Choosing the right tools to start really helps to make setting up a shopping cart and online marketplace both affordable and practical.

Average costs for merchant account, payment gateway, hosting service, domain name, shopping cart software or service, and secure hosting are in excess of $75 per month. This is not possible for many startup stores or people who are starting a business because of financial need. Is there an alternative?

The first time I considered an online shopping cart, I began to research the whole process. The more I learned, the more discouraged I became. Expense mounted on expense, and it was totally impractical to even imagine being able to afford the services if we purchased them one at a time. And since they were all dependent on each other to actually benefit us, there really was no point anyway.

Recently I began building a webstore again, adding a shopping cart to my bulkfoods website. It has over 700 items, so this is a major undertaking. Indeed, the large catalog of products is one reason why it would have previously been so expensive. Because many free or low cost shopping cart options have limits on how many items you can have, or how many pages you can use.

I will overview the usual process, what I did, then outline what your alternatives are and the advantages and disadvantages, go over the process step by step along with important considerations in taking the step, then summarize.

The Usual Process

Website services are available in a range of options. They generally fall into one of these categories:

1. Comprehensive services, you pay, someone else does ALL the work. This is usually expensive. Package deals exist, but they are not personalized, and do not reflect the individuality of YOUR business, which is critical to setting yourself apart from the masses online. The exception is if you find a small business or individual who has the experience to offer you a customized solution based on your specific needs, and tailored to your business. They may be willing to use free or low cost services for which they pass on costs, and they may be willing to work with you to reduce overall costs, and then train you to maintain the site once built. Expect to pay at least $200 for services that won't end up costing you long term in customers. (Contact us, Adventure Tech-Web, if you need such services - Ok, so that was a bald advertisement, but we warned you, didn't we?)

2. Set up your own services like the large corporations do. This used to be the only option! It kept small businesses totally out of the market, because they had to pay for their own services first hand, and they are expensive. This is not an option for shoestring startups! Fortunately new options came into play.

3. Cookie Cutter all in one solutions. I don't advise this one! You pay for hosting, the domain name, and a website built from a "site builder", from which you choose page templates to put your own text in, or you get a designer that cranks out standard websites with no real flexibility. The problem with canned websites is that they LOOK like canned websites. Because they are designed to work for EVERYBODY, they are personal for NOBODY. And a website NEEDS to be personal. If it is not, you are just one of the numbers, and the customers will purchase elsewhere.

4. Low cost choices with limited functions. Here is where you have to do your homework. There are good things here, and bad ones. Some limit things that you need, others have done thier homework and base the limitations on most commonly used and needed services. Your particular business may not need things that they leave out, or it may need things they leave out, but not things they include! Finding a good one is the catch, but once you do, this is the range you will most likely find the greatest degree of balance between cost and function.

5. Free services. Some are good, some are bad, but you really gotta know what you are getting! Some free services limit the options so as to make them almost unusable. Others have built in requirements for later purchase. Some lack needed flexibility, and others do not let you easily upgrade if you are able to grow your business. If you choose to use free services, choose carefully, and beware that free services that LOOK like free services can hurt your business because customers may not be as confident purchasing from you if you do not look successful enough to afford a small hosting fee. This is not true of all businesses, but is with some. Once in a while there is a true gem in this category that can be recommended wholeheartedly. We found one that we endorse fully that fits this description.

Normally to set up a webstore with shopping cart, you need the following components:

1. A website. You can get a website several ways. You can hire it done and there are plenty of people (including us) who will do it for you for a price. There are "canned" options which rarely work really well, and there are ways to do it yourself, which may work or may not. Anyone can build a website. It takes a special combination of varied skills to build a GOOD one (writing, page layout, design, computer skills, and web skills). What you do NOT need is a high priced corporate level designer to build you a $3000 website (hey, that is the CHEAP one!). You also do not need to pay $29.95 for a website that looks like all the other similar websites out there. If you have to hire it done, expect to pay $150 to $350 to get a nice, personal, and functional website with 5-25 pages (including helping you with everything from domain registration on up to search engine registration). If you do it yourself, study up first on what makes a good website.

