Internet Commerce: Payments and Security
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Transcript Internet Commerce: Payments and Security
Internet Commerce:
Enabling Web
Storefronts
presented by:
David Strom
David Strom, Inc. USA
[email protected]
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Why This Tutorial
The Internet is moving from a collection of
technologies to a set of commercial services
To use the Internet successfully:
you need to know how it works; but,
you must also understand why it works…
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A fun topic, things changing quickly!
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Course Topics
What Becomes Success?
Choosing the Right eCommerce Path
Installing and Operating Your Own Storefront
Examples of various products
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Course Approach
Discuss technology
Provide pointers
Give examples
Provide insight into various approaches and
technology choices
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What This Course is Not About
Nuts
and bolts of payment systems
In-depth on security
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Some Disclaimers
I’ve lived in the Internet for a long time
Fundamental aspects of Internet dynamics are
unavoidable
I have consulted to some of the vendors mentioned
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Today’s Topics
I: What Becomes Success
II: Choosing the Right eCommerce Path
III: Installing and Operating Your Own Storefront
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Topic I: What Becomes Success?
Overview of eCommerce market
Review physical storefront success factors
Propose some definitions
Define success for the web
Draw up five eCommerce principles
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Overview of eCommerce Market
Predictions
Success factors
Five principles
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eCommerce Revenue Predictions are
Wide-Ranging
Source
1996 (B$US)
2000 est. (B$ US)
IDC
$2.2
94
Forrester
1.4
117
Jupiter
.7
15.6
Dataquest
6.4
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And Not Very Believable
IDC says the web will become a mass market in the
US by 12/98!
With 100 million users!
Let’s not confuse web users with eCommerce
BUYERS!
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Ticketmaster
US$5 million/month via the web in sales
Started 11/96
Generating lots of new buyers, who wouldn’t
ordinarily use their service
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Then there is Disney.com
Web site Daily Blast signing up 15k
members/month
Sales via web are equal to 3x-5x of physical Disney
store!
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And of Course, There is the Porn
Industry
“However, extensive interviews with adult site
owners yield a picture of a highly charged market
of approximately 10,000 sites generating about $1
billion in revenue
per year, most through
electronic credit card transactions.”
from Interactive Week
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Sad State of Today’s eCommerce
Marketplace
Poor quality tools
Hard-to-find stores
Limited payment methods
Credit card snooping perceptions
Older browser versions can’t view latest sites
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Case in Point: Buying a Bike Rack
Item not carried: outdated catalog
Telesales not familiar with web
No cross-sell or substitutions online
Needed three phone calls to complete purchase
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Let’s Learn From the “Real World”
Compare what works for physical stores
Try to extend to the web
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Critical Success Factors for Physical
Storefronts
Location
Branding
Good service
Good product selection
Proper pricing and margins
Traffic
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First Problem:
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None of these translate on the ‘net!
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Now Try to Agree on Definitions for
Web Stores
What determines a good location?
Position on a search page
Nearness to popular destination
Ad on a popular server
What determines branding?
Memorable domain name
Popular search category destination
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An Example of bad location: Montana
Meats
www.imt.net/~lingerie/buffalo/buffalo.html
Can’t they afford their own domain name?
www.company.com/~anything is BAD NEWS!
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Another Case: Buying Toner and
Batteries
www.cartridgesusa.com, www.batterybarn.com
Catalog shows pictures of parts
Easy to find relevant item
But payment acknowledgement incomplete
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Determining Traffic
Hard to do -- is it hits, page views, registered users?
[HITS = How Idiots Track Success]
Hard to measure -- do you count gifs? Use log files?
No general agreement on any metrics!
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Traditional Advertising Doesn’t
Apply Anymore
Can’t measure anything
Every site has its own banner sizes
The Web is not TV
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One Working Definition of Success:
SURVIVAL!
If a site is still running after 12 months, and getting
more traffic, it is a success.
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Does a site actually have to sell
something?
Many actual eCommerce sites don’t do the complete
transaction (Cisco)
Require faxes or telephone calls!
Some merely have catalogs
A good example: Singapore Power Authority
www.spower.com.sg/readmeter.cgi?cmd=form
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Good eCommerce Examples
Easy to find merchandize
Good service
Individual customization is key
Simple navigation
Business-to-business focus
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AMP Connect
Have customers in 100 countries
Speak many languages
Produce 400 catalogs covering 135,000 items
Mailings cost US$7MM/yr
Fax back cost US$800,000/yr
But you can’t buy anything directly!
