So now you know you will be starting your own eCommerce website. Per our last blog entry, you have already assessed what you will be selling, approximately how many products you will be selling, and you have already explored which of the various platforms will be best for you: Ebay, Craigslist, Facebook Marketplace, Amazon Marketplace and/or your own Website. If not, be sure to see my last blog entry here.
The biggest advantage of selling from your own website is that you don't have to share commissions with anyone. When you sell on Ebay & Amazon, although they are huge marketplaces, you share commissions and pay fees to both, not to mention your commissions/fees to your merchant account. They are in a sense your partners. Selling from your own website, your only partner is Paypal or whatever other merchant account you choose. So learning a little bit about online marketing can be easier than taking on two big partners.
Every eCommerce website has what is called a “Merchant Account”. All eCommerce needs to link with a banking source where the actual money transitions will occur. Paypal is one of the biggest on the internet and it was pretty much "the first" safe online payment merchant account that spread like wildfire. The beauty of PayPay from a business owner's perspective is that you hook into PayPal's software system and they do all the rest. They employ the software developers who not only update the software but take on the important safety features that are needed today to keep the online transactions safe. This is all handled by PayPal and this is what you are paying for with your 2.7% commissions that you pay to use PayPal merchant services online.
So when you think about what you are getting for this commission, it makes you feel better about having to pay it. At least you are getting software and financial security services in exchange for this. You will never see any of the customer's credit card or banking information. This is all handled by PayPal and they assume all the legal risks that attach to that.
PayPal allows people to use a PayPal account, a check, or a credit card. You as the merchant never see the person’s financial information. Again, PayPal bears all responsibility for anything that can and does go wrong. You don’t have to worry about any lawsuits if there is a compromise. It’s PayPal's problem. Just for the record, PayPal has an excellent history of safe transactions. I can only remember one time shortly after PayPal was started that there was some kind of a compromise. Since that time, PayPal is up on the latest in financial online safety practices.
PAYPAL'S BOTTOM LINE:
PayPal charges 2.7% per transaction. That means, you pay 2.7% of everything you sell. If you sell a tshirt for $15.00, you pay PayPal .46 cents. If you sell a television for $300.00, you pay PayPal $8.10. The part I like the most about PayPal is there are NO HIDDEN FEES, TAXES OR OTHER CHARGES. It does not cost you any monthly fee to have a PayPal account.
CREDIT CARD PROCESSING BY BANKS AND OTHER INSTITUTIONS:
Banks and other “merchant accounts” offer merchant online services too. Many of these companies claim they charge the same amount as PayPal, but I had merchant accounts before PayPal and was never able to read the bill. There were taxes, fees, gateway fees, international fees, and it wound up being very expensive. So all I have to say is be careful of other companies who claim they are only charging 2.7% or charge less than PayPal. Buyer beware.
HOOKING UP YOUR ECOMMERCE:
All eCommerce websites have to be hooked up to your merchant account. When you sell on eBay, PayPal handles all of the transactions. eBay has purchased PayPal and it takes all of your banking information during the initial setup so you do not even realize you are joining and PayPal and hooking up eCommerce at the same time. But their signup system is easy and simple. You want your website setup to be the same.
HIRING A WEB DEVELOPER:
If you are planning to start a huge eCommerce company and have thousands and/or millions set aside for marketing because your plan is to compete with eBay, Google and/or Walmart and Amazon, you will seriously need to hire an eCommerce web developer team because you will need to have someone on staff who can deal with any glitches that occur on a day-to-day basis.
Otherwise, if you plan to oversee a small to mid-sized online business, you can operate your website using already-available eCommerce software. Some of the choices I have outlined below:
Shopify is a software that offers free websites with shopping carts. They cost anywhere from $40 a month up to over $99 a month, depending upon how many products you have. This is also just the maintenance fees. There are also transaction fees on top of these fees as well. You can see Shopify’s plans here. So again, you will be taking on Shopify as your monthly partner and paying them management fees, payment fees and commissions.
You also will have to build your own website (or find a developer who works with shopify) using Shopify’s templates. They do have lots of templates, but be aware that you will need to conform your design to their templates, not the other way around. If you are flexible on what your website will ultimately look like, this might be a good choice for you.
Shopify also assumes that you will be doing a certain amount of self-management, so you will need to study up and familiarize yourself with how the shopping cart works. They do have I believe a 24 hour a day customer service. If this sounds like something that would work for you, shopify is a very well-known and reputable company.
I don’t know anything specific about Magenta Software, but only know if its existence. It is probably similar to Shopfy mentioned above. So you can google them and see if this choice is something that would fit with your choice. You can see their information here.
WORDPRESS - WOOCOMMERCE:
Building a website on the WordPress platform with a Woocommerce Plugin will allow you to build both the website and the shopping cart that you want. This is the easiest choice for someone who does not want to incur any monthly expense "just to have the website". Your only expense will be the yearly hosting and web url charges which are approximately $120 to $150 per year; approximately $10 to $15 dollars on a monthly basis.
By building on the WordPress platform, you can also expand the website with a blog or your own forum, or membership, or classroom, whatever you desire. You can continue to build the website as you grow as a business. You are not locked on any front. You can continually build onto the platform using plug-in software.
WordPress is fairly easy to self-manage. There are lots of videos all over the internet showing you how to do this. It’s advisable to pick "a teacher" who can take you from the start of your wordpress website all the way to setting up the woocommerce plugin.
Woocommerce is a plugin that works flawlessly with WordPress, and it can take PayPal, GoogleWallet, Authorize.net, and some other well-known merchant accounts. Setup of Woocommerce is fairly simple. There is a learning curve regarding setting up shipping zones and shipping classes, but again, you can learn a lot from the tutorials on Woocommerce’s website itself.
The ultimate management of the wordpress website and woocommerce couldn’t be easier. You can offer sales, coupons -- pretty much anything another company can offer.
In my humble opinion, I would recommend building on a WordPress platform and using the WooCommerce plugin.