|
Choose the Right e-Commerce
Solution for Your Toronto Website
More and more Toronto businesses these days are beginning to
sell and distribute their products and services via the Internet.
It’s a win-win situation – consumers get the best selection at the
lowest prices, and retailers get access to markets outside their
geographic location. But, depending on the type of Toronto e-commerce website
the business is pursuing, the cost to implement the project could
range from a couple hundred to a few thousand dollars. There are
some less professional but more cost efficient solutions, as well as
some high-end solutions that will have your website rivaling the
best e-commerce sites around. In this article I’ll discuss the
different options available to Mississauga website owners as well as the costs
associated with those options.
E-commerce on the Cheap
It’s a common misconception that in order to
conduct business over the Internet you have to have an
expensive merchant account that will allow your customers to
pay you by credit card. This previously was
the case, but today there are a number of services available that
make e-commerce a very affordable option. These services come in the
form of third party credit card processors.
A third party credit card processor acts as an intermediary between
the customer and your website. Generally, a customer will click on a
link to purchase a product and be taken to the third party’s website
to process the credit card information in a secure environment. The
payment for the purchase is deposited in your account, and the order
information is forwarded to you. The only cost to the Mississauga e-commerce
retailer is usually a small fixed fee and / or a small percentage of
the sale.
This is a good beginner option for any business looking to make the
e-commerce leap because the upfront costs are very low. 2CheckOut
(www.2checkout.com) is a good choice for a third party credit card
processor - they only require a $49 setup fee, and then $0.45 per
transaction and 5.5% of the sale amount. An even cheaper route would
be to use PayPal (www.PayPal.com) to receive payment over the
Internet. The only downside with PayPal is that the consumer must
have a PayPal account in order to use this payment method. The
upside of both these products is the fact that they will provide the
shopping cart system and associated codes to that are necessary to
integrate into your website.
Although using a third party credit card processor can be cheap, it
does have its disadvantages. The shopping cart system may not
seamlessly integrate with your website because it’s not easily
customizable. Also, it looks a little less professional when the
purchaser must leave your website in order to enter their credit
card information. But, when weighing these disadvantages with the
costs associated with building a professional e-commerce website
they really don’t seem like a big deal.
Really Taking the Plunge
Opening a fully functional online store with the ability to process
credit cards on-site can be a pretty costly production. Here is a
list of elements that all need to be integrated: a shopping cart
system, secure web server, payment gateway, and a merchant account.
There are some shopping cart systems that are available for
free, and many web hosts offer the ability to integrate a
shopping cart system into your website. But, if you’d like
your system to be fully featured, easy to use, seamlessly
integrate with your website, and include advanced functions
such as automatically calculating tax and shipping charges,
the cost could run several thousand dollars to purchase and
setup.
The most expensive and difficult part of this process is obtaining a
merchant account to process credit card numbers. These accounts
usually have monthly and transaction fees associated with them.
Most businesses already have merchant accounts to process
their retail transactions. The problem is that these
accounts are not always setup for online or "card not
present" transactions, and the retailer may need to get
another merchant account for online sales.
In order for the shopping cart system to communicate with a
merchant account, they need to be interfaced with a payment gateway.
Payment gateways usually require a setup fee of a few hundred
dollars and a percentage of each transaction. Lastly, all the
communication needs to take place over a secure server. This means
that your website hosting package will need to be upgraded to
include Secure Socket Layer (SSL) encryption. An SSL certificate is
billed on either a yearly or monthly basis, and the cost can total
in the hundreds of dollars.
In addition to the extra costs associated with processing
transactions right on your website, there is also a
significant difference in the price your webmaster will
charge to setup the different solutions. Using a third party
to process transactions usually just involves inserting a
few lines of code into the website which shouldn’t cost very
much. On the other hand, implementing a fully functional
e-commerce website can easily add another thousand dollars on top of all the other costs.
As with any project, it’s probably best to start small before
shelling out big bucks for a professional e-commerce solution. And
don’t forget, even after you’ve spent thousands of dollars getting
your e-commerce website launched, you’re probably going to have to
spend thousands more marketing your website in order to recover your
investment. E-commerce is not cheap!
... Back to
Website Design Articles
|
