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Ecommerce for Small Business: What to Think About

Paul Fasel
, President

If you want to start selling your wares online, it has never been easier to do.

There are many different ways to get started, from the simple --setting up a store on Ebay or Amazon -- to the complex: creating a custom solution that integrates inventory, Point-of-Sale systems and supply chain management.

At the simplest end, a vendor can easily get started selling on Ebay, Amazon, Etsy or any of the other sales portal sites out there. There’s no need to purchase a shopping cart or set up a payment gateway, and for many people, this kind of store will be all they’ll ever need. But many people find an Ebay store to be too generic looking, and the fees the sites charge can be high. For someone running a real business online, something more robust and customizable is well worth the investment.

At the other extreme, a complete supply chain online presence may be too costly and probably more complex than many small businesses need. For most small businesses, the right solution will be somewhere in-between. Fortunately there are plenty of options that will affordable to build and easy to use, if the business owner answers a few basic questions up front.

 

How do you expect your shipping workflow to work?

Do you want to “drop ship,” which is where your supplier ships directly to your customer? Under this kind of system, your store is acting as the middle-man and all you have to do is accept payment, take your profit and have your supplier ship the items. Do you want to keep inventory? How do you want to track your inventory? How do you order from your suppliers? Do you want the re-ordering automated?

 

How do you want to collect money?

Do you want a complete payment solution where your site takes credit cards directly and the money appears in your bank account? Or do you want to use Paypal or another online payment service?

If you want to take credit cards directly you’ll need to set up a payment gateway. We recommend Authorize.net. Their gateway works with almost every shopping cart out there, and the payments appear in your linked bank-account at the end of every business day. Credit card processing fees can be expensive, but Authorize.net offers a great service with a very reasonable fee structure.

Also keep in mind that you cannot collect the money from the credit card until the item has left your facility on the way to the customer. For example: if someone orders a product that is not currently in stock, you cannot process their payment.

 

What state and local sales taxes apply where you are?

What area do you plan to ship from and what sales taxes apply there? Some places, like Washington State, New York State, and Kansas, require that ecommerce sites collect sales taxes. Many local areas also have local sales taxes. These issues need to be worked out before determining which shopping cart you plan on integrating into the site.

 

How do you plan on shipping your items?

This might seem simple but is probably the most complicated part of an ecommerce system. The choices are US Mail, UPS and FedEX, and each of them have advantages and drawbacks.

UPS is the easiest to integrate with a shopping cart, and they have some helpful features, such as printing of mailing labels directly from the site, and an automated email that goes to the customer when the package ships.

We generally avoid FedEX, because it requires you to run their software on your server. For this reason, unless you are planning on doing a very large volume of sales with them, the cost to implement FEDex into your website is not worth the small savings you might get on the shipping charges.

The US Post Office remains my favorite solution for many of our clients. They are the most cost-effective way to ship, they give you the flat-rate boxes for free and they offer free daily pickup. The down side to the Post Office is that you can’t print postage labels directly from the website --you will need a 3rd party application to help, such as Endicia or Pitney Bowes.

Because of how burdensome printing postage labels can become for larger-scale shipper, we recommend UPS for most of those businesses. If, however, you’re a small company and do not plan on shipping a large volume of products, the Post Office is probably the best fit.

 

A word about SSL Certificates and Site Hosting

Unless you decide to sell through Ebay or one of the other sales portals, you will need to purchase something called an SSL certificate, which enables the credit card number to pass from your customer’s computer to your credit card processor securely.

This impacts the way your site is hosted, and the expense of hosting, since you will need a dedicated IP address and the web server will need a few extra features activated in order to get the SSL Cert to work. The cost for the SSL Cert can be as low as $20 per year, but for a larger company can be as high as $300.

When building your ecommerce site, we strongly recommend working with a web developer who has experience integrating a shopping cart, SSL Cert, shipping modules and hosting requirements into a seamless online store experience for the customer. Dorey Design Group has been helping businesses unlock the power of online sales for more than twelve years.

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