Ecommerce Web Hosting 101

Updated July 16, 2008

Ecommerce web hosting is a term we use to define a complete set of software products and services that are integrated together by the provider that allows a business to sell its products and services online, efficiently and cost effectively.

Before discussing ecommerce web hosting 101 and how this affects your business, we must first address the big fuss about the Internet. So what is this big fuss and why is there so much talk about ecommerce since it started all those years ago in mid 1990s?

Never before in history was there a medium whereby you could sell your products/services (such as electronic goods and content) to billions of people around the world and deliver as fast as an email being sent.

The Internet is the most powerful shopping mall, the most accessible market, and the least costly real estate on the planet. You can open a shop in this worldwide mall and sell your products and services 24 hours a day, even in your sleep. And you don't pay for an expensive space lease, you don't pay for store equipment, you don't pay for overheads for your shop, you don't have to open a set hours, and you don't have to leave your house every morning and drive to work miles and miles away. Your ecommerce web hosting real estate cost much less than traditional brick and mortar.

You can literally open an online business with a few hundred dollars and pay around $50 a month for your entire ecommerce web hosing that includes all you need for your infrastructure. That's it. Of course this does not include your marketing, but there are many options for cheap or free marketing and promotions online. You can get your site into online search engines and directories for free, join online groups to display your product offering, or launch your business on a forum with self promote your products.

May be these will not make you rich fast but the fact is - it costs nothing or costs very little. For instance, you can place ads online on a pay-per-click basis and get some sales with very little money out of pocket for each sale in comparison to the cost of running a entire mail campaign, newspaper campaign, or a TV or magazine campaign, before you even get your first sale.

Now you can jump head first into an ecommerce web hosting solution and try selling a few things online without any real plan or any thought to what you are doing. In fact many people have done this in the past and still do so. But we think there is a better way to do ecommerce.

Here is what we have seen work again and again in the past 10 years.

"Select a niche area for your ecommerce"

Instead of competing with Dell computers on computer parts, or with Microsoft on selling operating systems, find something that is not being sold on the Internet yet (or not totally saturated) and be the first to introduce it and market it. Many small businesses who have done so, have succeeded. It makes sense to be the first to sell an item.

Traditionally most businesses try to find something that sells in large quantities and there is a known huge demand for it already. On the Internet it does not often work that way. Sell a niche product and/or service and that is where the money is.

Internet is a medium of automation and competing with automation kings like Dell and Microsoft will not often help your business. Find your niche because they will not be able to compete with you because their overheads cannot allow them to compete at niche level. And they don't want to either, because if they cannot sell a large quantity of a high demand item, there is no way they can sell the item - it makes no sense for them financially.

First compile a list of products or services you think you are interested to sell online. Then qualify the business opportunity by asking some key questions:

Is the product a high gross margin product?

Does the price range between $10 and $500?

Can buyers easily obtain this product from stores or malls?

What is the need for this product?

Can you sell a particular type of this product and offer exclusivity?

Is the product easy and cheap to ship or is it heavy and therefore expensive to ship?

Is your product something that a buyer has to see, feel, and touch before buying?

Or is the product a commodity?

Is there a lot of competition already offering the same identical product/service?

Can you market this product with passion and excitement?

These questions will help you qualify the product or service that you will eventually select to offer on the Internet and get started with your ecommerce.

Once you have decided on what you want to offer to your online customers then you need to get started with your ecommerce web hosting and here we suggest that you divide this project into for distinct tasks, namely: PLAN, BUILD, PROMOTE and MANAGE your ecommerce business.

A very well developed business plan does not ensure your success but it sure helps you succeed by taking a hard sensible look of what you are doing and how you intend to do it. A plan accomplishes 2 things. First it clarifies in your mind what you want to achieve and how you want to achieve it (the means, the resouces, the strategy, etc.). Second, it allows you to see both the macro and the micro and therefore you will finish before you start, without getting stuck half way not having throught through all that is involved in operating the new business venture.

You can read more about planning your ecommerce by visiting, Plan Your Ecommerce Business.

Building your store and getting an ecommerce web hosting to display your store can be fun and exciting. Despite the technical troubleshooting, this is often the creative side of starting an ecommerce site and most people often enjoy it, at least the first few times.

