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TeeShirtSamurai · February 9th, 2006

Hello,

You have a great site here with a wealth of information and a very helpful community -- very refreshing.

I plan to open up my own shop within 6 months and I'm very anal about having lists and making sure everything is just right. I just want to make sure I'm clear on what's needed to setup shop online before it goes live:

1. Domain Name (got it)
2. Someone to host your site
3. A website (obviously)
4. A shopping cart program to integrate with your site
5. A merchant account to accept credit card orders

Am I missing anything?
What is the average monthly cost to run your site (merchant account/host/etc)?

I'm a little overwhelmed by the choices for #'s 2, 4 and 5. I have budgetary concerns but don't want to skimp.

Thanks for any responses.

jdr8271 · February 9th, 2006

Most people use paypal for 4 and 5.

For hosting...theres a million different companies. I have had a good experience with intelnetics.com

Rodney · February 9th, 2006

I wouldn't say "most" people use PayPal for 4 and 5, but it's a good way to get started.

For #2, I would say never skimp on your webhosting budget. Your shirts can't sell if your website is down.

If you have a "real" (like through a merchant account provider with a processing gateway that sends the funds to your bank account every 3 days) merchant account, the monthly fees will probably be around $30-$50. With PayPal, there are no fees.

Hosting should run you between $10-$40 per month depending on where you go. LunarPages is good, Pair is great, but not as cheap.

Most webhosts will have some sort of ecommerce package or have the ability to install ecommerce scripts on your site (like zencart, oscommerce, etc).

Don't forget:

6. Printed T-Shirts
7. Marketing Plans/Budget

EngBulldog · February 9th, 2006

I have read several postings about paypal and most have been pretty neutral, but anyone explain the negatives with having paypal as their only / primary merchant. Besides having to transfer funds to your personal bank account. Thanks for any info

TeeShirtSamurai · February 9th, 2006

Rodney,

I saw you recommend e-onlinedata.com as a merchant in another post. I just want to make sure I am clear about the monthly costs. Does this seem about right?

Statement Fee: $10
Monthly Processing Minimum: $25
Authorize.net Access Fee: $15
==========================
$50/month

Also, when they mention the 2.29% Visa/Mastercard rate that is what they are going to take for themselves each transaction?

suzieh · February 9th, 2006

For webhosting, use Cavecreek http://cavecreek.net/. Don't skimp on cost. Lots of bandwidth, stable, live tech support from real geeks. They've been around a long time. They used to have a merchant account service called CC Bill...kind of costly, but merchant accounts are tough to get and are based on your credit rating.

I searched Yahoo's webhosting several month's back and the reviews were not good. Slow and lots of downtime, hard to get support. I'd budget $25 for reliable ISP provider. You'll have to take into consideration what you want (use own CGI scripts, secure server, windows, linux, etc....the geek details).

Explore e-commerce web templates. Many are available for under $200.00.

Your best resource may be your local libarary....try our Los Angeles Public Library's website
http://www.lapl.org/resources/guides...us/1start.html

Lots of information on the site on starting a business, links to Small Business Administration (go to their site http://sba.gov/)

I have the very old hardback of this book. I suggest often for very new business owners:

The McGraw-Hill Guide to Starting Your Own Business : A Step-By-Step Blueprint for the First-Time Entrepreneur (Paperback)
by Stephen C. Harper $10 from Amazon.

Susan

TeeShirtSamurai · February 9th, 2006

Suzieh, thanks for the great info.

I had no idea your credit rating affected whether or not you could get a merchant account. My credit isn't bad but it isn't super.

TeeShirtSamurai · February 9th, 2006

Nevermind the rate question, got it:

*Monthly Processing Minimum: There is a $25.00 Monthly Processing Minimum for every merchant account. This is the minimum amount you must pay each month for your Visa/MasterCard processing. The Monthly Processing Minimum does not apply to monthly fees, gateway fees or transaction fees.

Example #1: If your rate is 2.29% and you have $1000 in sales during the month, your total Visa/MasterCard processing fees would be $22.90 ($1000 x 2.29% = $22.90). This amount is less than the $25.00 Monthly Processing Minimum, so you would ONLY be billed the Monthly Processing Minimum.

· NOTE: You will never be billed the Monthly Processing Minimum and the Visa/MasterCard rate. You will be billed the Monthly Processing Minimum OR the Visa/MasterCard rate, whichever is greater for that month.

Example #2: If your rate is 2.29% and you have $1500 in sales during the month, your total Visa/MasterCard processing fees would be $34.35 ($1500 x 2.29% = $34.35). This amount is greater than the $25.00 Monthly Processing Minimum, so you will ONLY be billed your Visa/MasterCard rates for that month’s processing (and no minimum will be billed for that month).

