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Introductory E-Commerce
 
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Introduction to E-Commerce

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Introduction to E-Commerce

The Internet is obviously a great new medium, and brings with it untold opportunities and potential, most of which we cannot yet comprehend or imagine. But what most people don't realize is that it requires a whole new way of thinking, what the philosopher Thomas Kuhn called "a paradigm shift."

I say this because I've seen so many people take their offline, brick and mortar, businesses, and simply transfer it online, often putting up what amounts to an online catalogue. Admittedly, this may work fine for some people and some products, but it is not taking advantage of the new medium and all that it has to offer.

One big problem here is that there have been so many so-called experts wanting to cash in on the Net phenomenon yet so few of them who really know what they are doing and how to maximize the opportunities for their clients. They know a bit more than their customers, shroud their work in secrecy, and make it appear far more technical and difficult than it actually is.

It is our intention here to both de-mystify cyber-business and to clear some of the debris and hubris from the e-record. In other words, what follows is some straight talk, tips and insights for those considering doing online business, whether you are just starting a business or already have a business and wish to add an online component.

Let's start with my introductory list of the ten basics of taking it to the Web.

Baby Steps: The Top 10 Basics

1)
Do the research. Study and learn as much as possible. This general rule of life certainly applies to a successful online business. Do your homework. Take some time and familiarize yourself with the online world, focusing on business sites in particular. Look how the big boys do it.

Determine what you like in a website and begin to envision how your own will take shape. If you have no standards or criteria on which to judge the work that someone is doing for you, they can get away with a lot, and often do.

Electronic commerce is a huge, multi-billion dollar, rapidly changing field and it is vital for all new merchants to learn as much as possible - and then to keep up to speed with the changes. Fortunately, there are many great resources available online - all you need to do is find the time to read them!

The shortcut here is to find several very professional, trustworthy sites, and learn from them. Sign up for several good mailing lists on topics that interest you and try to at least gist them every day. And finally, find and retain a good consultant - you will not regret this.

2)
Take aim. Choose your niche and focus For those considering starting a brand new online business from scratch, consider the following. There are literally thousands of potential web-based businesses to choose from, but if you try to address too broad an area or market you'll probably fail - unless you have the funding available to become a major online player right from the start. Even then, you're playing with fire.

The secret of success for the small online business is to choose a niche and then focus, focus, focus. Develop a set of rules or guidelines that tightly define the boundaries of your business. Then, the next time you get a "hot" business idea in the shower you can use your rules as a litmus test: if your idea meets these rules, falls within your strict guidelines, then by all means go-ahead and follow it through; otherwise, ditch it fast.

If you fall into the category of my friend, with his well-established offline business and niche, then you needn't worry so much about this point. You will want to check out your competitors online, see what and who you are up against, and then work together with your Web consultant to bury them.

3)
Chart your course. Plan carefully and realistically. One of the biggest mistakes that newbies, start-ups, and would-be Web entrepreneurs make is to assume that "normal" business rules do not apply to the Web and therefore there is no need for business and marketing plans. However, all businesses need a plan or they are like a ship without a rudder, aimlessly floating about and very vulnerable.

When drafting your business plan, strive to remain realistic, particularly about the number of visits your site will receive, the percentage of visitors that will actually make a purchase, and the time and money it will take to build your business.

Be sure you understand your statistics. Have your personal consultant (see below) explain them to you.

Your focus should be on the needs, desires, and expectations of your customer, not on your entrepreneurial wish list. If you follow all of these steps patiently, and with due diligence, the latter will follow automatically from the former.

4)
Brand yourself. Create a unique and professional website with your own domain name. Your website will be the cornerstone of your success online. It should stand out from the rest of the pack and it should have a unique domain name.

Consult the professionals - in this case, someone in advertising, ideally Web advertising or marketing. There are considerations for names online that do not apply offline, which will enable your site to attract more visitors.

And get a good web designer, someone whose work you like, and someone with whom you will be able to work together with to create your company's distinctive website.

5)
Find a home on the Web. Get a good host. Your consultant should be able to help you with this. There are many, many hosts out there and the whole scene can be very confusing indeed.

