In our first “Beginner’s Guide” post we explored essential front-end considerations for selling online, building your platform, search engine optimization, measuring performance and owning the results. The operational, “under-the-hood” part of e-commerce can be daunting and just plain boring for High Energy Creatives or, you know, most humans. But it is essential for your customers to receive what they’ve ordered, get support when required and, of course, for you to Get Paid. So we’ll keep it clean and simple, and have you back plotting world domination in no time. Let’s jump in…
Credit card processing fees, chargebacks, minimums, reserves — get to know the game, playa. It is the only way to Get Paid. Here’s the quick and dirty executive overview about e-commerce payment options…
Payment Gateway: When customers input their credit card numbers for payment, the request needs to be encrypted and securely transmitted across the internet to the credit card company and issuing bank, screened for fraud, and then authorized or declined — all in the space of 2-3 seconds. Payment gateways like Authorize.net and Cybersource are the secure vehicle for moving this sensitive information between any number of financial institutions. Dip into the nitty gritty about payment gateways here.
Payment Processor: While the payment gateway acts as an information superhighway traffic cop, the Payment Processor does the real work. They check the credit card details with the issuing bank, screen for fraud, and ultimately authorize or decline the transaction.
To summarize: you’ll need to get connected before the money can be collected.
(Warning: the above is an over-simplified explanation of mission-critical financial services. Work with professionals who understand the nuances of your particular business, and who can help select and set up the best payment solution.)
The last word on payments: always offer your customers more than one payment option — credit cards and Paypal are a perfect 1-2 punch for selling online.
The payment has been authorized, now the order needs to be transmitted to your warehouse for fulfillment, invoiced, and logged into your accounting software. Take the proper amount of time to think through the entire workflow, and budget for resources that will allow you to continually optimize it. Lost orders, missed shipments and blank ledger entries can consume hours of frustrated ulcer development that are better spent on business development.
Pick fees, storage fees, weight penalties, postage and freight (inbound and outbound) — these are just a few of the costs associated with getting physical products to your customers (if your offer is for a service or digital app/software/file that is simply downloaded — lucky you). Even if you are bagging and tagging from your garage, be sure to account for the entire spectrum of fulfillment in your cost-to-serve calculations to maximize profitability.
Your customers need it. You’ll learn a ton and build a better business around selling online. At the very least customers need an easy way to request more information, be guided through checkout, complain when something’s gone wrong and high-five you when it’s gone right. Email is good to start. As the business grows, you’ll want an efficient ticketing system to keep track of everyone, monitor trends, and send tailored auto-responses that let customers know you care. Zendesk is among the best, most comprehensive do-it-yourself services available. Offering an 800 phone number is also highly recommended. If you are boot-strapping and need it done on the cheap, check out ODesk for customer service professionals who can take calls (yes, my technerdphile friends, some still prefer to communicate with a human).
ALSO, customer service can be transformed into a profit center in and of itself — through recommendations, referrals, and offers that turn angry callers into enthusiastic customers (more on this in a future post).
It is important to recognize that sub-standard operational processes can drain profitability from your business battery very quickly. Take the time and allocate appropriate resources to tune your e-commerce engine and keep it humming.