E-Commerce Strategies
Electronic commerce (E-commerce) simply means buying and selling products and services online rather than in a real "brick and mortar" store in your own neighborhood. E-commerce allows people from all over the world to buy from each other. Products range from hard goods that have to be shipped, to e-goods which are digital products that can be easily transferred or downloaded via the Internet. E-books are a great example of a digital product that can be sold, then downloaded instantly-- no shipping or waiting. To successfully sell online, you need a few things:
Website: Assuming you already have an Internet connection since you're reading this, next you'll need an actual website-- an online store for visitors to come and buy! If you're an expert webmaster, you could create your website by writing html code. Or, you could save loads of time and money and use a "template" based website company that has done most of the work for you (highly recommended!). Both options are discussed more indepth on the Website Building page.
Suppliers: So you understand about websites, know what you want to sell, but where do you get the merchandise? You have options here: you can buy merchandise at a discount from wholesalers, stock that product in your home, offer it for sale at a profit on your site, then package and ship it after you get an order. You could also work with drop shippers who stock all the product and ship for you. Generally you don't buy a product from a drop shipper until you get an order. Then you let the drop shipper know what to send and to who.
Either strategy works and works well! You could also do both, depending on the type of products you are selling. You just have to decide what's best for your situation-- do you have the money to buy inventory in advance? The extra space in your home to store and package and ship it? You might make more money this way, but it requires money upfront and a lot more of your time. Relying on drop shippers means a lot of the process is out of your control, so a good relationship and good communication is imperative.
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Merchant Services:
If you plan to sell hard goods on your site, you will need a way to accept payment online. In order to accept credit cards, you will need a Merchant Services account. This is basically an account with a bank or a payment processing company that allows your website to accept credit cards online. Of course you aren't "swiping" cards through a machine the way you do in a "real" store, but the concept is the same-- it is just done virtually through the power of the Internet. The merchant service provider processes your customer's credit card, deducts its fee for doing so, then deposits the difference into your checking account. In addition to traditional credit cards such as Visa, MasterCard, and Discover, you can also accept PayPal (more on that subject if you scroll down this page). Each merchant service provider will charge "discount fees" which include a per-transaction fee (10-25 cents), a percentage of the total sale (1-3%) and usually a monthly subscription ($20 or more), and a set-up fee. These fees vary greatly, so be sure to research a variety of merchant service providers and understand their fees and terms and conditions in advance. Your website must be set up to accept online credit cards by having a "shopping cart" or other method for your customers to "check out" of your online store.
If you plan only to promote other people's products and services on your website through Affiliate Programs, you won't need a Merchant Services account because you are not handling the financial transation. The links and banners on your site will direct buyers to the vendor's site to make the purchase. You get a commission for referring them. Less expense, less work, and you still get paid-- how simple is that?!
PayPal:
PayPal is another option for collecting payment online. Anyone who has bought or sold on eBay is familiar with PayPal. The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, or credit cards. PayPal has quickly become a global leader in online payment solutions with more than 70 million active accounts worldwide. Available in 190 markets and 19 currencies around the world, PayPal enables global ecommerce by making payments possible across different locations, currencies, and languages.