This is why HostSearch exists. We have done all the homework for you in this area already. You just need to determine the basics of what you need and enter this criteria into our search engines. For example, once you know how much you want to pay, how much disk space you will need, and what platform you will be working on, HostSearch generates a list of reputable web hosting companies where you can situate your site in cyberspace. Our e-commerce search engine can be found by clicking HERE .

6)
Automate. ASAP. Many new Web merchants wrongly assume that automation is something they need to think about only once their business gets bigger. However, the best time to set up automated systems and procedures is before a Web store opens its doors for the first time.

The important thing is to at least have a plan in place that details what tasks you are going to automate, and when you are going to automate them. For tasks that you decide to automate later, check to make sure that your initial Web store can be expanded to include them.

For example, if you decide not to implement real-time credit card authorization initially, ensure that your merchant account, your shopping cart and your host (ISP) can support this at a later date and that you will be able to upgrade easily.

7)
Think "dynamic." Provide new products or services on a regular basis If you can create a new product of your own once or twice a year, you'll stand a better chance of growing your income continually. Also be sure to update your existing products on a regular basis to keep content and sales fresh.

If you're not able to create your own products that often, then consider finding a product you could get behind and do a joint venture with the owner. Even if the owner does not offer an affiliate program, you can offer to promote their product or service for a percentage of sales. Let them know you have a targeted list of prospects that would love their product, especially if they could get it at a reduced price through you!

Ideally you should sell at least one product or service that you own completely. If that's simply not possible right away, then make sure you align yourself with only the strongest companies that you can rely on going forward.

Your site needs to be kept fresh and dynamic. Surfers need to know that someone is minding the store. Tell them about yourself. Make yourself real. Put up pictures of your staff and your office. Sell yourself!

8)
Be in touch. Design an opt-in email strategy. You must always be growing a tightly targeted list of prospects. It's the only way you can "capture" a percentage of the folks who visit your site and do not buy the first time (which is unfortunately nearly all of them!).

An opt-in strategy works best when you give something of value away in exchange for a visitor's name and email address. Then, you must stay in touch with these people on a regular basis, while providing value for them.

Be professional and polite to them since we are all receiving far too many emails from people and companies we have absolutely no interest in. Make it easy for them to "unsubscribe."

9)
Direct traffic to you. Design a viable marketing strategy. Lets face it, in order to make money online, you must get visitors to your site. There are tons of ways to do this on the Internet and people are inventing new ones every day. But what works for one site may not work for the next. It all depends upon your target market and your products and services.

If you need to pay to get listed on Yahoo!, well then pay. $199 to be listed may seem like a lot, but how many orders would it take you to recoup this? The same with GoTo - if you must pay for keywords or "click-thru's" then so be it. This is business after all. Nothing personal.

You say you don't know where to begin with this. Well then...

10)
Get a Guru. Retain a Web man. Hire a Consultant. Everyone thinks they are a writer. Or a musician. Or an actor. And now, or so it seems, a Web Designer.

Believe me. Everyone is not.

The single best investment you can make in launching your online business is to have your own personal Web consultant by your side, holding your hand, guiding you, working with you, plotting with you, strategizing with you.

There are many candidates out there for this position, so finding a handful to interview should be no problem. Check out their portfolio of clients. Look at their web sites. Assess their strengths and weaknesses. And decide if you could work with this person in your online business.

In the best of all possible worlds, this person would possess a package of skills, from designing web sites, to maintaining and promoting them, to sales and marketing. Although this may seem like a lot to ask for, these people are around and are well worth paying a monthly retainer to - or hiring - in order to help you realize your online business goals.

You may need to motivate this person with a cooperative package; for example, they get a certain percentage of online sales, or even handle all the orders. Different companies and individuals can tell you what they have to offer. The point is not to think you can do it all yourself, or simply delegate an already busy employee additional responsibilities they do not have a clue about. Invest. You need to speculate to accumulate.

It's often difficult to separate the hype from the reality, but if you do your homework, read a bit, surf around and look at professional sites, and use professional resources like HostSearch, you will be well on the way to putting up your own e-commerce site. With a good product, a good site, and some perseverence, you may soon find yourself with a successful online business. Committing to doing it right is the first big step in anything you undertake, and online business is no exception .