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Solution: “Step Searching”
Saqqara.com software to enhance Oracle database
Provide user feedback as they type in the query
Show how many matches in the database
Different mechanisms for searching:
by part number
by alphabetical names
by part family
by picture even
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AMP connect.ampincorporated.com
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AMP Connect (con’t)
And can set to list parts that are available in specific
countries!
Updated daily with over 200 item changes
Detailed drawings saves time for customers to pick
the right item
Saved AMP over US$5MM in production costs
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Save in Translation Costs
AMP catalog in several languages
Translation cost was US$100,000
Versus US$1.5MM to produce separate translations
of print editions
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Silicon Investor www.techstocks.com
Difficult to find anything
Incomplete database of companies
Companies are arranged poorly
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First Principle of eCommerce:
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It is easy to find what you are selling!
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Amazon.com
Services frequent readers with a variety of
programs
Editorial comments
If you liked this book, you’ll like...
Notification of new books by author, topic
Simplified “1 Click” ordering
Uses simple pages and email
Associates program for commission kickbacks
Gift certificates via email
And ... lots of books
to choose
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Strom Inc. 1998 from
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Amazon
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Update your directories!
This one is almost a year old
www.asiapage.com/alist.html#jewellery
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Non-secure servers
Many SG sites collect credit cards on them
GoodWood Florist
www.asiapage.com/goodwood
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Second Principle of eCommerce:
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Deliver solid service!
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Dell
Most notable site for computer buyers
Customize the features you want via a web form
Simplifies and personalizes the shopping
experience
WYSIWYB (buy)
>US$1MM/day in sales!
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Dell
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Canadiantire.com
eFlyer uses email notification along with web forms
Customize exactly what coupons and deals are sent
to you
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Third Principle of eCommerce:
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Individual customization is key
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BMW Motors
Example of what not to do
Use gratuitous graphics
Cheesy low-res videos
Toys, not tools
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BMW
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Compare with Subaru
Find specific information about each car
Can price options to your particular needs
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How NOT to Design a Payment
Screen
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www.netmar.com/~hamorder/cshorder.shtml
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How NOT to take advantage of
bandwidth
www.clickdiz.com
Two different pages, one for SG ONE, one for all
others
But SG ONE page has just heavy graphics -- why?
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A better example: fishing licenses
Simple, quick, and does the job with a minimum of
clutter
www.permit.com
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Fourth Principle of eCommerce:
Make navigation simple!
Use small graphics, site maps, indexes
Avoid clutter, frames
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Int’l Commerce Exchange System
Matches overstocked sellers with buyers
B2B exclusively
Uses faxes to notify potential customers
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ICES www.icesinc.com
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Fifth Principle of eCommerce:
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Business-to-business focus
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Topic II: Choosing the Right
eCommerce Path
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Four Approaches:
Join an eMall
Outsource to an ISP
Buy suite of software
DIY
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Joining an eMall
Only if you don’t have any in-house programming
staff
Don’t want or can’t trust consultants to do it for you
Want someone else to handle payment processing
Don’t care whether your store is tied into your own
financial system
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The Mall of eMalls
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malls.com, of course!
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Different Kinds of eMalls
Collection of independent links elsewhere
Landlord/hosting provider
Become a sales representative and Make Money
Fast!
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Evaluating eMalls
Do they offer storefront design?
Have in-house programmers?
Hosting of your own web?
How many payment systems do they support?
What kinds of accounting reports do they offer?
Who are the other tenants and do you like them?
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The Truth about Internet Malls
Read your contract
Check your site for errors
Evaluate your content
Measure your results
Promote your site
(from www.netrageous.com/reports/thetruth.html)
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Reasons Not to Join an eMall:
You know and like perl
Don’t have to take payment via the web
Want complete control over your site
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The Results So Far Haven’t Been
Encouraging
Many store owners haven’t sold anything from the
mall!
Over 90% dissatisfied with mall operator
Basic HTML errors and unresponsive staff to fix
problems
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The Catch-22 of eCommerce:
To be successful, a software vendor has to promote
his products via the Internet.
But this means eating one’s own dog food!
