Many online stores are built with robust, full-featured e-commerce software — programs that handle inventory management, product display, checkout, and more. Some of the fancier storefront packages do everything but boil an egg, and if you pay enough you might find one that does even that.
But many established site owners who want to start receiving payments from customers don't want to buy this advanced software. They don't want to rebuild their site from scratch — they simply want to add the ability to sell their goods online.
What these established site owners want is to add a shopping cart — the e-commerce tool that allows a site to collect credit card numbers from visitors.
For example, a hobbyist who started a site a few years back as a labor of love, or a small business site that was launched as an online brochure. Now these sites get healthy traffic. If they added a shopping cart they might rake in some legal tender.
Before we look at adding this function, realize that there's confusion around the term "shopping cart." There are at least two ways the term "shopping cart" is used in online parlance:
The term "shopping cart software" often refers to full-fledged e-commerce software — programs that are much more than just a shopping cart. Many of these online store packages are complete site building systems. In some cases, an established site owner who doesn't want to rebuild their site can use just the checkout function from one of these programs.
The term "shopping cart" also refers to a hosted solution. In this scenario, a third party hosts a merchant's checkout procedure, or may even host and maintain the software for a merchant's entire store. With a hosted solution a merchant is not responsible for processing credit card transactions, which is a cheap and simple solution for some small site owners.
Any of these possibilities could work well for a site owner, depending on their needs and finances. With that in mind, let's go shopping for a shopping cart.
What Does a Shopping Cart Do?
Even the most basic of today's shopping carts enable a good deal of function, including:
First, they allow a shopper to add or remove items freely — yes, being able to remove an item is a necessary function. Many shoppers use a cart as a temporary holding pen. They only plan on buying a few of their in-cart items.
A cart also allows a shopper to choose options like size, quantity and color and change these at will. A good cart displays a running price total as shoppers add and subtract items.
A cart handles the most cumbersome task: tax calculation. Of course there's usually no sales tax for items bought over the Internet (although most states require you to pay a use or sales tax for all items purchased over the Internet and used in your home state), but shoppers buying from a store in their state must pay it, and shoppers at big chain retailers with nationwide stores must pay it. A cart generates sales tax based on a shopper's zip code.
Your cart calculates shipping costs, which can be a complex task. When you choose a cart, it's critical to get one with a robust shipping tool. Ideally, it will be equipped to interface with all the major shippers (UPS, FedEx, DHL) and allow you to set any number of shipping options: by weight or zone, flat-fee price and by different delivery rates (overnight, second day air, standard).
A good cart sends an e-mail confirmation of the shopper's order. A really good cart will also send an e-mail when the item actually ships.
When a shopper shops on your site, hopefully she's not all alone — many other shoppers are also using the cart on your site. So how does your cart application know which individual shopper is using each cart?
In most cases this is done using cookie technology. A cookie is a tiny data file sent from your site, placed on the hard drives of your shoppers. Many e-commerce programs use this same cookie technology to offer discounts and coupons to returning customers. (Without the cookie, the software wouldn't know that users are repeat customers.)
A shopping cart is of little use by itself — you'll also need a merchant account to accept credit cards. A merchant account comes bundled with some carts. Or, you may choose to get your own merchant account. Learn about merchant accounts here.
A cart's most important job is to facilitate a secure transaction between your site and your shopper, and between your site and your credit cart processor. It does this using a SLL (Secure Sockets Layer) connection, which encrypts data to prevent it from being accessed by hackers. A cart interfaces with a payment gateway, which is an Internet-based infrastructure that enables secure data to flow between your Web host and your credit cart processor.
Some of the big firms that provide payment gateways are Authorize.net, CyberSource, Innovative Gateway Solutions, PayPal and LinkPoint. Some Internet merchant account providers offer turnkey solutions, so you won't need to select your own payment gateway.
However, be aware that not every cart will interface with every payment gateway. Before you get set up with a payment gateway, make sure it works with the cart you've chosen.
Some Common Solutions
The world of shopping carts seems to be expanding. While there are a handful of well-known players that make popular carts, there's an ocean of solutions designed by small firms, in some cases a lone programmer.
As this list demonstrates, there are at least 150 shopping carts out there, and probably a few more will pop up as you read this.
The following list, though, contains some options to be aware of as you look for the ideal shopping cart.
