What is e-commerce (electronic commerce or business)?

E-commerce means selling products, services, and information through the internet. E-commerce allows the entrepreneur and small business to compete with large businesses by allowing them to catch the customer immediately instead of losing them because they don’t take the time to complete a paper form and mail a check.

There are three main elements required to incorporate e-commerce on your web site: a catalog, a shopping cart and a merchant account or payment service. Depending on the number of products/services you offer, the catalog can range anywhere from one payment button to one or more pages that display photos and descriptions of your products/services. The shopping cart provides the ability for customers to add multiple products to a virtual “cart” and “checkout.” You can add a shopping cart to your web site by using shopping cart software that you will need to configure into your site. Or you can use a third-party shopping cart service, like PayPal, that generates the cart and checkout pages for you.

To collect the payments you will need a merchant account or payment service. A merchant account approves you to have credit card funds put directly into your bank account. You will also be required to incorporate a gateway onto your site to process the credit cards in real-time as opposed to using a machine or by phone. This method usually requires a per transaction fee and a monthly fee for the service. In addition extensive web design knowledge will be required to incorporate the gateway onto your site.

The second method to collect payments on your site is a third-party payment service like PayPal. . PayPal is one of the most cost effective and popular methods for online payments, especially since the company was bought by eBay. PayPal allows you to set up a free account to accept credit card or bank-transfer purchases without the need for a merchant account. Only a small fee ($0.30 plus 2.9%) per transaction is charged and there is no monthly fee for the service. Even if you do not have a web site you can still generate payment buttons and links that you can send via an email to receive online payments.

To see PayPal in action, visit the Duluth Merchants Association website, www.duluthmerchants.com. You can now pay your membership dues online with the click of a PayPal button! You will also be able to make other payments like the 5K Run/Walk registration and future event payments on the web site.

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