Jim’s Guide to eCommerce For Beginners



What exactly is eCommerce?

Business is rapidly catching up to the technology that’s been created for it. A popular term today is eCommerce. “What’s it all about and why should I care?”, you may be asking yourself.

In its simplest terms, eCommerce is just conducting business online. Such business can be transacted in many ways. Think about conducting business in the physical world. You make deposits at the bank, visit the grocery store to make purchases, and go to the gas station to buy gas. Each of these activities denotes a commercial transaction.

Transactions between businesses are also common. They exchange services and lease or buy equipment. Instead of asking for an upfront payment, a business normally sends invoices to be paid later.

Commerce in the virtual world is conducted in much the same way by using various technologies. eCommerce has become popular for a number of reasons:

  • Convenience
  • Speed of transactions
  • Large numbers of businesses and consumers using eCommerce methods

A business is only as successful as the number of customers it attracts. With the huge number of people using the internet these days, businesses have discovered new avenues for increasing their sales. As with anything new, the customer’s trust has to be earned. How to accomplish that helps determine how an online business is set up.

ECommerce provides for the livelihood of businesses that operate strictly online. Depending on what their product line is, eCommerce can expand the markets for a physical business globally. Because of the internet, an entirely new group of consumers is available with infinite niche possibilities.

All of this can result in many headaches before you get to the point where you are earning money. Although selling online can be seen as simple in concept, the production side can be a bit tougher.  Knowing the little things can make the difference between having an enterprise that’s successful and one that does nothing.

Before you embark on your eCommerce ship, there are a number of decisions you must make.  Important things here are planning and strategy.  Fortunately, there are a great many resources available to get you started in the right direction.

Use whatever resources you have at your disposal. They can be of help with everything you need – selecting products to market, setting up your site, and marketing.

Different Kinds of eCommerce Sites You Can Create

Are you interested in eCommerce? It is not only the wave of ‘now’ but of the future as well.  Technology enables businesses to conduct business online which provides yet another way of doing business.

You may be asking, “What can I do with an eCommerce site?” Surprisingly, it’s not just for sales. Depending upon where your business is based, it can be used for many different purposes which we will discuss below:

Virtual Storefronts – When you shop online, these are the sites that you see selling merchandise. With a site like this, everything can be done in one place. It definitely gives new meaning to the term “one-stop shopping.  Shopping in a virtual store is in many ways similar to shopping in a physical one.

By using menus, customers can choose product categories and narrow down their searches. After items are selected, they are placed in a virtual basket or cart. Once shopping has been completed, the customers can checkout and get confirmation of their purchase.

With a virtual storefront, you can sell many types of products. Your only limitation is what you can deliver to your client in a way that you still make a profit for your business.

Information Sites – The goal here is to make the sale but not on the website itself.  Informational sites are often used by companies with physical stores to advertise their products online. This kind of site is also used by large corporations to gain interest in their products.

Finding information is one of the main reasons people surf the internet. Suppose you wanted to buy a car but didn’t want to spend all day driving around and using up gas.  Instead, you can get assistance in making your car purchasing decisions by visiting internet sites that provide information on cars.

These websites provide content on the various products they sell. Site visitors are able to view photos and/or videos of the products as well as a description, pricing, and location information.

Marketplaces – just think of eBay. Unless you’ve been living in a cave, you probably know all about eBay. If you are in an eCommerce setting, sellers and buyers are brought together by a middleman. Sale items can be bought through a bidding process as is done on eBay or purchased directly.

Here, there are several businesses working at the same time in the same area, thus competition. However, since you are working in a virtual setting, there is much room for expansion as your business continues to grow. The best part is that much of what you need to get ready for your eCommerce business is already laid out for you.

Something to think about: Know the type of site you want to start out with. By utilizing any of the types of sites listed above, online businesses can broaden their appeal and be visible to many more customers.

Creating an eCommerce Website

Once you decide that doing business online is right for you then the job of creating your online presence begins. Creating a site for eCommerce is similar to creating a website in general. So let’s get started!