2. Domain Name. Domain names traditionally cost $30 per year or so. You can now get them for much less - sometimes web hosting companies will offer them free for the first year if you purchase server space from them. The domain name is an optional item if you do not need high level hosting services, but previously you had to have one if you wanted a functional shopping cart. Now you don't. You can use a sub-domain, or you can park your site in someone else's webspace if they will let you, and have your URL just be their web address with your folder tacked onto the end. You can put it in your email space if your ISP lets you, but again, you will have no choice of domain name, it will end up looking like this: http://w3.trib.com/~lwheelr/, or something like that. A good domain name helps your business be found and remembered easily. But you can get along without paying for the best one if you choose. You can sometimes save by using domain extensions other than the hot 3 - .com, .net, .org. There are tons of new ones available now, from .biz to .us, or .info, depending on what you are doing with your site and where you live.

3. Paid Hosting - Traditionally this was expensive. Free accounts had 2MB of space, and you had to pay $15 per month for even 25MB. Well, hard drives have grown, and with that the costs of hosting have plummeted. You can get 10 to 50 MB of free space now, and hosting plans start cheaper. For a webstore though, you usually have to have one with Secure server capabilities to protect the sensitive information of your customers. This is much more costly. With current options though, this is no longer critical, and you can do it with just a cheap hosting account (some of which do have SSL options for additional fees), with a third party hosting your shopping carts. Shopping cart hosting is also a specialty, and many companies will offer it to you for a price. A hefty one usually. Skip it, we tell you how to get around it later.

4. A merchant account. If you want to accept credit cards, you need some sort of merchant account. These will usually be priced by some complex formula of monthy maintenance fee, per transaction fee (with a monthly minimum), and sometimes additional fees for other services. It is hard to know just how much it will cost you. And one that accepts credit card transactions when you cannot see the person using the card is usually more expensive. There are services like PayPal that offer no montly fee, no maintenance fee, and totally use a per-transaction fee, but they tend to be either limited or VERY costly (one solution charges you 10% of the payment amount). PayPal IS the most affordable, but has had the limitation of requiring membership before transactions can occur (this changed, I am not sure how effectively it changed). Many customers do not want to have to join something just to buy your product.

5. Payment Gateway. A payment gateway is an online service that authenticates credit card purchases in real time. This is a valuable service, and generally you need it because shopping carts do not allow other ways of accepting credit cards. The shopping cart we recommend allows an option if you already have a merchant account, and there are other options now too. Fees for Payment Gateways are a lot like merchant account fees - complex! It may be hard to figure out ahead of time exactly how much it is going to cost you.

6. Shopping Cart Software or Service. This is the software that drives the Buy button and tracks what the customer is purchasing. It also collects payment information and may route the payment through a third party payment system such as PayPal. Shopping carts are usually either very expensive, or very limited in function. We found one exception, which will allow you to have your shopping cart fully functional and flexible enough to use either low cost, or traditional solutions. PayPal also offers a free shopping cart system, but they require that your customers use PayPal to pay (this may have changed).

Here is what I did to save money, I work an average of 3-5 hours a day:

1. All website design and work is done by me. I created my own website and did all my own data entry work. And it is WORK. My bulkfoods site took about 2 weeks of hard work to originally design and set up. It has a lot of products though, and I am skilled at website design, having done a wide variety of them over about 4 years. Check out Basics of Building Your Own Website if you need info on how to do this, otherwise you have no choice but to hire it done.

2. All shopping cart setup is done by me. Shopping cart work is WORK. It took three days just to revise my site enough to accomodate the shopping cart, and another week to enter in the data for the products. Each item must be hand coded in with price, description, and other details, into a link or form with special coding that tells the shopping cart how to handle the information. This is true of ANY shopping cart setup (some will import data from a database, but you still have to enter the data into the database first). You have to learn some new skills, and it can be hard to understand at first. But the things you have to learn are not that many, and once you have the code for ONE item, you can duplicate it (copy and paste) and change just the details for each additional item. If you cannot figure it out, you will have to hire or beg help. Expect to pay a flat fee plus a per item fee to set it up.

3. Low cost domain name. I got a bargain domain name. The one I wanted was not available, otherwise I would have paid the $9 to get it (a domain name scalper had bought it, parked it, and offered it for resale for $8000.... Yeah right!). I got the same name, but with a different extension at the end for just $4.50. The drawback is that a browser defaults to .com if someone does not type the full domain name, and .com is easier to remember. But this was a step forward, and I can live with it. I registered my domain name through www.godaddy.com.

