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E-Commerce and Magazines: Programs and Ideas that Work presented by: David Strom Port Washington NY USA [email protected], +1 (516) 944-3407 What This Course is Not About Mathematics of Public Key Cryptography

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E commerce and magazines programs and ideas that work l.jpg

E-Commerce and Magazines: Programs and Ideas that Work

presented by:

David Strom

Port Washington NY USA

[email protected], +1 (516) 944-3407

Strom MPA NY 12/00

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What This Course is Not About

  • Mathematics of Public Key Cryptography

  • In-depth discussion of Visa® and MasterCard® operating regulations for eCommerce

  • Legal advice for eCommerce issues related to operating a web storefront

  • Writing your own storefront systems from scratch

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Why This Tutorial

  • A successful magazine must incorporate and coordinate print and web editions

  • Any web site will eventually get involved in selling something online

  • Good storefront design and tactics will increase sales

  • Tough to evaluate various payment systems and products

  • Tough to stay on top of current eCommerce technologies and still run your publication!

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For Future Reference

  • Copy of this presentation (Powerpoint), links to sites and resources: www.strom.com/pubwork/ecommerce

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Course Topics

  • Good and bad web storefront design, defining successful and secure eCommerce ventures

  • What are the things a magazine person should know about eCommerce and web publishing?

  • Overview of working Internet payment systems

  • Choosing service providers or suites

  • Installing and operating your own magazine web site

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Course Approach

  • Overview of major payment systems and storefront products

  • Give real-life examples and online demos

  • Help relate information to your own situation

  • Provide insight into different approaches, technologies

  • Discuss pros and cons of each

  • Multiple Q&A sessions

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Recommended Books

  • Magdalena Yesil's Creating the Virtual Store : Taking Your Web Site from Browsing to Buying (1997)

  • Dan and Emma Minoli's Web Commerce Technology Handbook (1998)

  • Phil Greenspun's Database Backed Web Sites

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  • Marshall Rose

  • Stephanie Denny

  • … for their help in preparing this presentation

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My Background

  • I’ve been involved in the Internet for some time

  • Have used most of the products we demonstrate

  • Have consulted to a few of the vendors, but still have strong opinions

  • Founding editor-in-chief of Network Computing magazine

  • Built several hi-tech publishing web sites

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My Beliefs

  • My perspective is from the consumer’s viewpoint, as well as from the publisher’s

  • I believe that coordinating print and web is a natural evolutionary step for magazines

  • Most eCommerce has had accidental success to date

  • The web is a very different animal from print!

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Topic 1: Introduction to Internet Marketing

  • Advantages and disadvantages

  • Speed of adoption is immense!

  • Different kinds of approaches

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Internet Marketing

  • Look good to the public,

    • be on the cutting edge

  • Supplement traditional channels,

    • be real-time

  • Focus on global niches,

    • be high-content

  • Avoid the trailing edge,

    • the competition is already doing it

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  • Direct, one-to-one marketing opportunity

  • Allows you to learn useful information and build subscriber relationships

  • Relatively inexpensive medium compared to advertising, direct mail or telemarketing

  • Capacity to be a major distribution channel

  • Results are measurable, sometimes

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Internet is Cheapest Cost Per Contact

  • Internet: $.98

  • Direct mail: $1.68

  • Telemarketing: $31.16

  • Tradeshows: $162.00

    Penton Research, www.penton.com, 11/97

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Obstacles to Wide Deployment

  • Easy forms of payment

  • Trust in the system

  • Perceived benefits and profits

  • Technology and infrastructure still primitive

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What can go wrong on the Internet

  • Store is offline

  • Overall lax security with ConEd bills

  • Visitors steal your subscriber lists and other privacy glitches

  • Credit card fraud

  • Shopping cart hacks

  • Stealing your domain name

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General security practices

  • Make sure you protect your web site!

  • See “Ten ways” article from Winn Schwartau

  • Limit access, isolate servers, lock down scripts, so forth

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Accidental downloads

  • Ikea hack

  • Others such as Nissan, DeBeers, Butterball

  • Even Amazon’s affiliate email addresses were briefly exposed!

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Other notable privacy mistakes

  • Real Networks collecting user song playlists

  • Amazon.com displaying book buying habits of corporations

  • Infobeat sending email addresses to their advertisers

  • This can happen to you!

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What Went Wrong

  • All collected key information without their customer’s knowledge or approval

  • All were leading edge companies that should have known better

  • All quickly corrected their mistakes and informed the public

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Some Lessons Learned

  • Consumer control of privacy is essential

    • most folks simply want the choice of opting out

  • The granularity of control must be fine, e.g.,

    • over number and frequency;

    • over categories of interests; and/or

    • over (indirect) dissemination to third-parties

  • If you promise privacy protection, make sure you actually deliver it throughout your site!