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Leading USA eMalls
Vendor, location
Number of stores
ViaWeb
www.viaweb.com
Internet Mall
www.internetmall.com
Blue Money
www.bluemoney.com
$100/month, all done with
a browser
$150 + $15/mo, % of each
transaction
Outsourced payments and
catalogs
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Leading Singapore eMalls
shop.bnn.com.sg
www.shoppingvillage.com.sg
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Find an ISP
More ISPs are offering eCommerce solutions
Have to use their software standards and payment
schemes
Could be pricey
Just catching on in USA
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Some Examples
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www.psi.net/web/ecommerce.shtml
www.Best.com/bizcomm.html
www.Brainlink.com/html/saleslink.htm
www.Earthlink.net/company/webservices.html
IBM: mypage.ihost.com
www.Netcom.com
business.Mindspring.com/prod-svc/smbiz/
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Price Comparison for ISP hosting
Provider
Setup fee (US$) Monthly fee
(US$)
IBM
260
55
Earthlink
624
194
Netcom
450
300
Mindspring
175
324
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Plan name,
payment
options
Bronze, credit
cards
Premium Plus
Commerce Site,
credit cards
Commercial
Advantage,
credit cards,
Cybercash
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Price Comparison assumptions
10 Mb disk storage
Single email account
InterNIC $100 fee included for domain name
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New Approaches: GeoShop, Tripod
Builds on GeoCities “communities” but for
merchants
$25/month for just commercial listings
$100/month for actual transactions
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working with Internet Commerce Services Corp.
Tripod will offer something similar this summer
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One Way to Support Lots of Payment
Systems
Wired-2-Shop
www.wired-2shop.com/TestDrive/Admin/PaymentList.asp
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The Suite Approach
Leading contenders
What is part of the suite and what isn’t
Prices and platforms
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Popular eCommerce Suites
Vendor, Product
Version
Price
Platform
ICat
Elec Comm Suite
3.0
$9000
NT, 95
IBM
Net.Commerce
2.0
$5000
NT, AIX
Microsoft
Commerce
2.0
$5000
NT
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Popular eCommerce Suites (con’t)
Vendor, Product
Version
Price
Platform
OM Transact
Open Market
2.3
$250,000
Unix
Intershop Online
Intershop
2.0
$5000
$8000
NT
Unix
WebSite Pro
O'Reilly
2.0
$800
NT, 95
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Four Typical Elements
Catalog
Storefront designer
Ordering/inventory system
Shopping trolley/check out system
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The Cold Hard Reality of Suites
Suites are nothing more than collection of products
Lack integration among various elements
Difficult to setup, customize, and use
Require you to live “inside” their structure
Limited payment options
Sounds like early MS Office
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Payment Systems Included in Each
Suite
Microsoft: Verifone, Buy Now
IBM: Verifone, SET, eTill
iCat: None (but many third parties)
OpenMarket: Verifone
WebSite Pro: InternetSecure, CyberCash
Intershop: CyberCash, ICVerify, others
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Sample Stores Included in Each Suite
Microsoft: 4 stores
IBM: 5 stores that are part of an eMall
iCat: 1 hardware store
OpenMarket: none
WebSite Pro: 1 bookstore
Intershop:3 stores
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Databases Supported in Each Suite
Microsoft: SQL Server
IBM: DB2
iCat: 4D, Sybase SQL Anywhere
WebSite: Access
Intershop: Sybase SQL 11
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Dealing With ODBC
Have to understand how to set up data sources
Intimate knowledge of your data structure
Re-install ODBC drivers at least once!
Best to start with built-in database
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Store Wizards Included in Each Suite
WebSite Pro (but doesn’t do much)
net.Commerce v3 (11/97)
MS Commerce
create appearance
navigation
registration, check out flows
payment methods
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Tips
Don’t install anything before making sure you have
everything!
Downloads for free, but they expire
Can you export existing files to these systems?
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WebSite Professional
website.ora.com
Version 2, shipping since 9/97
US$799!
NT (or 95)
Supports Cybercash OR Internet Secure (Visa, MC)
One sample store (bookstore)
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Sample storefront
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http://merchant.inline.net/admin/
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WebSite Configuration Sheet
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Store Properties
Only can operate a single payment system
Run on a series of Access databases
Built-in tax table, but for N.Americans!
