Selling on the Web 2008. Choosing the right payment system can determine your online success, but with so many options how do you decide? This presentation will show you the different ways to accept payments and how to choose the right one for your business & customers.

1. Choosing the right payment system for
your business and your clients
Richard Hudson of
“Providers of web solutions to small businesses”

2. Interesting Statistics
• Number of UK Internet Users (Aged 15+) – 38.48 million
• Internet users who have bought online – 65%
• Internet users using the Internet daily – 54%
• Amount Spent Online in Last 6 Months per User - £573
• Total Online Spending (UK) - £46.6 billion
• Users who believe using a credit card online is ‘safe’ – 65%
• People using the internet for business purposes – 10.96 million
• Total Online Advertising Spend (2008) - £3.0 billion
• Top types of sites visited (visits per month):
1) A site where you can buy a product or service – 19.19m
2) Map/Direction sites – 17.35m
3) Local Info services – 15.23m
Source: Actinic/BMRB Internet Monitor/IAB

3. Interesting Statistics
• U.K. Internet sales surged 54 percent in 2007, adding to
pressure on stores as higher living expenses weigh on
shoppers' incomes.
• Web sales rose to 46.6 billion pounds in 2007 and accounted
for 15 percent of the country's total retail spending.
• Britons are turning to the Web for convenience and value as
increased tax, utility and food bills sap spending.
• City centre retailers may lose 15 percent of their market share
to online competitors over the next five years.
• Latest research has found that 49% of UK fashion companies
put e-commerce systems as their top investment priority over
the next three years.
Source: Bloomberg

4. Before you start - Market Research
• Research your Competitors (Web, eBay, Amazon, Offline)
• Selling Prices
• Postage Charges
• Availability
• Reputation
• Distribution (Local/National/Global)
• Evaluate your potential market
• Understand your customer and their needs

5. Before you start - Your Products
• Establish unique selling point
• Supply and Stock Availability (Lead Times)
• Manufacture for Stock, Make to Order or Drop Ship
• Selling Prices (factor in overheads and other costs)
• Financial Implications

6. Before you start - Taking Payments Online
• Online Credit Card Payments
• Payment Bureaux (e.g. PayPal, Google Checkout)
• Acquiring Payment Service Providers (e.g. Worldpay,
Barclays ePDQ, HSBC)
• Payment Service Processors (e.g. Protx, SecureTrading)
• Offline Credit Card Processing (via PDQ machine) – NO!!
• Offline Credit Card Processing by SMS (e.g. Adelante)
• Offline Payment (e.g. Cheque, Postal Order, On Account)
• Cash (using Go&Pay/Payzone outlets)
• Financial Implications of Selected Option
• Consider Chargebacks, Transaction Fees, Security and
Protection from Fraud
• Important to Offer Different Payment Options to Customers

7. Comparing Credit Card Charges – Bureaux
• Paypal
FREE setup and no monthly fees
Transaction charges on sliding scale based on monthly sales:
up to £1,500 – 3.4% plus 20 pence
£1,500.01 - £6,000 – 2.9% plus 20 pence
£6,000.01 - £15,000 – 2.4% plus 20 pence
£15,000.01 - £55,000 – 1.9% plus 20 pence
above £55,000 – 1.4% plus 20 pence
• Google Checkout
FREE setup and no monthly fees
Transaction charges linked to Adwords usage
Sales of up to 10 x Adwords Spent – FREE
Sales above this – 1.5% plus 15 pence
Non Adwords Advertisers pay 1.5% plus 15 pence per transaction

8. Comparing Credit Card Charges – Banks
• Worldpay
£75 setup, 3.35% plus 15 pence for all transactions, £15
min per month – Retain funds for 4 weeks, pay weekly
• Barclays
£150 - £250 setup, 2.5% commission for all transactions,
£25 min per month – 3 day clearance
• HSBC
£200 setup, 3-4% commission for credit cards, 30-40 pence
commission for debit cards, £20 min per month – 3 day
clearance
Shop Around - Aim to pay £150 setup with 2% for credit cards and 34
pence for debit cards - £20 per month minimum commission