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Preventing Credit Card Fraud

  • Don't accept orders unless full address and phone number present

  • Be wary of different "bill to" and "ship to" addresses

  • Be careful with orders from free email services

  • Be wary of orders that are larger than typical amount

  • Pay extra attention to international orders

  • When in doubt, call the customer to confirm the order

  • Use software or services to fight fraud

  • When you’ve found fraud, contact your merchant bank immediately

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Be Aware of Shopping Cart Hijacking

  • Example

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Stealing your domain name

  • Typo.net and AmericaOffline.com

  • Both sell ad space for things like:

    • amazom.com

    • www.eartlink.net

  • acivilaction.com vs civil-action.com

  • whitehouse.gov vs. whitehouse.com

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Dealing With Rogue Domains

  • bestbuys.com vs bestbuy.com

  • United Airlines vs untied.com

  • Use same colors, try to go after same audience

  • Lawyers are standing by to take your call…

  • Use various tools to track down offenders:

    • companysleuth.com

    • dejanews.com

    • whois.userland.com

    • bannerstake.com

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And The New Domain Suffixes

  • Seven new ones approved to begin this spring:

    • .biz, .pro, .coop, .museum, .aero, .info, .name

  • Others are certainly on their way

  • New registrars and new procedures to make things more complex

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Topic 2: What Becomes Success?

  • Overview of eCommerce market

  • Review physical storefront success factors

  • Propose some definitions

  • Define success for the web

  • Draw up eCommerce principles

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Let’s Keep Our Perspective

  • Size of US movie industry -- $7B!

  • Size of adult video rentals - $6B!

  • Total US music sales -- $6B!

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  • Started 11/96

  • US$20 million/month via the web in sales

  • Ten percent of total sales via the web

  • Generating lots of new single ticket buyers, people who don’t like to order via the phone

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Then there is Disney.com

  • Web site Daily Blast signing up 15k members/month

  • Sales via web are equal to 3x-5x of physical Disney store!

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Sad State of Today’s eCommerce Marketplace

  • Poor quality tools

  • Hard-to-find stores

  • Limited payment methods

  • Credit card snooping perceptions

  • Older browser versions can’t view latest sites

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Case in Point: Buying a Bike Rack

  • Item not carried: outdated catalog

  • Telesales not familiar with web

  • No cross-sell or substitutions online

  • Needed three phone calls to complete purchase

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Compare Moviefone vs. BAM

  • BAM web site doesn’t carry event information in real time

  • BAM orders are fulfilled weeks later, and no indication on web site of sold-out events

  • MF: Real time ordering, easy navigation via web and phone

  • MF: no surcharge on tix, no waiting in long ticket lines!

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Let’s Learn From the “Real World”

  • Compare what works for physical stores

  • Try to extend to the web

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Critical Success Factors for Physical Storefronts

  • Location

  • Branding

  • Good service

  • Good product selection

  • Proper pricing and margins

  • Traffic

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First Problem:

  • None of these translate on the ‘net!

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Now Try to Agree on Definitions for Web Stores

  • What determines a good location?

    • Position on a search page

    • Nearness to popular destination

    • Ad on a popular server

  • What determines branding?

    • Memorable domain name

    • Popular search category destination

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An Example of bad location: Montana Meats

  • Link

  • Can’t they afford their own domain name?

  • “/~” is BAD NEWS!

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Determining Traffic

  • Hard to do -- is it hits, page views, registered users?

  • [HITS = How Idiots Track Success]

  • Hard to measure -- do you count gifs? Use log files?

  • No general agreement on any metrics!

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Traditional Advertising Doesn’t Apply Anymore

  • Can’t measure anything

  • Every site has its own banner sizes

  • The Web is not TV

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One Working Definition of Success:


  • If a site is still running after 12 months, and getting more traffic, it is a success.

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Does a site actually have to sell something?

  • Many actual eCommerce sites don’t do the complete transaction

  • Require faxes or telephone calls!

  • Some merely have catalogs

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Principles of Good eCommerce

  • Easy to find merchandize

  • Good service

  • Individual customization is key

  • Simple navigation

  • Make payments easy

  • Make buyer feel transaction is secure

  • Communicate effectively and frequently

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Danish eShopper Survey (2/99)

  • Why people shop on the web

  • Convenience and ease of use are the main reasons people buy

  • After you have deliberately looked for information about a product or service, how often do you buy it? Almost always, only 2%!

  • Only 5% of their visits to eCommerce sites are to buy!

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First Principle of eCommerce:

  • Make it easy to buy!

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  • Services frequent readers with a variety of programs

    • Editorial comments

    • If you liked this book, you’ll like...

    • Notification of new books by author, topic

    • Simplified “1-Click” ordering

  • Uses simple pages and email

  • Associates program for commission kickbacks

  • Gift certificates via email

  • And ... lots of books, toys, electronics, etc. to choose from

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Use Affiliates Programs Wisely

  • They bring traffic to your doorstep

  • Nice revenue sharing model

  • Lots of them to choose from to model your own on:

    • AssociatePrograms.com

    • Refer-it.com

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A Different Take on Affiliates: ClickRewards

  • Pays you in airline miles for your patronage

  • Accrue miles on many sites

  • You redeem benefits on their site

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Amazon vs Borders

  • Borders link

  • Cookies vs logins

  • Who makes it easier to buy books?

