explain to me all of the steps involved in e-commerce?

December 11, 2003 11:09 AM

Can someone explain to me all of the steps involved in e-commerce? [more inside]

Here is the deal. I know that e-commerce involves a number of layers of security, site certificates, and the like - but I'm not sure how they go together, exactly.

I'm knowledgable in backend stuff, but haven't had to tackle this - until now. Assume I already have the product(s) I want to sell, but nothing else. No software, no site certificates, nothing.

Thanks in advance.

posted by hijinx to computers & internet (12 comments total)

In the general sense, you're going to need to build a couple sub-systems.

1. display the stuff you have for sale - probably easiest part
2. let people order something - meaning create a database backend to account for users, addresses, inventory, etc
3. record credit card info and process it - by far the hardest part as you'll need to store them securely and transmit info to a cc billing service and process results
4. fulfillment, if any - if you have to mail stuff out, you'll want to incorporate the website reports into whatever shipping system you have (which could be as simple as encrypted email sent to a guy in a warehouse).

But remember, there's not a lot of point in reinventing this wheel that has been invented hundreds of times. Look into existing packages as much as you can to save labor.
posted by mathowie at 11:28 AM on December 11, 2003

Not to spoil the great snark-free vibe we've got going here, but isn't there an about.com site that will cover this for you? What kind of luck have you had with the usual web searches on this question? I would think this is a question for which is there is plenty of easily available info already out there...

Is there a more specific question here that I'm missing?
posted by stupidsexyFlanders at 11:29 AM on December 11, 2003

A few questions to consider:

How do you wish to sell your product?
Do you intend to accept personal checks? Debit Cards? Domestic, Canadian and overseas money orders? Credit via banks, or escrow agencies, such as PayPal??

What's your return policy?
Are you planning to sell items which are covered via the manufacturer's warranty only? Will you charge a restocking fee? Can items be exchanged for credit, or only for identical items of equivalent value?

What's your privacy policy?
Will you require customers to complete an online form, or have them contact you via email for payment?
If forms are used, will the customer data be stored on the site server? If so, what sort of encryption will be used?
What sort of administrative rights will your staff/webhost/site designer be allowed to have - and will these rights affect the way orders are processed?

It's good to draw up as many of these questions as possible before even starting, as a number of less scrupulous "consultants" tend to gloss over these sort of details.
posted by Smart Dalek at 11:32 AM on December 11, 2003

Honestly you aren't going to find a single answer to your question, because there are many different possible answers at many different levels of detail, for many different kinds of configuration. Also, because your question is incredibly vague.

In simplest form, however, you'll have various components:

A web server which provides the site that customers will use to view, select, and purchase products. Most people use Apache for this purpose.

Another web server (or instance of a web server) which does much the same thing, but using an SSL connection between itself and the customer's browser. Again, Apache is the most common software.

An SSL certificate (typically purchased from a "certificate authority" such as Verisign) which establishes the identity of your web server and provides a context for key exchange with the customer's browser. This certificate file is installed on the secure web server. These cost a moderate amount of money.

An application environment (such as CGI, mod_perl, PHP, a Java servlet container like Tomcat to name just a fraction of the options) on those web servers which allows you to run the software that will run your site. Many of these are free, but there are some for which you could pay hundreds of thousands of dollars if you so wish.

Software for that application environment which manages the details of the transaction: a "shopping cart," credit card number verification, order tracking. Software of this type is plentiful and ranges from free downloadable scripts to custom-written projects costing millions.

A database server which stores information about your customers, the transactions, products, orders to fulfil, and such. Oracle is a good, though expensive, choice for a large installation. Other databases can be had for free, small fees, or licensing in the tens of thousands of dollars per CPU.

A merchant account with a credit card processor. Your bank can very likely provide this service, and often will provide some assistance in hooking your web site up to it.

Other components which might be helpful are a fulfillment system to help you manage and fulfil orders, control inventory, and potentially automate some of your shipping needs; as well as additional software for customer relationship management (handling returns, sales and support inquiries, et cetera).

Without knowing the scope of what you're trying to accomplish, it's difficult to tell you much more than the general outline of the components you'll use. If you're anticipating hundreds of thousands of orders per month, the system will look very different from one where you will be selling handmade pottery out of your garage.

If your operation is small enough, it's possible to almost entirely outsource the whole thing to an outfit like Yahoo Small Business.
posted by majick at 11:32 AM on December 11, 2003

My roommates use this service to power their ecomm site, and so far they've been very happy with it. Service provides hosting, secure certificate, access to credit card gateway, and a license to Miva Merchant shopping-cart software which you can either just link to an existing site or use to build a site from scratch. They've been very happy with it -- especially the live telephone help available 24/7.
{/advertisement}
posted by anastasiav at 11:53 AM on December 11, 2003

PS: Feel free to email me (my addr is on my profile) if you want more details about their evolution from zero to fairly profitable on-line-only business....
posted by anastasiav at 11:54 AM on December 11, 2003

Don't forget the basic invaluable things like having a business plan and forming a limited liability entity like an LLC.
posted by anathema at 12:31 PM on December 11, 2003

I guess that's actually beyond the scope of the question. I assume you have things like that worked out.
posted by anathema at 12:32 PM on December 11, 2003

Yep - it's an existing company.

Sorry about the vagueness of the original question; I'm basically starting from scratch. There's an existing system in place (which I don't understand, hence the question) but I've been asked to reevaluate it going forward.

I've done a few small-time PayPal things in the past, but this is a major system that will sell hundreds or thousands of items during a 3-4 month period. Also, there is no physical inventory, so that aspect is irrelevant.

I also did try a few Google searches, but the results were spammy. Besides, I wanted to give Ask a real shot. majick and mathowie, your answers helped immensely - thank you.
posted by hijinx at 12:42 PM on December 11, 2003

What kind of luck have you had with the usual web searches on this question? I would think this is a question for which is there is plenty of easily available info already out there...

I'm sure there is, but sometimes an overabundance of information only leaves you wondering "is there anything more? do I have it all?"

I frequently find myself wishing for one succint summary of everything I need to know, all in one place, even if it doesn't have supporting detail, just so I know I've got my bases covered before I dive in.

hijinx - I think the main two ecommerce things you're probably not familiar with are:

1) The certificate you will need to be able to do secure transactions (SSL, etc) with your customers. From what I understand you license this from Verisign, install it on the server end, and it simply verifies that you are who you say you are when you say who you are.

2) A merchant account for accepting incoming payments by credit card. Go to a bank for this.

The rest is simply operating the website and fulfilling orders. You can do that with or without a database, custom domain name, animated GIFs, whatever, depending on your specific situation, but to perform online sales, without going to a turnkey solution, you need the two things above.

I highly suggest checking out some turnkey solutions if possible. http://stores.yahoo.com is an example.
posted by scarabic at 3:49 PM on December 11, 2003

If you want to run your own software, I can't speak highly enough of the open source package osCommerce. If you know a bit of php, it's incredibly flexible, and if you know nothing of php, it's still right nice. (The flexibility/ease of MovableType is a good analogy.) I'm using a customized version for my farming cooperative, and I see it used by online stores all over the web.
posted by ewagoner at 6:05 PM on December 11, 2003

I don't know what software you're using but a very good reference on the technical and a bit on the practical end of things is PHP and MySQL web development. The examples in the book are all e-commerce. The book covers certs, security, etc. PHP and MySQL are free software, so you can play with them at home.
posted by skallas at 6:31 PM on December 11, 2003