Selling Online (E-Commerce)
The Benefits
- Expand your market
- Sell to the world, not just locally
- Find new channels for marketing
- Online marketing allows you to reach customers who
do not use or have tired of other media
- Target your marketing specifically to your ideal customer
- Increase Sales
- E-Commerce allows you to take credit card orders without manual processing and only a relatively small upfront cost
The Pieces
Website
- Hosting (where the website is "located", who "runs" the website)
- Domain name (e.g. mybusiness.com)
- Security Certificate/Encryption – needed to take credit cards (or take credit cards offsite)
Credit Card Orders
- Gateway – takes credit card information from your site
- Merchant Account – a bank account
Issues
Cost
- Website
- Hosting for e-commerce - starts at around $20/month
- Domain Names: around $15/year
- Web Design/Development
- SSL Security Certificate: around $100/year
- Gateway/Merchant Account vs. PayPal
| Gateway / Merchant Account | 2.2-2.5% | Varies, typically less than PayPal | Merchant acct.: about $20/month (often waived if enough transaction fees), plus setup
Gateway: $20-30/mo., plus setup
| More convenient, usually better integrated w/ website | Moderate or high transaction volume |
| PayPal | 2.9% | $0.30 | None, easy to setup | Less convenient | Low transaction volume |
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Remember selling online can increase your sales!
Legal Compliance
- Privacy
- California Law requires a Privacy Policy
- Sales Tax -
Required for in-state transactions usually only on products (includes any state where you have a "physical presence")
- Terms of Use
- Disclaimer (of Liability)
- Vary by Jurisdiction (e.g. promotional contests could be considered gambling)
- Enforceable Online Contracts – vary by jurisdiction also
- MCM Web Solutions, LLC does not provide legal services or advice (this document is not to be considered either)
Fraud
- The merchant is legally liable for fraudulent orders placed on their site. This means that if someone fradulently orders a product or service from your website, you will likely lose the money or time you spent on filling that fradulent order.
- Fraud is about 1% of all Internet orders, that means the other 99% are legitimate
- Prevention
What you can do -
Don’t ship to PO Boxes
Match billing and shipping addresses
Don’t take orders from outside of the "developed" world (stick to N. America and W. Europe)
Theft of Intellectual Property
- Give notice of copyrights, trademarks, etc. on your website
- Registering them also helps in the event of legal battles such as domain name “squatting” (e.g. someone else registers a domain name with your company’s name)
Account Freezes
- If using PayPal, consider getting a separate bank account solely for PayPal use or at least avoid linking
your sole bank account to PayPal as PayPal accounts can be frozen when chargebacks (e.g. a purchaser tries
to get a refund from his/her credit card issuer) occur.
Other Options for Selling Online
- Yahoo Storefronts
Downside: commissions (1.5%), monthly fees, lock-in
- Amazon
Downsides: commissions (6% or higher), only products (no services), lock-in
Upside: exposure (also for eBay)
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eBay
Downside: Only products (no services, though this may change in the future), transaction/listing fees, lock-in
Summary
- E-commerce presents both opportunities and challenges.
- When these challenges are properly managed, e-commerce is a useful tool for your business.
Feel free to contact us using the form at the left or by phone at (919) 467-1081 for further information and your free initial consultation.
E-Commerce Website Design and Development Serving Raleigh, Charlotte, and Greensboro, North Carolina