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Update your directories!

  • This one is two plus years old

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Another Side of Service: Repeat Business

  • Make the shopper feel part of the family

  • Shopping as entertainment (online auctions)

  • “Do what I mean” search function (Amazon again looks at common misspellings made in the previous 24 hours for book searches)

  • Periodic targeted email updates and reminders

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Second principle:

  • Deliver solid service!

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  • Customize your music tastes

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Third principle:

  • Individual customization is key

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Consumer Reports

  • Finding out what you get when you buy their new car pricing service

  • Just a few clicks from the home page!

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Fourth principle:

  • Make navigation simple

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How NOT to Design a Payment Screen

  • Too confusing

  • Still have to enter credit card numbers, just in an unfamiliar way

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Common mistakes with payments

  • Provide too few or too many order confirmation pages

  • Confusing methods and misplaced buttons on order page

  • Make it hard for customers to buy things

  • Don’t make your customers read error screens

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Here is a good example: Hearst’s publications

  • Let’s use Cosmo

  • Notice how the discount is highlighted

  • Simple navigation and online ordering

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Fifth principle:

  • Make payments easy!

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Making the Buyer Feel Secure: the Six Components of eCommerce Trust

  • Seals of approval, logos of credit card companies

  • Identifiable brand name

  • Ease of navigation

  • Order fulfillment easy to understand

  • Clear purpose and site presentation

  • Fast and simple technology

    (Cheskin Research)

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Perceptions of Credit Card Snooping Still Exist eCommerce Trust

  • But are largely popularized by media, not consumers!

  • Internet fraud stories are still common from both buyer and seller sides

  • Just starting to see authentication services (such as Cybersource) ramp up

  • Trust will take a long time

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Sixth principle: eCommerce Trust

  • Make the buyer feel secure!

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How Should You Use Email? eCommerce Trust

  • When to communicate?

  • What to communicate?

  • When is email helpful and when is it spam and annoying?

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Email Uses in eCommerce eCommerce Trust

  • Sending order acknowledgement

  • Sending shipping notification

  • Purchase receipt

  • Telling customer when item is in stock or on sale

  • Responding to specific queries about service issues

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Email Receipts Should Contain the Following Items eCommerce Trust

  • Total price, including shipping

  • Your address and the store’s

  • Items ordered

  • Whether they are in stock or not

  • When they shipped

  • Bonus: order number and URL to view this info online, link to UPS/Fedex tracking system

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When to Send a Customer Email? eCommerce Trust

  • To acknowledge the order was placed

  • To say items shipped (or not ) and money changes hands

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Seventh principle: eCommerce Trust

  • Communicate effectively and frequently!

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Communicate Effectively and Frequently eCommerce Trust

  • Get your response systems in place

  • Tie in your storefront with any existing customer relationship management tools and call centers

  • Send replies within an hour of initial order, within 24 hours of any query

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Topic 3: eCommerce for Magazine Publishers and Editors eCommerce Trust

  • Using email effectively

  • Coordinating web and print content

  • Charging for content

  • Handling subscriptions online

  • Advertising choices

  • Marketing partnerships

  • Staffing considerations

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Using email effectively eCommerce Trust

  • Newsletters as subscription builders

  • Sending out notification of new issues or specials

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Bad newsletter example: eCommerce TrustNetwork World

  • Too many, too confusing

  • Opt-out message confusing as well: Should read Please check here if you WANT to receive these messages

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Good newsletter example: eCommerce TrustTidBITS

  • Easily searchable and complete archives

  • Coordinated email/web publishing schedule

  • Sponsors clearly delineated in both email and web pubs

  • Multiple languages

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Coordinating web and print content eCommerce Trust

  • Mistakes I’ve made in the past

  • The web is not a book

  • Contests and interactive gee-gaws

  • Hire the right ME

  • Issues to consider

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Mistakes on ICS ( eCommerce Trustwww.intranet-build.com)

  • Had different graphic artists for print and web, ended up doing graphics twice

  • Had web team inexperienced in publishing industry

  • Lack of overall coordination, no one really in charge

  • Print deadlines drove web content, rather than the other way around

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ICS design flaws eCommerce Trust

  • Print was 4 serial editions, web static

  • Articles mainly reference works and too long for the web

  • Lame email newsletter to drive repeat traffic

  • Too many ad spots cluttered the page

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Some wit and wisdom from Norm eCommerce Trust

  • “We still haven't found a way to put a magazine on the Web.” Norman Pearlstine, editor in chief, Time magazine.

  • CNNSI has taken off, yet “I'm not convinced that charging subscriptions wouldn't result in the site falling apart.”

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The web is not a book eCommerce Trust

  • People don’t like to read from a screen

  • People are more impatient over 28.8 modems

  • Navigating online is still harder than turning pages

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Don’t get too attracted to technology eCommerce Trust

  • Frames suck

  • The fewer graphics the better

  • The more complex your pages, the more limited your audience

  • The more dynamic your site, the less can be indexed by a search engine

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Interactive is a dirty word eCommerce Trust

  • Visitors aren’t interested in video games

  • They take too much time and technology to do right

  • Develop simple contests that play off registrations

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Understand your audience eCommerce Trust

  • What pages are popular?

