Okay, the one I've been waiting for or dreading, I'm not sure which e commerce selling stuff online. That is a very complicated world. And I'm going to impart hopefully, some advice and a bit of information. I do want to step you through the pieces of e commerce so that even if you don't tackle them yourself, you have some understanding of the flow of information, and money and security and stuff like that involved. It's very important, especially if that's how your business is getting paid on. e commerce was a hairball, when I started, we did things like build shopping carts.

Now you can buy them and it's absolutely the way to go. But let me step you through what happens in a in a basic e commerce transaction and then talk through the pieces involved for a business to be e commerce capable. Let's say this is your client, some guy out there, that's going to buy something you're selling. And he's on your website and he says, that's great. I like it, I want to buy a website ecommerce site might be the same thing might not be the same thing. Ecommerce might be sort of a piece that fits within your website might not you'll particularly run into that if your business is content intensive.

You make one decision about web hosting, not web hosting company, web content management system content management platform, you might have a WordPress, what started as a blog platform for most of your web content. But then when you get to the G, I want to sell this, you hand off or you link to a page or a forum or something on an e commerce site on an e commerce engine. Those two are not always separated. There are great content management systems with shopping cart functionality built in there or shopping cart and e commerce systems with decent Content Management built in, I guess my My point is there's a dividing line between the two called taking money. So when your customer here says he wants to pay you for something, one of the minimal things that's going to happen. This is just sort of web standard stuff.

He should flip over whenever credit card, credit card data, because it's about the only way to buy stuff is involved to a secure site at an SSL Secure Sockets Layer connection, and it'll show up as an HTTP PS, HTTP secure. In the browser, some of will show a lock on lock icon for an HTTPS connection. What that basically means is to a great extent, not that it can't be defeated, to a great extent, the data sent to and from his computer or mobile or whatever to your e commerce site is secured in transit on if you don't outsource it, essentially By all of your ecommerce functionality, lock stock and barrel, which is frankly my recommendation when you're just starting in this, if you do some of your own e commerce, you may end up having to get a certificate, a certificate that says your company is your company and the certificate is what tells his computer that that connection is actually reliable and secure.

And that you're not pretending to be somebody else or somebody else's and pretending to be you. So SSL secured by a certificate if you if you kind of go turnkey, you may not need to do this. I just want you to understand what it is. So he's gonna send credit card and minimum verification information to you. Let me rant for just a second. I was in college desk clerking at a crappy old motel, and I learned the following.

If it starts with a four, it's a visa if it starts So the five, it's a MasterCard, it starts with a three. It's an American Express. It's irked me for 20 years to get asked what card I'm using, as soon as I've pushed the first number, you know what card it is. So stop asking me what card I'm using. If you build ecommerce sites, it's just crazy. You know what card it is just look at the number anyway.

So this guy pulls out his card, let's say in this case, it's a visa, his information is going to go to you or your ecommerce system over that secure socket layer. And that's it, you're done and you're all paid. No, it's not that simple. What happens behind the scenes, is to go from e commerce, to actually charging the guy's card is another step, the e commerce system for the most part. So both these things together. e commerce system wants to talk to what's called a payment gateway.

The payment gateway is a separate system out there in the world. Its job is to talk to people Separate networks that the separate credit card providers maintain. And I mean networks in the technical sense, although there's a lot of that involved. There. They're they're called payment networks. Let me point out a crashing I already feel like 50 years old, they've been around for a very long time.

So if your customer sends a visa to your ecommerce site, your ecommerce site is actually going to check and more or less hand off the transaction information to your payment gateway gateway, you may have an arrangement with one payment gateway and a separate arrangement with an e commerce site or an e commerce engine on if you do the payment gateway thing. You have to get what's called a merchant ID. shorthand for that in the industry is need. What's your mid on if you go the route of getting a maid getting a merchant ID from a payment gateway Don't be impatient. The conventional approach to that now we'll talk about at least one alternative, the conventional approach to that takes paperwork. And frankly, it takes weeks on, you'd think you'd go faster, it just doesn't tend to go faster.

There's responsibility that the credit card, the credit card networks are taking on. When someone's a merchant, they need to know that it's a legit business before they sort of shoulder that risk and happily accept the fees that they're going to accept. So merchant ID mid, usually tied to payment gateway. There are way too many options to list off all the possible payment gateways out in the world. One of the big dogs is these guys authorized net. I'll talk about PayPal, I'll try to talk about PayPal and understand every aspect of PayPal a bit separately because it's a little bit of each of these but if you're going to somewhat conventional route and you need a payment gateway box throws dotnet.

