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New Year, New Business!

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Must-Do's for the Holiday Sellin...

The Price is Right! - How To Arr...

Building Your Line-Up - 5 Produc...

Everybody's Doing It - 5 Reasons...

4 Things You Should Know Before ...

Creating a Web Site that Sells -...

Stages of Conversion - Increasin...

10 Holiday Sales Tips - How to C...

Safe and Stress-Free Shopping - ...

EBay for Everyone - Getting Onli...

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Giving Something Back - Online C...

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Profitable Knowledge - Adding In...

No Experience Necessary - Buildi...

The Voice of Experience - Gettin...

A Matter of Trust - Protecting Y...

Designing Your Web Store - The B...

Website Set Up - 3 Tips for Star...

How to Build an E-Biz on a Budge...

How to Improve Conversion Rates ...

How to Handle Product Recalls in...

Maximize Your Sales with a Full ...

Your eBiz Can Win Against the Cu...



website - If You Wanna Play, You've Gotta Pay!

by Chris Malta

If you have Internet access, you probably have some 'Free Web Hosting' space that came with it. Most of the larger Internet Service Providers (ISP's) offer you that, as an enticement to sign up for their services. Should you try to use this free hosting to sell products on the Internet? No!
Technically, it could be done, but it would be difficult, and your Internet provider would probably shut you down for it.

If you want to sell products on the Internet, you must pay for a good ECommerce Web Site.

Why? What's the difference between a 'Free' Personal Web Site and an ECommerce site, and what exactly are they charging you for?

Without getting into lots of shades of gray here, there are two basic kinds of Web Hosting:

• Personal Web Site Hosting

• Ecommerce Web Site Hosting

If you're starting an Internet Business where you will sell products, Ecommerce Site Web Hosting is what you need. First, though, we need to talk about Personal Web Site Hosting, so that we can understand the differences.

Personal Web Site Hosting

The Free web hosting that you might get with your Internet Access account falls under the category of Personal Web Hosting. If you sign up for an AOL Account, for example, you might get free Web Site Hosting for your own personal Site.

Free Web Site Hosting is very limited. It will have tight size restrictions, meaning that you will not have room for a large number of web pages on the site. Also, you will not generally be allowed to use it for business purposes.

For example, I have a friend who has an Internet Access account with one of the large, well known Internet providers. He gets a small, free web hosting space with that account.

He uses it to put pictures of his family on the Internet, and to talk about the things that are going on in their lives. It falls under the category of a Personal Web Site, because nothing is sold on that site.

There are millions of Personal Web Sites on the Internet. From Dog Grooming Tips to Family reunion sites to the latest Nose Hair Clipping Methods. You can say anything you want to say on a Personal Web Site.

You just can't directly sell anything. Free Personal Web Hosting doesn't allow it, and paid Personal Web Hosting doesn't have what you need.

What do I mean by 'directly sell'? Well, there is indirect selling, and there is direct selling.

• Indirect Selling

Let's say I created a Personal Web Site that talked about my Cousin's recipes for Five-Alarm Chili. I list a couple of Three-Alarm Recipes there, to get you interested. Then I tell you that for the really GOOD stuff, you can mail me a check for $5, and I will send you the Recipes for the Five-Alarm Gut-Busters. I put a Mailing Address on the site, and I sit back and wait for your checks to roll in.

That's what I call indirect selling. The Site is getting you interested in the product, but you have to go through an outside process (mailing me a check) in order to complete the sale.

If I try to do that on a FREE Personal Web Site, and my Internet Service Provider finds out about it, they may shut me down.

It's up to them. in general, I'm not supposed to be selling in any way on most FREE Personal Web Sites.

However, I can pay for a Personal Web Site from a Web Hosting Company, if I want to. I'll get a larger web hosting space that I can put more pages of information on. I can do pretty much anything I like, within the law, on a Personal Web Site that I pay for. So I can use it for indirect sales if I want to.