  • What inbound links produce visitors?

  • How long are they at your site and where do they go?

  • What browsers do they use and where do they come from?

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Complement your print publication eCommerce Trust

  • Don’t worry about “giving away the store”

  • Match content delivery with newsstand availability

  • Have search button right up front and on top

  • Put lots of navigation aids everywhere

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Issues eCommerce Trust

  • Does your audience first see something on the web or in print?

    • how do you display URLs and cross-reference?

  • Should the web edition be a reference work or stand on its own?

    • reading from the screen is slower than from the printed page!

  • How easy is it to update your own content?

    • keep archives of the past, even if out of date?

  • Are web and print editions enemies or bedfellows?

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Content management tools eCommerce Trust

  • Vignette, Broadvision, Allaire Spectra, RunTime, Fatwire

  • All are complex software tools that enable you to stage, edit, approve, and manage your web content

  • Need many skills to develop and operate properly

  • Six-figures fees common

  • First understand overall eCommerce picture before purchasing

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Charging for content eCommerce Trust

  • Subscribers vs. visitors?

  • Free vs. paid portions of the site

  • Require registrations on portions of the site

  • How not to do it: Infoworld, which had two separate servers (free and paid)

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Think carefully about advertising eCommerce Trust

  • What you promise may not be what you deliver

  • Who really clicks on ad banners anyway?

  • Sell sponsorships like Forbes ($275,000 each)

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Handling subscriptions online eCommerce Trust

  • Can you sub provider work with online additions/changes?

  • Do you have the infrastructure to do this well?

  • Do you already have an Internet payment mechanism in place?

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Advertising presentation choices eCommerce Trust

  • Zdnet – sliding advertising window

  • Geocities’ annoying logo at the bottom of screen

  • TheStreet.com online ad kit

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Another bad ad idea: Cue Cat eCommerce Trust

  • Wired magazine, others

  • Special device that is connected to a PC

  • Scans ads so users don’t have to type in URLs

  • Why would anyone want to use this?

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Marketing partnerships eCommerce Trust

  • How to separate edit from sales cleanly

  • What are you selling and how do you sell it online?

  • Who’s idea is this, anyway?

  • Hearst is queen here

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Staffing considerations – the new help wanted ads eCommerce Trust

  • Wanted: Webmaster

  • Required skills: High proficiency in various web based programming, development tools, CGI, cookies, DNS, eCommerce, FTP, HTML 2.0 through 3.02, IIS Server admin, Javascript, Java, MS SQL, Netscape server admin, NT Server admin, perl, Unix admin, web security

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You Need to be a Superhero: eCommerce Trust

  • Part web designer

  • Internet technologist

  • SQL database admin

  • Payment system maven

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Hire the right web ME eCommerce Trust

  • Who can make the trains run

  • Who knows enough HTML to be dangerous

  • Who comes from publishing

  • Who can coordinate with print counterparts

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Things You’ll Need to Discover eCommerce Trust

  • Are your sales and marketing staff web-savvy?

  • Is your accounting system adaptable to web purchases?

  • How do you reconcile web accounts with your existing financial systems?

  • Does your business owner understand Internet culture?

  • Can anyone find you on the Internet?

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Software requirements can get odious eCommerce Trust

  • Content management server

  • Ad banner server (incl. with Website Pro, MS Commerce)

  • Audio/video content servers (Real Server, Enliven ads, etc.)

  • Clickstream analysis software

  • Ad networks (DoubleClick)

  • Affiliate networks

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The Most Under-rated Skill: eCommerce Trust


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Topic 4: How to get paid over the Internet eCommerce Trust

  • Different devices

    • Credit Cards

    • Electronic Wallets

    • 1-Click and other technologies

  • Setting up a merchant account

  • Privacy and security issues

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Payment Basics eCommerce Trust




Access Point


Access Point


• deposit & withdrawal

• transaction status inquiry

• authentication

• problem resolution



• purchase & refund

• transaction status inquiry

• authentication

• problem resolution

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Hierarchy eCommerce Trust

  • Payment System (clearing house)

    • Clearing house between acquirers and issuers

  • Acquirer (third-party processor)

    • Authorizes, processes and settles for merchant bank

  • Merchant Bank

    • Accepts merchant deposit

  • Merchant

    • Accepts authorized cardholder transaction

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Difference Payment Pieces eCommerce Trust

  • System: provides processing and settlement of transactions

  • Gateway: software/services to support eCommerce merchants, acquirers

  • Device: initiates transaction from credit/debit card

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Attributes of Superior Payment Systems eCommerce Trust

  • Universal, world-wide acceptance

  • Recognized value

  • Reliability of transactions

  • Ease of use to customer

  • Capacity for quick settlement and collection

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Requirements eCommerce Trust

  • Mass appeal

  • Easy payment by the customer

  • Have acceptable risk to bank and merchant

  • Accommodate changes, cancellations and returns

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Let’s Consider the Customer eCommerce Trust

  • Changes the order

  • Doesn’t fill out all fields even when asked

  • Mistype credit card and other data

  • Cancels order entirely or never finishes order process

Strom MPA NY 12/00

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Objectives in Offering Payment Choices eCommerce Trust

  • Customers like choices, but remember: they are here to buy stuff!

