Selling products online, be they physical or digital, has never been easier than it is today. The e-commerce field has grown past simple third-party tools that are tacked-on to web hosting plans. Now, many e-commerce platforms offer website builders and domain registration (though, web hosting services support e-commerce integration, too). With this blending of utility, the e-commerce platform matters less than the features you need to connect with potential customers.

What Is E-Commerce Software?

E-commerce software lets you track and manage product inventory, as well as fulfill and ship orders. It helps you maintain a product database, track sales, market to customers, offer discounts, maintain a loyalty program, and even create a blog to connect with potential customers.

Even better, there are numerous turnkey bundles available that combine custom or name brand shopping cart solutions with e-commerce-focused web hosting services, banks and payment processors, as well as e-commerce fulfillment and warehousing operators. The problem with such complex, do-it-all services, however, is that it's tough to know how to evaluate them or even where to begin. Don't worry, we're here to lend a helping hand.

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You Need E-Commerce for Your Small Businesses

Before we talk about what to look for in a e-commerce service, you may be wondering why you need one. As mentioned earlier, many web hosting services now offer e-commerce packages as part of their hosting plans, using built-in tools or integrating with open-source tools. It boils down to just how much extra work you, as a small business owner, want to put in to manage your store from scratch. It's just another set of hoops through which to jump if you have to set up your own merchant account and payment gateway. Plus, everything is on the web now: If you make your customers place an order and then call you with their credit card information, you are going to lose a lot of sales.

A PayPal button on your website is a good first step, but if you want to operate an attractive, modern online storefront from which people can shop day or night, then you really are better off using full-featured e-commerce platform instead of trying to glue all of the separate parts together on your own. E-commerce services streamline the relationship between buyers and sellers by handling multiple payment methods, collecting tax, and calculating shipping costs. A straightforward shopping experience means buyers get the product faster, too. A happy customer is just good business, after all.

How Much Does It Cost?

It's difficult to choose an e-commerce platform strictly based on price. Some offer advanced features, but impose restrictions on transaction or monthly data transfers; others limit a plan's features by price. Most e-commerce tools offer templates (also known as themes), but some may fence off popular ones into their premium packages. That means you must pay more money for an attractive website. A website builder is useful for customizing templates.

Some services may have a low monthly cost, but charge fees for transactions and for add-ons that let you integrate with third-party tools. Depending on your requirements, you can expect to see prices as low as $9.99 and as high as thousands of dollars per month. As always, it pays to read the fine print.

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There are two types of transaction fees to keep track of when evaluating e-commerce services: the ones charged by the shopping cart and the ones charged by the payment gateway. You can't avoid the payment gateway fees; whichever service you select will charge a certain amount per credit card transaction. That's the fee from Authorize.Net or PayPal, for example.

Some e-commerce platforms charge an additional transaction fee for using the service regardless of the payment gateway. This means you pay your shopping cart vendor a certain percentage per transaction before the payment gateway collects its fee. Consider this scenario: A customer came to your store and paid $100 via PayPal. Your vendor will collect $3.20 for that transaction and PayPal will collect $3.20 (the actual amount will vary based on your PayPal account type). E-commerce platform typically offer bandwidth restrictions if they don't charge transaction fees.

Many services have tiers based on how much monthly data you need. If you expect high traffic volumes and sales, then you should look at unlimited plans or at least something more generous than the typical 1GB of bandwidth. Others restrict storage, which limits the number and size of product images you can display. Cheaper plans have smaller storage capacity, so if you have a fairly large product database or plan to have multiple images per product, then you will have to think about how much you need. Otherwise, that monthly bill with overage fees is going to be a surprise.

Monthly data is consumed whenever visitors swing by your website. If you list several images for a single product or you have a long slideshow, then that will eat up data. In that case, you'll need a generous data allotment. Think carefully about what you want from your store to determine if bandwidth limits or transaction fees make sense for you.

Important Features

Some e-commerce services are better suited for selling physical goods, while others support digital and virtual products, such as ebooks and services. As a result, you need to think about the types of products you want to sell before selecting a service. Some e-commerce companies let you migrate data from an existing service. They handle bulk, product database uploads, as well as moving customer and order history. If you aren't setting up a brand-new storefront, then you really need to look for e-commerce tools to help with the move.

Look for plans that let you organize inventory and maintain a customer database. If there aren't any built-in tools, see if you can integrate your cart with a third-party service. If you plan to send emails from your e-commerce website, then MailChimp, for example, might integrate with your service tier. See if you can issue discounts, gift certificates, and run sales.

You want search engine optimization (SEO) tools to help your storefront rise up in search results. You should consider integrating Google Analytics (GA) into the dashboard to understand who is coming to your store and what they are doing. You won't need GA if the shopping cart provides its own website metrics, but it's still a good tool to consider using with your store.

Don't rely on documentation, tutorials, and forums for customer support. Those are great resources but, ideally, you should be able to get someone on the phone or in a web chat, at least. Ideally, the support should be available at any hour of the day. You don't know when things will go wrong, so why should you have to wait for normal business hours to get help?

Many e-commerce tools offer trial periods. Take advantage of the trial to learn how to work with the shopping cart dashboard. If you find it annoying to see the placed orders, enter products, or fulfill orders, move on to a shopping cart that fits into your workflow.

Finally, think about security. While many of your customers will shop while using a virtual private network (VPN) service, there are still plenty who won't. To protect them, make sure your online store and its underlying web hosting provider either offer a Secure Sockets Layer (SSL) certificate or can accommodate a third-party certificate you purchase from someone else. In addition, make sure to invest in a dependable website monitoring tool to stay on top of any security or performance issues in real time.

Shopping for the Correct Cart

Take a look at the table below to determine the e-commerce features that you need for your online store. If you already have a store with one of these services and want to tell us about your experiences (good or bad), then let us know in the comments. Have an opinion about a store we didn't list here? Let us know that, too.

Juan Martinez and Mike Williams also contributed to this story.