Over in the private forums we have  sections for advertisers to talk discuss CRM’s, shopping carts, fulfillment, packing, how to become an advertiser, basically just about everything you can think of. As more and more current advertiser and future advertisers continue to become members of the private forums, we’ll get to proceed into a lot more advanced advertising topics as well. However today, I wanted to provide a basic guide because I’ve been getting a quite a few emails on exactly what a shopping cart is and does. Instead of just keeping that information private, I thought I would release and entire guide on it for anyone looking to start using shopping cart software.

By definition, a shopping cart is simply:

A shopping cart is a software application that typically runs on the computer where your Web site is located (the Web server), and allows your customers to do things such as searching for a product in your store catalog, adding a selected product to a basket, and placing an order for it.

The shopping cart “integrates” with the rest of your Web site. In other words, there are typically links on your Web pages that customers can click on, and which allow them to perform some of the functions described above. For example, many ecommerce Web sites have a “search” link appearing on every Web page, as part of the navigation area. The link points to a feature (i.e. the search feature) provided by the shopping cart.

Shopping carts are written in a variety of different programming languages. Some of them provide full access to the “source code”, thus allowing experienced programmers to make modifications to the system features, some others don’t. Some shopping carts run on Windows Web servers, some on Unix, others on both. In most cases, you can place the shopping cart on your Web server simply by transferring its files there using any FTP software, where FTP stands for File Transfer Protocol.

Now let’s talk about the “kinds” of shopping carts there because I think this is where a lot of ecommerce and starting advertisers get confused. I’ll break this into two parts for easier information consumption and we’ll start with basic shopping carts first.

Basic Shopping Carts – These are the carts such as Paypal and Google Checkout. These are typically what starting advertisers go with to get their feet wet for the first time. When you decide how to allow customers that visit your Web site to purchase products or services from it, the first thing to decide is whether you want:

1. A simple way for them to purchase a product/service
2. A comprehensive e-commerce system that allows you to manage your catalog, discounts, process orders, etc.

If you plan on using just a simple basic shopping cart then there are several good, free options for you. Remember, these basic shopping carts simply allow you to place a link on your Web site that will let your customers purchase that product or service. Things like managing discounts, specials, promotions, product options, etc. will not be available. You will also have limited or no control on shipping options, making multiple payment options available, etc.

Google Checkout:

Full-featured shopping carts

Most merchants need more than just an “add to cart” button. For them, there is a vast array of options in the market today. These advanced shopping carts are not just a “shopping cart”, but rather full-featured ecommerce applications that handle everything from the storefront catalog to sophisticated store management tools. With full featured shopping carts though, it may seem like it’s getting more confusing because now you will have to choose between “hosted” or “licensed” shopping carts. When you shop for a shopping cart, one of the first things to decide is whether you are looking for software that you wish to own (and possibly customize to better fit your needs) or rather a service that you want to subscribe to.

Hosted shopping cart

When you buy or subscribe to this kind of service (e.g. Yahoo! Stores, Volusion, BigCommerce, etc.), you are typically charged a combination of a setup fee, a monthly fee, and, in some cases, a commission on sales.  The advantages are typically that a lower initial cost and quicker start-up time. The disadvantages are higher medium and long-term costs, the fact that you are “locked-in” (you can’t move the shopping cart elsewhere if you don’t like their service), and often the inability to customize the shopping cart’s source code, if you need to.

Licensed shopping cart

A licensed shopping cart is software that you buy and host yourself, typically where your Web site is already hosted, or on a new Web hosting account. You normally pay for the software license fee, and, in some cases, for a yearly support & updates plan. The advantages of using a licensed shopping cart are typically a lower medium- and long-term cost, the ability take the software with you (e.g. you decide to change Web hosting company), and the fact that you often have access to the software’s source code, and can hire a developer to customize it, if you ever need to do so. The disadvantages are normally a higher initial cost, and longer start-up time (but the software vendor may be able to get everything up and running for you).