  • Make it safe for everyone involved: customer, merchant, and banks

  • Consider how easy it is for your customer to use, not just how easy it is for you to manage

  • Payments in a virtual world should imitate those in the real world

Strom MPA NY 12/00

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Properties of payment technologies eCommerce Trust

  • How much software does the buyer need to install?

    • Does it come with the desktop operating system?

    • Does it come with the browser or other software?

  • What third-party clearinghouse is used?

    • Provide trusted relationships

    • Reduce risk, complexity in processing

Strom MPA NY 12/00

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The Way Things are on the Web Today eCommerce Trust

  • Some payments are authorized off-line, through traditional POS terminals

    • E-mail message to customer later (hopefully), confirming order and shipping information

  • Many merchant servers connect with payment authorization systems

    • Authorization is real-time during the web session, and the sale is completed with secure server and browser software

Strom MPA NY 12/00

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The Way Things are on the Web Today: Secure and Un-Secure eCommerce Trust

  • Secure transactions via secure browsers and servers with SSL

  • Un-secure transactions with lack of proper encryption (account numbers sent “in the clear”) via e-mail messages

  • Un-secure transactions due to “export” versions of browser and/or server software

Strom MPA NY 12/00

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The Way Things are on the Web Today eCommerce Trust

  • Secure transactions do not guarantee the validity of the customer account information

    • A high percentage of credit charge-backs for MO/TO transactions are for “merchandise not received”

    • Address verification services can help protect you, and in some cases are required

Strom MPA NY 12/00

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Online eCommerce Trust



Different Ways to Capture Customer

Strom MPA NY 12/00

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Online Capture eCommerce Trust

  • Happens simultaneously with authorization of transaction

  • Fastest method of capture for online merchants who can guarantee same-day shipment of goods

Strom MPA NY 12/00

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Post-Authorization Capture eCommerce Trust

  • Capture is a separate step from authorization of transaction; post-auth message instructs bank to capture transaction

  • Example of use is for delayed shipping of merchandise

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Batch Capture eCommerce Trust

  • Transactions are captured in a batch mode after authorization (like post-auth capture)

  • Multiple authorizations are submitted at one time for capture

  • The batch is transmitted through gateway (CyberCash) to the bank for funds transfer and merchant account reconciliation

Strom MPA NY 12/00

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First, Remember the Old Payment Providers? eCommerce Trust

  • Digicash

  • Cybercash (first generation)

  • First Virtual

  • Mondex

  • GlobeID

Strom MPA NY 12/00

Why didn t they work l.jpg

Too complex to implement eCommerce Trust

Too much cumbersome infrastructure

Not too many stores took their kind of money

Too many other technical challenges

Solved the wrong problem first (credit card snooping)

Why Didn’t They Work?

Strom MPA NY 12/00

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SSL Credit cards eCommerce Trust


Cybercash and other payment gateways

1-Click service providers

Monthly bill delivery add-ons

Peer-to-peer payments

One-time credit cards

So What Payment Instrument to Use?

Strom MPA NY 12/00

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Credit cards, debit cards eCommerce Trust

  • JCB, Visa, MasterCard, Discover, American Express

  • Buyer gets card from issuing bank

  • Merchant is sponsored by acquiring bank

  • Merchant knows buyer and authorizes payment

Strom MPA NY 12/00

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How Credit Cards Work eCommerce Trust

  • Transactions authorized against customer’s line of credit at issuer (promise to pay)

  • At point of settlement, cardholder’s account is charged and merchant’s account is credited

  • Transactions subject to chargeback to merchant under certain conditions

    • Lack of proper authorization

    • Lack of proper identification / address verification

Strom MPA NY 12/00

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S-HTTP/SSL Features eCommerce Trust

  • Supply 16+4 in encrypted form

  • Require merchant to have a cert signed by a trusted third-party

  • Requirement of client-side cert is a trade-off:

    • yes: buyer must “register” before making purchase (S-HTTP, SSLv3); or,

    • no: no assurance as to buyer’s identity (SSL)

  • Merchant site becomes a credit card repository

Strom MPA NY 12/00

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What About eWallets and SET? eCommerce Trust

  • IBM Consumer Wallet (both SET and ECML, $50,000!)