Technologically, it feels like old hat we use Authorize. net for part of our business feels like old hat feels like batch processing. But it's rock solid. It works. And almost everybody on any part of this ecosystem uses Authorize. net.

So your payment gateway is taking the card information from this guy and saying, okay, that's a visa. And what are they doing? They're checking with visa to say is it a valid card? Could you validate it against the authorization information might be name address might be the three digit code. Ecommerce gets categorized differently than commerce that's done face to face. In short, it's called card not present because you weren't actually there didn't physically see him.

It didn't swipe a mag stripe through a reader. So e commerce transactions tend to cost a little bit more because the credit card guys and the gateway guys shouldering a little bit more risk, once the gateway has taken care of validating, that probably charge later. I think the rhythm I see on our payment gateway is validate the card, bulk all the transactions together and then run a batch probably I wanted once a day batch and say charge this one charge this charge this one charge this one. So the actual money transfer doesn't necessarily happen. The second your customer has bought a widget or something from you. The payment gateway then actually takes the money and hands it off, not to your bank.

Probably probably to a merchant bank account. A conventional checking and savings business bank account is not the same thing as a merchant bank account. That's about the limitations of what I know about banking regs and the difference between them. I just know that they're not The same thing. So for example, when we set up our payment gateway, I opened a merchant account with I couldn't even remember the name of the bank. For me all they were was an absolutely necessary step in between charging cards and eventually collecting are collecting our hard earned money.

That merchant bank every so often would actually take the funds that accumulated and deposit them in our bank bank. On if you looked at the section on banking. And I said we outgrew credit union how grew local banks, one of the things that we got out of our relationship with a major national bank is they're able to be a merchant bank in terms of this daisy chain as a whole. So ecommerce transactions now go from our payment gateway to what is effectively a Wells Fargo merchant bank account for us and I believe within 24 hours reconciled and the funds actually land in our bank account, if you're paying attention to cash flow, which you absolutely should, that matters. One point about this long daisy chain, someone's peeling off either a fee, or a percentage, every step of the way, on payment gateway, maybe x cents per transaction plus y dollars per month.

I think that's the way hours work. The merchant bank is probably taking a percentage, Visa, MasterCard, Amex. That's what those clouds over on the side there Visa, MasterCard, Amex, discover the four big dogs and payment networks are taking a piece of the transaction as well. So what you collect here in the bank, and what was actually sent to you are really not the same thing. Be prepared for that and know what percentage you're paying in each step of this ecosystem. So that if your ecommerce starts growing, you can go do some math and say, what's this actually costing me?

Is there a point of leverage Let me walk through a few on e commerce engine things for you alternatives for you, if you will, on my biggest recommendation is try not to do e commerce yourself. Don't talk to a software developer who's going to handle e commerce for you. There's there's no reason unless you're at a fairly big scale. To do that for a small business. If your needs are incredibly esoteric, make sure that your business isn't so widely defined that you can can't afford to operate it. But if you're selling services, if you're selling subscriptions, if you're selling hard goods, you can solve those problems with a more turnkey solution.

I'm gonna walk through some of the options in the market. This is just scratching the surface Magento was and I still believe is an open source, ecommerce platform. It's one of the big dogs in the space. I think they went from licensing or sorry, not licensing. It's open source from making the ECAM engine available so people could integrate it to their site to providing a hosted version as an alternative. You remember when I said you might go from here's my website, here's my ecommerce site.

If you've got a website sitting on WordPress, and you decide to use a hosted Magento site, that might be one of the handoff points where you go from a page here to a page here in order to accomplish that. Some web hosting companies have the Magento shopping cart as a turnkey install. To go with content management systems. I believe media temple, our hosting company actually offers a Magento cart doing that from memory I might be wrong on if you decide to do that. I understand that you're taking on more detail, more technical configuration and setup and a little bit more work in return for greater level of control and possibly a greater level of integration Magento has a sterling And everything I've run across, it's worth looking at. You move away from Magento.

There are more turnkey, all in one set up your shop on the net sites. Volusion is one of the big volume players in that space. Another big volume player in this space, if I've got the tab up here is Shopify. Try if you can to solve your e commerce issues with as turnkey solution as possible, because the time and effort and terminology and technology that you'll have to get into running an e commerce site where you take on more load will suck up most of what you'd pay or more than what you'd pay in the relatively minor fees. This kind of thing this turnkey shopping cart ecommerce site thing wasn't around 10 years ago and my experience with real real honest to goodness e commerce projects. Back when e commerce was new was the transactions and the actual charging tended to be like 40 50% of the project.