You can read more about building your ecommerce by visiting, Build Your Ecommerce Site.

Online promotion is often much less costly that traditional means of advertising and promotions since a few large companies still control the traditional TV, Radio and Print media. Internet being a new media is not yet controlled by only a few big players so there are many options open to small businesses who have their ecommerce web hosting and want to promote their new real estate.

You do need to learn about many of the new methods that apply to online promotions, such as:

Get more exposure on search engines through search engine optimization

Offer the chance to win a free gift in a sweepstake for registered users

Reach online users by incorporating an eZine in your ecommerce web hosting site

Periodic emails sent to opt-in newsletter audience offering tips and discounts

Sign up affiliates to sell your products and/or services

Send emails to existing online customers to offer discounts for repeat business

Join discussion groups, blogs, online chat and social networks and include your URL

Send a list of promotions and discounts with a confirmation email to a new customer

Use viral marketing and offer your customers to send an email to their friends

Offer a survey to find out what your customers want and need

Use online advertising with search engines

Use online auction sites to help sell your products

You can read more about promoting your ecommerce by visiting, Promote Your Ecommerce Site.

Once you are operating an online business you need to manage your business and the services that you use as part of your ecommerce web hosting, e.g. your traffic analysis tools, your bandwidth, disk space, advertising campaigns, marketing budget, email management for customer support and marketing, technical server setup, security, etc.

This can be done either efficiently or in a badly organized way. You will know very quickly which method brings you more revenue and helps you with market penetration, customer retention, and business development.

You can read more about managing your ecommerce by visiting, Manage Your Ecommerce Site.

Ecommerce Web Hosting 101

As mentioned before, ecommerce web hosting is a term we use to define a complete set of software products and and associated services that are integrated together by the provider so that the business owner can sell its products and services online without having to develop software, install and configure Internet servers, or have to build site security for ecommerce.

In addition, server management, datacenter monitoring, redundency systems, and networking equipment are all included in ecommerce web hosting services.

Let's describe what is involved in an ecommerce web hosting service:

Hosting - includes bandwidth, hard disk space for web site and for software components that need to be installed on the Internet servers, networking equipment (routers, switches, etc.), physical security, data security, SSL secure server certificate, data redundancy, power backup, and other related services.

Domain Name - this is your business name in cyberspace and most ecommerce service providers now include this with ecommerce web hosting service since it makes sense for them to install this on the web server so that a customer does not have to do any technical setup. Also, service providers are happy to pay for this - AND - they will own the name so that you will have to stay with them for your hosting.

Business/Company Website - this is the presentation of your web pages that describe your company and present your products and services and your expertise in your business.

Electronic Catalog - this is often integrated with your ecommerce web hosting service and it is more useful for companies that have many products (more than 10) and allows a logical and organized display of each product and their associated options and details.

Shopping Cart / Single Order Page - for an online customer to place an order they need to first provide some information, such as delivery address, business address, business information and email addresses, etc. and it makes sense to provide an easy interface to allow the online user to modify or delete or amend or add to the information about their order before they submit the order. The shopping cart software (or a single order page if that is what some online merchants prefer) provides this organized means of placing an order.

Checkout Page - this is where the credit card information is entered and then submitted to the secure servers with encryption and the order is approved and finalized.

Payment Processing Service - once the order is submitted through the checkout page, then the credit card information is submitted to the banking networks for authorization and acceptance and allocation of funds. The payment processing service provides this service through a payment gateway connection to the banking network.

Manual Processing - also called Virtual Terminal is often used for orders that are placed on the telephone when the customer does not (or cannot) place an order through the shopping cart system.

Customer/Order Management System - for customer support, a business manager needs access to the system that organizes the transaction information with order details and customer information. This is often a database that is already integrated with the ecommerce web hosting service.

Reporting System - use for sales/marketing/accounting/customer analysis and very useful to help you manage your online business.

Technical Support - there will be times that an online business owner needs technical assistance from the ecommerce web hosting service provider.

Internet Merchant Account - to take payment online for a customer's order, an online business needs an Internet Merchant Account that facilitates the VISA and MasterCard credit card processing by merchant. Also, a separate merchant account is needed for American Express, and one fro Discover card.