The reason that the providers of FREE Web Sites don't want you selling things on them (directly or indirectly) has to do with the number of people who visit the Site. Web Hosting Companies reason that someone who creates a Site that's built to sell something will be marketing that site with everything they've got. That person will be trying to attract as many visitors as possible. That means that many more people will be visiting that Site. The Hosting Company's Web Server (the Hosting Computer where that web site actually resides) will have to work harder to accommodate all that Traffic (customers), and the Hosting Company wants to be paid for that.



However, if you want to pay for a Personal Site that sells something indirectly, that's OK with them. Their Web Server is working harder, but at least they're getting paid for it. That's what their business is.

So, in general, no selling at all on a FREE Personal Web Site. Indirect selling is usually okay on a paid Personal Web Site.

• Direct Selling

Direct Selling means that the visitors to your Web Site can actually complete the transaction on the Site itself. They can whip out a Credit Card, okay an Electronic Check, use a payment service like Paypal, etc., right then and there. They go to your Site, see something they like, and they complete the sale.

You shouldn't try Direct Selling on any kind of Personal Web Site. Personal Web Sites, by definition, are Informational only. While Indirect Selling will work, Direct Selling will not. Personal Web Sites are not set up for Direct Selling.

Ecommerce Web Site Hosting

So, what kind of Web Site is set up for Direct Selling? You guessed it! An Ecommerce Web Site!

An Ecommerce Web Site is really just a paid Personal Web Site with a couple of added features:

• Shopping Cart

• Payment Processing

I'm sure we're all familiar with the concept of a Shopping Cart in our everyday lives, right? Big metal cart with four wheels.

One of the wheels is always either stuck, or square. Some of them come with screaming kids attached, depending on your personal situation. You squeak, thump and scream your way through the aisles of your favorite Supermarket, loading up on milk, hamburger and Cocoa Puffs. Then you stand in line at the Checkout Counter for ten minutes behind the lady who's trying to write a check, but can't find her ID.

Well, the concept is the same on an Ecommerce Site, except for the squeaking, thumping and screaming.

If you've ever bought anything online before, you've seen an online Shopping Cart. It's the part of the Web Site where you:

• Choose the Product you want

• Choose the Quantity you want to buy

• Enter your Name and Address for Shipping

• Enter your Credit Card number, or other form of payment

• Complete the sale

A Personal Web Site is just a collection of Folders and Files on a Web Server that sits in a room at a Hosting Company somewhere.

A Shopping Cart is just another collection of computer files.
In order for the Web Hosting Company to turn a Personal Web Site into an Ecommerce Web Site, most of the time all they have to do is add the Shopping Cart files to it.

From the Hosting Company's point of view, it's pretty much as simple as throwing a switch.

On an Ecommerce Web Site, the Shopping Cart is not just a place to toss your Cookies until you get to the Checkout Stand. The good ones also calculate Sales Tax based on where your customer lives, calculate the Shipping the customer needs to pay (based on their Zip Code), and more.

Like anything else, there are good Shopping Carts, and bad Shopping Carts. A Shopping Cart, after all, is just another computer program written by some person, somewhere.

It's only as good as the skill and creativity of the person who wrote the computer program.

The good ones are easy to use. The poorly designed ones usually are not. I've had Sites where the Shopping Cart was something I almost never had to think about, and I've had Sites where the Shopping Cart was a constant nightmare that I had to futz around with constantly just to stay in business. You need to make sure you choose your ECommerce Hosting company carefully. Cheaper is not better, in most cases.

Once the Hosting Company activates a Shopping Cart on your paid Web Site, that Web Site now has all the Informational capability of a Personal Site, and the Ecommerce capability to directly sell products.

However, even though you have the Site and the Shopping Cart, you still cannot actually collect money from your Customers until you have a Payment Processing Gateway.
Another, more common name for a Payment Processing Gateway is a Merchant Account.

If you want a better understanding of Payment Processing (Merchant Accounts), there's a whole Chapter on them in my FREE EBook, which you can download from our site at www.worldwidebrands.com.

Here's how Payment Processing fits in to your Site:

1. Your customer looks at the Informational Pages of your Web Site, and finds a product they like. The customer places the product in your Site's Shopping Cart, by

2.

selecting it for purchase.

3. Your Site's Shopping Cart tells your customer to enter all the personal and credit card information that the Shopping Cart needs to complete the sale.

