 If
you have a product or service to sell, a web site allows
you expand your market to the world. Even if the
world is too broad a target, what you have to offer can be
made available to any segment of the Internet audience. All
you have to do is provide a way for them to buy what you
have.
Your web designer will help you work through the details
necessary for setting up online shopping, but let me explain
three basic options, starting with the simplest (and cheapest)
solution:
Mail In Orders
The easiest way to sell online is to simply
post the product information on your web site and then provide
instructions on how to mail in an order with payment. You
may even provide an online form that can be filled out, printed,
and sent with the buyer's check. This option requires no
cost for your e-commerce options other than the design and
hosting of your pages.
This option may work if you people are highly motivated
to get what you're offering. In that case, they'll do whatever
it takes to buy from you. But online shoppers are use to
convenience, and most will resist taking time to fill out
forms, write a check, and then wait that much longer for
you to receive the order before their product can be shipped.
In most cases, you're better off with one of the other options.
Using PayPal
Services like PayPal will
process credit card payments online and then notify you (via
email) of the purchase details. It is a quick, easy, and
inexpensive way for new businesses to begin accepting credit
card charges. You will likely need to pay your web developer
to integrate PayPal into your site, but this may not cost
much, especially if you are only selling a few items.
It costs nothing to set up a PayPal account, but like any
credit card processor, PayPal will charge you small per-purchase
fee (30 cents) as well as keeping a percentage of your sales
(less than 3%). If you compare these fees to other merchant
accounts, you'll find them to be quite reasonable, especially
for low-volume sales.
What are the disadvantages of using PayPal? The
primary disadvantage is that the money from your sales is
kept in your PayPal account until you request a transfer
to your bank account, a process that takes 1-3 days. Buyers
will also be aware that they are using the PayPal system
(not your own merchant account), although PayPal has provided
ways for you to customize the payment process and does not
require buyers to join PayPal when making purchases.
I've personally used PayPal for over 7 years. Many of my
clients use it to collect online payments. For the beginning
online business that isn't quite ready to invest in a merchant
account, PayPal provides a great payment option.
Merchant Accounts
This option is the most convenient for you and your buyers.
Of course, it costs more, too, but most larger, established
businesses find that it makes sense to process online payments
using their own bank.
In addition to the cost for building your online store,
you will need to invest in these services:
- Merchant Account - Established through
a bank, this account processes the funds acquired through
credit card payments, both online and offline. In addition
to the fees associated with each purchase, your bank may
also include other annual or monthly fees.
- Payment Gateway - In order for the payment
information to be passed from your web site to your bank,
a payment gateway service will be required. This requires
an annual fee.
- Site Security Certificate - In order
to protect your buyers' private information, you will need
a security certificate issued for your web site. This requires
an annual fee, although some host providers or payment
gateways will secure the payments at no additional fee.
Some businesses avoid the payment gateway fees by receiving
the credit card information in an order and then processing
the payment offline. Each web owner will need to
weigh the cost of time spent processing credit card payments
offline (especially as sales grow) against the gateway fees
to determine what method is preferred.
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