There are 4 (loosely translated of course) main groups of e-commerce software options available to a merchant today. Carts, Hosted, Licensed, and Commercial. Small to medium businesses tend to focus on the middle — makes sense. Carts don’t have the professional control and features that you need. Commercial products target large enterprise and are way too expensive for consideration. So, that leaves Hosted and Licensed software left standing as the two choices for the SMB.

• Hosted: quick to market, capable and customizable, inexpensive to start, pricier long haul, runs the works for you, saves you time.
• Licensed: slower to market, portable and configurable, heavy on start-up cost, cheaper long haul, you run the works, costs you time.

How Do Shopping Carts Work?

Just as there are many different types of virtual shopping carts on the market today, the ways in which these carts function also differ. Some work by using simple data collection forms and passing the information through the URL of the Web store. Others work by storing the customer’s shopping cart in a database on the Web store’s server. Further still, many work by using “cookies” – small pieces of information sent by a Web store’s server to a customer’s Web browser – so that it can be read back from that browser. Each method in and of itself has its advantages and disadvantages.

While relatively easy to implement, passing the information through the URL of the Web store involves using form variables in the URL and a listening CGI component on the Web store side. This method by itself can be messy, as URLs can get cluttered and unorganized.

Storing the customer’s shopping cart in a database on the server allows Web store owners to see the existing shopping carts at any time, before or after purchase. This information can be valuable, allowing Web store administrators to gauge future product needs – based on the contents of shopping carts belonging to customers who, for whatever reason, did not complete the checkout process on their last visit, but may intend to complete the process at a later date.

When using cookies, a virtual shopping cart can be stored in the customer’s Web browser, instead of on the server – eliminating any database maintenance that is necessary when using the above option – and thus also eliminating any potential functionality issues.

Comparing Shopping Cart Software

This is really where you need to watch out. I know when I first got started and did a Google Search I came across some pretty spammy sites built for SEO traffic that offer shopping cart reviews but they were filled with affiliate links and when I contacted these websites, nobody would answer me so this is a major red flag. However, after working with advertisers for nearly 4 years now, I’ve been able to really lock down a lot of contacts in the industry that offer shopping carts which I list in the private forums. However, for the blog readers here, simply check out the Wikipedia page on shopping cart comparisons here. There’s a ton of them:

Most shopping carts include two components: the storefront, which is what your customers will see (the catalog, the search pages, the checkout pages, etc.), and the administration area, which is what you will use to manage the store. Although you find both components in virtually all ecommerce applications available on the market, the features that each of them offers vary alot.

A good storefront should include at least the following features:

• A store catalog that is easy to browse and that presents product information is a way that is both useful and graphically pleasing.
• A search feature that allows customers to quickly locate a specific product. The more filters are available on the search page, the better (e.g. price, part number, description, etc.)
• A customer service area where existing customers can change their account information, view previous orders, etc. There should also be a way for customers to retrieve a lost password.
• Special pages where customers can easily find products that are on sale, featured products, products that belong to the same brand, etc.

A good administration area should include at least the following features:

• A way to easily set general store settings such as the way products should be displayed (e.g. how many products will be shown on each catalog page), the currency and date format to be used, etc.
• A module to create and manage product categories, and order the way in which they are displayed on the storefront.
• A module to create and manage products, and assign them to categories. To improve productivity, there should be tools that allow you to change settings across multiple products at once (e.g. change the price for all products in the “tennis shoes” category).
• A way to assign options to products (e.g. color and size), with the ability to set price changes that are dependent on the selected option (e.g. if you select an XXL size shirt, then you pay an extra $5). To improve productivity, there should be tools that allow you to assign the same options to multiple products at once.
• Flexible ways to set multiple shipping (e.g. UPS Ground is free for order over $100), and payment options (e.g. real time credit card processing, COD, and NET 30, but the last one only for wholesale customers).