4. Your Shopping Cart talks to your Payment Processing (Merchant Account) Gateway, and transfers money from your customer's credit card to your bank account.

Some hosting companies include Payment Processing with their Ecommerce Sites, and some make you go out and get your own. Either way, it's not hard to deal with.

Stocking the Shelves

Now that this Web Site is set up for Ecommerce, it needs products on the shelves.

Every Shopping Cart is a little different. When you're ready to load your Shopping Cart with images and descriptions of the products you're selling, the Shopping Cart software itself will have step-by-step help to show you how to do it. Again, the good ones make it easy.

Time to Pay the Piper

Ecommerce Web Sites, of course, are not free.

If ya wanna play, ya gotta pay, right? That's a given fact the world over, no matter what you're doing.

How do the Web Hosting Companies determine how much they'll charge you for your Ecommerce Web Site? Basically, it has to do with three things:

1. Hard Disk Space:

Web Hosting Companies have rooms full of computers that hold the computer files and folders that make up Web Sites.

The 'Hard Disks' on these computers are where the Web Sites actually reside. A Hard Disk is like a File Cabinet that you might have in your home or office. You have documents you want to save, like your Homeowner's Insurance Policy, last month's paid bills, little Timmy's school Report Cards, etc.

You put all those documents inside those tan colored File Folders you get at the office supply store. You label each folder, and stuff it into your File Cabinet.

After you do that long enough, that File Cabinet starts to fill up. You'll get to a point when your File Cabinet is full. You just can't stuff any more Folders into it. You don't want to throw away any of the Folders and Files you already have in there, so you go out and get another File Cabinet, and start filling that one up as well.

That's exactly what happens with the Hard Disks on a Hosting Company's Web Server.

They keep on selling Web Sites to more and more new customers. Those Web Sites are collections of Folders and Files, stored on the Hard Disks of the Hosting Company's Web Server computers. The customers create their Web Sites, which means they are creating more and more new Folders and Files on that Web Server's Hard Drives. Just like filling up a File Cabinet.

So, think of a Web Server computer as a very expensive File Cabinet. The Web Site Hosting Company that owns that Web Server has to charge money for space in that "File Cabinet", because it costs them so much money to buy that computer, and it costs them money to maintain it.

When you buy Web Site Hosting, that's one of the things your Web Site Hosting Fees pay for. The space that your Web Site takes up in that Web Server's Hard Drives.

When you build your Web Site, you're going to be creating Computer Folders and Files on the Hosting Company's Web Server. The more "pages" you create for your site, the more space your Site takes up on the Web Server's Hard Disk. The text on your pages takes up very little space. Images, however, like your Title Banner and any other pictures you place on the Site, take up much more Hard Drive space.

So, one of the ways that Hosting Companies use to decide how much to charge you is the Hard Drive space your site will take up.

Now, Web Hosting Companies know that some people create small Web Sites, and some people create large Web Sites. Other people create very large Web Sites. One Web Server computer might be able to hold 250 small Web Sites. Or maybe 100 medium-sized Web Sites. Or just 20 or 30 big Web Sites. Then there are the really big, high-traffic Web Sites (like our Web Site!) that have to have their own Web Server all to themselves!

In order to control the number of Folders and Files (Web Pages) that people stuff into their Web Servers, the Hosting Companies don't wait until after your Site is created, and then charge you for what you've done. They give you a Disk Space limit that you can't go over, and they charge for that Disk Space, whether you use it all or not. If you do end up creating so many Web Pages that you go over that Disk Space limit, they will "Upgrade" your Hosting Plan to a larger Disk Space, and charge you more money for it. They may also move your whole Web Site to a different Web Server that has more Disk Space available.

Very few people ever go over the basic Disk Space limits on most Web Servers, so you shouldn't have to worry much about that. It is, however, very important to be aware of it and what it means.

2. Bandwidth Restrictions:

A Bandwidth Restriction is another kind of size restriction. Bandwidth has to do with the number of people who visit your site.

Think of a single road that leads to a Shopping Plaza in your town or city. Let's say there's a Sears store at that Plaza, and a few much smaller stores next to it.