Well documented data structures in typical O’Reilly
fashion
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Recommendations
Lowest priced suite by far!
iHTML is robust, but will take some learning
Nice store setup and organization of catalog
Good low-end solution
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Intershop
demo at presentation.intershop.com (admin/admin
for store)
Includes Sybase SQL 11
US$5000 for NT, higher for Unix, includes 3 mos.
support
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Six Different Managers
Catalog
Products
Store
Purchases
Inventory
Customers
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Characteristics
Everything managed via browser, which can get
tedious
But you already have a database behind it
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Payment Options galore
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Recommendations
Most flexible payment options of any suite
Better at processing orders than site creation
Not good for large catalogs
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Microsoft Commerce (nee Merchant)
Still evolving
More of a development platform than a suite
Closely tied to IIS, SQL Server et al.
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The many Microsoft servers
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Shopping with MS Commerce
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MS Commerce
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Microsoft Upsells
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Recommendations
If you are going to use any other MS apps
If you believe developers will follow
If you must stay on the cutting edge of MS products
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Commerce Server Specifics
NT, fast Pentium with 128 M RAM essential
US$5000
www.microsoft.com/commerce
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iCat Electronic Commerce Suite
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iCat Process
Use four-step process
Make changes to staging db
Use designer and built-in catalog
Then post changes to production db
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Create Your Database
Can use bundled Sybase SQL Anywhere
Enter upsells, promotions, and discounts
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Design Your Templates
Look and feel of storefront
Design views of catalog
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Setup Your Hard Disk
Locate your files
Setup your web server
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Set Misc. Options
Matching sales tax rates to zip codes
Use registration and indexing tools
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iCat Demo Catalogs
www.icat.com/catalogs/democats.htm
Demonstrate variety of options
Several different stores to view
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Recommendations
No wizards, all browser-based forms
Tedious but straightforward
Lots of third-party add-on tools
Best for people new to db or the ‘net
Best if you don’t have computer-based accounting
system yet
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iCat Specifics
NT, fast Pentium with 128 M of RAM
US$9000 for professional version
www.icat.com
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IBM Net.Commerce
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Included
IBM’s Web Server
DB2 database
Shopping trolley system
Credit card verifier
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Setup Four Basic Web Forms
System Configuration, web server directories
Access Control, user identities
Server Control, start/stop servers
Database Management, setup
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Recommendations
Great if you already use DB2 for inventories
Most security-conscious suite
More depth than iCat
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Net.Commerce Specifics
NT, fast Pentium with 64 M of RAM
AIX too!
US$5000
www.internet.ibm.com/net.commerce
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Coming in version 3
“Intelligent Catalog”
Recognizes shopping preferences
New SET payment server
Integration with Domino Merchant
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OpenMarket
High end solution
Worldnet offers hosting of OM servers
Still needs customization!
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Recommendations
If you can afford it ....
Really the price covers lots of consulting time
High transactions and throughput needs
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OpenMarket Specifics
Various Unix
US$250,000 and up!
www.openmarket.com
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Do it Yourself Path
Traditional merchant banking approach
More risk, especially when your payment system is
on the ‘net
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Steps Involved for DIY’ers
Get a web server
Get merchant software
Integrate with your back end systems
catalogs
inventory
customer accounts
Be prepared to do lots of coding
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The 90s Help Wanted
Wanted: Webmaster
Required skills: High proficiency in various web
based programming, development tools, CGI,
cookies, DNS, eCommerce, FTP, HTML 2.0 through
3.02, IIS Server admin, Javascript, Java, MS SQL,
Netscape server admin, NT Server admin, perl,
Unix admin, web security
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But First: Consider the Customer
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How Customers Buy Stuff
Sometimes have partial orders
Sometimes cancel orders
Sometimes inventory systems lie
Sometimes shipments are returned
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Purchasing Stages
One product has a 14-stage process!
Need to gather so many items:
Shipping info
Item inventory, pricing
Order pricing
“Last chance” (upsells, cancel out)
All this means: get thee to a database!
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What is Needed
A way to track orders
Provide shipping status
Provide payment status
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Our Recommendation: email!
Capture that email address
Use it for status reports
Outcalls and future upsells
Reminders
But how do you valid the address these days?
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Payment System Considerations
Do customers need accounts and profiles?
yes: reduces the amount a visitor has to type
no: less of a privacy concern
Should shopping be persistent across the session?
yes: use accounts or cookies
Should all communications be via SSL?
yes: then you’ll need the appropriate browsers and
servers
Do I want to have multiple stores on a single server?