The first thing you have to do is to decide what type of website you are creating. Will you have a storefront that is virtual? Will this be strictly an informational or content type of site? Are you putting the two together? You may want to consider a marketplace type of structure.  In the end, it’s up to you!

The Basics

A domain name represents who you are online and says something about your business. If an offline brand is already established, then the domain name is usually the same as the company name. If your business is strictly online, it can be anything you want. Think about some names for your new venture. Do a search on the internet to determine if any of your name choices are taken.

People will find you once you have a name.  If you want the pages of your website and content to be ranked in search engines results, you will need to register your site with search engines.  You should use related to your business within your content and throughout your site.

Whom will you get to host your website?  When selecting a web host, pick one that offers additional services like templates and site maintenance, for example. Try and get as much space as you can for information storage and page creation for the price you pay.

Setting up a Virtual Storefront

For eCommerce sites that sell products, there is a process in getting ready for business.  You’ll first need to set up your virtual storefront. This is where you will display your products for customers to look at. In order to satisfy potential customers, you will want to provide as much information as possible.

Very few customers will make a decision based on the description alone. You are better off using your own images of your products on your site instead of stock photos. To enable rapid viewing, the photos will need to be compressed.

In addition to products, storefronts need a way for you to keep tabs on your items. Shopping carts and baskets now come into play.

It is the same here just like with a regular store – payment types must be specified and verified. You will find software and internet resources available to make all of this possible for your eCommerce business.

Creating the website is just the beginning. Once you get your website started, you can add other features as you go along to make your site a place where everyone will want to transact business.

ePayments: Which to Choose

Online businesses use their sites as information destinations and also to sell their products. In order for customers to make a purchase, they need to know what types of payment are accepted. You have many choices in eCommerce.

When you enter a store, the first thing you want to know is, “Will they accept my currency?”  In the United States, most places will accept credit cards with the most popular being Visa, American Express, and MasterCard.  Local businesses accept credit cards, checks, or cash.

One of the first questions you must answer is where your business will be conducted? If your business is open to international buyers, you will want to consider their payments closely so that you do not end up alienating them. Here are some of the more popular forms of payment.

Credit Card Payments

As we said, many people accept plastic. You can display this prominently on your checkout page if you desire to do so.  If you are using credit cards, remember that fraud does occur.  If you have customers who are unsatisfied or fraudulent customers, you could end up with charge backs.

In order to accept credit card payments, you will need to create a merchant account with a bank.  For a fee, the bank will process payments between your bank and the customer’s bank.  Before you decide which bank to use, compare bank policies on transaction fees and charge backs.

The use of credit cards is a type of B2C transaction.  What this means is that the transaction takes place between the customer and the business.

Third Party Payments

Payments that use a third party to complete the transaction are typically P2P, meaning person to person. Here is how it works.  When a sale is made, the money is transferred from the buyer’s account into the merchant’s account by a third party.  PayPal is a popular example.

PayPal accounts can be set up by anyone for free. You will need an email address linked to the account plus a bank account to link to in case your PayPal account has low funds. This is a common type of account for most folks doing business in marketplace type settings}.

Personal financial information does not need to be shared in order to have money transferred.  The business owner can have confidence that the funds are there and that the products being sold are paid for as the transaction is handled in real time.  When using PayPal, merchants have options to set up their merchant account. In order for international buyers to receive payment into their account, currency exchange is offered in their native currency.

One consideration when doing business online is the type of payment. In order to provide you with the greatest amount of confidence and the least amount of hassle, accept forms of payment that are widely used and known.  Not everyone believes the check is in the mail.

Buying Shopping Cart Software

If your eCommerce site will be used to run a virtual store, your customers will need to be able to select the items they want as they continue to shop. They obviously need a shopping cart.  If you want to learn how to enhance your online business, learn more about buying shopping cart software.

