eCommerce Website - Where is the Money?

I was working with a small business today in Georgia that had a simple problem - the new eCommerce manager couldn't find the money from his eCommerce website.  Like people at many small businesses, he filled many roles, which partly explains why he was in this situation. It also gets pretty confusing, what with websites, shopping carts, credit card payment gateways, and internet merchant accounts. So I started by going over these components in his eBusiness.

First, he had a shopping cart module built into his website that he owned.  The customizable shopping cart allows people to add products from the online catalog, and then enter shipping and credit card payment information. 

Second, the credit card payment gateway is a third party service that connects the shopping cart to the financial networks needed for the credit card transaction, including the customer's credit card issuer and his internet merchant account. 

Third, the internet merchant account is at his local bank, which also enables him to collect credit card and cash payments at his brick-and-mortar store.

So our eCommerce manager logs into his eCommerce administration website and sees all the orders.  Customers are getting automatic notifications. The orders are being fulfilled and the credit cards are charged after shipment.  Inventory is being depleted. All the information the company needs to market and sell their products online and fulfill shipments is found in the eCommerce website and the eCommerce administration online tool.

In our case, Authorize.net is the credit card payment gateway.  Our eCommerce manager logs into the Authorize.net administration site that gives him the capability of a virtual credit card terminal plus reporting.  Daily transactions and summary reports shows the credit card transactions.  The detail of each transaction holds the eCommerce website order number, to tie website orders to the credit card transactions.

Most importantly, the money is transferred to his internet merchant account at his local bank.  So after we talked, he called his local banker.  As soon as the banker returned from his bar-b-que lunch social, they reviewed the internet and store merchant accounts, fees, and statements.

The eCommerce manager had all the information to reconcile eCommerce website orders with the credit card transactions and with the money in his merchant bank account.  He analyzes the hosting fees and fees from the credit card gateway and merchant account to calculate his net margin on online sales.  On a side note, when the UPS invoices for shipping, he reconciles what UPS charges against what his customers pay in shipping costs - found in his eCommerce administration tool.

There's a lot of moving pieces, each with assoicated costs, all of which requires attention when setting up an eCommerce website or an eBusiness.  We, at TwinEngines in Atlanta, GA, help small and mid-market companies build eCommerce websites and guide them through the process to set up all the components.  Whoever you turn to for eCommerce solution, make sure you go over all three areas to understand the process, operations and costs at the start.