Credit Card Basics for Online Retailers

Setting up your site to receive payments can be one of the more challenging aspects of heading out into the online marketplace. You basically have 3 options:

1) Paypal or Paypal-style processing account
2) Virtual terminal
3) Manual processing

These options can generally be used in combination. Let's review the pros and cons of each of these options:

Paypal
Paypal is very easy to setup, and does not require financial statements, proof of insurance or shareholder documents, nor do they require a guarantee or deposit. All they require is a business bank account, and a credit card to become fully verified. It generally takes less than a week to get your account verified.

Not everyone is comfortable using Paypal, and merchants accepting only Paypal can be viewed sceptically by online shoppers. Although Paypal has its own 128 bit SSL encryption, your website does not need to be secure to process through Paypal, which potentially leaves your customers credit card numbers unencrypted, depending on how your website is setup. Also, Paypal can take over 10 days to transfer funds from the Paypal account into your bank account. Paypal's exchange rates can also be a bit higher than most merchant accounts would be. Although Paypal is a great service, and very convenient for setup, I generally recommend that e-tailers get a Virtual Terminal as well.

Virtual Terminal
Setting up a Virtual Terminal legitimizes your online business to online shoppers; all legitimate Virtual Terminals require full 128 bit SSL encryption, which protects the information your customers enter.

It can take up to a month to set up a Canadian company with a Virtual Terminal; U.S. companies have a much quicker processing time; they can often be setup in less than 24 hours. Once you are setup, it generally takes less than 24 hours for the funds to be transferred into your band account.

Processing rates vary depending on a variety of factors, including:

• the industry you're in
• who your customers are
• if you are selling a physical item or a service
• which credit cards you accept
• which credit card rewards programs your customer is enrolled in
• what your sales volumes are

If you are selling your own tourism related products, such as kayak trips or walking tours, you need to discuss the application process in greater depth with your Virtual Terminal provider in order to indicate your industry correctly. For companies reselling high-risk products such as Travel Agencies, a bond may be required, as the risk for processing travel purchases is quite high.

Retailers selling physical products that are shipped using a reputable courier are much easier to get setup than service providers, and generally do not require a bond.

Manual Processing
The final option is to accept the credit card numbers online, but to process them manually using your Point of Sale processing system. Be aware that you need to be approved by your Merchant Account Provider for this type of processing, and depending on a number of factors, you may not be permitted to do under your agreement, in which case you would be required to physically swipe the card in order to accept payment.

5 Steps to getting your inventory online successfully

When you first begin to get your inventory online, it can be time consuming and frustrating. Here are some tips to make the process a bit less daunting:

1. Pick a category to populate first, e.g. a specific brand or an item type such as T-Shirts. The key here is ensuring that you have a small sample of what you sell in your retail store, that you can use as a learning experience. Keep it down to about 10 distinct products for your first batch; you can increase the size of the batches as your confidence level increases.
2. Get images of the products in the first batch, being sure to treat them in a similar manner. It is important for the professional image of your site to ensure consistent image treatment. Be sure to use a process that is repeatable when you take your pictures. (It is generally not advisable to take pictures of your products outdoors, as the light quality can vary substantially from minute to minute.) Keep your background consistent; if you use a white background, always use a white background, with the same lighting.
3. Decide what information you would like to share with your customers about the individual products; e.g. Brand, Special Features, Materials, Short Description. Try to be consistent with the length of the descriptions, and the type of information available: "Sweet 17 Jeans, Low-Rise Button Fly, Dragon Detail, These stylish hand embroidered jeans flatter every figure and provide excellent comfort. 80% Cotton, 20% Lycra" Be descriptive, but keep it short.
4. Decide how much you intend to sell your products for, and how many you have on hand to sell.
5. You should now have everything you need for the first batch; it's time to upload your items, your descriptions, your pricing, your inventory counts, and finally, your images.

Congratulations, your store is up and running! Now for the next batch...

How a Commerce Website Development Works

Recently a retailer asked me how e-commerce website development works, and I misunderstood the question and started to detail the technology that we use. Turns out, what she wanted to know was a bit more process oriented; what she needed to know was what to expect, and what we expected of her in order to get her up and running. Here's a breakdown of how it works over here:

1. Working with the retailer, we discuss the visual element requirements, such as colour, look and feel, website elements from other sites that they like, website elements from other sites they don't like, and what their current branding efforts look like. (Design Consultation.) We then discuss the functionality requirements, such as Merchant Account Providers, Inventory Management, and any additional functionality requirements such as Newsletters or Coupons. (Functionality Consultation)
2. Based on the Design and Functionality Consultations, we work on a design that addresses their wants and needs, while addressing the desired functionality of the site.
3. Based on the the Functionality Consultation, we implement the Commerce System with the required modules and customizations, and take the customer on a walkthrough of their system.
4. We present the client with the proposed design, and any changes to the design are applied.
5. The client enters their inventory and content for their site through the administration system.
6. Any additional external vendors are confirmed by the client, such as the Merchant Account Provider.
7. The final design is implemented, and the site goes live!