4. Low cost but functional hosting service. I purchased hosting service through godaddy.com also. It was more functional than most for the price, but had a low space amount, just 25MB. But it cost me only $4 a month, which I could afford even in a bad month. They did not make it simple to point the domain name at the space. I had to jump through a few hoops. And they were always advertising additional services on their site maintenance pages, which can be annoying. Access to some advanced services is so slow as to be totally unusable (I cannot access database services at all). I eventually got so frustrated with the inability to access the database (I was learning to use one) that I transferred my service to iPowerWeb. I am more than pleased with the range of services they offer (they keep adding stuff). They have added the ability to manage sub-domains, along with additional applications and plug-ins that make me able to do more with my site. Their instructional pages can be confusing for the advance services but their tech support always answers their emails. If you access your email accounts through their web-mail address it is VERY slow, but access through your email software is fast and reliable. The rest of the service is outstanding and their value is unbeatable. I can live with the shortcomings - they also have a bunch of add on functions that most places charge more for, and they make it simpler to install them than if you hunted up freebies yourself. I can recommend GoDaddy if you do not need a database. I can recommend iPowerWeb wholeheartedly if you can afford $10 a month.

5. Free Shopping Cart, fully functional! www.mals-e.com. I cannot recommend this highly enough. A fully functional shopping cart, with cart hosting provided by Mal. I don't know what this guy gets out of it, but it is just amazing software. And he also lets you use software to track an affiliate program if you want to set up a do-it-yourself version of one. No limit on number of items, and great integration with other cost saving services. You do have to learn how to set it up, but this is true of ANY shopping cart software. This is functional enough for almost any startup webstore. iPowerWeb also has a shopping cart option with their web hosting which does not cost you extra.

6. PayPal. Ok, everybody knows that! But PayPal is changing. They are making their services more and more competitive all the time, and more and more functional. PayPal integrates well with Mal's shopping cart, plus if you turn on Auto Return, it works with the affiliate tracker program also. And PayPal no longer requires users to register to make a payment (I have not tested this, but that is what they say). PayPal Shops can help you in marketing your website as well. One of the free services well worth using if you need it. I have researched standard merchant accounts and payment gateways, but the charges are based on many factors, and usually when you start adding up all the ways in which they are going to make you pay, you end up confused and with the absolute certainty that it is going to cost you too much. I always end up just sticking with PayPal, even though it is not as good as I'd like to have. As always, be on guard against identity theft, be sure you never enter the PayPal site through an email link, and always make sure you NEVER EVER enter sensitive data into a form on an email or open a program that appears to be sent to you from PayPal. Read their security updates and protect yourself just as you would with any other bank account.

You have several choices for each of the things I did. Here is the general overview:

1. Website. Expect to pay for a good one or spend a lot of time building it. Call us if you need a personal quote, or ask a friend for help. If you hire it done, you have to trust the person you hire. Use templates if you build your own, it can make your site go way faster. See our instructional helps in the Website Building section of this site.

2. You can do the shopping cart work yourself or hire it done. There are no other options. The work consists of entering code for each item you list, and sometimes additional code if your items have several options. Again, we can provide this service for you if you need, for a reasonable price.

3. Domain names cost between $5 and $30 per year. You can choose a bargain name, a full price name, or go with no name at all. If you use free webspace, you will get a subdomain (some paid space offers this too). It looks like this http://www.adventuretech.us/supermom, or http://supermom.netfirms.com, instead of http://www.supermom.com. Figure out whether your business requires a high level of trust, or if you are selling anything that indicates prosperity. In either case, a domain name may pay for itself in increased consumer confidence.

4. Server space. If you go with free space you will have the host services ads on your page. This can happen through a banner ad at the top (which they automatically place), through them putting your site into a frame window with their banner ad at the top or bottom, or through pop up ads that appear when your pages are open but that your viewers can close. The ads are always highly conspicuous, that is their purpose because the site is supported by ads if you get the space free. You must decide whether this is a detraction from your business or not. In general, it loudly proclaims your space to be free space, and may hurt consumer confidence in some business lines. Most hosts that offer free space will also offer a low cost option. You can try:

www. register.com - They use bottom banners. I have not personally used this service.

www.freeservers.com - Freeservers requires you to indicate whether you are using a domain name during the registration process for the space. This is true of free or paid space. You cannot change it later, you must delete your account and then open a new one. They also do not allow you to upgrade from one type of account to another easily, you must delete one, then purchase another (you lose time, and you may lose hosting fees too because they do not refund leftover monthly fees). Top banners on free space.

www.netfirms.com - Strict limits on file transfer size. Also if you post images there for use on eBay or somewhere else where an outside server has to retrieve the image it will not work because they do not allow access to images or files without first accessing a page with their ads on it. Otherwise a functional service. They place top banner ads on their free space. Since they use Google Ads, this looks less like free space than most.

