How do I create a website store?

Implementing a website store

A low-cost way for an organization to sell a few items is to list the items on their website, along with a request to send in a check for payment. A more robust low-volume online store can be implemented with shopping cart software and a payment services account. Another approach for low-volume online sales is for the shopping cart to send credit card information to you so that you can manually complete the transaction "offline" via a merchant account and point-of-sale credit card terminal. This will avoid the complexity and cost of using a payment gateway provider to fully process credit card transactions online. The most complete solution suitable for high-volume stores incorporates shopping cart software along with a merchant account and payment gateway.

Most website stores include database-driven shopping cart software and are designed to accept credit cards for payment. An additional level of cost and complexity is introduced when you fully process credit card payments online.

There are a number of store (or storefront) packages that your webmaster can install on your website in order to present products for sale, allow you to manage the product database, and to facilitate checkout and payment. OS Commerce is a free, "open source" package that is widely used. However, as with most free packages, support is limited. Other commercial products offer full support and more flexible storefronts starting at a cost of a few hundred dollars US.

There are also various levels of payment mechanisms:

• Person-to-person services, such as Paypal. These services can be relatively inexpensive, with fees of approximately 2.5% of each sale plus a fixed fee of approximately $0.30 US. However, buyers have to register with the service before paying for a product. This inconvenience can deter some potential buyers from completing a sale.
• Payment services (sometimes called "instant merchant accounts") actually handle credit card processing for you. They are more expensive, with fees ranging from 5% to 20% of each sale, plus additional fees, but are well-suited for small-volume stores. Payment services providers include:
  • Click And Pledge provides an excellent array of features and solid customer service.
  • 2Checkout.com is fairly inexpensive and flexible. Fees are approximately 5.5% plus $.045 per sale.
  • InternetSecure, based in Canada.
  • Paypal
  • Google checkout
  • ClickBank processes only digital merchandise. Fees are 7.5% plus $1 per sale.
  • CCNow charges $9.95 per month plus 9% of sales over $100.
  • Kagi charges 8% to 10% per sale.
  • RegNow focuses on software sales, with fees of 20% plus 15% of amounts that you pay to affiliates.
• A merchant account in your business name allows you to directly process credit cards. A merchant account is cost-effective for high-volume sales, but complexity and set-up costs may make it more costly for low-volume sales.

In order to set up a merchant account and accept payment on your website, you will need to include the following items:

• Merchant account. This is a credit arrangement with a bank and is required for you to accept credit cards. The set-up cost can run into several hundred dollars US, with an additional monthly fee of $10 to $100 per month, plus a percentage of credit card payment amounts called the "discount rate" (typically 2% to 3% of each transaction and a fixed fee of $0.30 per transaction). Chargeback fees for disputed sales can vary. Also note that some merchant accounts carry a termination fee.
   
  A merchant account may be obtained from various banks and other sources. Authorize.net is popular. Payquake and Electronic Clearing House (acquired by Intuit) provide inexpensive merchant accounts. WorldPay offers services outside the U.S., and is somewhat more expensive.
• SSL certificate. A SSL certificate confirms identity of your website and allows you to encrypt payment transactions in 128-bit SSL (secure socket layer) encryption. The cost typically runs from $100 to $200 per year, plus a fee to install the certificate on your website server.
• Payment gateway. This is an intermediate service provider that facilitates authorization of online credit card payments. The gateway is the interface between your online store payment system and credit card authorization. A merchant account is typically associated with a specific gateway and an additional fee may be imposed by the gateway provider.
   
  In addition, custom programming is almost always required of your webmaster to complete the connection between your website and the gateway provider. This in fact can be quite complex in order to provide data in the format required by the gateway's API (application program interface). The cost can range from a few hundred dollars US to several thousand.

Questions to ask of merchant account providers

Different merchant account providers provide varying levels of service. In many cases, the level of service will not be apparent until you actually establish and start using an account. Here are some questions to ask of merchant account providers:

• Where are they located? Are they located in the country in which you will be doing business?
• How long have they been in business?
• How long have they been providing merchant account services?
• Are they listed with the Better Business Bureau? What is their rating and what complaints have they had?
• What gateway provider to they use? How long have they used that provider? What problems have people had with the gateway provider?
• Can they process recurring annual membership fees? Recurring monthly donations?
• What is the application fee?
• Is the application fee refundable if they reject your application?
• What are their rates? Rates for qualified card holders are lower than rates for what the industry calls "mid qualify" and "non qualify" transactions. Be sure you are provided a complete schedule of rates.
• What is your chargeback fee (applicable in the case of internet fraud)?
• How long will it take to establish the account?
• What is the availability of their customer support? (Place a test call to customer support to see how they respond).
• What is the availability of their technical support? (Place a test call to technical support to see how they respond).

Questions to ask of payment gateway providers

Similarly, different payment gateway providers provide varying levels of service. In many cases, the level of service will not be apparent until your webmaster begins programming the API and testing the gateway. Here are some questions to ask of merchant account providers:

• Where are they located? Are they located in the country in which you will be doing business? Are they located in the same country as the merchant provider?
• How long have they been in business?
• How long have they been providing gateway services?
• How long have they been providing gateway services for your specific merchant account provider?
• Are they listed with the Better Business Bureau? What is their rating and what complaints have they had?
• Can they process recurring annual membership fees? Recurring monthly donations?
• What is the initial cost and per-transaction fee?
• How long will it take to establish the account?
• What degree of programming is required to interface with their API? Do they have interface scripts that your webmaster can use?
• How new is their API?
• What problems have people had with their API?
• What is the availability of their customer support?( Place a test call to customer support to see how they respond).
• What is the availability of their technical support? (Place a test call to technical support to see how they respond).

You should be aware that decision to implement a full-scale online store with merchant account and payment gateway requires a greater initial financial commitment as well as greater technical knowledge and skill on the part of your webmaster.