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Merchant Back-end Integration
Financial interactions
Clerical interactions
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Credit Card Issues
Separate authorization from settlement
authorize when order received, but
ship within 24 hrs of settlemen, and
beware of stale backorder data
Consumers can chargeback
either need a physical signature or
evidence of verified shipping address
Opening a merchant account (see
www.shopsite.com/help/payment.merchant.html)
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Electronic Bill Presentment
Saves on paper but requires lots of coordinated
systems
Can show bills with nice fonts, interactive
applications
Is separate process from the actual payment system
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Electronic Bill Presentment Issues
Does the processor use EBP with merchant bank?
Can users browsers support these new applications
Java applets
Active X controls etc.
Reconciliation requires access to both dispute and
payout information
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Microsoft’s MSFDC
A means to standardize on presentment
Have both web-based access and special consumerbased software
Former “Marble” server, read white paper at:
www.microsoft.com/finserv/marblewp.htm
Requires NT, SQL Server, IIS, etc.
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Other EBP efforts
Open Financial Exchange (www.ofx.net)
www.Integrion.Net
CheckFree’s E-Bill (getbills.checkfree.com)
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eBill
Most popular and in widest practice
Schwab and Intuit/Quicken are supporters
Most threatened by MSFDC
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OFX
Started with Intuit
Trying to standarize on too much at once:
data transfers
account inquiries
financial applications and transactions
Verisign Financial Server (US$1200)
digitalid.verisign.com/ofxIntro.htm
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Integrion
Banking-intensive plus IBM
No other software supporter, BUT…
Combining forces with CheckFree
Trying to establish their “Gold Standard” vs. OFX
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What about OBI?
Open Buying on the Internet
A bunch of standards: SSL, X12 EDI, X.509 PKI
Exchange of purchase order info
Unresolved issues:
who owns the catalog?
how much infrastructure is really needed?
knitting together a solid solution is more than
enumerating standards!
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What about SET?
IBM, Verifone having second thoughts
Specs still at 1.0 (barely)
Just handles the buyer authentication piece
Trial with Citibank/SG
www.visa.com
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Topic III: Installing and Operating
Your Own Storefront
What you need to know
What you need to buy
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You Need to be a Superhero:
Part web designer
Internet technologist
SQL database admin
Payment system maven
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Things You’ll Need to Discover
Are your sales and marketing staff web-savvy?
Is your accounting system adaptable to web
purchases?
How do you reconcile these accounts?
Does your business owner understand Internet
culture?
Can anyone find you
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Dealing with search engines
Some use <META>, some use <TITLE>
Keep descriptions at top of your home page short
and sweet
Web Review article:
webreview.com/97/10/17/webmaster
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The Most Under-rated Skill:
PATIENCE!
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Components Needed to Operate a
Web Storefront
Database of items to sell and current inventories
Secure web server
Searchable catalog server
Connections to backend payments and financial
servers
Shopping trolley system
Checkout/payment system
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Which Database Server?
Pick before anything else
Core of your store revolves around the database:
inventory system
accounting system
catalog system
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Database Server Recommendations
Use existing client/server db if possible
SQL Server: best with MS tools
Oracle: if you know pSQL already
Informix: all other situations
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Database/web Tools
Develop your own forms
Query your database
Develop your own catalog
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Why is a Catalog Important?
Your customers view of your store
Current with your own inventory and offerings
Don’t want to sell what you don’t have
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Catalog Software
Cadis.com, US$1500
Centor.com, US$50,000
Dataware.com, US$1800
Elekom.com, US$25,000
Isadra.com, US$10,000
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Other catalogs
Product
Price
ICat
US$9000
Intershop
5000
CatSmart
10,000
WebCatalog
(www.pacific-coast.com)
Cat@log
2500
Impulse
(www.inetrep.com)
<$1000
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Another choice: outsourced catalog!
ShopSite
IBM Home Page Creator mypage-products.ihost.com (N.
America only)
Mindspring with Mercantec
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ShopSite demo
www.reliablehost.com/cgi-bin/bo/start.cgi
username: test8
password: test
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Tool Recommendations
Cold Fusion, www.allaire.com
Sapphire/Web, www.bluestone.com
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Which Web Server?