Getting Started in ECommerce

In 2004, Enquiro.com conducted a study of the search behaviors of men vs. women. They found that women spend more time in their searches and at specific sites. The study also revealed that women tend to be more deliberate in reading search results, linger longer at sites and have a greater satisfaction in the overall shopping experience. Another study conducted by iProspect.com revealed that women are more apt to click the paid search advertising because they find it more relevant to their searches than do men (WebProNews - July 14, 2004).

What does this mean? It means that if we understand the searching and shopping patterns of our target audience we are better able to create marketing strategies to effectively drive traffic to our sites. Don’t yet have a website?

Electronic commerce or ecommerce is used to describe doing business over the Internet. Selling products and services to customers over the Internet can be accomplished a number of ways and various levels of sophistication.

The first thing you need is a professional Web site with its own domain name. You need to design and promote a Web site. You'll need access to expertise that can regularly design and maintain this Web site for you. A good website which gets visitors to return is constantly evolving and therefore, require ongoing attention. There are thousands of resources available for you to take advantage of, many of which are free. You can surf the Internet for what you need or you can simply visit www.WECAI.org to see the many resources we have listed. We have resources for guests and if you are a member we have even more resources to help you get started. In fact, you can search our domain registry and purchase your own unique domain name at www.affiliatesphere.com/domainregistration.htm

Developing a business over the Internet requires many of the same major activities as starting any other business. You need a business plan, something to sell such as a product or service; you need customers and you may even need financial backing to get started. In addition, you need to market products to your customers, exceptional customer service practices and many other resources just as you do with traditional bricks and mortar enterprises. They may include inventory, fulfillment, shipping banking relationships and more.

Your store will need a "merchant" account, or the ability to process your customers' credit card transactions over the Internet. This includes needing a "secure server," (security certificate such as Versign or Geotrust) so that thieves cannot gain access to your customers credit information. Your merchant processing can be as simple as accepting payments through PayPal or as complex as a custom designed shopping cart system you pay for.

Getting a Merchant Account - If you have a good relationship with your bank and they don't require a security deposit this may be your best option for setting up a merchant account. Alternatives to getting a merchant account through your bank are to go through a broker, a fulfillment house, or using third-party billing.

For more information on establishing an ecommerce presence check out the e-book entitled: Show Her the Money – The Woman’s ECommerce Handbook for Online Transactions (www.showherthemoney.com). If you are, or become a member of WECAI – www.wecai.org, this resource is yours with your membership.

In the previous Part we talked a little bit about what Ecommerce is, getting a domain name and setting up a merchant account. Ecommerce is more than that, much more. To have a really good online presence that gets people to stop and shop you need a strategy for success. Your strategy must include your USP or Unique Selling Position in the marketplace. What makes you stand out from all the other online entrepreneurs looking for the same type of customers as you? Can you stand out from the competition based on quality, price or benefits? Once you know your USP, you can begin the monumental task of telling the world about your site. A really unique selling position will give you an advantage over all the competition – well that and a lot of planning and investing of your time and money.

FOCUS

Emphasize the benefits and the results the customer will get from purchasing from you and using your product or service. You can discover the benefits by listing all the features and then converting them to benefits. List everything your product or service offers. For each feature list a relative advantage from the customer’s perspective. You can discover the customer’s perspectives when they buy. Simply ask them, “ Why did you place an order today or use our service?” BE very specific when creating your benefit statements. An example of this is, “You will save $100.00 sells better than “you will save money.” “You will loose 20 pounds in 10 days” sounds better than “you will loose weight.” Rank your benefits in order of importance to the customer. If you have enough of them, use bullet points for emphasis.

Emotion sells. People make most buying decisions with their heart and not their head. Paint a picture of the results the customer will get when they purchase from you. “ You will look 20 years younger.” “You will be $100 richer.”

Make sure you include a call to action. Want them to make a buying decision today? Give them a reason to do so. Offer a bribe (discount, bonus, something for nothing).

Your website must load quickly and function easily. If your site loads slowly people will get impatient and go elsewhere. Do all your links work? Have you tested your order page by running sample orders? Have you tested load time using different connection speeds? You can get a fr*ee analysis by visiting Submitplus.com.

