eCommerce Basics

What does eCommerce mean? It is a service that ensures that the right product reaches the right customer at the right time and at the right price. At the start of any eCommerce venture the first thing you think is what will you sell. That will decide all the future decisions and partnerships you make. According to me a eCommerce business consists of 10 most important concepts. These are as follows:

    1. Domain
    2. Hosting
    3. CMS
    4. Payment Gateway
    5. SSL
    6. CDN
    7. Distributors/Dropshippers
    8. Logistics Partners
    9. Support Software
    10. Marketing

1) Domain
This is where your business resides. There is nothing much to it you just decide a name and you buy the domain you need. Some things to remember though, Keep the domain name short, easy-to-remember and catchy. Also insist on a .com domain. If you do want a regional or categorical domain buy it and point it to your .com domain name. Reason is .com domain names are TOP LEVEL Domain and are easy to optimize for SEO. Never use hyphens in the Domain name.

2) Hosting
This is the backbone of your eCommerce business. It is where your site availability is decided. Hosting is of 3 types: Shared, VPS and Dedicated. It is OK to start with Shared Hosting but as the website grows the traffic will shoot up. To handle traffic you need a VPS (Virtual Private Server) which is like a fledgling version of a dedicated Server. When your website grows exceptionally you will need a Dedicated Server to handle huge amounts of traffic. The yearly costs are as follows:

  • Shared – $120 yearly
  • Cloud VPS(Unmanaged) – $60/yearly (Lowest Plan) or more
  • Managed VPS – $1000 yearly or more
  • Dedicated Server – $3000 yearly or more

It is always recommended to use VPS or Dedicated Server after the traffic crosses 1000 transactions daily.

Also do deep research before choosing a web host. And also make sure to purchase hosting from a regional host of your target market if you don’t have good hosting in your region then use Linode or Digital Ocean.

Really huge companies have their own in-house dedicated servers. They are tied up with solutions providers like Dell or IBM to help them manage their servers. When we aren’t that big it’s wise to stick to hosting providers. Else there is another thing that will eat up your brains and capital. One more point (For Newbies) always check if your hosting provider is providing fully managed hosting. Else you can hire someone to configure the VPS or Dedicated Server.

3) CMS
Ir stands for Content Management System. CMS provides you with website framework/GUI and admin panel to help you add all your products, manage customer data, help in generating invoices managing orders and lot more. For a eCommerce website the CMS can be of two types

  1. Open Source Community CMS
  2. e-Commerce Turnkey Solutions

In Open Source CMS you get full control over your website. You can add all the features you want as you want. But if you don’t know a thing or two about building websites from CMS you will need to hire a developer that will charge about 15-150$/hour to work based on his level of skill/experience.

If you don’t know coding or developing websites you can use tunkey eCommerce provider like Shopify (http://www.shopify.com) or Zepo India (http://www.zepo.in). Turnkey solutions have everything from Logistics to payment gateways integrated within them. So its really little work for you to do. But the features will be what the provider offers. Also turnkey solutions are like 20-100$/month but it eliminates the cost of hosting. So its really up to you; whether you want full control or you want ease of setup. And yes if you are hosting on open source CMS like WooCommerce or Opencart, then VPS is recommended.

4) Payment Gateways
Now you have you website all setup on the domain and hosting you selected along with the CMS software you chose. To start an online transaction whats needed is for you to be able to accept payments from the users Credit Card or Paypal account or other means. Here is when the Payment Gateway comes in. They facilitate accepting payments from your customers and then deducting a small commission and depositing the rest to your local business account. There are several fees associated with payment gateways. Its called transaction discount rate. Lets say i am selling a t-shirt online for $100 the customer pays using his credit card online. The TDR for credit cards is say 1% then after one week(depends on payment gateway) i will receive a payment of $99(After 1% deduction) in my bank account.

Check if the payment gateway supports plugins for the CMS you are using.
E.g. payfas.com is a nigerian payment gateway. They have integration for WooCommerce …. And their fees are as follows.
https://www.payfas.com/fees.php
payu.in is an indian payment gateway. It integrates well with almost all of the Open-source CMS as well as some turnkey solutions in India.

Now after these 4 parts the hard part is done you have eCommerce website setup and you can accept payments. The hard part is over.

5) SSL
SSL stands for Secure Sockets Layer. It is a certificate that is added to your website. It ensures that all the information exchanged between your clients and your website is encrypted. This helps in preventing leakage of data if some hacker is watching the transactions from remote location, he wont be able to decrypt customer data which includes credit card details etc.

SSL are of two types Shared SSL and Private SSL. For eCommerce website NEVER EVER CHOOSE A SHARED SSL.

Private SSL is further classified into 2 typed Domain Validated and Extended Validated. Domain Validated SSL are setup within 48hrs and cost up to $100/year. Extended Validated SSL take a lot more validations on your business than just the domain name. They take about 10days to be setup also cost about 160$+/year.

EV SSL provides the highest level of security and creates a lot of trust with your customer.

Mobile Compatibility; as now a days people are shopping from mobile and mobiles are more prone to hacking its necessary that the SSL be compatible with mobile.

Warranty Level; This is the amount that is warranted by the SSL provider in case of breach of data and loss of money due to the same. This can vary from $10000 to $500000 depending upon the type of SSL certificate you choose.

6) CDN
This is an add-on to be added to your website to increase the website speed and security. This is not eCommerce specific. You can use this with any website. It stands for Content Delivery Network. What is does is it checks for static content on your website like images and stores them on a remote server and whenever a user accesses your website, it fetches your website from your server and images from other servers simultaneously thus increasing loading times. For Cloud VPS its not recommended to use CDN as your data is already served from Cloud. If you want a free CDN for your website check CloudFlare (http://www.cloudflare.com).

Now your complete website is setup with security and speed improvements. You can now start taking orders and fulfilling the orders of your customers. You place all the products you want to sell on your website with the help of CMS admin panel. When customer places an order you need to ship the products to him and you will receive the payment for the same in your payment gateway account which can be transferred to your account whenever you wish. The next parts are on Order fulfillment.

7) Distributor / Dropshipper
These are the people who will supply you with products you need to provide your customers. Distributors will provide the products to you and you need to ship them to your customers. Dropshippers will ship the products directly to you customers on your behalf.

8) Logistics Partner
If you need to ship the products to the customers you need a really good logistics partner who can ensure you timely and safe delivery for your shipments. In most well developed countries, Courier companies tie up with eCommerce firms to provide really cheap shipping rates.

9) Support Software
This is nothing but a website script that is implemented to help you with customer interaction. An example of the same is ZenDesk.

10) Marketing
You have everything in place to talk with customers, to accept orders, to fulfill orders etc. You need to market your service. Marketing has many forms. Some of them are:

  • SEO Marketing
  • Social Media Marketing
  • Email Marketing
  • Paid Advertising
  • Others

SEO marketing is getting your ranking with Google. You can hire a good SEO expert for the same or you can do it on your own. Social Media marketing is getting your presence on social media networks like Facebook, Twitter and Pinterest. This is free and is helping a lot these days. Email marketing is getting a list of potential customers and marketing your products and services to them. Paid advertising uses services like Google Adwords to display your ads online. If you can get 100 customer leads from paid adverts then at least 2 of them will buy from you. So factor this when planning your paid advertising. Others include word of mouth, posting on forums or groups, print media etc. With this I will end this post. Thank you for reading and best of luck with your eCommerce gig.

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