The Basics of Ecommerce: Elements of a Store
This is the first in a series of articles I intend to write as an introduction to ecommerce. There are a large number of factors that need to be considered when setting up an online store. What follows here is a basic introduction to the practical nuts and bolts you will need to have a basic grasp of in order to get going.
To begin with, let us consider the various stages of an online transaction:
- The customer enters the website and browses through the catalogue of products.
- The customer places the items they want into a shopping basket and when they are happy they click on a ‘proceed to checkout’ button.
- This is called a ‘card not present’ purchase. The customer enters a secure area of the site, and is reassured by the fact that the url in the address bar now begins ‘https://’ (as opposed to ‘http://’), a lock icon is displayed and the address bar background turns yellow.
- The customer enters their card and personal information, and this information is sent to a ‘virtual card reader’ where the card is ‘authorized’ for the total amount but not charged.
- When the items are shipped, funds are captured and the transaction is completed.
This process will be familiar to anyone who has bought something online. However, mapping it out like this means it is now fairly straightforward to compile a list of required elements for an online store.
1) A Catalogue of Products
Making it easy for your customers to find the products they are interested in is one of the most important yet over-looked aspects of any online store. There are two basic methods of finding products: searching and browsing. As a minimum all stores should offer their customers the option to do both.
2) A Shopping Cart Facility
This is a very simple piece of functionality that most customers will expect from a store. Keep it simple, don’t try and do anything clever that might confuse potential customers.
3) Encryption of Sensitive Data
This is achieved using something called a SSL certificate. All online stores need to buy one of these certificates; it is used to encrypt the credit card and personal information entered by customers. The encryption level is almost impossible to break and is the safest mechanism you can use to collect confidential information.
4) A ‘Virtual Card Reader’
In both the traditional brick-and-mortar environment and in the online world, sellers require a merchant account in order to receive payments by credit card. Brick and mortar stores have a handheld device that reads the card details and authorizes the transaction. The online version of this device is called a payment gateway, and is simply a computer that processes, verifies and accepts/declines credit card transactions through a secure internet connection. Sometimes the payment gateway and merchant account are sold separately, however it involves unnecessary work to get the two entities to work together and is far easier to opt for a solution where the two are bundled together as a combined payment system.
5) Shipping
Unless the store is selling something that can be delivered digitally, such as a piece of software, or a downloadable file, shipping of products will be required. The buyer has already decided to make their purchase and given you their card details, but getting this process right is essential if you ever want them to come back to your store in the future. The key is to keep to customer informed at every stage. Send them an email to confirm the order straight away and tell them there and then when the item is likely to be dispatched. If this date changes for any reason, let the customer know. When the order is shipped let the customer know, and tell them when it should be delivered by. There also needs to be a foolproof system in place so that when items are released to the shipper there is some mechanism to trigger the completion of the card transaction so that funds can be transferred. Hopefully this will not be left up to some guy called Geoff in the warehouse to ‘let someone know’.
So here we have the 5 basic elements that will need to be in place before any transactions can be completed. Fairly obviously, it is also desirable to have a comprehensive back-end system in place so that the merchant can manage the catalogue and keep track of stock levels etc. This concludes the first article in this series on the basics of ecommerce. In the next artilce we will look at ecommerce solutions: what options are available to someone who wants to open an online store?
If you have any questions or comments about this article, or anything else on the site please feel free to email me at info@prwdesigns.co.uk.