Make your website easy to look at and read. I find dark background tend to be more difficult to read than do pale backgrounds. The overall look of your site should be clean and professional. When we were first creating the Women’s ECommerce Association, International we did everything in-house. Not being truly adept at HTML coding we thought we could just use a simple program to create a professional site. It was okay, but the one we now have is so much better. Why? Because we hired a professional. You can create a website with a good template program. We are using ECommerce Templates to create our new look for WUN Publications. It is simple to use and relatively inexpensive.

When it comes to graphics, be conservative. Sites that are laden with graphics and flash tend to take longer to load. If your site takes more than 3 seconds to do so, you will loose many visitors and potential buyers. If you must use graphics, make sure the files sizes used have been reduced as much as your image editing/compression software will allow.

View your site using as many different browsers as possible. In addition to Internet Explorer and Netscape, there is Opera, Mozilla, Lynx and those are just the ones that run on Microsoft Windows. WebMonkey has a chart of those supported by Macintosh, Unix/Linux and others. Also, many people will surf with their browser’s graphics switched off. Make sure you know what your site looks like without the graphics and that it is still easy for visitors to surf.

One last thought Make sure all your important information is above the fold. If you know that visitors are looking for something specific and you make them scroll down to find it, chances are they won’t.

Build and Promote Your Web Site

When I was writing this article, I posted a message on the Online Advertising (http://www.o-a.com) mailing list asking people to tell me about how they made or saved money on the Web. One individual wrote to me saying that small businesses lose money more often than they make it on the Web because of the high cost of creating and running a Web site.

Unfortunately, there is some truth in what that individual had to say. Many small businesses have spent more money on the Web than they will ever make or save.

But the good news is that doesn’t have to happen. You can profit from the Web if you plan carefully and use your ingenuity.

Decide What the Purpose of Your Web Site Will Be
If you go to business meetings or look in the local papers, you will find numerous service providers who offer Web site design, hosting, and marketing services. Among them are advertising agencies and marketing firms, desktop publishers, office support services, commercial artists, computer programmers, computer consulting firms, and companies that also sell Web site hosting and Internet connectivity services.

Some of them will have experience setting up huge corporate sites, some will have limited experience building Web sites, and some may be people claiming to be Internet consultants or Web site developers because they have just purchased a Web page creation program and assume that owning the program gives them the expertise to design Web sites.

Many will try to convince you to buy their services now, whether or not you know anything about the Web—or about them. Don’t be pressured by their solicitations. Don’t sign any agreements to buy Web site space or to have a Web site created until you have a clear vision of what you want the Web site to accomplish.

Every decision you make about your Web site should be focused on what you want to achieve by having a Web site. Do you want to use the Web site primarily as a capabilities statement or online version of your press kit or promotional materials? Will you be selling products to consumers directly from your Web site? Or will your primary purpose be communicating with customers, employees, or suppliers?

To avoid spinning your wheels or spending money on services you don’t need, make a list of all the capabilities you need and put them in priority order.

Determine Your Needs
To save time, money (and possibly your sanity), plan out the Web site carefully before you sign any contracts or spend any money on developing it. You can determine what capabilities you’ll need and gather the information you need to get accurate pricing estimates by answering these questions:

1..Who do you want to use the Web site?
2..How many people do you expect to use the site?
3..How will you let them know about the site (how will you market it)?
4..Who will do the marketing?
5..What capabilities (ordering, database, audio, video, and so on) will you need?
6..How often will you have to update the Web site?
7..Who will do the updates?
8..What will it cost to host the site (or for your own server and Internet connection)?
9..What will it cost to design the Web site?
10.What it will cost to market the Web site?
11.What will it cost to update the site?
12.How much will you have to spend on inventory?
13.What will fulfillment costs be?
14.Will you need warehouse space?
15.Will you have to hire employees?
16.How many sales or leads will you need to break even on costs?
17.What sales volume do you want to attain?
18.How much, if anything, do you expect to make in advertising revenues?
19.How soon do you need to reach your sales goals?

Use the answers to these questions to determine what it will cost you to build the site and maintain it. Then compare your costs to the results you hope to achieve and determine if the cost will justify the results.

If the results will justify the cost, set specific goals and timelines for achieving the goals and start the project. At each step along the way, compare your progress to your needs to keep it on target.

If the results won’t justify the costs, look for ways to cut expenses or increase revenues. Or don’t build the site at all. You can reap many of the benefits of the Internet without having your own domain name and Web site.