Rodney · February 9th, 2006

Quote:

Originally Posted by ph0yce


	Rodney, I saw you recommend e-onlinedata.com as a merchant in another post. I just want to make sure I am clear about the monthly costs. Does this seem about right? Statement Fee: $10 Monthly Processing Minimum: $25 Authorize.net Access Fee: $15 ========================== $50/month Also, when they mention the 2.29% Visa/Mastercard rate that is what they are going to take for themselves each transaction?

That sounds about right.

The 2.29% fee is the fee they take from each transaction. Most all merchant accounts will charge varying percentage fees per transaction depending on your risk factor as a merchant (brick and mortar swiping the card versus mail order/telephone internet sales with no card present).

How eonlinedata does it is say you process $200 worth of transactions on Monday. Monday afternoon, those transactions get "batched" and and sent for collection. By Wednesday or Thursday morning, they deposit that $200 directly into your bank account without any fees taken out.

At the end of the month, they bill you for your transactions (the 2.29%) and for the gateway fees.

Some things are "negotiable" like statement fees, etc, so if you are high volume, you can try and work out better rates.

A "gateway" is how you get your shopping cart to securely, automatically and electronically communicate between your customers bank and your merchant account provider at the exact time of sale.

That way when a customer places an order in your store for a t-shirt, they can find out in realtime if that transaction is approved and you know you will get paid for the merchandise.

Usually, most stores are setup to "Authorize" the order total at the time of sale, and then "capture/finalize/batch" the order once the merchandise actually gets shipped out. The gateway handles all this.

Without the gateway, you would have to just accept the credit cards securely through your shopping cart. Then use the online merchant account terminal to type in the credit card numbers and process each transaction. This can get very time consuming and also introduces a margin for error (typing in a cc number wrong, billing address wrong, etc). There is also the chance the card is declined and then you have to contact the customer to check to make sure they typed the info right, gave you a good card number, etc. You also need to screen the orders for fraud, etc.

The gateway makes it all automated so once the customer puts in the information in your shopping cart, it gets sent directly to their bank via your gateway and they (and you) will know right away if the transaction is approved or declined. The gateway can also handle automated fraud screening and address matching.

Oh, one thing I forgot in your list above. You would need a SSL (Secure Sockets Layer) Certificate for your webhosting account so you can process transactions securely (throuhg a web address like https://yourstorename.com). Sometimes the webhost can provide you with access to their "shared" SSL server so that you don't need to get your own, but the secure URLs will be like https://yourhost.com/~youraccount/yourcart/checkout.php instead of https://www.yoursite.com/yourcart/checkout.php (which doesn't always make a difference, but sometimes having your own SSL can help give the customer more confidence in buying from you, especially if they don't have to get transferred to a different URL).

Hope this helps some

TeeShirtSamurai · February 9th, 2006

The more I compare LunarPages to Pair and Cavecreek, the more I like them.

With regards to the SSL Certificate, they do offer a shared certificate. However, they do also allow you to purchase a personal certificate as well. In order to get a personal certificate you have to supply the following information (last question below):

*Domain/subdomain name to make the cert for:

(the subdomain or domain must already have been setup)
Country:
State / Province:
City:
Company Name:
Division:
Email address you wish to have associated to the certificate:
Password for the cert: (must be alpha numeric only - Aa-Zz / 0-9)
Street Address.
Zip/postal code. (Please note we cannot accept PO Boxes for addresses)

*Please also note that a certificate can only be set up for either https://www.domain.com or https://domain.com. If a certificate for https://domain.com is accessed through https://www.domain.com, it will give a security warning saying the name does not match the name on the certificate. The certificate will still secure the data however.

I have no problem with any of that but am a little confused by the subdomain bit there. Assuming a fictional name of www.joebobstshirts.com, there is no subdomain and all I would need to submit for the certificate would be www.joebobstshirts.com, right?

I'm assuming the subdomain bit means if you don't have your own domain? Give the same name but under your ISP (i.e. comcast.com/joebobstshirts) instead. I wouldn't need to worry about a subdomain if I have my own top-level domain right?

cneutra · February 9th, 2006

Hi all, I'm in the same place in the growth of my t-shirt business as Ph0yce, so thank you for posing the original question so succinctly.

Rodney, would you consider PayPal a reliable gateway?

Can anyone describe what happens after Paypal takes a payment from a customer? (How does Paypal notify me? Because I, as CEO and chief mailroom clerk, need to fulfill the order promptly.

Any thoughts on OScommerce as a shopping cart source? It's free and a recommended vendor on the PayPal site. What are the pitfalls?

I had planned on having my web developer use the PayPal shopping cart for business. But I need to make sure I have a scalable solution. Although the basic PayPal program seems like a good deal for t-shirt vendor newbie, once you sell approximately 30 shirts at $20. per month their price escalates and a monthly fixed fee service becomes the more affordable option.

