Can You Take Orders? 

An E-Commerce Basic

So you want to sell stuff on-line? Great! With the right promotion, e-commerce can expose your products to a global audience. But beyond developing a world-wide market through promotion, e-commerce directly impacts how you receive customer orders. What do you need to take a customer order? What do you need to receive payment?

Obviously, you need a web presence, but your web presence needs some special infrastructure to become an e-commerce site. In brief, you'll need these four infrastructure pieces:

1. An Electronic Storefront
2. A Merchant Account
3. A Payment Gateway
4. Integration of 1, 2 and 3

1. The Electronic Storefront

When you shop at a grocery store, you browse the items and put your selections into temporary storage - a shopping cart. You don't own these items: you can put them back at any time before going to the cash register to pay. Similarly, the e-shopping cart is the heart of the electronic storefront. As a potential customer browses for products at your e-commerce website, the e-shopping cart provides a means to put items into temporary storage before actual purchase.

2. The Merchant Account

After you've deployed an on-line shopping cart, visitors can stop by, browse your site and order your wares. Now, you have to give them a way to pay you.

At the most basic level, you can give your customers an address of where to mail a check or money order. However, you'll probably lose a lot of impulse or regular, repeat purchases: psychologically, you'll want to closely tie ordering an item with paying for the item. To this end, you can set up an e-checking service, where customers can enter in their checking account information on-line. And in the case of traditional EDI payments, you will need to pre-arrange customer agreements and procedures.

Many internet savvy customers still prefer paying by credit card. Your customers will want to be taken to an SSL secure server where they can safely enter their credit card information. At that point, you'll have to process their cards (i.e. squeeze the actual cash from their plastic to your pocket). In order to process credit cards, you must have a credit card merchant account and a way to process the account.

3. Payment Gateway

As an e-merchant, you'll want to do real-time credit card processing (instead of "swiping" through a point-of-sale terminal that places a phone call to the financial network to return "authorized" or "declined" status). You'll want to process the credit card information in real time to the financial network. This is the work of the payment gateway.

The gateway essentially performs the same function as the POS (point-of-sale) "swipe" terminal...only it is automated, real-time, over the internet. There are over 300 gateway companies on the market today (top examples: Cybercash and PaymentNet.) Essentially, the gateway is a software system that:

1. takes the on-line payment information off your shopping cart credit card form,

2. sends this information to the financial processor using your merchant account, and

3. reports whether the transaction was approved or declined.

A few days later, the processor will deposit the money (after they take their cut, which often includes a setup fee, monthly fee and a volume or per-transaction fee) into your bank account.

4. A way to link it all together.

Now you'll need a way to connect your on-line shopping cart with your gateway (and processor), using your merchant account. Often a shopping cart will not talk to a gateway. Or, a gateway will not accept a certain type of processor. Or, your merchant account won't work with a certain gateway. A common incompatibility tends to be between the shopping cart and the gateway. With so many gateways on the market, shopping cart software is struggling to keep up with the myriad of changing protocols.

Endnotes

Remember - infrastructure is only the foundation of your e-commerce site. Don't forget to pay attention to the cosmetic effects (copywriting, photography, graphics, etc.) and to promote your site by deploying an effective e-marketing plan.