Ecommerce Primer: What You Need to Set Up Shop Online

If you were to look at ten different retails sites online you'd probably notice small to drastic differences between each of the sites. While they all offer products for sale, the features, functions and options available to customers will differ.

Regardless of how big or how small a retail Web site is, all e-commerce sites have the same basic fundamental building blocks that enable them to work. From choosing a domain name to accepting and processing credit card payments online, Web retailers have a lot of work to do before they can hang their open-for-business sign.

Choose a Domain Name, Web Host and Design a Site

If you were planning to open a physical store, one thing you would plan early on would be your business name and location. Online, you need to register a domain name, find a service provider to host your site, and you  also need to design the Web site itself.

Domain Names

A domain name, if you’re not familiar with the term is what identifies you on the Web. Consumers will type your domain name (e.g. ecommerce-guide.com) into their browser to visit your site. Domain names must be registered with a domain name registrar. At one time there was only one domain name registrar—Network Solutions, Inc.—but today there are dozens of accredited registrars.

• Cost: Expect to pay a yearly fee to keep that domain name registered.
• Sample Vendors: NetworkSolutions, GoDaddy.com, register.com
• Ecommerce-Guide Tips: How to Pick a Domain Name

Web Site Hosting and Design

The next step is to think about where you want to host your retail site. There are a number of issues to consider when you choose a host, but the best way to choose is based on your own level of expertise.

If you are a business owner and have very little technical know-how, then you will probably want to consider an e-commerce host that provides you with everything you need in one package. This would include site building tools (via customizable templates and an easy wizard-based interface), shopping cart, security, reporting tools and, oftentimes, the merchant account and card processing gateway.  

The other option, if you decide not to use a full-service-commerce provider, is to design your own Web site or hire a site designer. Costs will vary and designing your own site may be more expensive; however, the main benefit of doing it yourself is that your site will look unique, it will be customizable, and it will encompass all the features you want.

• Cost:  Expect to pay a monthly hosting fee. Some e-commerce hosting providers may charge percentage-of-sales or per-transaction fees. Hiring a designer can be expensive, and you may need to bring him or her back for future updates and changes.
• Sample Vendors:  NetworkSolutions, GoDaddy.com, Volusion,
• Ecommerce-Guide Tips: Hosting Plan Primer, All About Web Site Hosting, Site Building with Photoshop and Dreamweaver, Site Optimization Primer

If you choose a full-service commerce provider, many of the Web shop building blocks we discuss will be included in your hosting package. Still, you should learn the e-commerce lingo and understand how these e-commerce fundamentals interact and rely on each other.

Making Online Transactions Work

Merchant Accounts and Payment Gateways

To conduct financial transactions online you need two things; the first is a merchant account, which allows you to accept credit card payments from customers. To obtain a merchant account, most people—provided they are a registered business and have proof of that—can apply for a merchant account at a local bank. If you choose to use a hosted solution then you may be able to obtain a merchant account through the provider.

The second item you need for online transactions is a payment gateway. This is the system that automates the payment transaction between you (your bank) and the shopper.  A payment gateway will process, verify and accept or decline credit card transactions on your behalf through secure Internet connections. Payment gateways should meet all industry standards and regulations, including PCI.

• Cost:  Expect to pay a subscription fee (yearly or monthly) plus per transaction fees to the service provider and the credit card issuer used for the transaction.
• Sample Vendors: VeriSign, Authorize.net, Global Payments Inc., RBS Worldpay , PayPal
• Ecommerce-Guide Tips: An Introduction to Payment Gateways, Payment Processing Beyond PayPal, Setting Up Payment Methods