Databases:

Of course, if you are already familiar with the general operation of a virtual shopping cart – you might consider the aforementioned an overly simplified explanation. The shopping cart needs to be able to obtain product descriptions and inventories, and store orders and customer information. All administration is performed via the simple-to-navigate Web based administration area, eliminating the need for database experience/knowledge from the end-user. A lot of shopping cart softwares connect to popular commercial database packages, such as Microsoft Access, SQL Server, and MySQL, to store and retrieve data.

Baskets:

Just as you might choose grocery items from several different aisles at your local supermarket, a visitor to your Web site can navigate through the site, choosing items which may appear on different pages from one another. Continuing this analogy, as you walk down different aisles in the supermarket, items are placed in a shopping cart, which serves as a “basket” for those items until you are ready to check out. Similarly, shopping cart software keeps track of the chosen items as a customer navigates through your Web store.

Checkout Counters:

Once the customer is finished shopping, the shopping cart summarizes the items and facilitates the checkout process – allowing him to pay for all items at once – just like the checkout counter at your local supermarket. It totals the cost of the items placed in the “basket”, applies the necessary discounts or coupons, calculates sales tax, and adds shipping costs according to the shipment method specified by the customer (i.e. UPS, USPS, or your own custom calculations.). Fields are provided to input ‘ship to’ addresses and payment information. To fully automate this process, shopping carts can communicate directly with real-time Internet payment services such as USA ePay, VeriSign, PayPal, and others to provide real-time authorization of credit cards and checks during the checkout process.

Of course, the analogy above assumes that the customer can rely on the shopping cart’s “permanence” – that is, once items are placed in the cart, they remain there as the customer navigates from page to page until the customer is ready to check out. What’s more, if the customer leaves the Web store without checking out, the items remain in the cart and are still there upon their return. PDG’s products operate on this very notion of permanence.

As is the case with real-life shopping carts, virtual shopping carts exist in many different varieties. Some are very sophisticated technically, and have a professional appearance about them, while others are very simple to use. Unfortunately, these attributes do not always co-exist within the same product. You will have to check with your shopping cart software to see if it has the flexibility to meet the needs of virtually every type of Internet storefront – and at an affordable price. They are fully customizable from the creation and customization of HTML template files used to create the storefront right down to the type of navigation buttons you choose to use. This helps create a seamless connection between the main body of your Web site and the e-commerce software itself.

How Shopping Carts Can Help Your Business:

• Payment Processing – Many shopping cart programs offer credit card processing as well as check, PayPal or other methods of processing payments.
• Webpage Design – Many merchants are good at selling things, not designing web pages, so some shopping cart software will include step by step wizards to help take the mystery out of that process – you don’t even have to know HTML.
• Storefront Design – Step by step store front wizards incorporate templates and other tools to help you set up the look of your web site’s storefront.
• Inventory Control – Good shopping cart software will keep track of your inventory and generate reports automatically.
• Shipping – Nearly all shopping carts offers a shipping tool that calculates shipping costs for customers based on parameters that you set, some can even link up to common shipping methods like FedEx or UPS.
• Tax Calculation – Most shopping cart software can calculate taxes, a valuable tool, especially since many states are considering requiring merchants to collect taxes for online sales.
• Customer Management – Most shopping cart software has features that will let customers view their previous purchases. The program will also recognize the customer when they come back for a return visit.
• Marketing – Some web store owners are familiar with selling their products directly to a customer, but have no experience in taking advantage of today’s powerful internet marketing techniques. Most shopping cart software offers integrated information on affiliate programs, social network marketing methods, and help with merchandising. Many are able to create coupons, gift certificates or other incentives as well. In addition, they provide sales reports and ‘hit’ or page-view traffic information as well to help optimize the customer conversion experience.
• Security – Customers won’t purchase online if they feel the website cannot protect their personal information. Most shopping cart software will offer protection by encrypting information, processing credit cards through reputable processing services and by allowing customers to move through their program without having to download cookies.