• Tip One: Make It Easy to Use

Shoppers want to view information, add products to the cart, review selections, make changes, and pay simply by clicking buttons. The “add to cart” button should be prominently displayed. Navigating between product pages and the cart should be easy. Modifying the cart should be simple. Conversion is more likely when the cart is easy to use.

• Tip Two: Make It Interactive

What colors and sizes are available? Is it in stock? How much money will they save if they buy in quantity? What will shipping cost? Building interactive features into the shopping cart allows consumers to explore options and be assured they are getting exactly what they want.

• Tip Three: Give It Time

Making the customer’s cart savable lets him build his order over time. For example, eBay’s half.com site lets customers save selections to a wish list. They can return later to purchase selected items. If a sale is not completed in a given period of time, the shopper receives an email reminding them to update their wish list.

• Tip Four: Automatically Calculate Totals

Keeping the consumer informed of total costs will build his or her confidence in shopping through the website. The shopping cart should show the product total, tax, and shipping costs. Many sites show a summary page as the final step before the consumer completes the transaction.

• Tip Five: Allow Multiple Payment Options

Accepting payment through a number of methods will increase the likelihood that the transaction will be completed. Some customers prefer using credit cards. Some use PayPal. Still others use echecks. Providing a variety of payment options makes purchasing possible for a wider range of customers.

• Tip Six: Keep It Secure

Consider becoming a member of a third-party privacy seal program, which verifies the credibility of ecommerce sites. Ensure encryption of personal data. Display the website’s privacy policy. Assuring consumers of the site’s trustworthiness eliminates concerns and encourages a mutually beneficial business relationship.

• Tip Seven: Confirm the Purchase

An automated email confirmation following the sale assures the customer that his or her order is in progress. As added assurance, many etailers find it a good practice to include contact instructions so the consumer can keep tabs on the status of the order, make inquiries, and track shipping.

Consumers look for ease of use, efficiency, and security when purchasing online. A well-designed shopping cart can meet these needs and increase conversion rate and revenue for etailers in a highly competitive market.

• Bring in new customers. When a consumer is ready to buy and knows of multiple sources for the product, price is often the deciding factor. Consumers are attracted to a good deal. Offering a discount code to new customers provides an additional reason to shop at your particular website over all other options.

• Encourage repeat business. Satisfied customers will be more likely to shop again when they are reminded to do so, and given a compelling reason to return. A special discount code can be sent via email at specific intervals as a thank-you for past purchases and to encourage repeat business.

• Increase order size. Time-limited offers create a sense of urgency and give customers a reason to buy more than they originally intended. Discount codes can be offered for a percentage off the purchase price of a second item, for example, or for free shipping on orders totaling a specific amount.

• Tracking. Gathering data on customer trends is imperative for every retailer. Issuing separate discount codes for different mailings, website promotions and affiliate partners, for instance, provides important information on where customers come from and which marketing campaigns are most effective. This data can then be used to make decisions about future marketing programs.

• Control inventory flow. Physical stores manage inventory flow by marking down items they want to move. Online storefronts can use discount codes for the same purpose. The discount can be offered across the board, or used to bring in new customers with an interest in that particular product category, or sent to previous customers who bought similar products.

There are several ways discount codes can be applied. Retailers generally offer a set dollar amount off the normal price of a product, a percentage off the price of a single item, a discount on the order total, or free shipping on orders that exceed a minimum dollar amount.

Discount offers can be extended through a number of vehicles. They can be posted on the landing page of the storefront. They can be emailed to select past or potential customers. They can be introduced on the order summary page to encourage the customer to add items to the shopping cart. Or they can be listed at sites such as currentcodes.com or dealhunting.com.

Many retailers determine the effectiveness of their marketing strategies by tracking the use of discount codes. The information can help businesses achieve the highest possible ROI and sales at the best available rates.