From start to finish, this process generally takes between 4 to 6 weeks, and is dependent on the speed of the clients responses. The fastest that I have seen a Commerce System be implemented is 7 days from start to finish, and was only possible due to a very organized client with an existing design; I understand that it took them 2 months prior to contacting me for them to develop their content and take their pictures.

We built it, why won't they come?

There are a plethora of visually stunning websites that retail businesses have spent thousands of dollars developing. The site gets launched after many months of design and development time; the business owners are convinced that their sales are going to exponentially explode!

And then they don't. A whole lotta bucks and zero bang.

"Why don't people buy from my website?" The business owners ask themselves. "My site is gorgeous; it's hip; our products are great!"

Just like any other business venture, websites require creative and persistent marketing strategies in order to draw a crowd. The method of marketing can be considerably different, while sharing many similarities to the opening of a new retail location: you have to let your existing and potential customers know what the address is in order to entice them to shop at your online store.

• If you have a storefront, be sure to place your URL (website address) on your signage, stationery, shopping bags and anything else that you would normally put your logo on
• Tell people about it! Make sure that your staff are trained to talk about it: "Check out OurShop.com; you can preview and purchase our new spring line there!"
• Don't put images that make your product look poorly; nice pictures are very important
  
• Make sure the content on your site is indexable by the major search engines
• Make sure your commerce solution works; test it!
• Ensure that as many payment options as possible are available to your customers, (There's nothing more frustrating than getting to the checkout and discovering that the store won't accept your preferred credit card.

Be excited about it! You have just opened a new location! Celebrate it; everybody loves a party!

Retailers Partnering for Online Success

Imagine a situation where you have 2 fashion designers with their own lines of women's fashions. They have a similar price point, and are targeting the same market. They are both interested in selling their products online, but find the cost prohibitive.

The owners of Store A and Store B have both gotten national media attention for their shops, but are only able to sell locally. It benefits them both to change this, and is possible to reduce their costs by teaming up. They are located on the same block, and the owners have a good relationship.

Store A and Store B find a URL that they both like; we'll call it shopAB.com.

Store A has a great relationship with their Merchant Account Provider, and they get a great rate on all of their credit card transaction.

Store B has a larger storage area and gets a great deal on shipping through a trade association they belong to.

They decide to pool their resources to get their products online; this reduces their Total Cost of Ownership (TCO) for the e-commerce site by half, and expands their marketing efforts through co-marketing; every time someone visits their website, they both get exposure. Every time the shops are mentioned in the media along with the website, they both receive attention by association.

And as far as getting media attention goes, a couple of businesses willing to work together for the benefit of both is in itself a news worthy story.

So you want to open an online store...

Selling your retail products online can be one of the more daunting steps that a small business owner can take. It can also be very rewarding financially, if it is planned and implemented correctly. Starting an online store is much like opening a new store, and requires investments of time, energy, and money. Here are some things to consider:

It takes approximately a month from start to finish to design and implement a basic e-commerce site, assuming that everyone is communicating effectively and all of the pieces are in place before you start. Some of those pieces include:

• Your logo in digital format.
• A list of websites that you like who are selling similar products online, and notes on what you like about them.
• Images of your products.
• A clear understanding of who your customers are.
• A fulfillment plan: How are you going to get your products into the hands of your customers? Who will be responsible for order fulfillment, shipping, and reordering from suppliers?
• An online merchant account. You can't accept online payments without one; if you already have a merchant account for your physical location, you will still need to set one up. (Alternately, you can use Paypal to accept payments, but there may be more economical options available through a Virtual Terminal/Merchant Account provider.)
• A great e-commerce development company with a good track record

The last point can't be stressed enough; a company that knows the technology that you need to sell your products, and has the ability to design a website the reflects your store, is very important. A professional e-commerce company will have the processes in place to help you evaluate what you need to do to make your site a success.

Running a successful online store takes overhead. Take www.shopkitson.com; they have an extremely successful online store, which is managed well by the staff at Kitson. They aggressively market their online store on the internet using very savvy Guerilla Marketing techniques, Search Engine Optimization, constant product updates, blogs, and numerous other online promotion tactics.

Many retailers take the same steps as Kitson to promote their physical locations, but in some ways actually waste their marketing dollars by providing only an informational website. Potential customers are unable to fulfill their impulse shopping impulses, and go on to another site, where they can shop to their hearts content without leaving the comfort of their own home.