Don’t Purchase Your Own Internet Server
You don’t have to have your own Internet server (computer dedicated to serving pages to the Internet) and Internet access lines to put your business on the Web. The most cost-effective way for most small businesses to launch and maintain a Web site is to rent server space from a Web-hosting company.

Similarly, if you don’t have the time, skill, and interest to do a good job of designing a Web site, farm out the chore to a reputable contractor or Web design company. The reason is simple: The time you would have to invest to learn to create Web pages could be put to better use selling your products and services and running your own business.

Know What to Expect
With Web design, like other services, you don’t always get what you pay for. High price is no assurance of good design or a result suited to the intended use for your site. One organization paid more than $9,000 to have their Web site designed and hosted for a year. The Web site consisted of only a few pages of text and one graphic image. There were no databases and no order forms. The only interactive feature was a function to send mail to the owners of the site. The entire job, including creating the graphic image, shouldn’t have taken more than a day or two to create.

You could get ripped off like this, too, if you don’t know what you are buying. Launching a Web site is a process that involves several types of activities. Depending on the nature of your site, those services will include some or all of the following:


1..Setting up the Web site on a hosting service
2..Hosting the Web site on an ongoing basis (storing the Web site on a computer, connecting it to the Internet)
3..Registering a domain name (giving yourself a unique “address” on the Web, such as yourbusiness.com)
4..Designing Web pages (similar to typesetting and laying out a newsletter)
5..Designing artwork (creating original artwork for the Web site)
6..Writing the editorial content for the Web site
7..Programming a database to work on the Web (for mailing lists, surveys, catalogs, customer sales data, and so on)
8..Registering the site with Internet search engines
9..Marketing and promoting the site (on the Web and offline)
10.Advertising (on the Web and offline)
11.Scanning your graphics and text to make them usable on the Web
12.Maintaining the site on an ongoing basis

Few companies offer all these services. Many, however, offer “complete” packages that include setting up and hosting the site along with design and limited maintenance. Although using a single source to do all the work sounds convenient, it isn’t necessarily a good idea. The person who is a whiz at computer programming may have no artistic abilities and no eye for graphic design. Someone who is capable of putting text into html format may not know anything about creating the editorial content for the site or about Internet marketing. (Don’t assume they can type well or spell words correctly either!) And the company that hosts the Web site may charge a small fortune to “design” your Web site, when all they do is plug your material into a cookie-cutter template that they use to “design” every Web site they create.

Furthermore, if you are charged a flat fee, you may wind up paying for services you don’t need, or overpaying for the ones you do need.

To make sure the price you are quoted is fair, ask the provider to give you an itemized list of services they provide and to specify the fee they are charging for each service.

Get quotes from several vendors and compare them. Look at how much disk space you get, how much bandwidth you are allowed (how much data can be transferred monthly for the fee), and what extra charges you’ll incur if you go over these amounts. If you plan to sell online, see if there are extra charges for a storefront, too. Ask whether you will have access to update the files yourself if you decide to; how many e-mail accounts you will be given; and whether there are extra charges for autoresponders, mailing lists, and other services you may want.

Know the Going Rates
Be wary of deals that offer you a set number of pages unless you have no plans to add anything to your site after it is set up. A page requires very little space on a computer. If you need to have only a few pages on the Internet, you shouldn’t have to pay more than $10 or $15 a month for hosting them, plus a reasonable hourly fee for taking your material and converting it into html Web pages.

In 1999, Web-hosting prices for people who could build their own Web sites ranged from as little as $15 a month to $50 a month or more depending on the amount of computer (server) space needed and whether the Web site would require database, audio or video capabilities. A site costing $15 per month in hosting fees is adequate for most small businesses whose primarily goal is to put sales literature on the Web to get sales leads. Some hosting companies included shopping cart software (software for setting up a retail site) at no extra charge with host plans costing about $25 a month. Graphic artists and programmers typically charge $75 an hour and up. Conversion of documents to simple html pages costs between $15 and $25 an hour.

Find Affordable Web Hosting
If you will be creating your own Web pages or if you want to compare the prices your service provider quotes to price elsewhere, be sure to visit

BudgetWeb.com http://www.budgetWeb.com/budgetWeb/index.html. This Web site contains a directory of companies that offer Web-hosting services and a primer that explains some of the terms you may encounter in setting up your Web site. There is also a list of questions you should ask a Web-hosting company.