Hundreds to choose from
Must support SSL and/or SHTTP
Platform isn’t important, really
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Get Your Certificates in Order
Bring up form inside web server
Send to Verisign on letterhead with credit card (!)
Receive cert from Verisign
Install on your web server
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What can a Shopping trolley do?
Simplify ordering process
Track multiple purchases for a single visitor
Display items purchased
Calculate total prices, tax, shipping charges
Track item attributes (colors, styles, sizes)
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Different Shopping Trolley Methods
Account-based
Cookie-based; see www.cookiecentral.com
Encoded URLs
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Shopping Trolley Programs
S-Mart: www.rcinet.com/~brobison/scripts
Minishop: www.egrafx.com/minishop
mvend: www.iac.net/~mikeh/mvend.html
PerlShop: www.arpanet.com/perlshop
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Commercial Programs
Internet Shopping Cart Server:
www.webisland.com/cart
Rent-A-Cart: www.rent-a-cart.com
CyberCart: www.lobo.net/~rtweb
AutoCart: www.autocart.com/Autocart
WebCart: www.staff.net/webcart.html
SoftCart: www.mercantec.com
WWWOrder:
www.virtualcenter.com/scripts2/WWWOrder.html
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Shopping Trolley Example
www.asizip.com (SoftCart)
Shopping basket
Cookies to track purchases
Simple navigation
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Payment Systems for SSL
ICVerify, www.icverify.com
Worldpay/PSI www.psi.net/worldpay
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ICVerify Process
Customer submits 16+4 through SSL browser
connection
Merchant swre records to a file
ICVerify submits to bank
ICVerify receives response from bank, creates answer
file
Merchant swre retrieves answer, sends response to
customer
No per transaction fee!
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Supported Merchant Servers for
ICVerify
MS Merchant, Commerce
Oracle Payment
Mercantec SoftCart
Internet Factory Merchant
InterShop Online
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ICVerify Demo Download
www.icverify.com/library/downloads/icvdemo20.html
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WorldPay and PSI
Multicurrency payments
>100 for product prices
16 different ones for settlement
Have to host your web at PSI
Includes SoftCart and iCat software as well
US$1000 + US$1400/yr
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WorldPay Demo
www.worldpay.com/demo/store.html
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Prices of Typical Products
Product
Inex
SoftCart
MallManager
WebCatalog
Saqqara
VPOS
WebMate
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Type
Accounting
Shopping Cart
Catalog
Catalog
Search tool
Payment server
Development tool
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Price
US$6000
900
2000
1600
700
2500
750
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Inex Demo
Financial backend strength
Store front and some aspects of suite
www.inex-corp.com
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Don’t Forget About Security
Make sure you protect your web site!
See “Ten ways” article from Winn Schwartau
Limit access, isolate servers, lock down scripts, so
forth
See
www.nwfusion.com/netresources/0202hack1.html
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What About Web Server Load
Balancing?
Resonate, HydraWeb, Cisco
IBM Interactive Network Dispatcher,
www.ics.raleigh.ibm.com/netdispatch
Packeteer PacketShaper, www.packeteer.com
Others at
www.techweb.com/se/directlink.cgi?NWC19970801
S0026
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Putting Together Your Own Solution
Mercantec shopping trolley
SQL Server database
ICVerify payment system
WebCatalog
IIS web server
Total price: <US$10,000
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Don’t Forget the Process and People
Put together policies and procedures book that
describe what you did
Gather forms for your business partners to sign up
for ISPs if needed
Document how to make changes to your product
catalog via the web
Approach your trading partners with solutions, not
problems!
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Conclusions
eCommerce crosses many different skill sets
Software is still too dicey in many areas
Standards aren’t much use right now
Suites don’t offer much in the way of integration
DIY may be the best solution
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Some eCommerce Resources
Windows Sources reviews of 3 eCommerce suites:
web1.zdnet.com/wsources/content/0697/ntadmin.h
tml
My Infoworld reviews
www.strom.com/pubwork/iworld.html
www.webcompare.com, all the web servers you
could ask for
PC Magazine review of various products
www5.zdnet.com/products/content/pcmg/1620/pcmg0024.html
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Copy of This Presentation
www.strom.com/pubwork/spore98w1.ppt
links at www.strom.com/pubwork/spore.html
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Conclusion
Review
Q&A
David Strom
+1 516 944 3407
[email protected]
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