What do we mean by ’shopping cart’ software?  It is represented by a basket icon or shopping cart usually found at the top of your product pages. It provides the customers with confidence that they can buy as many items as they want and have them placed somewhere safe until they are ready to checkout and buy.

An online shopping cart is similar in many ways to the one you use in the grocery store. Before getting to the checkout, you can put whatever you want in it, remove unwanted items, and keep a running tally on the untaxed cost.

If you want to add a shopping cart into your store, you will need the proper software. There are a large number of shopping carts available so you need to look around.

Features of Shopping Cart Software

When it comes to buying software, you want to get what you pay for. There is quite a bit involved in setting up an online shop.  Software can be frightening to many people.

-          Select an easy to install software package.  Wizards used to guide you through each step are something you should look for.  Even if no store existed before, you can still integrate shopping carts into your website.

-          Select a package that’s search engine friendly. Customers need to be able to find you and learn about your products.  With all of your product descriptions, use optimized keywords.  If your images can be viewed as either thumbnails or as larger images, they will attract more customers.

-          Shopping carts can be designed to look different.  You can showcase your own style by utilizing software that enables you to customize your store and shopping cart.  Buttons to help you navigate through the store along with pull down menus would be included.

You will need to pay to buy this software.  Depending upon what you need, the price can vary anywhere from just over $100 to over $1,000. If you are a small business with very few products, then the most expensive shopping cart would not be feasible.

Shopping cart software programs are set up to meet the many needs of the merchant. In addition to the features discussed above, software programs help you to:

  • Create and input coupon codes
  • Manage inventory
  • Track shipments
  • Keep a customer address book
  • Web hosting
  • Set up a merchant account/gateway
  • Create reports
  • Establish secure payment network

There are many considerations for shopping cart software. Select the one that works best for you at the lowest fee possible.

Payment Gateways: Cash or Charge?

You want the customers who see your virtual storefront to be inspired to buy from you. Once they decide to make a purchase, they need to have a way to make their payments. That is where payment gateways are needed.

A gateway is similar to a conduit allowing information to get from one place to another. With eCommerce, the use of a gateway allows for verification of credit cards and the transaction of business. If you plan to accept payments, you will need a payment gateway.

If you are going to deal with credit cards, you will need a merchant account.  You can open a merchant account at any bank you choose.  Once a credit card transaction has been verified, this is where the money will be transferred.

Online, you will find many companies that operate as payment gateways to enable you to accept credit card payments. You can independently choose the payment gateway that’s right for you. Companies that can offer more than one service presents yet another option.  Many shopping cart software packages will include both merchant account and gateway options.

First Things First

You need a merchant bank account and a payment gateway account to get you started. Before selecting a bank for the merchant account, make sure they accept payments from the gateway account that you will be using.  The payment gateway account enables you to process payments between your site and your merchant account.

Business owners who sell online and accept credit cards also have an internet merchant account.  The payment gateway transfers the funds here but they don’t remain. As a merchant, you can designate another bank account for business and have the funds transferred there.

The Nuts and Bolts of how it Works

Here is a basic representation of how this process works.  While several steps are involved, everything happens quickly.

1.     The customer goes to your website and selects products to buy. Once they’ve decided to checkout, they are taken to a payment page where they can verify their order and the type of payment they are using.

2.      When a customer makes a payment, their funds are sent to the payment gateway you have decided to use. The transaction is forwarded to your banks’ processor through the payment gateway.

3.      Next, the transaction proceeds to the credit card network. The transaction is then forwarded by that network to the bank that issued the credit card to the customer.

4.      If the customer has enough credit to make the purchase, then the transaction is approved. Next, it moves back through the system taking the same way it came in.

5.      Both you and the customer receive payment notification details once the notification of approval reaches the payment gateway again.

Payment gateways make it easy to process credit card transactions. Once this is set up, you can focus on other parts of your eCommerce business.

Site Navigation: Finding Your Products

Don’t you hate looking for a product to buy and getting routed through several web pages before you even see a picture of the product?  So does everyone else. If your goal is for your visitors to become customers then creating an easy to navigate eCommerce site is essential.