9. Comparing Credit Card Charges – Protx
Protx charge is £20 per month for up to 1000 transactions a quarter – PLUS your
merchant account charges:
1. Lloyds TSB Cardnet - £75 setup, 3.35% plus 15 pence for all transactions, £15
min per month – Retain funds for 4 weeks, pay weekly
2. Barclays - £150 - £200 setup, 2.5% commission for all transactions, £20 min per
month – 3 day clearance
3. HSBC - £150 setup, 3-4% commission for credit cards, 30-40 pence
commission for debit cards, £20 min per month – 3 day clearance
4. Streamline - £250 max setup, 2.5-3.5% commission for credit cards, 35-55
pence commission for debit cards, £25-£30 min per month – 3 day clearance
Shop Around - Aim to pay £150 setup with 2% for credit cards and 34
pence for debit cards - £20 per month minimum commission

10. Shipping Charges
• Consider suitable shipping policy and charges
• Research various despatch methods (Royal Mail, Courier)
• UK, European, Global Shipping Charges
• Consider insurance and order tracking
• Don’t forget packaging materials
• Quantity, weight or value shipping model
• May influence choice of e-commerce solution

11. Trading Online Legally
• Data Protection Act
• Privacy and Electronic Communication Act (Spam laws etc)
• Copyright
• Trademarks
• Disability Discrimination Act
• Terms and Conditions/Privacy Policy
• Insurance

12. Selection of e-commerce solution – Deciding Factors
• Order volumes
• Frequency of changes to products
• Number of products
• Stock availability
• Preferred payment/shipping options
• Budget

13. Types of e-commerce solution – Off the shelf
Three main types
• Packages included with hosting. For example:
• 1 and 1
• 123-reg
• Fasthosts
• Online shopping mall facilities. For example:
• eBay
• Amazon
• Etsy
• Off the shelf software packages. For example:
• Actinic
• osCommerce
• EKMPowershop
• All require setup and customisation which takes time and
knowledge to create something unique.

14. Types of e-commerce solution – Static (Developed for you)
• Static buttons containing product information and prices
• Limited options (e.g. colour/size)
• Products do not frequently change or go out of stock
• Fixed shipping charges
• Order information delivered by email (not stored)
• Web developer responsible for changing product details
• PayPal Shopping Cart is leading solution
• Google Checkout latest to enter the market
• eBay or Amazon are other alternatives
• Not considered full e-commerce

15. Types of e-commerce solution – Dynamic (Developed for you)
• Content controlled by database
• Content management facilities
• Stock management
• Order information stored and easily accessible
• Customer information available
• Automated customer contact
• Support for more complex shipping policies
• Flexible configuration and product options

16. Types of e-commerce solution – Advanced Features
• Featured/Related Products
• Special Offers
• Advanced stock control (for product options/multiple
locations)
• Multiple selling price groups (retail, wholesale, distributors,
agents)
• Advanced product database management
• Returns Management
• Discount Coupons
• Reviews

17. Other Issues to Consider
• Accessibility of Site
• Photography
• Website Content (possible use of a copywriter)
• Hosting (very important!!!)
• Payment Processing
• Security
• Domain Name Registration (try www.123-reg.co.uk)
• Internet Connectivity (get broadband)
• Legal Issues
• Insurance (e.g. Product/Public Liability/Contents)
• Thorough Site Testing

18. Service
• Communication with Customer including Order Confirmation
• Provide Order Status Updates
• Respond to Enquiries
• Fulfil Promises
• Documentation with Goods
• Provide clear policies for delivery/returns
• Good Service Builds Brand/Business Loyalty

19. Establish All Project Costs
• Stock Acquisition
• Website Development (Get more than 1 quote!!!)
• Legal Costs
• Hosting Charges
• Ongoing Charges including Transaction Costs
• Cost of Marketing Campaign
• Feasibility

20. Useful Links
Manchester Digital - www.manchesterdigital.com
Manchester Digital Development Agency - www.manchesterdda.com
Taking Payments Online - www.electronic-payments.co.uk
HM Customs & Excise - www.hmrc.gov.uk
Information Commissioner (Data Protection Act/Privacy Laws) –
www.ico.gov.uk
Patent Office (Trademarks) – www.patent.gov.uk
Trading Standards (Consumer Rights) – www.tradingstandards.gov.uk
Office of Fair Trading (Distance Selling Regulations) – www.oft.gov.uk
Royal Mail – www.royalmail.com
Vanilla Storm – www.vanillastorm.com
E-Commerce Guide - www.ecommerce-guide.com
Internet Business Manifesto - www.strategicprofits.com/manifesto/
Contract Store – www.contractstore.com

21. Thank You
ANY QUESTIONS?
If you need help with your business call:
Richard Hudson
Vanilla Storm Limited
T 0161 282 4525
E rh@vanillastorm.co.uk
W www.vanillastorm.com