How to Set Up, Part 1

by Melissa Campanelli, March 27, 2006 Entrepreneur Magazine

So you want to set up an e-commerce site. While it may seem daunting at first, don't fret. The following is an overview of different ways to go about it. Simply pick the one that's right for you, and log on.

Going Solo
Many experts and entrepreneurs believe that building your own website is a no-brainer, thanks to the inexpensive, easy-to-use and sophisticated e-commerce services available.

"If you're a one- to two-person firm, [you have] someone on your staff [who] can design a website and you only sell a few products, there's no reason not to do it yourself, particularly with the out-of-the-box solutions available nowadays," says John Jantsch, a marketing coach, author and creator of the Duct Tape Marketing system for small businesses.

Jantsch, who lives in Kansas City, Missouri, built his site, www.ducttapemarketing.com, in 2001 and says you can create a robust site for less than $150 per month, plus a few hundred dollars for software. Popular tools include Microsoft's FrontPage, for $199, and Macromedia Dreamweaver 8, for $399.

After setting up your website, you'll need a shopping-cart software program or service so you can take orders, calculate shipping and sales tax, and send order notifications. This costs about $29 to $79 per month. The most popular options include GoEcart.com, 1Shoppingcart.comand ShopSite Inc.

Your next step should be to obtain an internet merchant account from your bank, allowing you to accept credit card payments online. If your bank turns you down, try others--and consider offering to move all your accounts to that bank to up your appeal. Or you can perform an online search for "credit card processing" to find a variety of companies offering accounts to budding online businesses.

You'll also need a payment gateway account, which is an online processor that hooks into both your customer's credit card account and your internet merchant account. The gateway verifies information, transfers requests and authorizes credit cards in real time. Leading providers to smaller merchants include Authorize.Net, CyberSourceand VeriSign.

An even less expensive way to get started accepting online payments is to use PayPal, an account-based system that lets anyone with an e-mail address securely send and receive online payments using a credit card or bank account. PayPal is free, but the company charges 2.9 percent plus 30 cents for every transaction under $3,000. The company also has a product called PayPal Website Payments Pro, which offers basic shopping-cart functionality and costs $20 per month plus transaction fees.

Of course, you still have to actually host your site. You can do it yourself on a computer that can be dedicated as a web server and that has a broadband internet connection, but such systems are costly and have limited capacities. Your other option: Use a web-hosting company. Many entrepreneurs swear by some of the bigger names in web hosting, such as Affinity Internet, Go Daddy Software, Hostway, Interland, iPower, Network Solutions, 1&1 Internet, Verioand Yahoo!. But some entrepreneurs prefer small, local hosting providers since they offer a direct contact--especially important if your site has an outage. Whether you use a large or small provider, basic hosting services--as well as domain-name registration and e-mail accounts--cost about $10 per month.

There's also a free option: Microsoft plans to launch a beta version of Microsoft Office Live early this year, providing small businesses with their own domain name, a website with 30MB storage, and five e-mail accounts, each with 2GB storage. Visit www.microsoft.com/office/officeliveto check for availability.