Most of the traffic on that road to that Plaza is going to be headed for the Sears store, right? The more people the Sears store attracts, the more traffic there will be on that road. When Sears has a sale, the road really gets busy.

The smaller stores start to complain to the Town, since their customers get tired of fighting all that Sears traffic. Eventually the smaller stores' customers will start shopping elsewhere to avoid getting tangled up in the traffic that's going to and from Sears.

On the Internet, that traffic is called Bandwidth.

In order to move a growing number of people to that Plaza without slowing everyone down, the Town needs to add more Bandwidth to the road, by widening it. This will have the effect of turning the road into a Higher Bandwidth "Pipe", through which more cars can flow faster.

This is what happens with Web Site Hosting Companies. They watch the "bandwidth" that your site is consuming. That means they are keeping an eye on the customer traffic that comes into all the Web Sites on any Web Server. If your site starts drawing too much traffic, they call that Consuming too much Bandwidth. The more Bandwidth you consume on that Web Server, the less there is for all the other Sites on the same Server. The Web Server gets overloaded with Traffic.

So, they tell you that you must Upgrade your Hosting Plan, to allow for more Bandwidth to your Site. This will probably mean that they will move your Site to a less crowded Web Server. Fewer Sites on that less crowded Server means that there's more Bandwidth for those Sites to share. No traffic jams.

The process of moving your Site is something that they do for you. It might cause some minor inconvenience for a couple of days, but the Hosting Company will help out with that.

So, when you first set up your Web Site Hosting, the Hosting Company will go over a number of Bandwidth plans, from smaller to larger. It's up to you to give them an idea of how much customer traffic you expect.

When first starting out, it will take time to bring in an increasing amount of customer traffic. You don't want to pay a lot for additional Bandwidth that you don't need yet. So, it's okay to start small, and Upgrade your Hosting as you need it.

All right, we've talked about Disk Space Restrictions, and Bandwidth Restrictions. They are both things that your Hosting Company Sales Rep will talk over with you when you buy Web Site Hosting Space. The Rep will help you decide what combination is right for you, so don't sweat it!

Next, we'll talk about:

3. Product Number Restrictions:
This one's easy.

Some Hosting Companies don't worry about Bandwidth Restrictions. Instead, they simply charge you by Disk Space, and the number of products you plan on putting up for sale on your Site.

These people have complicated formulas all worked out that tell them how much Bandwidth is usually consumed per product for sale on a Web Site. That makes things very simple for you. They'll have a Rate Card that tells you how much your Site will cost depending on how many products you plan to sell, and that's it.

For example, if you plan on selling from 0 to 50 products, you pay one amount. If you plan on selling from 51 to 100 products, it's a higher amount. And so on.

The more expensive the Hosting Plan you buy, the more Disk Space they'll give you for your Site.

There's not much more to say about Sites sold by Number of Products, except to explain Product Variations. This is easy to understand. Let's say you're selling T-Shirts. For every T-Shirt you sell, you have four sizes: Small, Medium, Large, and Extra Large.

Even though each T-Shirt may come in four sizes, it still counts as one product. Any Hosting Company that tells you that one T-Shirt that comes in four sizes actually counts as four products when calculating your Site Cost under this method is trying to rip you off.

Okay, you get the idea, right? :o)

The three basic restrictions you'll see when purchasing Ecommerce Hosting are:

• Disk Space

• Bandwidth

• Number of Products you can sell

You'll almost never see all three of those restrictions together. What you'll usually see is some combination of two of those three.

Let's Compare...

These examples are from a large, well-known Web Hosting Company, and show three levels of Ecommerce Web Site Hosting sorted by cost:



You can see the price differences in these three Ecommerce Hosting Plans. In each column, I've highlighted in bold the Hosting Company's reasons for these price differences.
The first thing I notice about these packages is that this company has decided not to even bring up the Bandwidth issue. They've figured out how much Bandwidth you should need to sell a certain number of products, and they've priced their packages by Number of Products instead of Bandwidth.

In fact, when you get right down to it, the only real difference between these packages is the Number of Products you can sell.

Yes, I know there are other things that seem different. Let's look at those.

