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Shopping Carts & Online Payments
Getting to the Heart of the Cart
Knowing your business needs is crucial to shopping-cart selection
If you came to this article hoping we’d tell you exactly which shopping cart you should choose for your business, you will be disappointed. We don’t know.
However, thanks to the expertise of a pair of industry veterans, the process of choosing a shopping cart is about to get easier for online-business owners. It starts with an understanding of what types of shopping carts are available. For example, www.shopping-cart-reviews.com, managed by Australian Mark Baartse, features information and reviews of 157 shopping carts.
“I find that people are overwhelmed by the choice,” he said. “There are just so many products out there that people get confused and flustered, I guess, which is one of the reasons I created my site in the first place.”
Baartse said his hope is that ecommerce entrepreneurs might utilize the information on www.shopping-cart-reviews.com to narrow their choice to two or three applications. However, don’t bother asking this Aussie which shopping cart is right for you, either.
“At the end of the day, you’ll have requirements that I’ve never dreamed of,” he said.
Dan Douglass, a 20-year veteran of the information technology industry and the technical director for InSite Interactive, one of Dallas’ premiere interactive marketing agencies, leads a team of experts that helps businesses traverse bumpy shopping-cart waters.
He says picking the right shopping cart depends on a business’ goals, resources and vision. Presuming you, the entrepreneur, have a grasp on those concepts, where do you begin?
There are three primary types of shopping-cart systems: hosted solutions, out-of-the-box software products and what we’ll call alternative-payment/pseudo carts.
Hosted Solutions
The simplest way to think of a hosted shopping-cart solution is to envision it as an application somebody else helps you set up and customize and that lives on somebody else’s server. Douglass said the online Amazon stores that many ecommerce-business owners use serve as a good example.
“That’s a clever way to do the hosted solution,” he said.
Advantages to a hosted solution include:
- Tech support. You’ll typically have access to experts who will help you with technical issues.
- Data backups. Somebody has to make sure transactional data isn’t lost.
- Set-up assistance. Unless you’re technical, this advantage is worth its weight in gold.
- Lower costs. Thanks to a licensing structure, you share the cost with other businesses who utilize the same server space as you.
“(A hosted solution) may be more cost effective for a smaller retailer,” Douglass said.
The former U.S. Navy nuclear submariner puts his and InSite Interactive’s efforts into helping businesses take advantage of hosting solutions whenever the entrepreneur’s budget is such that a from-scratch shopping cart is not economically or functionally viable.
However, there can be disadvantages to the hosted shopping-cart framework.
“You’re at the mercy of whatever the hosting solution will provide,” Douglass said.
For example, even though many hosted-solutions providers offer tech support as supplementary to a licensing agreement, some non-technical business people get completely exasperated by the thought of having to deal with tech support.
“Plus, you tend to rely on other people to be subject matter experts,” Douglass said.
In other words, there is always the possibility that the proprietor of a hosted solution doesn’t really have the expertise required to manage a shopping cart within the context of your business needs.
Out-Of-The-Box Software Products
If hosted solutions include shopping carts that somebody else hosts and manages, out-of-thebox software products include shopping carts that you install and manage by yourself. Think of the former as remotely hosted applications and the latter as locally hosted applications.
Douglass said there are some sophisticated business advantages to be gained by going the software route, including:
- Reporting. Many out-of-the-box shoppingcart products offer multiple ways to seamlessly export data into your sales software.
- Flexibility. Software selections are often platform- and technology-independent.
- Short-term cost. Expect to pay about $250- $2,000 for the shopping-cart software itself.
However, unless you or somebody within your business operation has significant technical expertise, a software solution might involve more trouble than it’s worth.
“Managing a really big shopping cart can be complicated,” Douglass said.
He noted that anyWindows-based software solution would require you to have an understanding of not only the shopping cart itself, but also of Microsoft’s Information Server and its active-directory structure. Douglass’ MCSE+I, MCDBA, MCSD and MCT certifications underscore the gravity of his suggestion.
Among a business owner’s software-based shopping cart choices include free applications such as osCommerce and Zen Cart, according to Baartse. However, he cautions nontechies to steer clear of these options if saving a few bucks is the primary motive.
“It can be pretty tricky for someone who’s got a nontechnical background. I think you need to be really careful about the free shopping carts,” Baartse said.
“Don’t make your decision just for the fact of saving $300 or $400 because you’re going to be stuck with this product for a long time. It’s a lot of work to shift from one product to another product,” he added.
Not only is it a lot of work to change carts in midstream, it also costs businesses money, even if the application was originally free.
“You’ll lose that $300 or $400 many times over,” Baartse said.
However, if the business owner feels confident enough in his or her technical abilities or is fortunate enough to have partnered with somebody who can help them through the set-up and maintenance process, Douglass said to be sure the free shopping cart fits your business needs.
“That’s the challenge of free — finding one that works for you,” Douglass said.
Alternative-Payment/Pseudo Carts
Solutions such as the shopping cart offered by PayPal are, technically, hosted; however, they’re a bit nontraditional in terms of how transactions are handled.
Experts suggest that shopping carts offering consumers a multitude of payment options beyond traditional debit and credit cards are the wave of at least the near future. For example, Douglass noted that many savvy consumers are leveraging “escrow systems” to make online purchases.
Some banks create escrow systems to allow consumers to obtain credit card numbers for the sole purpose of making online purchases. The consumer assigns an amount of money available to a credit-card number for the purpose of a single purchase, and that money can be drawn from any account, invisible to the business.
Where PayPal has a distinct advantage as a shopping-cart system over other options is in making the payment-processing aspect of the online business easy and inexpensive.
“Setting up payment processing can be as expensive as the cart itself,” Douglass said.
Douglass noted that a friend who sells poker chips online had a PayPal shopping cart up and running in little time.
“It took him five minutes to set it up,” he said.
Challenges
Whether the online business owner selects a hosted shopping-cart solution or a software package, or perhaps something free but robust, he or she must consider a plethora of issues that go beyond the functionality of the cart itself.
For example, if you choose a software package to run your shopping cart, where will you host it? How much will that cost? How do you plan on dealing with security? Do you have a plan for assessing sales taxes?
Douglass noted that many states are pursuing online businesses to collect sales taxes. He even cited city-tax differences between Dallas and suburban Plano, Texas. His point was simple: “Everybody wants a piece of the Internet action.”
That includes the tax man, and that must be considered when choosing a shopping cart for your business. Eventually, lawmakers will need to standardize online-taxation rules for clarity, he said.
“Somebody will have to come along and say, ‘Internet sales tax is 5 percent. That’s the deal.’”
Furthermore, businesses will want their shopping carts to look like their online business from the standpoint of branding.
Nevertheless, the shopping cart that’s right for your business depends on a number of factors, and Douglass said he recommends you examine your business goals and needs before even researching prospective applications.
Once you know how your business will handle sales online, from transaction to distribution, reviewing a resource such as www.shopping-cart-reviews.com will help you balance those needs against product offerings.
However, Baartse noted that in the end, “there’s no one perfect shopping cart.”
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Published on Thursday, August 31, 2006
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