How Does an Online Shopping Cart Work?
By Andy Scherer
So far, in our online store series published this week, you have learned about tools and tricks of an online store as well as the benefits of building an online store either in conjunction with or separate of a physical location. As you probably can imagine, though, when consumers place a product order that desired product doesn't just magically appear at the customer's doorstep, right? Instead, there is a process that goes along with an online shopping cart purchase. Let's start from the beginning, and take a look at the steps involved:
- Creating the Customer -- First and foremost, once a visitor clicks onto your site, it is your job to ensure that they become a buyer. In order to accomplish this (as we discussed previously), you provide easy to find information and products, and user friendly shopping cart tools. Conversion is key so focus on cross promotion and content. This step is priority as you cannot move onto step 2 until you have visitor buy-in.
- Clicking on the Cart -- After you have converted the visitor into a buyer, they will transfer their desired products to their online shopping cart either through a click and drag feature, mini-cart feature, or full-page cart. Depending on the features of the cart the total amount due to the business will be tallied, the shipping will be calculated, and other information can potentially be displayed. In order to get people to step 3, you must be able to make the "checkout" button prominent within the cart or on the header of the site.
- Check Out with Their Check Book (or Credit Card or Electronic Money) -- When the client is done shopping on your site, they will click the "checkout" button (the one that is easy to find, right?) which will bring them to an order processing page or process. During this process, they will have the opportunity to choose a payment method of a cash model, check model, or credit model of payment*. A cash model is done via creating electronic money or tokens through a bank (similar to PayPal). The check model is where the client submits a virtual/digital check for payment. The credit model is where the customer inputs credit card information. Step 4 comes very simply when the customer clicks the "submit order" button.
- Translating the Transaction -- When the client submits the order, the information gets sent to the business instantly. The sent information generates a customer invoice which the consumer must then approve and confirm the final order. If a credit card or check is used for payment,the following happens: (1) The business then generates an authorization request for your credit card and sends it to their' bank. (2) Their bank sends the authorization to the acquiring service (internet merchant account provider) who gets the authorization from the customer's bank which (in turn) gets sent back to the business' bank and payment is made. Let's take a quick show of hands of who knew there was that much involved? Now, with PayPal (or similar service) there is a direct transaction to the business' bank.
- Direct or Indirect...That is the Question -- Now, if you, as the business, are a direct retailer once you get the payment you have the ability to organize the shipping and get the client the product. However, if you must order product through a vendor, you must place the order with the vendor who can either directly ship to the client or ship to you who then ships to the client. My suggestion, if you must go through a vendor is to have them directly ship to the client on behalf of your company.
Overall, it is not a difficult process from either the buyer's or seller's point of view, but the primary difference between an online store and a physical storefront is the process of shipping. Remember that conversion of your site visitors is key to increasing productivity, and capitalize on shopping cart features that ease the process of online shopping for your customers. And, as always, feel free to leave your comments and/or questions below! We'd love to help you figure out your online store and increase your online productivity today.
*An Internet Merchant Account is needed for credit card and check transactions
Wondering where to begin?