It was always the part you tore your hair about. It was always the part that made you go nuts on. So Volusion Shopify, I would take a look at those two. One shopping cart is a call it a shopping cart plugin pulling on, I think of it as a baby version of what magenta or sorry, of what Volusion and Shopify do. I'm guessing one shopping cart has gotten more and more full featured, where you can manage your inventory and products and stuff like that in the system. Let me throw one story in there from the past because you do want to think about this.

When you're selling online. If you're selling something you don't have an infinite supply of the ways that you manage inventory really start to matter to you. If you had a place full of shoes and you were selling shoes in the store, as well as selling them on e commerce on the back end, you have to keep your Point of Sale and your e commerce system in sync. I just sold those sold those side 12 Doc Martens, so I shouldn't show them as available on my e commerce system. So questions about integration to databases and stuff like that start to matter. Or you go the other route and make your ecommerce site your point of sale, which happens as well.

One alternative solution for very partial ecommerce and I'm saying that carefully, is a really, really impressive and amazingly useful web service called wufu. They call themselves the online form builder. what wufu has done is actually made web databases usable by human beings. It's actually very impressive what you can build and what you can do with it if you need to collect data and be able to change what you collect. If you need to charge for small one off single items or even possibly ad hoc transactions. wufu is capable of doing e commerce right out of one of those wufu forms that you're in control of.

And frankly, it's surprisingly easy. We used, we used wufu forms to charge for one of our services for a year and a half, two years, something like that, before we changed our subscription approach, and it was really quite cool. I could copy a form, put a new product in place, boom, off to the races. So that's a snapshot, a very, very light snapshot of the range of choices to get you into this game of e commerce of charging for stuff online. Other options to know about Yahoo, Yahoo stores have been around forever. I don't know where they sit.

Now. It's worth taking a look. On last time I looked I wasn't nuts about the design that may well have changed. So take a look. If you're a nonprofit, or if you're some sort of event kind of thing. Do know about better Paper tickets, which is a amazing service that basically helps nonprofits, charities, arts organizations, and so on charge for tickets, ecommerce style, but they don't take a chunk out of it.

No, no fees if you're a nonprofit. So when I work with nonprofits who are trying to fill the house and sell tickets, I say please, please, please set up a brown paper ticket. People are so much more likely to book it when they've got the impulse to book it on and this is a way for you to do it without having to get into the e commerce business. Let me hit a couple of other pieces of this ecosystem that are a little bit newer and frankly, make life a whole bunch better than they used to be. One of the things I want to talk about is a relatively new service called stripe, stripe comm and type stripe where you've been on my life guys stripe lets someone with a bank account. take credit cards Doesn't that sound simple, that's basically what it is.

They work on a percentage basis. Their technology is top notch developers seem to just love, love, love, love stripe. And as stripe becomes a viable choice on the platforms involved in the front end talking to your customer, I'd strongly recommend looking at him. For example, I think the guys here at wufu just added stripe integration. This was sometime after I was wishing they'd done it, but they added stripe integration. So in theory, if you have a business bank account, you can open up a stripe account and buy the next day open up a wufu account and buy the day after that.

Be charging for widgets or services or something online and buy a day or two after that. The cash would actually land in your merchant bank accounts sorry, your bank account bank account I believe that's the difference with stripe is it's not a merchant bank account required. Yeah, that's one of the differences. They take a percentage, it's actually pretty modest compared to some of the others. So if you're new to ecommerce and want to try avoiding the whole merchant ID domain, take a look at stripe, I don't know that it's perfect for everything. But I've been extremely impressed at the rates at the technology and frankly, at the lack of bureaucratic silliness, it's like, sign up and rock and roll, which is as it should be.

Two other ecommerce points to make and then I'll try to talk about PayPal a little bit. If you're dealing with live physical cards in your business, and you're looking at all of this information about systems and cloud based but you're running a real time face to face with people business, and you're not set up to accept cards yet. Take a very hard look at square. These guys are changing the game of accepting credit cards. I've been watching him show up gradually in Are locals for local farmers market. And I'm delighted.

I'm delighted that guys who are selling potatoes that they worked hard to grow, are able to tap that kind of payment that I tend to carry around like cash, what's cash, but I've always got a card and they go swiping it, and they're, they're doing a lot of smart stuff. They seem very fair in how they're growing their business and they've opened up credit cards to this huge range of people that couldn't do it before. I wouldn't be surprised if you see buskers on the street, pull up their iPhone and say, Hey, buddy, can you spare a visa and he noticed this thing doesn't ask you what kind of card you're using. Because if you look at the first number you actually know on last point before I talk PayPal, a little bit subscriptions. In broad strokes, there's a couple ways to handle subscription type of services where someone signs up and they're getting charged over and over usually, usually monthly.