Ask for References and Check Them
Before you agree to have anyone design your Web site, ask for references. Get the names and URLs of Web sites they have designed for other companies. Look at those sites and see if you like them. Is the design of the pages attractive? Do they load quickly? Do they all look the same? Look around the sites for the e-mail address of the owners and send them e-mail. Ask if they were satisfied with the work that was done for them and if it was done in a timely fashion.

How to Get Free Internet Merchant Accounts

Here I will show small businesses how to get free internet merchant accounts. If your business is to grow and succeed, it is essential to accept online credit cards.

Benefits of accepting online credit cards.

1. It has been proven that sales increase dramatically when you accept online credit cards.

2. Up to 75% of online purchases are made on impulse and customers spend up to 50% more when using their credit cards.

3. Above all, if you accept online credit cards you build credibility in the eyes of your customers as they assume only established businesses will accept cards.

However, it is not necessary to have your own internet merchant account to be able to accept credit card payments on your website. Most small businesses do not need their own online merchant account.

How to get free online credit cards

Getting your own internet merchant account is more difficult than obtaining an offline merchant account because the card is not present at payment nor is the signature obtained. Sometimes, small and new companies face extra difficulties.

Nevertheless, these problems can be overcome by getting a Third Party Processing company to accept online credit card payments on behalf of you or your company.

How Third Party Processors operate

The payments your customers make are processed through the third party’s own merchant account, and you the retailer is paid (minus a commission) by the third party processor. This allows you to sell online without the necessity of having your own internet merchant account.

However, the Third Party Processor makes its profit by charging a processing fee. Usually, third party processor charges are a little more on a transaction compared with having your own online merchant account. Though set-up fees are usually free or minimal.

So, there you have it. You can accept online credit cards on your website through a Third Party Processor without needing your own merchant account. Free internet merchant accounts by another name!

Evaluating Vendors of Ecommerce Fulfillment Services

Once your website has secured an order, you have to fulfill it. While the fulfillment of digital goods is usually handled online, the delivery of physical goods is handled in a "brick-and-mortar" world.

When choosing a fulfillment company ( http://www.4th-media.net/order_fulfillment/decision_making.php ) for your ecommerce operation, you need to evaluate both fulfillment services and ecommerce services for order processing.

Evaluating Fulfillment Services

Fulfillment services includes receiving, inventorying, warehousing, delivery, record-keeping and customer inquiries. You have options to outsource part of or all of fulfillment services to a third party.

Receiving - This is the process that fulfillment vendors acquire goods from suppliers and the accuracy of services starts at the receiving.

Inventorying - The skills of inventory management directly impact the quality and cost of fulfillment. If inventory is out of stock, you may lose customers. If inventory level is too high, it may increase the cost of inventory.

Warehousing - Physical goods are stored in a warehouse and valuable items are usually stored in secure storage. While fulfillment companies have their warehouses and distribution centers, small businesses can store goods in their garages or basements.

Shipping - For order fulfillment, goods are delivered to customers in various shipping methods - ground, overnight, etc. at fulfillment centers. Customers specify shipping methods when they place their orders and the fulfillment companies may adjust the shipping methods of the delivery.

Return and Order Inquiry - Customer Service Reps at fulfillment companies can handle return and refund for their clients. Most ecommerce sites allow customers to view their orders and status of fulfillment online.

Record Keeping and Reporting - The ability to track all information pertinent to the order fulfillment (from inventory items, customers, orders to shipping) will help businesses to gain insights into the behaviors of their customers. Fulfillment companies and large organizations usually install inventory and fulfillment management software to automate the processes. Small business owners can find shareware for less than $100.

Evaluating Ecommerce Services

E-commerce fulfillment vendors are usually fulfillment vendors that provide ecommerce services related to fulfillment.

Online Catalog - Ecommerce fulfillment vendors can either develop online storefront ( http://www.4th-media.net/online_storefront/ ) for you or integrate your online storefront into their backend fulfillment system.

Online Payment Processing - Online storefronts from ecommerce fulfillment providers should have the ability to process payments online in credit card, electronic check, and purchase order. Using a fulfillment company, you can accept credit card online without a online merchant account.

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