The Pieces
Website

* Hosting (where the website is “located”, who “runs” the website)
* Domain name (e.g. mybusiness.com)
* Security Certificate/Encryption – needed to take credit cards (or take credit cards offsite)

Credit Card Orders

* Gateway – takes credit card information from your site
* Merchant Account – a bank account

Issues
Cost

* Website
* Hosting for e-commerce – starts at around $20/month
* Domain Names: around $15/year
* Web Design/Development
* SSL Security Certificate: around $100/year
* Gateway/Merchant Account vs. PayPal
Gateway / Merchant Account typically charge between 2.2-2.5% for Visa and Mastercard, which is less than PayPal’s standard 2.9% rate.
A merchant acct is typically about $20/month (often waived if enough transaction fees), plus setup.
Payment gateways usually run $20-30/mo., plus setup and are more convenient, as well as usually
being better integrated with your website.
* Remember selling online can increase your sales!

Legal Compliance

* Privacy
* California Law requires a Privacy Policy
* Sales Tax – Required for in-state transactions usually only on products (includes any state where you have a “physical presence”)
* Terms of Use
* Disclaimer (of Liability)
* Vary by Jurisdiction (e.g. promotional contests could be considered gambling)
* Enforceable Online Contracts – vary by jurisdiction also
* MCM Web Solutions, LLC does not provide legal services or advice (this document is not to be considered either)

Fraud

* The merchant is legally liable for fraudulent orders placed on their site. This means that if someone fradulently orders a product or service from your website, you will likely lose the money or time you spent on filling that fradulent order.
* Fraud is about 1% of all Internet orders, that means the other 99% are legitimate
* Prevention
What you can do -
Don’t ship to PO Boxes
Match billing and shipping addresses
Don’t take orders from outside of the “developed” world (stick to N. America and W. Europe)

Theft of Intellectual Property

* Give notice of copyrights, trademarks, etc. on your website
* Registering them also helps in the event of legal battles such as domain name “squatting” (e.g. someone else registers a domain name with your company’s name)

Account Freezes

* If using PayPal, consider getting a separate bank account solely for PayPal use or at least avoid linking your sole bank account to PayPal as PayPal accounts can be frozen when charge backs (e.g. a purchaser tries to get a refund from his/her credit card issuer) occur.

Other Options for Selling Online

* Yahoo Storefronts
Downside: commissions (1.5%), monthly fees, lock-in
* Amazon
Downsides: commissions (6% or higher), only products (no services), lock-in Upside: exposure (also for eBay)
* eBay
Downside: Only products (no services, though this may change in the future), transaction/listing fees, lock-in