BA 65 Hour 5 ~ Creating an Ecommerce Site


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BA 65 Hour 5 ~ Creating an Ecommerce Site

  1. 1. Creating an Ecommerce Site Planning and Managing Your Business Web Site BA 65
  2. 2. <ul><li>&quot;A lot of advertisers lined up to throw money at this stuff because they were caught up in the hysteria about the Web. </li></ul><ul><li>But now they want to know how you make money selling a $1.59 bottle of dish detergent on the World Wide Web.“ </li></ul><ul><li>Karen Burka </li></ul>
  3. 3. Business Basics <ul><li>Proof of Concept - look before you leap </li></ul><ul><li>Cost of online presence </li></ul><ul><li>Is your business suited for online? </li></ul><ul><li>Great Job @ 80% vs. Poor Job @ 100% </li></ul><ul><li>Usability - work hard on this one </li></ul><ul><li>Customer Service - anytime, anywhere </li></ul><ul><li>Make your choices carefully and deliberately </li></ul>
  4. 4. What is Ecommerce? <ul><li>“ Using the Internet to transact business with your customers” </li></ul><ul><li>Web site must justify costs </li></ul><ul><li>Monitor success from the start </li></ul><ul><li>Competition may influence decisions </li></ul><ul><li>Market share - you need it - study competitors </li></ul>
  5. 5. Web Storefronts <ul><li>Ecommerce and Web storefront - obvious </li></ul><ul><li>Not everything sells on the web </li></ul><ul><li>Significant sales requires aggressive marketing </li></ul><ul><ul><li>Traditional and non-traditional </li></ul></ul><ul><li>3 elements to storfront </li></ul><ul><ul><li>Catalog </li></ul></ul><ul><ul><li>Order </li></ul></ul><ul><ul><li>Payment </li></ul></ul>
  6. 6. The Catalog Element <ul><li>Displays information about your product or services </li></ul><ul><li>Build online catalog two ways: </li></ul><ul><ul><li>Individually designed Web pages - static pages </li></ul></ul><ul><ul><li>Pages generated from database by Web Software </li></ul></ul>
  7. 7. The Order Element <ul><li>Keeps track of your customers’ catalog selections </li></ul><ul><li>Buy Now - straight to payment - one product </li></ul><ul><li>Cardinal rule of ecommerce </li></ul><ul><ul><li>“ Always make it easy for your customers to BUY” </li></ul></ul><ul><li>Multiple purchase with shipping, taxes </li></ul><ul><li>Bring on the Shopping Cart </li></ul>
  8. 8. The Payment Element <ul><li>Lets your customers pay for their orders </li></ul><ul><li>Low tech - phone call - not ideal </li></ul><ul><li>Most people want to purchase on your site </li></ul><ul><li>Third party payment processors - PayPal </li></ul><ul><ul><li>Low end, low cost option </li></ul></ul><ul><ul><li>Basic HTML </li></ul></ul><ul><ul><li>Could cost you in the long run - per transaction </li></ul></ul><ul><li>Web software - high end - payment gateway </li></ul>
  9. 9. Storefront Options <ul><li>Simplify matters </li></ul><ul><li>Do you require a shopping cart? </li></ul><ul><li>How much control do you need over the appearance of the storefront? </li></ul><ul><li>Do you want to accept credit card payments over the internet? </li></ul>
  10. 10. How Do You Decide? <ul><li>Are you in business to make a profit? </li></ul><ul><li>Estimate the value of a Web storefront and budget accordingly - ROI </li></ul><ul><li>If using a shopping cart - get experienced help </li></ul><ul><li>Options, options, options </li></ul>
  11. 11. The ASP Question <ul><li>Application Service Provider - access to specialized software that runs on the server </li></ul><ul><ul><li>Storefront services - “hosted” </li></ul></ul><ul><li>Login to service provider’s Web site - to edit </li></ul><ul><li>Product Data stored in database on service provider’s network </li></ul>
