Ring It Up! Understanding Online Shopping Carts

Business web sites can be broadly categorized into two types: those which exist purely for disseminating and/or collecting information and those which make sales.

There’s nothing wrong with the first type; for some businesses it may not make sense to do selling or take payments online. For instance a house painter could book appointments online but can’t really price or sell his services online.

Most businesses, however, could benefit from making sales and taking payments online. Those sales might be strictly supplementary such as a veterinarian who also sells a line of pet care products or they might be the main staple of the business such as a graphic designer who works from home making web pages.

The one thing that all income producing web sites have in common is a shopping cart; some way to actually accept payments.

Features of online shopping carts

By now, pretty much every man woman and child in America has purchased something online. You may or may not have stopped to consider all the functions that a shopping cart performs.

  • Keep a tally of the items a customer purchases. By doing this in the background, it allows customers to keep shopping and adding items to the cart until they are ready to check out.
  • Automatically remember the “contents” of each customer’s cart. This memory is configurable and can last only as long as the customer’s session is active, it can last a predetermined number of hours or days or it can last indefinitely.
  • Allow customers to update quantities and/or remove items from the cart.
  • Automatically calculate sales tax, where applicable.
  • Offer one or more shipping options and automatically calculate shipping charges for the option selected.
  • Accept discount codes and automatically apply the correct discount.
  • Display a total (plus usually subtotals) so customers know how much they are paying.
  • Accept one or more forms of payment:
    1. Credit cards
    2. Debit cards
    3. Direct debit from a bank account
    4. Online payment services (Paypal, BillMe, etc)
    5. Corporate or government purchase order
  • Perform currency conversion as needed. In some cases even accepting payment in multiple currencies for the convenience of your buyers.
  • Display and/or issue a receipt. The best will both display as well as send a receipt to the customer’s email address.
  • Send order and payment details to the merchant (you). Most will also send the customer information they collected.
  • Perform order fulfillment:
    1. For electronically downloadable purchases (eBooks, streaming audio/video, membership subscriptions, etc.) the cart will deliver the final product.
    2. For physical goods and services, the cart will format and print shipping labels or work orders.

That’s a lot of stuff!

Where to get a shopping cart

These are complex and highly specialized pieces of software. For that reason, it’s generally best to use a hosted service rather than purchase, install and own dedicated software. If you do want to purchase and install your own software, eCommerce Templates has one of the best packages available.

There are many shopping cart service providers. One of the more well-known stand-alone service providers is 1ShoppingCart.

Or you could sign up with a more all-inclusive merchant web site hosting service like 3Dcart or Shopify. These are essentially web site hosting providers which also provide all the amenities needed for eCommerce as part of your standard account.

If you have a very low volume of sales or are just starting out, you could also use a “free” service such as those hosted by Paypal, Amazon, Google and others. Recognize that these are not really free and charge a rather substantial (on a percentage basis) fee for each transaction.

Cost and fee structure

The cost of an online shopping cart varies based on features and sales volume. In general, there are two components to the fee structure:

  • A base fee, which ranges from free to several hundred dollars per month, and
  • A per-transaction fee for each sale made.

Lower base fees typically equate to higher per-transaction fees and vice-versa. Only you can determine whether your volume of online sales and average sale amount would make one fee structure more attractive than another.

As your business grows and changes, so can your merchant account.

Customized interface

The non-integrated hosting services such as 1ShoppingCart allow you to customize the appearance of the checkout pages. So even though they are hosting the shopping cart software on their own servers the colors, text, images and other visual elements make it indistinguishable from your own site’s pages. This gives your customers a seamless buying experience.

The third-party providers also send all the buying information back to you. They never store or record it for their own purposes. (Except credit card numbers and related validation information. Laws regarding the safeguarding of this information are strict enough that you are better off letting them handle it.)

Get selling!

Whichever type of solution you use, the listing process is pretty simple. You just enter a few pieces of information such as a unique item number and description, some pricing information and perhaps a link to some photos or an online catalogue page. Within minutes, you can have your first few items up for sale.

No special technical skills needed.