Think of navigating on a ship or airplane. The navigational system lets you know that you are heading in the right direction and gets you to your destination. When you are off-course, it lets you know that as well.

You can navigate your website by using site maps.  A site map will show where useful information on the site can be found. Included are topic headings and links to those pages.  A customer can find the specific place they want to be on the site by visiting the site’s site map.

One rule that many website owners use is that is should take you fewer than three clicks to reach any destination on your site.  Customers who have to click three times or more will find another site where this is not the case.  Sites that are hard to navigate lose lots of business before anyone ever sees their product.

Customers should be able to get from your homepage to your product page quickly. You will want to customize your website to create a customer friendly website.  When a cursor passes over a link that is clickable, it will change color or turn into a hand symbol.  Before going live, you should test all your links and pages.

Landing Pages

When you advertise on other sites, you include links to your site. If you want to showcase your products, it is better to link to a landing page as opposed to your homepage. With a landing page, the customer is taken straight to where the product is located. A landing page takes the customer to where the products can be viewed in your storefront for a particular category of products. By clicking, the customer can read a description or buy the product.

Your landing page can be chock full of information. It can contain content that describes a certain product. There is also a button to click on and view it in the virtual storefront. If you want to use your eCommerce business as a vehicle for building email lists then you can include a form on our landing page for capturing customer information.

If your products can be found easily they are more likely to generate sales.  Link your web pages together to make this more likely to happen.

eCommerce Security: What You Need to Know

The Internet has opened up a new chapter in business commerce. It has shown criminals an entirely new way to steal your information and ruin your life. Consumers today are very much aware of the sites they visit and the information they input.

Protecting Yourself

To build a client base, you will want to build a list of some sort.  To connect with more potential customers, you need to employ list building as a strategy. You can create both direct marketing campaigns as well as email campaigns.  You are much better off creating your own list of potential customers as opposed to buying one.

In order to help generate that list, business owners use opt-ins. Visitors should be asked for their email addresses in exchange for additional information, coupons, newsletters, or other freebies.  You will want to have a disclaimer statement at the bottom of your opt-in pages. This statement gives your customers assurance that their information won’t be shared with a third party. If it is to be shared, you will need to specify which information and for what purpose.

Types of Security

There are different types of security measures that you can take to protect your virtual storefront. The customer’s information has to be kept private, not vulnerable to tampering or altering, and authenticated and received properly. Whichever types you decide to use, put a digital representation of the authentication on our checkout page. It’s similar to hanging up a certificate behind the counter in a physical store.

To authenticate the sender and receiver of information, digital signatures are used. You can ask for a password to use as a digital signature when making transactions. You’ve probably seen some boxes with mixed up numbers and letters where they ask you to replicate it in a box. This process can be used in verifying who you are.

Remember the storefront’s digital certificate? By using that certificate, customers are able to verify that you are really who you say you are. This will protect you from bogus merchants who want your money.

The definition of SSL is secure socket layer. You have probably seen those initials or the open or closed lock symbol on a website page. To view certificates and to learn how the site is encrypted, just click on the lock. Behind the scenes, public and private keys are used to encrypt information. The private key is used for decryption while the public key is used for encryption. Many layers of security come into play from your server to the payment gateway to the issuer of the credit card.

Unwanted intrusions can be blocked by firewalls. Most folks have one on their own computer. If you want to prevent others from tampering with your customer’s confidential information that you store on your server, then you will need a firewall.

Security is a necessary part of keeping your business information safe and providing good customer service.  At your disposal, you have the technology needed to keep customer data safe from predators.

Merchant Accounts: Storing Your Money

Do you have a bank account?  Most folks do. This is where you keep your money instead of in a mattress. As a business owner, you need to designate certain accounts to hold the revenue that you will generate through credit card purchases.

There are many people out there looking to defraud others. This is recognized by the credit card industry and they require merchant accounts for any business that is going to process credit cards. It can either be online or offline. In a physical store, the credit cards manually processed either by the clerk or the customer. In this article, we will be discussing merchant accounts for eCommerce businesses.

