
The Shop-Cart is what keeps track of the user's order while they are shopping. When they are done and are ready to pay for their merchandise, they submit their order. Once they submit their order it is handed to the Shop-Cart secured by the SSL and sent to the Gateway for Processing. As you can see the Shop-Cart is only a small piece of the puzzle.
If you're on a tight budget, the extra fees involved in real-time processing might be better used to aggressively advertise and drive customer traffic to your site. Processing a few orders per day doesn't take very long and until you find it to be more time-consuming to process the orders yourself, you are probably better off processing a small amount of orders manually.
If on the other hand you are starting with a healthy budget and an aggressive marketing plan, you will probably be better off implementing real-time processing right from the start. Changing order-processing methods can sometimes result in system down time and you don't want anything to slow down your momentum once you've started.
So Who do you Choose to Make All this Work?
Choosing the right company for this task is perhaps the most important decision you can make. No one is an expert in all areas of eCommerce, because there are so many variables and options depending on which configurations of hosts, shop-carts, certificates, gateways and merchants accounts you choose. You'll need a company that is experienced in eCommerce and making all the pieces work together. i4Market is that company!
eCommerce can appear simple once you understand how all the components work together. A merchant account allows you to accept credit cards, your hosting company shows your website to the world, your shopping cart helps your customers shop and order more easily, the SSL certificate protects your user's financial data and your liability and the Gateway allows real-time processing. All independent components working together to make your job easier, more productive and profitable.
About the Author:Robert Boilard is a professional developer, marketing strategist and one of the principals' at i4Market, LLC. Since 1993 Robert has been producing successful website and marketing campaigns for companies from the 2 person office up to the Fortune 500's. Visit us today!

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