Ecommerce in its most simple form can be defined as buying / selling products or services with help of electronic means. One of the most used electronic means is of course the internet, which has evolved as one of the most important commercial platforms.

As a result of this amazing development, many businesses,  ranging from small home based to large enterprise businesses scale, are looking for affordable and flexible ecommerce solutions.

Without a doubt, the most popular ecommerce solution deployed on the internet are online shops. Online stores are essentially web sites which fulfill the function of a traditional retail store.  Like some retail shops which you find on the corner of the street, most online shops are equipped with a shopping cart function.

A shopping cart is a piece of programmed functionality that enables the shopper to select, manage and initiate and order the selected products. Stores without shopping carts typically let the shopper order products via email.

Depending on your business objectives and whether you are a starting or an enterprise business, there are several ways of creating a professional online shop and grabbing a piece of the ebusiness-retail pie.
With all the choices and different types of solutions available nowadays, it has become difficult to distinguish what is right for you and your business.

This article will give you an overview of available types of ecommerce solutions and the differences between them.  After reading this article you will hopefully be able to select the ecommerce solution that fits you and your business needs best …

Depending on if you already have a web site as well as your needs, there are are basically 2 different ways of  creating a professional online shop :

• Hosted Ecommerce Solutions
  These are complete packages offered by ecommerce solution providers which include all parts necessary to create an online shop quickly and manage it effectively.  A package generally includes : domain name registration, web site hosting, setup or building,  design (templates), administration (adding / removing products) and shop promotion (SEO, PPC, SEM).Some of the most popular hosted ecommerce solution providers are : Web.com, Yahoo! Small Business, and ProStores (which is backed by eBay)

  Hosted ecommerce solutions are getting popular with both starters as well as established businesses. Good providers usually offer you several packages geared towards several stages that your business happens to be in.  With this comes support, promotion and the comfort of having responsibilities such as security, dealt with by your provider.

  Hosted Ecommerce Solutions are ideal when you are starting out and don’t have a web site online.  On the other hand, more and more businesses who already have a site are creating an online store through one of these companies and are simply linking to it from their main web site.

  This is a simple and very effective option, as it separates the risk of technical difficulties which can occur in the main site from the the ecommerce part.

• Standalone Ecommerce Solutions
  A ecommerce solution that is created by assembling stand alone parts.  In order to create an online shop for instance, you’ll need to take matters into your own hands and Register a Domain Name, get yourself a Reliable Web Hosting account and have your web site (online shop) set up by either yourself or a webmaster.

  Open source software offers an alternative to hosted solutions.  If you’re going to build a stand alone ecommerce solutions, you’ll probably end up using either oscommerce, zen-cart or cubecart.

  Ecommerce elements such as a shopping cart and a back end online shop administration, are usually added by PHP / ASP scripts, depending on which scripting language is used for the open source package.  A popular and relatively easy way to accomplish this is by adding pre-programmed modules that extend the functionality of the original software package. Most popular CMS (Content Management System) such as Drupal or Wordpress offer a variety of ecommerce plugins for use.

  Another, even more work intensive way is having the solution programmed from scratch or delivered by an ecommerce company that has programmed their own modules. The downside is that you will be completely dependent on them and unless you are a doing business in which privacy and security are very important (such as a financial organization) this option is usually unaffordable.

  Stand alone solutions, are used mostly when very specific custom functionality is needed which cannot be delivered by a hosted solution. Other situations in which businesses can choose to build an ecommerce solution from scratch are in cases of exceptional security or privacy.  A financial bank is a good example of this.

  Note: often I’ve had to explain to a client that building online shop from scratch by hiring numerous professional that this kind of solution would be ‘overkill’ and would cost them too much time and money. If you’re a starting business, don’t make the mistake of being scared of a $10 monthly fee for hosting at a solution provider, as you’ll be paying this kind of money to the hosting company that’s hosting your stand alone solution anyway.

Points to Base your Decision Upon,

Before you can choose what fits your needs and your business best, have a look at the list below. Too many enthusiastic online business starters rush into their venture without carefully thinking about their needs. Eventually they end up switching between solutions and unnecessarily paying more.