  12. 12. The ASP Question <ul><li>Host part or all </li></ul><ul><li>Vendor maintains service - advantage </li></ul><ul><li>You do not have 100% control - disadvantage </li></ul><ul><li>With ASP the total cost of your storefront is lower </li></ul>
  13. 13. Shopping Cart Software <ul><li>More control over appearance than ASP </li></ul><ul><li>You will need some professional help </li></ul><ul><li>Buy license and avoid monthly fees (ASP) </li></ul><ul><li>More complex - more expensive </li></ul><ul><li>Two distinct elements: </li></ul><ul><ul><li>An Administration site - interface to manage </li></ul></ul><ul><ul><li>A public site - the customer side </li></ul></ul><ul><ul><li>Both share a database </li></ul></ul>
  14. 14. Shopping Cart Software <ul><li>Hunting for shopping cart </li></ul><ul><ul><li>Different prices, features, configurations </li></ul></ul><ul><li>Your shopping cart should support your Web site goals, Web site plan and storyboard </li></ul><ul><li>Does your Host offer to install? </li></ul><ul><li>Focus on both customer and admin sides </li></ul><ul><li>Shopping cart should make your life easier! </li></ul>
  15. 15. Shopping Cart Features <ul><li>Try before you buy - all carts are not the same </li></ul><ul><li>Categories - Subcategories </li></ul><ul><li>Product Listing and Detail </li></ul><ul><li>Shipping </li></ul><ul><li>Taxes </li></ul><ul><li>Price Levels </li></ul><ul><li>Coupons </li></ul><ul><li>Product Options </li></ul><ul><li>Payment Gateway Support </li></ul><ul><li>Customization </li></ul>
  16. 16. Understanding Online Payments <ul><li>Mind-boggling array of chopping carts </li></ul><ul><li>Complexity is high - easily confused </li></ul><ul><li>Most misunderstood element of ecommerce </li></ul><ul><li>Pay for too much, too little, or wrong things </li></ul><ul><li>Become knowledgeable - your work is not done with this class </li></ul>
  17. 17. Accepting Credit Cards <ul><li>Compare payment processing to traditional point-of-sale scenario to understand </li></ul><ul><li>Goal - transfer money from customer credit card account to your merchant account </li></ul><ul><li>Need to establish merchant account 1 st </li></ul>
  18. 18. What is a Merchant Account? <ul><li>A special account you set up with your bank for receiving credit card payments </li></ul><ul><li>Where all payments are deposited </li></ul><ul><li>May take a few weeks to setup - Internet Merchant services </li></ul><ul><li>Two types of merchant accounts </li></ul><ul><ul><li>Card Present - point of sale card swipe </li></ul></ul><ul><ul><li>Card Not Present - MOTO </li></ul></ul><ul><li>All Internet transactions are Card Not Present </li></ul>
  19. 19. Understanding How Credit Card Payments Work <ul><li>3 steps: </li></ul><ul><ul><li>Authorization - verifies that the customer’s card is good for transaction </li></ul></ul><ul><ul><li>Capture - collects the transactions you are ready to settle into batch </li></ul></ul><ul><ul><li>Settlement - transfers the money from your customer’s credit card account to your merchant account </li></ul></ul><ul><li>Purchase - Authorization - Capture - Batch </li></ul>
  20. 20. Why the Payment Gateway is Important <ul><li>No face-to-face </li></ul><ul><li>Payment Gateway - Internet payment processor </li></ul><ul><ul><li>VeriSign - </li></ul></ul><ul><li>Acquiring Financial Institution - arranged your merchant account - may be bank or other </li></ul><ul><li>Economic sense - you may get discount </li></ul><ul><li>Payment Gateway - connects Web site with merchant account’s banking network </li></ul>
  21. 21. How Internet Payment Works <ul><li>Getting paid - Authorization and Fulfillment </li></ul><ul><li>Customer enters credit card information </li></ul><ul><li>Shopping cart software process the order </li></ul><ul><li>Payment gateway requests authorization from customer’s financial institution </li></ul><ul><li>Merchant uses admin tools to capture payments </li></ul><ul><li>Payment gateway settles capture payments </li></ul>