www.godaddy.com - Lowest monthly paid service. They do not offer free hosting. Paid hosting has a surprising number of advanced features though some are not usable because their servers for administration are VERY slow - I cannot even access SQL software to upload a database because I cannot get in (always times out). Low cost domain registration also, but interface is slow, and not very intuitive. One email account that will accept email aliases. Informational pages provided by this company are also extremely limited and not very helpful.

www.iPowerWeb.com - Great intermediate solution. $10 a month or so gets you a huge space, database use, lots of server based applications and plug ins, good up time, sub-domain capability, lots of email accounts, and more. Slow web mail access, some help pages for advanced functions are rather frustrating, but help pages for basic stuff is very good. My "best choice" recommendation if you can afford $10 per month. They often offer free domain registration for the first year also, which can save you that cost starting out.

www.interland.com - These guys cater to large websites. $16 per month for 250MB of space (maybe more now). But the service is highly functional, has multiple email accounts attached also. Services available at higher cost that allow sub-domains, and advanced services. They do offer some good instructional pages, but since they are aimed at pros, they don't explain things in a teaching mode.

5. Shopping cart. You can pay for shopping cart software that you install on your own server. If you do, you get into a technical maze of requirements and other services that may be needed. You can also find other small shopping cart services for free, or for low cost, but they usually have limits, and changes when your business grows would be a lot of work. I personally cannot see any reason why anyone would need to use a lesser service than Mal's. His cart will work for anyone whose store is taking in less than a several hundred orders a week, and for unlimited items. It provides for growth, and for most small businesses will work as a long term solution, not just as a stop-gap until you can afford something better. Check it out at http://www.mals-e.com. While you are there, read up on mTracker too and think about creating an affiliate program once your business is stable. And no, I do not get anything for recommending him (darn it!), I suggest it because it works.

6. Your alternative to PayPal is another online payment system like Yahoo payments, eGold, or something else. But PayPal is by far the most common, most well used, and most functional of them all. They are in the business of helping small businesses and they do it very well. They are constantly changing to make more services available and to make it easier to use. They know that their real customer is small merchants, and that is who they are catering to. If you have a merchant account already that allows you to accept cards from people whom you do not actually see, then you can use Mal's shopping cart and just set it to collect the credit card data and you can verify it manually later. This is more work for you, and means that there is a delay between placement of order and verification of payment, but works well for many merchants.

Step By Step Store Setup

Give yourself a month between starting and having a functional store. It may take more or less time than that, so be patient.

1. Sign up for a PayPal account if you do not already have one. Cross linking it with credit card and bank accounts (which you need if you plan to do transfers of payments to your bank account) will take a week or so.

1. Build your website on your computer. If you have one already, review it and make sure there is a place for the buy and option buttons. Adjust the design to work smoothly once shopping cart buttons are installed. If you need more instructions on this, see Basics of Building Your Own Website. You may need a different page layout to accomodate details.

2. Get your domain name if you want one. Find information on the registrar's site on how to point it to the webspace.

3. Get your webspace if you need it. Read up in the info files on how to upload files, or how to set your domain name. It will take 24-48 hours to get the domain name to link to the space and actually work.

4. Go sign up at Mal's. Just do the store. Save mTracker for another day! Do your homework at start reading up on how it works and learning how to configure it. Set up the options in the Admin area.

5. Write the code for one of your buttons. Upload it on a test page and see if it works. When you get the code right, start duplicating it and modifying it for other items, and work your way through till all items have buy buttons.

6. Upload your site and test it. And test it!

7. Register and market your website. See more instructions in Website Marketing Handbook.

Certainly the same full set of services won't be right for everyone, but this tutorial should give you a good idea of what you need and where to find it. Beware of doing a net search for services, people tend to trust search results and it is just as easy for a dishonest seller to rank as it is for an honest one to do so. Read the user Terms and Agreement completely, and make sure you understand what the limitations mean. Give yourself room to grow, but keep the costs reasonable, and you'll be in the best position to lay a good foundation for growth without undue risk.

Good inexpensive services are hard to find, but they ARE out there. Use caution and good judgement, and get advice from friends who have been there when possible.

Adventure Tech-Web offers shopping cart setup for a predictable price, or if you set up your own, we offer a website assessment service for $25. We check your site for functionality, design, efficiency, and accuracy, and make recommendations for changes. We also provide complete web design services including graphical design and content writing. Please ask us for a quote before you decide that you cannot afford it!