Disk Space:

The E-Stand offers 250 MB (megabytes) of Drive Space. The E-Store and the E-Market packages offer 300, and 350 respectively. The truth is that there is not all that much difference these days between 250 MB and 350 MB. Those numbers are really designed to make it look like you're getting something better, when it probably won't matter all that much to you. No matter which plan you choose, you probably won't even fill up the original 250 MB to begin with.

However, there are two ways that someone could fill up those 250 Megs, and beyond:

1. Create a very talkative, cluttered site with way too much information. Selling is a balance between what you say, and what you don't say. Something I learned a long time ago, when I worked in the Newspaper Advertising business, is that empty space is just as important as filled space. You don't want to crowd your site with ten pages of details describing one broom that you're selling. You'll eventually fill up your Disk Space if you do that with all your products. Also, your customers will fall asleep while they're trying to read through all that nonsense to get to the product itself. Not a good thing!

2. Take the "unlimited" nature of the E-Market package too literally, and really put a huge amount of products up there. You're going to find that when Web Hosting companies use the word "unlimited", they don't really mean it. They just mean that they don't think you'll ever get around to selling enough products so that you crowd your so-called "unlimited" space on their Web Server. There IS a limit, and they will let you know immediately if you ever reach it!

So, those Disk Space numbers are largely window-dressing in these packages.

Payment Processing:

Notice that on the first two packages, the E-Stand and the E-Store, they tell you that Payment Processing is available. That means that it's not included! However, they may be hoping that you won't pay attention to that, and think that it does come with the Package.

In the E-Market Package, Payment Processing is included, but be careful! There are good and bad kinds of Payment Processing, and many things you get FREE or INCLUDED aren't very good.

Again, you can read more about Merchant Accounts (Payment Processing) in my FREE EBook.

The only important difference between these Hosting Packages is the Number of Products you can sell. That all goes back to how much Bandwidth higher Numbers of Products use up on a Hosting Company's Web Servers. That's the real reason behind the price differences.

It's not as hard as it sounds!

We've gone over some pretty complex-sounding things here. It's important to realize that creating an Ecommerce Site is not as complicated as it seems to be. The information in this Article is very important for you to understand, because knowing why things work the way they do is just as important as knowing how to do them. However, even though the info here may make the world of Web Hosting seem complex, it really isn't. Not to you and me, the "End Users" of these Ecommerce Sites.

Most good Hosting Companies today make creating a Web Site as easy as "point and click" with your computer mouse. The use of "Templates", which are ready-made Web Site pages that you can choose from and customize, makes creating a Web Site a virtual breeze. Internet Malls make things even easier.

• So, if you wanna play, you gotta pay, folks!

Free and Personal Web Sites just don't have the capability or the horsepower to pull your Shopping Cart around the Internet for you. An ECommerce Site is a requirement, but they're not as complicated as they sound. There are also many very good ones that are not very expensive, but be careful of really cheap deals... they're usually not worth the headaches!

 
Archive List

ARTICLE ARCHIVE LIST

 

Beware of Web Sites Bearing 'Fre...

'Set' your Products to Sell

Is Your E-Biz Ready for the Holi...

If You Wanna Play, You've Gotta ...

New Year, New Business!

Finally, An EStore That Has It R...

Must-Do's for the Holiday Sellin...

The Price is Right! - How To Arr...

Building Your Line-Up - 5 Produc...

Everybody's Doing It - 5 Reasons...

4 Things You Should Know Before ...

Creating a Web Site that Sells -...

Stages of Conversion - Increasin...

10 Holiday Sales Tips - How to C...

Safe and Stress-Free Shopping - ...

EBay for Everyone - Getting Onli...

Learning from the Best - Good Ad...

Giving Something Back - Online C...

How to Build a Successful Websit...

Profitable Knowledge - Adding In...

No Experience Necessary - Buildi...

The Voice of Experience - Gettin...

A Matter of Trust - Protecting Y...

Designing Your Web Store - The B...

Website Set Up - 3 Tips for Star...

How to Build an E-Biz on a Budge...

How to Improve Conversion Rates ...

How to Handle Product Recalls in...

Maximize Your Sales with a Full ...

Your eBiz Can Win Against the Cu...