  • GlobeSET (SET now, server-side non-SET later)

  • Transactor/Citibank Wallet (Jscript bookmark, gone)

  • eWallet.com (only SSL, now Entrypoint/Infogate)

  • Microsoft Wallet (in Win98, IE 4.01) (both SSL and SET, evolved into Passport)

  • Brodia/ECML

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What’s in an eWallet? eCommerce Trust

  • Credit card accounts

  • Debit card accounts

  • Checking accounts

Strom MPA NY 12/00

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All of These Have in Common eCommerce Trust

  • Access to your accounts

  • Credit card and other account numbers are stored by the service provider in a database, or on your hard disk

  • These numbers are not transmitted to the merchant

  • Consumer must initiate account set-up in advance of making any purchases

Strom MPA NY 12/00

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How Electronic Wallets Work Today eCommerce Trust

  • Consumer must initiate request for electronic “wallet” software

  • Credit card or other account numbers are given to provider one time before any purchases are made

  • Closed system: only available to participating merchants and cardholders who have signed up in advance

Strom MPA NY 12/00

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How Electronic Wallets Will Work in the Future eCommerce Trust

  • With SET protocol, will contain digital IDs with encrypted account information

  • Since digital IDs will be tied to specific accounts, wallets will keep track of all that information

  • At that point, wallets will be widely distributed and universally accepted

Strom MPA NY 12/00

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Interoperability is the Key eCommerce Trust

  • Wallets will become widely used when the following events occur:

    • Mass distribution of wallets to consumers is easily made

    • Will be accepted by all merchants, regardless of wallet brand or payment brand

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eWallet Demonstration eCommerce Trust

  • Entrypoint

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Some Problems with eWallets eCommerce Trust

  • Not transferable to other wallets

  • Tied to a single PC

  • Not available for use at many web storefronts

  • Just solve a small part of the overall payment process

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Trends eCommerce Trust

  • eWallets will eventually go away

  • SET becomes a server-side issue

  • SSL still dominates eCommerce transactions for many years

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1-Click Service Providers eCommerce Trust

  • 1Clickcharge.com, qPass.com, InstaBuy.com

  • Mainly for digital content delivery

  • Per day pass (WSJ)

  • Charge 8- 12% per transaction

  • Universal membership

  • Don’t leave site while completing purchase

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1-Click Advantages eCommerce Trust

  • Ease of use

  • No credit card transmission over the Internet

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1-Click Disadvantages eCommerce Trust

  • Need to reach critical mass of users almost at launch

  • Still rely on username/password combination which can be cumbersome

  • Small companies without a lot of depth – still!

Strom MPA NY 12/00

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Setting up Merchant Account eCommerce Trust

  • Providers to consider

  • How to compare services

  • Choices in setting up account, fees

Strom MPA NY 12/00

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All Merchant Providers Are Not the Same eCommerce Trust

  • Compare services

    • Which cards do they authorize?

    • Do they provide electronic check services?

    • Do they provide check guarantee services?

  • Compare prices

    • Start-up fees

    • Monthly discount fees

    • Other service fees (per transaction)

    • Statement generation fees

Strom MPA NY 12/00

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Your Bank eCommerce Trust

Discount Rate: 1.5% - 5.0%


Application Fee: $100 - $300

Discount Rate: 1.5% - 5.0%

Per Transaction: .20 - .30

Monthly Fee: $10 - $25

(service / statement fee)

Chargeback Fee: Up to $25

Chargeback Reserves: Up to 10% of sales, for up to six months

Range of Credit Card Fees

Strom MPA NY 12/00

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New developments: one-time credit cards eCommerce Trust

  • “Private payments” introduced recently by AmEx

  • The number is used only once

  • Requires software download

Strom MPA NY 12/00

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Peer-to-peer payment providers eCommerce Trust

  • PayPal/X.com (claims 3 MM users!)

  • Billpoint (Wells Fargo/eBay)

  • Ecount (claims 400,000 users!)

  • Yahoo PayDirect

  • ProPay.com

Strom MPA NY 12/00

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Issues With p2p Payments eCommerce Trust

  • Transaction limits (usually $1000/day)

  • Tied to particular credit card accounts

  • Skimpy fraud provisions (tied to credit card issuer)

  • Some have huge transaction fees (ProPay charges sellers 3.5% plus 35 cents)

  • One benefit: payees don’t have to be part of the system to collect funds

Strom MPA NY 12/00

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Alternative providers (to phone, ISP, or other monthly bills)

  • iPin

  • Trivnet

  • eCharge

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Rent buy or build l.jpg
Rent, Buy or Build? bills)

  • Delusions: “I could do that myself”

  • Not invented here

  • Justification example: corporate procurement

  • Forrester research survey showed 30% spent over $500,000

Strom MPA NY 12/00

Rent buy or build140 l.jpg
Rent, Buy, or Build bills)

  • Rent: outsource to a CSP

  • Buy suite of software

  • Build it yourself

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Types of outsourcing l.jpg
Types of Outsourcing bills)

  • Web server hosting

  • Payment processing

  • Storefront creation

  • Email and customer management

  • Shopping carts

  • Catalog and inventory fulfillment

  • Ad banner, one-click networks

Strom MPA NY 12/00

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Find an CSP bills)

More ISPs are offering eCommerce solutions

Have to use their software standards and payment schemes

Could be pricey

Just catching on in USA

Strom MPA NY 12/00

Evaluating ecommerce isps l.jpg
Evaluating eCommerce ISPs bills)

  • Do they offer storefront design?

  • Have in-house programmers?

  • Hosting of your own web server machine?

