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How e-commerce works

E-COMMERCE IS MORE THAN A SHOPPING CART

You’ve had a website for a while and now it looks like time to make the step to selling online. Before you leap in, you need to understand how e-commerce works so you can make sure you get the best from your e-commerce website. Too many businesses merely add a shopping cart to their existing website, or worse still a link to a third-party e-shop, and get very poor results. To successfully sell over the Internet you need to effectively integrate all elements of e-commerce. This article outlines how e-commerce works and what your e-commerce website must do to succeed.

Catalogue and product information

The heart and soul of an e-commerce website is the provision of information on the products or services you offer. Customers need to find products and they need to be convinced to purchase these products. All other functions are secondary to this.

To enable customers to easily find products your catalogue must be organised in a way that fits your products and the way your customers think about them. Customers need to be able to search for specific items, and browse by category, size, region, style, or whatever makes sense for your products. How is your actual store laid out? What products do you put next to each other? Many of the principles behind the decisions you’ve been making for years still apply but a well-designed e-commerce website should offer customers even more flexibility.

The biggest problem for most e-commerce websites is they provide too little information. For most products the absolute minimum is an image and several paragraphs of text. Unable to pick up the product and look at it, customers will want detailed information such as size and materials. A clear description of the selling points and performance is also needed. Your yardstick should be that all the points you would make when selling a product in a physical shop need to be made. In addition, many Internet users want even more detailed information so links to further information such as manufacturer websites should be given where possible.

A critical but often overlooked area is information on product delivery methods and shipping times. Internet customers want to be confident that the product will arrive promptly. A returns policy is also essential, as all mail-order providers have learned. The essential element here is building trust.

The final essential element of the product information is that it must be accurate and up to date. Too many e-commerce websites fail to keep their product information up to date. Any e-commerce system must make it easy for you to update information or add products.

Shopping cart and order form

A shopping cart enables a customer to make multiple purchases by browsing the catalogue and adding products. For a very small product range, however, this is not necessary and a single order form can offer the customer the choice of product, size or other specification. The order form needs to be well linked to the product information pages.

A well set up e-commerce website allows customers to make purchases or add to the shopping cart from all pages which give product information. There should be no need to click to a new page once the customer has found what he or she is looking for. The shopping cart must have a layout and appearance consistent with the rest of the website – one of the main reasons for poor transaction completion rates is sending customers to different-looking pages. You take a lot of care with your brand and your website image for very good reasons and inconsistency here risks sales.

The shopping cart or order form needs to allow details such as size, weight, colour and quantity to be selected. Good e-commerce systems allow the price to include discounts and members’ rates. Accurate calculation of shipping charges and tax is essential – customers will not complete a purchase if they do not know exactly what these will amount to.

Credit card processing

To complete the transaction you need to get credit card details, verify they are valid, and credit the amount to your account.

Credit card details are usually collected through the shopping cart or order form. The information is protected using SSL encryption. In order to cater for more cautious customers, however, it is wise to also offer a fax-back form so the details can be sent by fax.

Credit card verification and account transfers can be handled in two ways. For low sales volumes businesses can use their existing systems to process the transaction offline. In this case the credit card details are sent by encrypted email. This approach saves on the cost of online verification but adds processing costs and special care is needed to ensure that credit card details are secure at the business’s computer system.

The best approach is online transactions using the wide range of reputable and highly security conscious online merchants. Encrypted credit card details are sent to the online merchant who checks validity and transfers the money to your account. While the online merchants obviously charge for their services, you save on transaction costs within your business. Delays are reduced. And most importantly this method is the most secure because the online providers have dedicated security that no small or medium business could afford.

Credit card processing needs to be efficient and the customer needs to trust your security. This means that all e-commerce websites should have a clear security policy and promote a highly professional image.

Order fulfilment

Rather than a resounding silence, on completion of the transaction a good e-commerce system immediately posts a confirmation of the order by email and on the website. The confirmation should also serve as a receipt or invoice. In Australia, the confirmation should qualify as a valid tax invoice.

The fulfilment of the order now proceeds and must be quick and efficient. The e-commerce system provides the order details and shipping address. A well set up e-commerce system can give very low overheads, but only if it is carefully integrated with your distribution system.

Conclusion

In summary, e-commerce is not complex but it does involve several steps. These steps are not complicated and thinking through how the process works from the customer point of view enables you to plan an e-commerce website that enables you to effectively sell over the Internet.

Michelle Davis is Director of Websites at Work – a small website design business that specialises in owner updatable websites.