PayPal is determined to be the 800-pound gorilla in the small merchant payment processing category. So it offers a shopping cart — for free — that's as easy to implement as any solution on the market. Bundled with this is a merchant account — again, for free: No set up charge, no monthly fee. On every transaction, PayPal charges 30 cents and 2.9 percent of the total. An established merchant with healthy sales volume could negotiate a better rate than that, but for a small merchant this offer is hard to beat. Possible drawback: the PayPal cart is so simple that it lacks some of the functionality of advanced carts.
Yahoo Stores is a complete storefront building system, but a merchant with an existing site could use just the checkout feature, and link to it within their site. For $39 a month, Yahoo bundles a merchant account and offers a reasonably sophisticated checkout procedure.
eBay's ProStores, like Yahoo, is a complete store building system. But again, you can build just a checkout feature and link to it within your site. The advantage of ProStores is that it allows integration between a merchant's eBay auction and their stand-alone site. For $29.95 a month you would have real time processing of major credit cards. (There's a bare bones version for $6.95.)
A popular solution, 1ShoppingCart is highly customizable and includes an extensive list of tools, like a newsletter and customer database. It's bundled with a merchant account (fees: 2.2 percent and .25 per transaction) for $29 a month.
Mal's shopping cart became popular using one main strategy — it's free. (However, there's a premium service for $8 per month, which is how the company makes money). Mal's is easy to set up: a merchant simply adds BUY ME buttons. Site owners needs to supply their own merchant account or PayPal account.
Used by 9,000 stores, OSCommerce is an open source solution. The good news is that it's free and highly customizable. The downside is that you'll need to hire a programmer to set it up.
This hosted checkout provider is used by both U.S. and non-U.S. sellers as an alternative to setting up their own merchant account. 2Checkout charges a $49 set-up fee, 5.5 percent commission and 45 cents per transaction. You can use 2Checkout's free cart or a third party cart.
Customizing Your Shopping Cart
While an off-the-shelf shopping cart may handle all of a small site's needs, any e-commerce site with an extensive inventory usually needs its cart customized.
In truth, almost all carts could stand a bit of customizing. "Even things as simple as nomenclature and labeling systems have to be customized," says Clifton Evans, co-author of Constructing Usable Shopping Carts. "Different people categorize their products in different ways."
In Evans's view, "Off-the-shelf programs don't tend to meet the custom needs that most businesses have." To use an off-the-shelf cart without tweaking it, even small businesses will probably need to "bend their business logic" to fit the limits of the cart, he says.
To further complicate the issue, a cart tends to need to be remade (at least somewhat) every few years.
Naturally, cart customization gets expensive. A customization job can take anywhere from two weeks to two months, and cost anywhere from $10,000 to $100,000, Evans says.
Evans cautions business owners that it's the beginning of a customization job — the first week — that is often the most crucial. This is when decisions are made. Plenty of money can be saved up front with proper planning and clear communication.
Shopping Cart Design Guide
Integrating a shopping cart into your site is about more than securing a merchant account and pasting a few Buy buttons. Your shopping cart is the central tool in the checkout process and this process is the make-or-break of e-commerce.
No Extra Questions
The fewer questions you ask your shoppers during checkout, the more likely they are to compete the process. "Ask only for the information needed to complete the order," says Jakob Nielsen, a noted Internet design expert. "Some people leave a site if too much personal information is required."
Offer More Information
Carts should allow "the easy ability to see what's in the cart, and to go from what's in that cart to the product page," Nielsen says. "And when they get to that product page, it should say 'this is already in your shopping cart.'"
Save Your Shoppers' Carts
Many customers like to fill up a cart and then leave the site while they make final purchase decisions. If there's no way for them to save their picks until they come back, that's a sure revenue loss for the site.
Don't Make Them Register
Forcing your shopping cart users to register before they buy "drives away business," Nielsen says. Not until after they've purchased should a "Thank You" screen offering sign-up — and say that registration will make future purchases easier and/or put them on an opt-in mailing list to receive newsletters and store coupons.
Shorter (and Sooner) is Better
Your shopping cart should take a shopper briskly through the process. A four-step checkout is better than a five-step checkout. (However, Nielsen warns against going overboard with this: it's not good to try to put everything on one page.) Also important: set-up your cart to show customers the shipping fees as soon as possible. Customers are naturally reluctant to enter their credit card unless they know the final total.
James Maguire is a contributor to ECommerce-Guide.com. His column appears every Monday.
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