On one way is to Take the transaction, if this guy was signing up for a subscription, so like i subscribe, you could take the transaction and many slash most of the eecom shopping carts and or the payment gateways will handle recurring transactions for you. For example, we have subscribers to a service that are getting charged every month by our authorized net gateway on, I don't have the kind of controls that I wanted there. But for changing rates, or coupons or discounts, none of those things were easy, at least in the version we're using. But it was a way of getting into the subscription business relatively quickly. If the core of your business is subscriptions. There are on the market now, subscription platforms think of them as like e commerce platforms only really designed for the subscription business which as he grows has a very different set of accounting and cash and customer issues recurly one, our evaluation.

So we actually use this platform. It's gorgeous. It's fast. I've been very impressed with it. So far, I haven't found something I'm cranky about integrates with stripe, by the way. So if you wanted to take subscriptions, you could go get stripe, get recurly, maybe skip wufu and rock and roll and start subscribing.

And then these guys included just because they have a great name chatter getter. I believe it's a Midwest incubator company. They have Craig company culture, their documentation is funny and they're extremely open in how they work with their customer base. So I would look at a minimum at both of those. There are probably a dozen other subscription management platforms out there. This is not the last word subscription management.

The point I want to make is if subscriptions are your business don't try jury rigging it because It'll keep you from scaling over time. Last thing PayPal, PayPal was is the classic pivot in startup terms they didn't actually set out. They set out to actually let people exchange money from Palm pilots, if you remember those. But a bunch of people from this crazy website called eBay, kept using their online demo. I'm not making this up. And finally, the guys that eBay or PayPal said, um, maybe the business is over there on the web.

We just thought it was a demo after we wrote all this code for palms. Let's stop doing the wrong thing. And let's really focus on the web thing. And then eventually eBay bought them because eBay's own customers liked PayPal better. PayPal, essentially sits on top of your credit card, you can have a PayPal account for paying and not expose your credit card. I think that was one of the initial appeals was pay with your PayPal account.

They've now flipped that over, where you can accept money through PayPal, and either be paid by someone else's paypal account. Let's see if I can draw that picture for you. I'm not going to do this 100% justice, but it's an important option to know about and I'll tell you a couple reasons why in a second. So here's PayPal. And this guy says, I've got a payment, I've got a PayPal account, and I'm going to go to an e commerce site and I want to pay him with PayPal, so that they don't know what my card number is perfectly viable approach perfectly viable concern. PayPal usually gives the guy the option to pay out of his bank account as well.

If you're a PayPal for business, then PayPal actually provides the code and pieces for you to take this guy's money either PayPal or a credit card if he doesn't have a PayPal account. Stick it more or less directly in your bank, I believe it ends up leave, you end up with a credit card in the mix as well. On broad strokes, if you have the ability to accept credit cards, adding the ability to accept PayPal will probably add to the number of subscribers or transactions or yeses that you actually get. There are people who prefer PayPal and won't buy unless they have that option. Conversely, if PayPal is your only solution, and people see the logo that says PayPal, on your website, you'll lose a percentage of people because there are people I know that there are people who see the PayPal logo and go Ah, I don't have a PayPal account, and they close the browser and they run away.

They even though the little sign says you can use your credit card, people go really fast on the net and see PayPal and they'll assume they can't use And you'll lose some transaction. So from the math that I know of, and have seen and look at it on reports, both is good, you'll probably get most of your transactions on cards, and you'll pick up an extra percentage on PayPal, PayPal can handle recurring transactions, yada, yada, yada, do pay close attention to that extra pipeline. If you open it up, you may end up with money sitting in your PayPal account that you didn't know about. So that's the section on e commerce. The last thing I would say just to reiterate, if you can go with a turnkey solution, if you can go with a Shopify or a Volusion. If you're selling stuff, and it meets it meets the the stuff category of some of the specialty sites, you might go with, like if you were an artist, and you said I just want to sell my paintings or sculpture.

Go look at places that are more communities for that kind of activity, like NC They have most of the commerce mechanisms built right in, so you don't need to spell mid. And you probably don't need to know about filling the blanks, merchant bank accounts, business bank accounts, all of that other stuff on my working assumption is that a lot of people are going to fall in this sort of I'm selling things or services bucket, if you're going to need more heavy duty capability, you might look at more of the shopping cart solutions, the Magento is and so on. And if you're really lightweight, just a little bit of commerce interact, interaction, possibly wufu, possibly just a PayPal gateway, lots and lots of detail. As I said, this is an extremely complicated world, but it's gotten so much easier than it used to be. Don't let fear this.

Keep you from launching something and trying something. kick the tires on days. And if it doesn't work for your business, close it, close the subscription, and go try the next tier up or down. Good luck.