In the eCommerce industry, any merchant that takes credit cards utilizes a payment gateway to conduct their transactions.  Each transaction is logges and automatically handled through this service account.

A merchant account is unlike your regular checking or savings account. The account is only used for credit card payments.  There are several options for selecting a merchant account.  Choose based on the fee schedules and extra services provided to you for choosing their bank.

Internet businesses use another account that is called an internet merchant account. This account is designed to temporarily hold funds derived from credit card transactions. The money is transferred from this account to your merchant account based on a schedule that you have agreed upon.

Along the way you will encounter fees that you will need to pay.  One example would be the fees for holding a merchant bank account just like with any other account. You’ll have monthly maintenance fees as well as a one time fee. There is a per transaction fee for every transaction they process. Fees apply when you add the internet merchant account for eCommerce.

A gateway payment service account is subject to fees. As a subscriber, you will have monthly maintenance fees as well as a one time fee when you sign up. In addition, the gateway will set transaction fees.

Be prudent when you are selecting any of these services for your eCommerce business. Do not be afraid to ask questions and be sure to do your homework. The banks an service providers need to list their fee schedules so you know exactly what you are paying for and if the value is there. If a financial institution withholds this information, you would be wise to choose another institution.

Whether you’re doing business online or offline, there is a cost. It is important to know where your money is going. You should be able to track your transactions by using reliable merchant accounts and through gateway payment services.

Selling Digital Products

When you think of selling products online, most people envision getting a big box delivered by the postman to their door. Many things other than physical products are sold by online businesses. One of the hottest commodities in the eCommerce market are digital products.

If you are going to sell physical products then your website will require lots of preparation.  To make the products visible, you can use photos, market them in other places, make landing pages, and create a shopping cart process that will meet the needs you your customers. When it comes to digital products, this process is different.

There are two ways in which digital products can be received – downloaded to the customer’s computer or by mail. You will find that most online business decide to offer downloads as they do not require inventory other than your initial files and are easy for the subscriber to receive.

But, it’s important to know how to get the products securely to your customers without getting scammed yourself. Here are some thoughts dealing with that:

Payment Methods

The issue of e-payments is still an issue with digital products. Just like with any other product, customers pay when they make the purchase. If you want to accept credit card payments, you will need:

  • Internet Merchant Account
  • Merchant Bank Account
  • Payment Gateway Account

A payment receipt still needs to be generated for your records and also for the customer if something should go wrong with the download. The credit card company can still do charge backs for digital products.

For digital products, using a third party, person to person (P2P), payment system is popular. This is the way PayPal functions. All you need in order to create an account is an email address to associated with the that account and a bank account to use for verification. Payments on your site are transacted by typing in an email address. The customer is taken to their Pay Pal account and can sign in securely there. After they arrive there, they verify that they really want to make the transaction. Once this is completed, they are returned to the product website for confirmation.

Getting Digital Products to Customers

Your digital products can be stored in a password-protected directory on your site.  This prevents just anyone from having access. Upon payment, the customer will receive details as to how to download their digital product. Tell your customers not to share the link with others.

If this seems like too much work, you can use digital download systems that will do everything for you for a monthly fee. Examples of this include PayLoadz (www.payloadz.com) and ClickBank (www.clickbank.com).

Digital products are very ‘hot’ right now.  One of the benefits of having an eCommerce business that sells digital products is low overhead and more profit. To be successful, utilize a system that gets the products to your customers and their payments to you quickly.

I hope this eCommerce overview has been helpful}!  For more content rich information, visit my website  and download some free reports.

Jim Stott
Magical Marketing, LLC


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2 Responses to “Jim’s Guide to eCommerce For Beginners”
  1. Lynell says:

    Definitely, what a great blog and enlightening posts, I surely will bookmark your blog.Best

  2. admin says:

    Thanks much, Lynell!!

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