• Tip One: Make It Easy to Use

Shoppers want to view information, add products to the cart, review selections, make changes, and pay simply by clicking buttons. The “add to cart” button should be prominently displayed. Navigating between product pages and the cart should be easy. Modifying the cart should be simple. Conversion is more likely when the cart is easy to use.

• Tip Two: Make It Interactive

What colors and sizes are available? Is it in stock? How much money will they save if they buy in quantity? What will shipping cost? Building interactive features into the shopping cart allows consumers to explore options and be assured they are getting exactly what they want.

• Tip Three: Give It Time

Making the customer’s cart savable lets him build his order over time. For example, eBay’s half.com site lets customers save selections to a wish list. They can return later to purchase selected items. If a sale is not completed in a given period of time, the shopper receives an email reminding them to update their wish list.

• Tip Four: Automatically Calculate Totals

Keeping the consumer informed of total costs will build his or her confidence in shopping through the website. The shopping cart should show the product total, tax, and shipping costs. Many sites show a summary page as the final step before the consumer completes the transaction.

• Tip Five: Allow Multiple Payment Options

Accepting payment through a number of methods will increase the likelihood that the transaction will be completed. Some customers prefer using credit cards. Some use PayPal. Still others use echecks. Providing a variety of payment options makes purchasing possible for a wider range of customers.

• Tip Six: Keep It Secure

Consider becoming a member of a third-party privacy seal program, which verifies the credibility of ecommerce sites. Ensure encryption of personal data. Display the website’s privacy policy. Assuring consumers of the site’s trustworthiness eliminates concerns and encourages a mutually beneficial business relationship.

• Tip Seven: Confirm the Purchase

An automated email confirmation following the sale assures the customer that his or her order is in progress. As added assurance, many etailers find it a good practice to include contact instructions so the consumer can keep tabs on the status of the order, make inquiries, and track shipping.

Consumers look for ease of use, efficiency, and security when purchasing online. A well-designed shopping cart can meet these needs and increase conversion rate and revenue for etailers in a highly competitive market.

There are two ways that ecommerce sites can arrange to accept credit card payments. One is by establishing a merchant account through the business owner’s own bank. Another is to use a third-party service to process the payments.

Bank Merchant Accounts – Most banks offer merchant accounts and processing gateways to their account holders. Funds from credit card purchases, less the agreed-upon fees, are deposited into the merchant account, then moved to the owner’s business or personal account on a regular basis (usually within 24 hours). The primary disadvantage is that approval for merchant accounts is more difficult to obtain for internet businesses than for standard retail businesses. Every bank has its own qualification guidelines and fee schedules.

Third-party services such as PayPal eliminate the need for a merchant account. They offer real-time processing of payments and transfer of funds to the business owner’s account for a fee, usually a small flat rate plus a percentage of the sale total per transaction.

Other features available might include a shopping cart that the business owner can install on the website, conversion from U.S. dollars to foreign currency, the ability to accept multiple forms of payment (such as electronic debits or echecks), customer service, and set-up assistance.

PayPal offers three account types, two of which can be used by merchants to accept credit card payments: the Premier Account and the Business Account. An individual can open a Premier Account, but a Business Account can only be opened by a registered business. A 2.9 percent fee is charged for receiving a payment, but as the dollar volume increases, the rate drops. Premier and Merchant Account holders can incorporate special html code into their website to create a “Buy Now” button. With one click, the customer is taken to a payment page to complete the transaction.

PayPal also provides a shopping cart to merchants. This software lets the consumer select multiple items for purchase, then proceed to the payment page to pay for all selections at once.

The cost for setting up a merchant account, processing gateway, and shopping cart can range from $500 to $1,500, more so if the etailer chooses to hire a web master to consult on or install the system.

For the start-up or small business owner, third-party services such as PayPal may provide a more accessible, affordable alternative to traditional banking options.

The wrong decision could result in a loss of profits and a lengthy contract that must be honored, even after a second account provider has been chosen as a replacement. Unfortunately, there are many business owners who find themselves paying for two services, because of this very reason.

