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
  

  	% of Transaction (Typical / Default Rates)	Per transaction fee	Monthly Fee / Setup Fee	Convenience to customers	Better Choice if
  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

• 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)
• 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) 357-7944 or (336) 521-4427 for further information and your free initial consultation.

E-Commerce Website Design and Development Serving Raleigh, Charlotte, and Greensboro, North Carolina