Defining eCommerce terms

Written by: Jonathan Briggs

October 30, 2004 [4611 views]

As the second part of my feedback I will give some definitions for the terms I asked you to define and explain. A few of you were way off the mark for some of them!

Payment partner
This is a company such as NetBanx, Worldpay, SecPay or PayPal who helps an ecommerce retailer take credit card or other payments. They have a relationship with credit card issuers and banks and charge a small fee for each transaction they facilitate (on top of the normal credit card fee). They provide the technology to do this either in the form of a Web Service or via a payment transaction page on their site for your store. They are important because they simplify the payment process.

It is not:
“A company that invests in your store”

Fulfilment
This is the process of picking, packing and shipping orders and handling returns. It is often handled by a third party such as Exel, Crossflight, Gardners Books or FX Logistics. Fulfilment companies often own warehouses for storing stock, many are automated and some operate their own fleets of delivery vehicles; others will use the Post Office or courier companies for the delivery. Many e-commerce companies handle their own fulfilment. It is important that orders, stock availability and refund instructions can be passed easily between the retailer and the fulfilment company.

It is not:
“That the customer is happy”
“Your potential to do something amazing”
“That all tasks are done to the max”
“Meeting your mission statement”
“About giving the company a good image”

Affiliate schemes
This is an arrangement in which other sites sell your products online in return for a fee or a percentage of the sale. Amazon pioneered the automation of affiliate relationships and pays 4-8% for orders that originate from a third party site. From the retailers point of view they have hundreds of other sites marketing and selling for them. For the affiliate it is a valuable source of income. In designing an affiliate scheme a retailer will often sometimes create a “white label” version of their site that can be rebranded by the affiliate or a set of tools that provide content and offers in a form that can be easily integrated into the affiliate site. A number of companies make money from brokering the relationships between sites and potential affiliates.

They are not:
“About working as a team”
“Extra services that relate to the products”
“Terms and conditions for a website”

DDA Compliance
The UK Disabilities Discrimination Act 1995 aims to outlaw discrimination against disabled people including in employment and access to goods and services. In October 2004 further rights came into force and these included the right to be able to use online services and e-commerce sites. Ecommerce sites should now be built to take into account the needs of all users including the partially sighted and blind. This might be through a separate accessible site or by using techniques that allow your store to be shown on adapted browsers or screen readers.

It is not about:
“The Data Descriptions Act”

Hosting
This is about putting your ecommerce site on an http server so that it can be accessed over the web. In reality it means finding a specialist company who owns servers, firewalls and connectivity and monitors the hardware and software on your behalf. Designing secure scalable hosting is a skilled job and will involve designing for component failure (redundancy) and load balancing. Low cost hosting can be a mistake if levels of access, service, security and support are poor.

It is not:
“putting a site together”
“about finding a cheap one”
“about buying a domain and some web space”
“tools for selling online”
“advertising other products or companies”

Clear business model
How does the business make money? The Internet has spawned hundreds of different models including auctions, affiliates, subscriptions, name your price, sponsorship and gambling. Many companies have a business model that relies on a number of different revenue streams.

It is not simply:
“knowing what the site is trying to achieve”
“long term goals”
“how they are going to progress and grow”
“a picture of the business procedures”
“the people involved in a project”

Customer feedback mechanisms
Ways of customers providing information back to the retailer. I want online stores that allow my to talk back to them as I can in the real world. I want to be able to complain, make suggestions, provide reviews and ask questions. These are all made possible if the site has a variety of feedback mechanisms.

!!!It is not simply:
“a contact telephone number”
“any improvements you make to the site”

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