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How E-Commerce Works

By: wood1e

The first thing that you need to understand is how e-commerce works: A consumer, or potential customer, accesses the Internet and navigates to your Web site. If you have a brick-and-mortar business, you'll want to have vital information on your Web site so that your customers can find you; this would be a static Web site. This may include current products that are on special as well as other product listings that make consumers believe that your business is where they want to make their purchase and is both appealing and a good value to the consumer.

Likewise, if you have an online business, you'll want to convince your potential customers or Web site browsers to make a purchase for the products you are selling from your Web site. Once consumers decide that they're ready to make a purchase, they'll need to be guided to an online transaction or secure Web server so that you can collect their personal and payment information using a secure encryption method. It is possible to create a Web site that can collect credit card and other sensitive data without offering encryption; however, most savvy shoppers will never enter credit card information into a nonsecure Web site. Therefore, we highly discourage any attempt to create a simple shopping cart that does not include secure socket layer encryption of personal or sensitive data. Operating a Web site without encryption for personal or credit card data is a sure-fire formula for disaster and loss of potential customers.

To enable your Web site for e-commerce, you must install and configure your products in a shopping cart. It is important to recognize the elements of a credit card transaction: your Web site contains the product pricing, description, and images, and the shopping cart is embedded into your Web site and stores the dynamic data regarding your product. When he or she is ready to "check out" from the Web site store, the customer typically clicks a "checkout" button and is taken to the encrypted version of the company Web site. The customer will typically continue with the checkout process by calculating shipping costs, entering personal information such as credit card data and a shipping address, and securely completing the transaction. All credit card companies charge a percentage of the sale as an overhead fee for using their credit processing services. The added service layer between your credit card processor and your Web site is known as a transaction service or gateway service. This layer recognizes an e-commerce transaction, performs immediate credit card authorization, and processes the transaction. While this service is not uncommon, it does add a layer of cost to operating your Web site. There are two distinct possibilities that account for how your order may be processed: after the order has been placed, all of the necessary information travels through a private gateway toward the "transaction/gateway processing network." This processing network is where the transaction is approved or denied, depending on the credit history of the consumer and the funds available. Although this may seem like a long process, it takes only a few seconds to complete. For the business owner, offering an e-commerce service is an added service and an added fee.

Another lower-cost option is to eliminate the transaction/gateway processing network. Many Web site owners prefer to manually "run" credit card payments through their desktop credit card processing/authorization systems and merely use the shopping cart as an order processing and retrieval system, where the credit card is processed manually after the online session is completed. This low-cost alternative eliminates the cost of the middle-tier authorization and does not affect what the consumer sees after completing the checkout process. With both options, the consumer should be sent an order confirmation by e-mail.

As mentioned, you will be able to use many different systems of payment to accommodate your online transactions, depending on how many transactions you average in one day. No matter what type of payment method you choose, you need to ensure that it is encrypted and secure so that the privacy and personal information of your customers is never jeopardized. As a reminder, never operate a Web site where you collect personal data or financial information without offering a secure and encrypted connection.

Article Source: http://www.articlesinsight.com

Synaxis Solutions are an Essex web design company. Whether you’re an established corporation or an emerging startup, it’s a well-known fact that your online presence can make or break your business. Offering clients a range of web design and online system solutions, including both standard and bespoke e-commerce applications.

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