  • How many payment systems do they support?

  • What kinds of accounting reports do they offer?

  • What prices and packages offered?

Strom MPA NY 12/00

The catch 22 of csps l.jpg
The Catch-22 of CSPs: bills)

  • To be successful, a provider has to promote his products via the Internet and have detailed descriptions on their own web sites!

  • But try to find this information isn’t easy.

Strom MPA NY 12/00

Some csp examples l.jpg

www. bills)psi.net/web/ecommerce.shtml




IBM: mypage.ihost.com




www.outer.net/ONCommerce (OuterNet)

Some CSP Examples

Strom MPA NY 12/00

Price comparison assumptions l.jpg

10 Mb disk storage bills)

Single email account

Registrar $35 fee included for domain name

Price Comparison assumptions

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Price Comparison for CSP hosting bills)

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Earthlink pricing explained l.jpg
Earthlink pricing explained bills)

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CSP Approaches bills)





Others entering a very crowded field

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Geoshop yahoo l.jpg
GeoShop/Yahoo bills)

Builds on GeoCities “communities” but for merchants (www.geocities.com/join/geoshops)

$25/month for just commercial listings

$180/month (or more!) for actual transactions

working with Internet Commerce Services Corp. who uses Open Market Transact servers (www.icoms.com/pp.htm)

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Shopsite demo l.jpg
ShopSite bills)demo

  • Can now handle two concurrent currencies

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The Suite Approach bills)

  • Leading contenders

  • What is part of the suite and what isn’t

  • Prices and platforms

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Popular eCommerce Suites bills)

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Popular eCommerce Suites (con’t) bills)

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Four Typical Elements bills)

  • Catalog

  • Storefront designer

  • Ordering/inventory system

  • Shopping cart/check out system

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The cold hard reality of suites l.jpg
The Cold Hard Reality of Suites bills)

  • Suites are nothing more than collection of products

  • Lack integration among various elements

  • Difficult to setup, customize, and use

  • Require you to live “inside” their structure

  • Limited payment options

  • Sounds like early MS Office

Strom MPA NY 12/00

Payment systems included in each suite l.jpg
Payment Systems Included in Each Suite bills)

  • Microsoft: Verifone, Buy Now

  • IBM: Verifone, SET/eTill

  • OpenMarket: Verifone

  • WebSite Pro: IC Verify, PC Authorize, CyberCash, others

  • Intershop: CyberCash, ICVerify, others

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Sample stores included in each suite l.jpg
Sample Stores Included in Each Suite bills)

  • Microsoft: 4 stores

  • IBM: eMall, simple and advanced sample stores

  • OpenMarket: none

  • WebSite Pro: 1 bookstore

  • Intershop: 3 stores

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Database support l.jpg
Database Support bills)

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Dealing With ODBC bills)

  • Have to understand how to set up data sources

  • Intimate knowledge of your data structure

  • Re-install ODBC drivers at least once!

  • Best to start with built-in database

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Store wizards included in each suite l.jpg
Store Wizards Included in Each Suite bills)

  • Websphere (the best)

  • WebSite Pro (but doesn’t do much)

  • Intershop (various wizards)

  • MS Commerce (although you’ll really need to know COM!)

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Slide162 l.jpg
Tips bills)

  • Don’t install anything before making sure you have everything!

  • Downloads for free, but they expire

  • Can you export existing files to these systems?

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Website professional website ora com l.jpg
WebSite Professional bills)website.ora.com

  • Version 2, shipping since 9/97

  • US$799!

  • NT (or 95)

  • Supports seven different payment processors: SSL, CyberCash

  • One sample store (bookstore)

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Sample storefront l.jpg
Sample bills)storefront

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WebSite Configuration Sheet bills)

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Store properties l.jpg
Store Properties bills)

  • Only can operate a single payment system

  • Run on a series of Access databases

  • Built-in tax table, but for N.Americans!

  • Well documented data structures in typical O’Reilly fashion

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Recommendations l.jpg
Recommendations bills)

  • Lowest priced suite by far!

  • iHTML is robust, but will take some learning

  • Nice store setup and organization of catalog

  • Good low-end solution

  • Other alternatives: ShopZone (www.btsw.com), Alpha Merchant (www.alphasoftware.com)

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Intershop l.jpg
Intershop bills)

  • Sample screens showing different “managers”

  • Includes Sybase SQL 11

  • US$5000, includes 3 mos. support

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Seven different managers l.jpg
Seven Different Managers bills)

  • Catalog

  • Products

  • Store

  • Purchases

  • Inventory

  • Customers

  • Admin

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Characteristics l.jpg
Characteristics bills)

  • Everything managed via browser, which can get tedious

  • But you already have a database behind it

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Payment Options galore bills)

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Recommendations172 l.jpg
Recommendations bills)

  • Most flexible payment options of any suite

  • Better at processing orders than site creation

  • Not good for large catalogs

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Ibm websphere l.jpg
IBM Websphere bills)

  • IBM’s Go Web Server

  • DB2 database

  • Shopping cart system

  • Credit card verifier

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Several ways to setup your store l.jpg
Several ways to setup your store bills)