• Security & Privacy Issues
  Because of the sensitive nature of the information passed along while doing ecommerce, for example credit card numbers and personal data, an online shop or ecommerce web site owner will need to take necessary measures to ensure security and privacy.

  With hosted ecommerce solutions, this important aspect is taken care of by the provider. Things to look for here are secure, SSL-encrypted credit card processing (Secure Socket Layer).

  If you are planning on developing a stand alone one shop, you will need to take care of this yourself. You’ll have to buy yourself a SSL certificate at your favorite domain name registrar and make sure that online payment processing system works correctly.

  Secure payment processing issues goes beyond the scope of this article. If you don’t know anything about secure payment processing I recommend you start reading about SSL (Secure Socket Layer).

  Without encryption of sensitive information such as credit card numbers, and personal data, you and your customers will be sitting ducks to theft.

• Technical Difficulties & Support
  Technical difficulties usually come unexpected and when your running a business web site, or an online shop for that matter, the last thing you want is having it unavailable for your potential customers.

  In case of technical difficulties, if you have a stand alone solution, you will have to figure out where the problem is and contact the responsible party in order to solve the problem (for instance your web hosting company having troubles because they upgraded to another PHP version).

  Of course problems can also occur with hosted solutions. However, you will be dealing with just one support team and the problem will probably more quickly be identified. Also, since many shops are hosted specifically for this task by the provider, you can be sure that no surprise changes to hosting configurations will be made which cause troubles to the function of your business.

• Business Development & Anticipation
  Have you ever thought about how your business might change in the future ? Are you planning on expanding your product categories ? Is your customer base going to shift to a different group ? Anticipation is an important part of doing business. Don’t forget that the ebusiness is constantly in development.

  If your using a hosted solution, then is there a possibilities to upgrade to a more sophisticated ecommerce package ? How does it answer your future needs ? Is there any indication of the provider you are using looking ahead and developing their own services to accommodate possible future changes ?

  If your using a stand alone solution, does it offer regular updates and upgrades ? In case of open source solutions such as oscommerce, how active is the community of developers and what are users saying in the forums ?

• Web Site Promotion & Marketing
  Web site promotion (SEO / SEM etc.) is not something that you can learn overnight.  It being so important to the success of your online shop getting found by the right web surfers (customers) should weigh heavy in the choices you make.

  Many hosted ecommerce solution providers offer promotional services which can include SEO (search engine optimization) and SEM (search engine marketing).  Look carefully at kind of promotional services are included in your package.  Are there any extra costs ? What kind of results can you expect ?  Are there any case studies provided ?

  If you are using a stand alone solution. You have no help in promoting your online shop. This means you’ll either have to learn to do it yourself, or you’ll have to hire professionals to do the job for you.

• Pricing & Monthly Fees
  Many people get scared away by the monthly fees that a hosted ecommerce solution provider charges.  However, nowadays there are very affordable packages available asI believe the cheapest starting price is about $10 / month at ProStores.Take into account that if you’re planning on starting a stand alone solution you’ll also have to deal with fixed costs in the shape of domain name registration, a web hosting account, SSL certificate(s) and maintenance tasks.

Summary,

Undeniably, there are many advantages to using a hosted ecommerce solution provider. Ease of use, quick setup and support are essential for many starting online business.  Before hosted ecommerce providers, starting an online shop was a real investment. Aside from the investment of development cost and time, maintaining correct functioning of the shop made the shop owner depended on technically skilled people, such as web masters, whom are called in to solve issues regarding domains, hosting and updating.

Nowadays, with the coming of companies such as ProStores, or Web.com most of these problems are history.  Service, maintenance and support are basically outsourced against reasonable fees and technical problem solving is included in the monthly fee.

When it comes down to making a choice between a hosted and stand alone ecommerce solution, it really comes down to your your needs, your time frame and the type of business you are planning to migrate to the internet.

If you are simply a retailer who wants to get their online shop going quickly and effectively, without technical hassle so that you can concentrate on your business, then a hosted solution is your best choice. On the other hand, if you have special needs which cannot be delivered by any provider, your only choice is to go it alone.