Ordering System Software

At the core of shopping cart software is the ordering system, the functions that make it possible to purchase a product online -- product selection, tax calculation, shipping selection and calculation, personal and credit card information entry form, real-time credit card approval (in most cases), and order confirmation. We'll talk about each of these in detail in a future article. Together they provide the core sales order function.

There are some shopping cart systems that provide only this basic function. Typically, they help you create an order button for each product, which you paste onto the product pages of your website. Then, when customers click on the order button, they are taken to the order system on the vendor's site where the transaction conducted. When the order is complete, your customer is sent back to your site.

Examples of stand-alone ordering systems are as follows (though I can only list a few examples among dozens of vendors).

• PayPal Website Payments Standard. An excellent payment system and payment gateway, with a simple shopping cart. Doesn't require a separate merchant credit card account.
• Americart Shopping Cart Service. A flexible ordering system that requires you to have both a merchant account and a payment gateway.
• 1ShoppingCart. A multi-use tool designed for small businesses that provides a shopping cart, digital delivery system, ad tracking, and an affiliate program. Requires a merchant account and payment gateway.
• 2Checkout (2CO). An ordering system for digital products and services for those who have difficulty getting a merchant account. Includes a payment gateway.
• Google Checkout. Allows merchants to sell online without taking credit cards themselves. Google handles the transaction and the payment gateway.

Store-Building Software

For sales of only a few products, an order system type of cart can work quite well. But if you have dozens, hundreds, or thousands of products, you'll need a store-building system to manage the complexity.

Store building software combines all the order system functions described above with those of a content management system (CMS). Another term for this is online catalog management software. Not only does it handle the products, prices, tax calculation, shipping calculation, etc. It also creates and manages the website and product pages where your customers will shop -- not only prices, but the entire look and feel of your store. Pages are based on templates -- either standard templates that come with the store or templates specifically designed exclusively for your store.

Any store with hundreds of products will have constant changes in prices, new models of existing products, sales and promotions, coupons, featured products, etc. Store-building software allows you to manage the entire store from a single web interface. Alternatively, store owners can make changes to a product database on their desktop computer, then upload the new database to the online store, which will cause the changes to be reflected online.

With all store-building software you'll need to select one or more payment systems -- ways to receive credit cards. Though you can use PayPal, Google Checkout, or 2Checkout, many store owners will get their own merchant credit card accounts and payment gateways.

There literally hundreds of examples of store-building shopping cart software on the market these days -- so many that it's difficult to keep up. Some of the better known examples of this software include the following:

• ShopSite produces search-engine-friendly product pages. I use it myself and, in earlier days, built many stores within this system. It comes in three versions: ShopSite Starter, ShopSite Manager, and ShopSite Pro. LexiConn specializes in web hosting for ShopSite stores.
• Yahoo! Merchant Services is another veteran e-commerce platform with a wide variety of features. With Yahoo! you pay a monthly fee plus a 0.75% to 1.5% transaction fee. But you won't need a payment gateway -- it's built in.
• Miva Merchant is a third veteran. It is offered by many hosting services and can handle a great many products.
• osCommerce is an open source PHP/MySQL e-commerce solution, widely used because it's free and powerful, though somewhat buggy. A couple of better-supported spin-offs include CRE Loaded and Zen Cart.

There are many good store-building carts, but there's no way to be comprehensive in this article.

Specialized E-Commerce Software

So far I've mentioned general purpose online store software. But there are two types of specialized e-commerce software I should mention: B2B e-commerce software and membership site software.

B2B Sales. Most off-the-shelf e-commerce software is built for retail sales. But business-to-business sales require a couple of features missing in some shopping carts:

• Customer accounts. B2B software provides for an account for each customer with password protected access. The backend will show order history, status of orders, etc. It may even allow for repeat orders based on previous transactions.
• Customer pricing. B2B software also allows pricing to be controlled for each customer or pricing tier, depending upon pre-negotiated agreements. Thus, depending upon the customer's status, upon logging in, the pricing shown might reflect 20% off list, 30% off, 40% off, etc.

Several of the better store-building software packages include such features. If you want software written specifically for a B2B environment, however, you'll need to be ready to pay higher prices.

Membership Sites. A second common kind of specialized software is for membership or subscription sites. You might pay for a one-week or one-year membership or anything in-between, which offers access to games, photos, an online community, etc. A good example of this kind of software is AMember, which is written in PHP with a MySQL database.

Hosted vs. Licensed Software

As we conclude our overview of e-commerce software, we need to consider the pros and cons of the two types of software offered: hosted and licensed.

Hosted or "Software as a Service" (SaaS). In this case, the software program -- and all your store data -- resides on the software vendor's site. You pay a monthly fee, usually based on how many products you have for sale (or sometimes based on your monthly sales revenue). The big advantage here is that the vendor takes care of all the technical details of hosting and providing security. E-commerce software from the better vendors is constantly being improved and those improvements and new features are automatically available in your software. No uploading of updates and then trying to get things working again is necessary. The advantage to the vendor is a continuous source of revenue that enables the company to upgrade and improve its software.

Licensed Software. The other alternative is to license software that will be installed on a webserver that you lease from a hosting service. The big advantages are price and control. You pay a one-time fee to license the software, which will probably include updates for the first year. You'll probably pay an annual upgrade fee so you can receive updates as they become available. You have greater control over your online store and may be able to alter the program code to meet particular needs of your business. But along with the control comes responsibility. When problems occur or security holes are identified, you are responsible to make the fixes, upload the updates, and keep it all working. What's more, less revenue to the vendor may prevent the continual programming required for upgrades and fixes.

There is no one best approach here. Both hosted and licensed approaches have advantages and disadvantages, but I thought you'd want to know some of the issues involved.

That's the quick overview. In future articles we'll dig deeper into features you're likely to find -- and features you may decide you need in the next version of your online store.