There are several helpful tips to take into consideration when researching merchant account providers. These tips are dependent on the size and type of business that is interested in providing e-commerce availability to their customers.

Small business owners, who are working with limited funds, may want to initially consider the use of an online provider such as PayPal or 2checkout to process their credit card payments.

Because of the fees associated with a more formal merchant account provider, many small business owners who process up to $1000 per month in credit card payments find that these third party payment processors work out quite well.

Business owners who process more than $1000 per month in credit card payments, may want to consider other vendors. When doing so, one of the most important things to look into is each vendor’s discount rate and per transaction fee schedule.

The discount rate refers to the actual percentage of the sale that the merchant account provider will keep. There is normally a separate rate for ‘swiped’ and ‘non-swiped’ transactions. These fees vary from vendor to vendor.

There is also a fee charged for every processed transaction. Again, these fees vary but can be anywhere from 10 cents to 99 cents per sale.

Business owners who process smaller credit card payments of under $25, might want to consider choosing a vendor offering a higher discount rate and lower per transaction fee, as this will probably be a money saver.

Other things to consider when looking for the right merchant account provider include: monthly statement fees, gateway fees, annual membership fees, equipment rental fees, batch fees, cancellation fees and contract length.

Merchant account services have come a long way over the past few years. Business owners will find that many of these vendors offer lower fees, short-term or even no contract options, and customizable account features.

In conclusion, the large number of e-commerce service providers is actually a good thing. Vendors must stay competitive, in an effort to attract new clients. This competition often results in lower fees and better overall service.

By taking the time to thoroughly research several merchant account providers, it is typically easier to make a final decision on the right one to utilize. Comparing the pros and cons of each vendor is a good way to begin this research.

In ecommerce, the “place” customers shop is the website, sometimes called the storefront. A commerce server is the software that controls the appearance and functionality of the website.

Common marketing practices include advertising the storefront on other websites, using search-driven services such as Google AdWords, creating information-packed email publications called ezines, and opt-in newsletters, which require potential customers to request the information.

When customers click on the link in a newsletter, ezine, or ad, they are taken to a landing page. Each new visitor counts as a page impression, or hit. Tracking these numbers gives the etailer an idea of how effective their marketing efforts are.

Items positioned above the fold are those that appear in the part of the web page that first shows up when the storefront is loaded. In etailing, it is common practice to use this prime position to promote those products or services that the company most wants to customers to see.

When customers visit the storefront, cookies are deposited in their computers. These small files track the customer’s preferences. For example, cookies record what pages have been visited and what products have been placed in the customer’s shopping cart.

The shopping cart is the software that tracks items the customer selects for purchase, calculates the sales total, and collects payment information. This software can be incorporated into the storefront and managed by the etailer, or into a separate program that etailers contract an independent party to maintain and host.

When a customer takes action to purchase, this is called a conversion. High conversion rates are as important as page impressions, so etailers strive to make their websites easy to use and often offer customers incentives for completing the purchase.

Offering multiple payment options is one way to make the process easier for customers. Etailers typically accept payment via PayPal (an online funds transfer service), by credit cards, and through echecks which take funds directly from the customer’s checking account.

Customer relations management (CRM) refers to all practices and procedures the etailer uses to ensure a positive experience for customers. This can include providing live support or a toll-free number, sending confirmation and thank-you emails following a purchase, offering a fair and efficient return and refund policy, and maintaining contact after the purchase to encourage repeat business.

Like any new field, ecommerce has its own language and culture. Understanding the vocabulary removes the confusion and frees etailers to become more effective in their marketing and sales efforts.

Merchants who choose to sell a selection of products use their website as an online catalog and order-taking center. Software, books and music top the list of most widely purchased products through online venues.

Things to keep in mind while deciding what products to offer include size and weight, which will affect shipping; durability of the product, since fragile or perishable items also present shipping challenges; and the existing supply and demand in the market.