  • Use nine-step wizard with populated catalog

  • Use wizard with empty catalog

  • Start from scratch

  • Import existing databases

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Recommendations175 l.jpg
Recommendations bills)

  • Great if you already use DB2 for inventories

  • Most security-conscious suite

  • Start with all IBM defaults to save time

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Websphere bills)Specifics

  • NT, fast Pentium with 256 M of RAM

  • AIX, 390, OS/400, Solaris

  • US$5000 Start, $20,000 Pro

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Latest features l.jpg
Latest features bills)

  • “Intelligent Catalog”

  • Java-based wizards to setup and manage store

  • Recognizes shopping preferences and upsells

  • Improved SET payment server, ad tracking partnerships

  • “Smooth Start” packaged consulting services

Strom MPA NY 12/00

Openmarket l.jpg
OpenMarket bills)

  • High end solution

  • Worldnet offers hosting of OM servers

  • Still needs customization!

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Recommendations179 l.jpg
Recommendations bills)

  • If you can afford it ....

  • Really the price covers lots of consulting time

  • High transactions and throughput needs

  • Use with Icoms.com front end service ($1000 + $100/month)

Strom MPA NY 12/00

Isn t somebody missing from the suite party l.jpg
Isn’t somebody missing from the suite party? bills)

  • Netscape

  • Oracle

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Topic 6: Installing and Operating Your Own Storefront bills)

  • What you need to know

  • What you need to buy

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One diy solution l.jpg
One DIY solution bills)

  • IIS

  • PerlShop shopping cart

  • ClearCommerce CSP

  • First American Payment Systems

  • Verisign certificates

  • Fees: $800 setup, $500/yr, $50/month

  • What took longest to work: perl scripts to make credit card payments!

Strom MPA NY 12/00

Components needed to operate a web storefront l.jpg
Components Needed to Operate a Web Storefront bills)

  • Database of items to sell and current inventories

  • Secure web server

  • Searchable catalog server

  • Connections to backend payments and financial servers

  • Shopping cart system

  • Checkout/payment system

  • Don’t forget about security!

Strom MPA NY 12/00

Which database server l.jpg
Which Database Server? bills)

  • Pick before anything else

  • Core of your store revolves around the database:

    • inventory system

    • accounting system

    • catalog system

Strom MPA NY 12/00

Database server recommendations l.jpg
Database Server Recommendations bills)

  • Use existing client/server db if possible

  • SQL Server: best with MS tools

  • Oracle: if you know pSQL already

  • Informix: all other situations

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Database web tools l.jpg
Database/web Tools bills)

  • Develop your own forms

  • Query your database

  • Develop your own catalog

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Why is a catalog important l.jpg
Why is a Catalog Important? bills)

  • Your customers view of your store

  • Current with your own inventory and offerings

  • Don’t want to sell what you don’t have

  • See catalog resources page

Strom MPA NY 12/00

Tool recommendations l.jpg
Tool Recommendations bills)

  • Cold Fusion, www.allaire.com

  • Sapphire/Web, www.bluestone.com

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Which web server l.jpg
Which Web Server? bills)

  • Hundreds to choose from

  • Must support SSL and/or SHTTP

  • Platform isn’t important, really

  • Choose:

    • NT/IIS

    • Solaris/Netscape Enterprise

    • Linux/Apache

Strom MPA NY 12/00

What can a shopping cart do l.jpg
What can a Shopping cart do? bills)

  • Simplify ordering process

  • Track multiple purchases for a single visitor

  • Display items purchased

  • Calculate total prices, tax, shipping charges

  • Track item attributes (colors, styles, sizes)

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Different shopping cart methods l.jpg
Different Shopping cart Methods bills)

  • Account-based

  • Cookie-based; see www.cookiecentral.com

  • Encoded URLs

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Payment choices l.jpg
Payment Choices bills)

  • Use gateway (CyberCash) or service provider?

  • Do you need support for multiple currencies?

  • Do you have to host your store elsewhere?

  • Do you understand the fee structure?

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Steps Towards Coding Your Own Payment Service bills)

  • Present user with a CGI form with shopping items info

  • Connect this to the service provider site

  • Provider displays his form to collect credit card info

  • After approval, you record info to your site

  • See WebTechniques article by Lincoln Stein, 8/98

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Again service providers differ l.jpg
Again, Service Providers Differ bills)

  • Compare services

    • Which cards do they authorize?

    • Do they provide electronic check services?

    • Do they provide check guarantee services?

  • Compare prices

    • Start-up fees

    • Monthly discount fees

    • Other service fees (per transaction)

    • Statement generation fees

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Prices of typical products l.jpg
Prices of Typical Products bills)

Strom MPA NY 12/00

Putting together your own solution l.jpg
Putting Together Your Own Solution bills)

  • SQL Server database

  • CyberCash payment system

  • WebCatalog 3.0 (supports CCash)

  • IIS web server

  • Total price: <US$10,000

Strom MPA NY 12/00

Thanks197 l.jpg
Thanks! bills)

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