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Building a Web Site: E commerce

The basic ideas

  1. You need a catalog that your user can view to see your offering of products.
  2. You need a way to allow your customer to place an order and to have a record of the order. This is considered the "shopping cart" portion of your site.
  3. Finally, you need a way to get your customer's money.

Option 1 - Third party processor

For people who are just starting out and aren't selling hundreds of products, we usually recommend PayPal ( It's free to set up, and then they take a small percentage of each sale. We recommend PayPal because they help to protect you against fraud (a growing concern, especially if your product is downloadable). One drawback is that your customers will have to register as PayPal members, but we've found that the process isn't any different than inputting information for any other major site.

If you'll be selling lots of products, PayPal may not be the best option for you. See below for the other option.

  1. Catalog - You can build your catalog within your web editor and use PayPal's "add to cart" form button code. PayPal has a lot of documentation to help you do this and even provides some default "button" images for you to use.
  2. Shopping cart - By using PayPal's "add to cart" code, you can link directly into PayPal's shopping cart. You don't need to set anything up on your site other than the add-to-cart button - PayPal does it all for you, allowing your user to add multiple items to their cart and check out.
  3. Payment processing - As your customer checks out using PayPal's shopping cart, they'll submit payment via PayPal by credit card or with their PayPal checking account. The money will be stored in your PayPal account. You can easily move it into your checking account and access it once the sale is made. Remember, PayPal will take a small percentage of each sale.

There are other third-party services available, including ClickBank, 2CheckOut, iBill, and more. has a nice comparison chart, but you can also type "third party credit card processing" in a search engine and browse through the articles that come up.

Option 2 - Set up your own merchant account

If you don't want to go through a third-party processor, but want to be able to accept credit cards yourself, you'll have to set up a merchant account. At that point, you'll probably want a gateway (often included with merchant accounts) to be able to process credit card transactions from your web site. You'll then need to either build your own shopping cart (hard!) or find a third-party shopping cart to process the customer's orders that can connect to the gateway.

  1. A merchant account approves you to put credit card funds directly into your bank account. There is usually an application fee, and you'll need a business banking account, and you should expect to pay around $40 in monthly fees. They also run a credit check, which may affect the level of your fees. Please note that you are responsible for the validity of all orders. You'll get penalized for fraudulent orders that result in chargebacks. Read the fine print carefully to figure out what fees will apply to you!

    There are many merchant accounts available. We know people who use:
  2. Your merchant account allows you to accept credit cards, but now you need a way to process the credit cards - by phone, with a machine... or, if you want to process them immediately online, through a gateway. Most merchant accounts include a gateway for a monthly fee (from $10-$40/month), so you'll want to look into this when you select your merchant account. If you have a downloadable product and credit card fraud is a major concern, you may choose to go with a company such as Cybersource. They act as the gateway and also provide a fraud scoring system.
  3. Gateways process the charge, but they don't do math (calculating order totals, shipping costs, etc.) and they don't keep a record of your orders, so you'll need a shopping cart. While it's possible to build your own, it requires a lot of programming knowledge. You'd probably be better off using a third-party product. There are many available, but it's hard to sort through the options. You'll find sites that advertise "shopping carts" but really require you to build your site according to their specs, or that require you to host with them, etc. There are a few shopping cart programs that we know of that can integrate into your web site, but we aren't experts in this area, so be sure to do your own research:
  4. Most shopping cart programs will either integrate into your web site or provide some kind of "add to cart" code for your web site. Some of them do not actually "build" your product catalog for you - you will have to look into this as you research shopping carts. You'll find that you will have to either 1) build your catalog page-by-page or 2) find out how to add a database to your web site. If you have over 75 products, you may want to consider the database option. (Note: Cactushop and the CyberStrong E-shop come with a product database and "admin" pages that make it easy for you to administer product information.)

Credit Card Fraud

Credit card fraud (and identity theft) is a growing issue, and one that you should be particularly aware of if you have a downloadable product, or even if you're just processing orders online. Apart from having to refund the money to the card, you may be hit with several types of fees including a "chargeback" fee. These fees can add up, and not only that, if you're consistently hit with fraudulent orders that go through, your own fees may go up!

If you think that this may be an issue for you, you'll want to take steps to protect yourself. If you're a small business owner and won't be running too many orders, we advise that you go with PayPal. Otherwise, you may want to check out Cybersource or a similar company (look up "credit card fraud protection merchants" in a search engine).

Next: Publishing Your Site

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