Rather than produce a product of their own, some business owners choose to act as a broker or distributor for products produced by another individual or company. Crafters and other artists often seek such channels through which to sell their wares. Other venues for obtaining products include trade shows, wholesalers, and local businesses that would like a wider customer base.

Services can also be sold over the internet. In fact, the web offers a convenient, cost-effective way for service providers to tell their story, link to samples of their work, and allow a method of contact for consumers who would like additional information.

Information continues to be one of the most sought-after products that consumers purchase online. Ebooks, white papers, special reports, and ongoing subscriptions can generate substantially higher profit margins than product sales, since associated costs are minimal.

It is wise to research both demand for a product or service as well as existing suppliers before making a final decision on what to sell. Search tools such as Google Overture and Yahoo allow merchants to test keywords to determine how popular those search terms are. Highly sought-after items are likely to be bigger sellers, provided there isn’t already a lot of competition for that business.

Some website owners generate revenue without actively selling any product or service. A website devoted to providing information about a particular topic, for example, can earn income by selling ad space to merchants with related products.
Cost-per-click (CPC) advertising is similar, but instead of paying a flat fee for ad space, merchants pay the affiliate a small amount for each visitor that clicks the link.

Affiliate marketing is another way to earn income with selling. Affiliates display ads or links for a merchant on their site. When visitors use the link to make a purchase from that merchant, the affiliate is paid a commission.

There are many options that business owners can consider beyond selling a product online. A wide variety of opportunities today make it possible for any business owner to succeed in ecommerce.

Addressing shopping cart security protects online business owners as well as their customers. Several steps can be taken to evaluate a cart’s security and make improvements.

• Does the cart use secure socket layer (SSL) encryption? Once the buyer has selected the items for purchase and proceeds to check-out, the software should run in secure mode on the buyer’s browser. Personal data such as credit card numbers should be encrypted before being sent over the internet to complete the order. (Merchandisers who host their own shopping cart must be verified and then purchase an SSL license through a certification authority such as VeriSign.)

• Is the credit card security code required to complete transactions? The security code is the last three digits printed on the back of Mastercard and Visa cards, and the four-digit code appearing on the front of American Express cards. It is generally requested from buyers who are not physically present, such as for telephone or internet orders, as an added safety measure.

• Is the shopping cart provider and/or gateway provider an established, reputable organization? Using providers such as Authorize.net, PayPal, and ClickBank gives online business owners added peace of mind in knowing that proven security structures are in place.

• Are cart and gateway providers PCI/CISP certified? The credit card industry has responded to the increased threat of identity theft and fraud by establishing new measures for internet transactions. These measures provide greater protection of sensitive information that is stored and transmitted online.

• Is the shopping cart provider a Hacker Safe site? Statistics show that websites displaying the Hacker Safe logo increase conversions by up to 15 percent. Owned by McAfee, Inc., Hacker Safe technology draws on aggressive research in online security and works with financial leaders to protect internet businesses from fraud.

• Are all passwords and data access systems secure? Security experts recommend that business owners do not share passwords relating to customer data and financial transactions with anyone. Additionally, it is advised that passwords be changed monthly to increase security.

Shopping cart security is a complex issue that depends on the technology used by, and the integrity of, all service providers associated with an online business. While the consequences of a security breach can be disastrous, there are proven steps that business owners can take to increase security considerably. A secure site instills greater customer confidence, increases sales, and ensures continued success for online sellers.

Here are some tips to help make the best decision.

First, consider cost versus available time. The business owner with a generous start-up budget and little programming experience might consider hiring someone to install the shopping cart. However, many new ventures find the entrepreneur with less money than time, making the cost of a good programmer or web master prohibitive.

On the other hand, taking on the project with little or no experience can cost a business even more in terms of down time, lost sales if the website doesn’t function properly, and ultimately, the cost to hire someone to take over the installation and correct any mistakes.

It is wise for the do-it-yourselfer to budget for technical assistance in the event that problems are encountered. Another safety measure is to purchase a shopping cart from a provider that offers customer support and technical assistance. Some companies offer online videos or other training as part of the purchase price, which could eliminate many installation problems before they occur.