  22. 22. How Internet Payment Works
  23. 23. Merchant Interface <ul><li>Capture, void, and refund charges </li></ul><ul><li>Browser-based from payment gateway </li></ul><ul><li>Login (daily) - review - process </li></ul><ul><li>Settle payments, transfer funds from issuing financial institution (customer) to acquiring financial institution (your bank) </li></ul><ul><li>Process refunds </li></ul>
  24. 24. Potential Payment Trouble Spots <ul><li>Not to complicated is it? </li></ul><ul><li>Easy process - logistics of implementing process that causes all the problems </li></ul><ul><li>Forewarned is Forearmed </li></ul>
  25. 25. Potential Trouble Spot #1 <ul><li>Your Customer and Your </li></ul><ul><li>Shopping Cart Don’t Get Along </li></ul><ul><li>Which credit cards do you accept? </li></ul><ul><li>Communication problem not technology </li></ul><ul><li>Visa, MasterCard - for sure </li></ul><ul><li>American Express, Discover - maybe </li></ul><ul><li>Shopping cart designed for optimum usability </li></ul>
  26. 26. Potential Trouble Spot #2 <ul><li>Your Shopping Cart Software Won’t Work With Your Payment Gateway </li></ul><ul><li>Not all shopping carts support all gateways </li></ul><ul><li>VeriSign vs. </li></ul><ul><li>Each payment gateway has its own rules for how transactions must be formatted </li></ul>
  27. 27. Potential Trouble Spot #3 <ul><li>Your Merchant Account Doesn’t Accept Online Payments </li></ul><ul><li>Must be able to accept Internet payments </li></ul><ul><li>Internet transactions considered more risky than tradition point-of-sale transactions </li></ul><ul><li>Financial institutions use different fee schedules to accommodate the risk </li></ul>
  28. 28. Potential Trouble Spot #4 <ul><li>Your Payment Gateway Won’t Work With Your Merchant Account </li></ul><ul><li>Question: Will my payment gateway communicate with my financial institutional banking network? </li></ul><ul><li>Ask before your purchase - move forward </li></ul>
  29. 29. Small Budget Payment Alternatives <ul><li>Setup charges and monthly fees with merchant account may be too steep </li></ul><ul><li>Cheapest method? - don’t do transactions over the net - phone, store, mail </li></ul><ul><li>Manual labor has it’s cost! </li></ul><ul><li>Internet shoppers participate in “Web Culture” </li></ul><ul><li>Solutions exist to suit your needs </li></ul>
  30. 30. The PayPal Alternative <ul><li>PayPal is the third most popular third-party Internet payment processor (no setup fees, monthly charges) </li></ul><ul><li>eBay liked it so much they bought it! </li></ul>
  31. 31. The PayPal Alternative <ul><li>How it works: </li></ul><ul><ul><li>PayPal establishes account for you </li></ul></ul><ul><ul><li>Customer get directed to PayPal with special code </li></ul></ul><ul><ul><li>Customer pays - PayPal deducts service charge and deposits the payment into your PayPal account </li></ul></ul><ul><ul><li>Your request payment from PayPal - check, deposit </li></ul></ul>
  32. 32. PayPal IPN <ul><li>IPN - Instant Payment Notification </li></ul><ul><li>Used for delivering electronic payload (eBooks, files, etc) </li></ul><ul><li>Secure way to guarantee that customers paid for your product before they received access to a download </li></ul><ul><li>Shopping cart will need to support IPN </li></ul><ul><li>Use of gateway page to deliver product </li></ul>
  33. 33. Payment Security <ul><li>“ Internet is a global network of computers with a large community of hackers” </li></ul><ul><li>Hackers have all the latest toys and tools </li></ul><ul><li>Don’t use email to send critical passwords or any other confidential information </li></ul><ul><li>Online protection for yourself, and your customers, is as important as offline security </li></ul>