Rodney · February 9th, 2006

Quote:

Originally Posted by ph0yce


	*Please also note that a certificate can only be set up for either https://www.domain.com or https://domain.com. If a certificate for https://domain.com is accessed through https://www.domain.com, it will give a security warning saying the name does not match the name on the certificate. The certificate will still secure the data however.[/list]I have no problem with any of that but am a little confused by the subdomain bit there. Assuming a fictional name of www.joebobstshirts.com, there is no subdomain and all I would need to submit for the certificate would be www.joebobstshirts.com, right? I'm assuming the subdomain bit means if you don't have your own domain? Give the same name but under your ISP (i.e. comcast.com/joebobstshirts) instead. I wouldn't need to worry about a subdomain if I have my own top-level domain right?

A subdomain is something like https://secure.joebobtshirts.com or anythinghere.joebobshirts.com

SSL certs are very specific, meaning that if you set it up without the WWW (like joebobshirts.com) then it will only work correctly with https://joebobshirts.com and if the customer goes to https://www.joebobshirts.com they will get an error message popping up saying the security certificate doesn't match the domain it was issued to.

Like this:

Some people like to setup their SSL certificate to work with a descriptive subdomain like https://secure.example.com. I think by having the word secure in the URL, they may feel it helps customers to understand that they are shopping in a secure environment.

You don't have to use a subdomain, though. Most are just setup as www.example.com so that the secure certificate works as https://www.example.com

Rodney · February 9th, 2006

Quote:

Originally Posted by cneutra


	Rodney, would you consider PayPal a reliable gateway?

Although PayPal now offers a gateway, the general PayPal service wouldn't be considered a "gateway" because the customer actually has to leave your site and go to PayPal's site to finish the transaction (which is what gateways help to avoid).

I think it's a good idea for merchants to accept PayPal, and it can be a good way to get your foot in the door accepting online payments, but as your business grows (or right from the start depending on how you prefer to set things up), it's good to have a real merchant account to accept secure visa/mastercard/discover/american express payments. There are some customers that love PayPal and there are some that will refuse to use PayPal to pay, so you don't want to lose customers by not offering a good variety of payment options.

Quote:


	Can anyone describe what happens after Paypal takes a payment from a customer? (How does Paypal notify me? Because I, as CEO and chief mailroom clerk, need to fulfill the order promptly.

You get an email from PayPal when you get a payment. Usually your shopping cart will also send you an email when an order is placed. Here's a quickie screenshot:

Quote:


	Any thoughts on OScommerce as a shopping cart source? It's free and a recommended vendor on the PayPal site. What are the pitfalls?

I've seen lots of t-shirt sellers use OSCommerce and the only pitfalls I know about are that it's a bit hard to customize to give it a truly unique look and feel. It has a pretty large userbase and support community and lots of addons to make it do cool things, so it's a good way to go if you're just starting out.

Quote:


	I had planned on having my web developer use the PayPal shopping cart for business. But I need to make sure I have a scalable solution. Although the basic PayPal program seems like a good deal for t-shirt vendor newbie, once you sell approximately 30 shirts at $20. per month their price escalates and a monthly fixed fee service becomes the more affordable option.

PayPal has a new "merchant account" option that is more like a traditional merchant account, but it comes with some weird restrictions and requirements (like special wording on the checkout pages or something). I think a combination of a traditional merchant account and PayPal is a good scalable solution.

As I mentioned in another thread, I started out not accepting credit cards at all (very hard to get a sale that way...but what can I say, it was 1996 and banks weren't really "web friendly" like they are now

). There was no PayPal back then. So I started using a service called CCNOW, then added PayPal when they came around, then got my own merchant account as my business grew. CCNOW is still a good way to process credit card transactions outside of PayPal, but they have very high transaction fees (9-10% last time I checked) but no monthly fees. The drawback is that they only disperse funds twice a month and your money has a longer "hold" period (which can be a problem for merchants who need the cashflow to buy more inventory).

Rodney · February 9th, 2006

Quote:

Originally Posted by EngBulldog


	I have read several postings about paypal and most have been pretty neutral, but anyone explain the negatives with having paypal as their only / primary merchant. Besides having to transfer funds to your personal bank account. Thanks for any info

The negatives are:

1) Some customers don't like to be transferred away from your site to finish their purchase. They don't know what a PayPal is or why they are going there or if they should trust them. Transferring a customer away from your site to make a payment is also something that can lose their trust in buying from your store.

2) Some customers who DO know who PayPal is may not like PayPal for whatever reason(s). So if they see that as their only payment option when checking out, they will just leave and you lose a sale.

3) Others, more saavy internet customers, who know who PayPal is and see it as your only payment option may not think your business is solvent enough to have its own merchant account and may think you aren't very stable.

#3 is probably a very small minority of customers though, and the main concerns would probably be #1 and #2.

But having PayPal is better than no online payment solution, so it's good to have it there.

Also, as a counter to #2, there are some customers who know PayPal and use it as the ONLY way they pay for stuff online, so those folk may be more inclined to buy from you if they see you accept PayPal.

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