Whether or not a professional is hired to perform the installation, it is important to make sure the shopping cart offers all the features that the business owner anticipates needing. The ability to customize in some ways is desirable – for example, to alter the appearance of pages so the cart matches the rest of the website – but all the desired functionality should already be in place. Internet marketing experts advise against buying software that has to be re-programmed, as this can be extremely expensive.

Any good shopping cart should offer commonly used features such as:
- calculating shipping, tax, and sale totals
- allowing changes to be made to the cart at any time before the customer finalizes the transaction
- the option to continue shopping at any point before the transaction is finalized
- the capability to accept coupons and discount codes
- customizable thank-you and order confirmation pages following the sale

Additional features to look for is up-sell capability, which recommends similar products based on the customer’s preferences before the sale is completed. Internet marketers have found that automated suggestions lead to thousands of dollars in increased sales.

Also related to higher revenues, the cart should ideally come with a built-in affiliate program for businesses that wish to derive the benefits of a network of marketing affiliates.

Other useful features include report generation, transfer of data to the business owner’s accounting and database programs, email and mail-merge functions, and ad tracking.

While the do-it-yourself approach is the right choice for some website owners, the best decision will be reached after considering time and cost factors and selecting the ideal shopping cart in advance.

In the past ten years, billions upon billions of dollars have been generated through ecommerce. Not bad for a relatively new phenomenon, right? While the revenue generated is impressive, even more impressive is the way ecommerce has changed the face of business for both the business owner and the consumer.

Ecommerce has become such a significant and powerful aspect of our lives. The United States Census Bureau, Department of Commerce, issues a quarterly report that paints a clear picture of how important it is. The statistics are staggering and clearly indicate how powerful a force ecommerce is in our changing economy.

Issued for public release in November 2007, the Q3 2007 ecommerce report was 34.7 billion dollars. Yes, billion. Are people buying more or simply buying less through traditional means? A study done by the USC Annenberg Center for the Digital Future suggests people now spend less of their dollars in brick and mortar establishments than ever before.

In fact, people spend 65% less in traditional stores since the ecommerce boom began. That isn’t to say shopping habits have completely changed. The gap is shrinking, though, and doing so at a rapid pace. The future of retail will rely heavily on the traditional retail front partnering with online ventures. As the saying goes, if you can’t beat them, join them.

What does all this mean for you, the ever important consumer? It may mean more than you think. Ecommerce has a growth rate of 25% per year. Growth in any area of business generates greater choice and availability of both goods and services.

It creates a healthy level of competition to keep prices low. It allows merchants to offer a wider range of transaction options and incentives. Most importantly, it gives the consumer more freedom on how to spend their hard-earned cash.

In decades past, one would head to the local bookstore for reading material. Most booksellers were more than happy to special order a book that was not available. Ecommerce has allowed us to order a book from any location in the world and have it delivered to our doorstep days later. The entire practice of ecommerce has certainly indulged our desire for instant gratification and undoubtedly made our lives easier. Who would have thought in just minutes one could pay their mortgage, download a CD, book a vacation, order groceries for home delivery and purchase a gift – with only a few clicks of the mouse?

It isn’t all about the consumer though. Ecommerce has changed the face of business full circle. Millions of entrepreneurs are jumping on board and making their ideas and wares available to the word for relatively small start-up fees.

New industries have sprouted, some out of necessity and some from sheer genius. The Aberdeen Research Group predicts the technology of BI (Business Intelligence) will be one of the most sought-after technological solutions for 2008. What is BI technology, you may ask? It gives the retailer real time information that allows a quick reaction to consumer demand on the Internet to help create customer retention and loyalty. Without ecommerce specialty, niche industries would never have existed. The domino effect filters down to the manufactures, sales people and marketers.

Ecommerce is here to stay. It’s no longer a novelty. The natural progression has been exciting to watch and participate in. To us it may spell convenience, to the world the possibilities have become endless.