  34. 34. SSL and Digital Certificate <ul><li>Secured Sockets Layer (SSL) - exists to take normal online forms and make them secure </li></ul><ul><li>To apply SSL to Web site you must acquire a digital certificate authority </li></ul><ul><li>Unique key that your Web host installs on server </li></ul>
  35. 35. SSL and Digital Certificate <ul><li>Encryption of data - hard to crack </li></ul><ul><ul><li>40-bit - Shopping sites use (most browsers support </li></ul></ul><ul><ul><li>128-bit- Banks may use - (older browsers my not support </li></ul></ul><ul><li>Your shopping cart host may provide a common checkout facility for all vendors </li></ul><ul><li>$50 - $350 a year (multiple-year/renewal discount </li></ul>
  36. 36. Understand Customer Concerns <ul><li>Hackers </li></ul><ul><li>Spam </li></ul><ul><li>Upfront about security and privacy with customers </li></ul><ul><li>Allow your customers to feel comfortable as quickly and easily as possible by addressing issues </li></ul>
  37. 37. How Secure is my credit card information? <ul><li>Provide easily accessible security link that explains your why your site is secure </li></ul><ul><li>Explain the techniques you use such as SSL </li></ul><ul><li>Display logo of authority digital certificate </li></ul><ul><li>Make sure site switches to secure mode before information is sent </li></ul><ul><li>Liability - don’t store credit card numbers - customers will reenter - and feel safe </li></ul>
  38. 38. What do you do with my personal information? <ul><li>Write and provide your privacy policy </li></ul><ul><li>Don’s share customer information with others </li></ul><ul><li>Don’t use email address for others to see </li></ul><ul><li>Opt-in approach to electronic communications </li></ul><ul><li>Opt-out approach - customer must do something </li></ul><ul><li>Most customers see something they didn’t ask for as junk </li></ul>
  39. 39. How long will it take for my order to arrive? <ul><li>Customers expect quick order fulfillment </li></ul><ul><li>Tell your customers upfront how long it will take to process and ship the order </li></ul><ul><li>Ideally you should ship in 24 hours </li></ul><ul><li>Rapid delivery choice </li></ul><ul><li>Charging credit card </li></ul>
  40. 40. What is happening with my order? <ul><li>Let customers know you have received order </li></ul><ul><li>Let customers know you have shipped order </li></ul><ul><li>Email will work for this </li></ul><ul><li>If you offer custom merchandise maybe you should allow customers to check on order through your Web site </li></ul>
  41. 41. Am I really getting a good deal here? <ul><li>Price is not only concern to customers </li></ul><ul><li>Give your customers information that explains why buying from you is better than buying from your competition </li></ul><ul><li>“ I offer only the highest quality merchandise!” </li></ul><ul><li>Remind customers of excellent return policy, free shipping, or whatever else makes your product or service superior - be creative! </li></ul>
  42. 42. What if there is something wrong with my order? <ul><li>Online purchasing doesn’t allow for your customer to touch, feel, and see your product before they purchase </li></ul><ul><li>Make your return policy very clear - and be generous - You want customers to purchase again </li></ul><ul><li>Comfortable customers comeback for more </li></ul><ul><li>First impressions work on the Internet </li></ul>
  43. 43. <ul><li>&quot;If anything, e-commerce will cause mom-and-pop-like businesses to proliferate. E-commerce redefines the neighborhood, the community, and the customer relationship. Instead of creating limits, it creates access to opportunities.&quot; </li></ul><ul><li>&quot;Mark,&quot; Decatur, Illinois, Fast Company, September 1999 </li></ul>