Merchant Account
A merchant account is a bank account established with a payment processor for the settlement of credit card transactions. Anyone who wants to take credit card orders must establish a merchant account.
There are a number of different types of merchant accounts available. You will need to consider how you will process credit cards and how your website will 'connect' to the merchant accounts payment gateway (usually their secure website) to process the credit card details.
Merchant accounts are available from a select number of UK banks as well as a number of third parties. Depending on your trading history, type of product and/or service will affect the fees and charges.
For UK companies with existing non internet merchant accounts (PDQ machines) you will have to contact your provider as most have different terms for internet transactions.
Your website Terms & Conditions
The merchant account provider will have their own criteria. However these cannot be solely relied upon to make sure your website complies with legislation.
It is your responsibility to ensure your online activities comply with the relevant legislation. If you are intending to trade outside the UK, you will also need to ensure that the legislation of those countries is being adhered to.
It is recommended that you seek professional legal advice when creating your terms and conditions and to ensure your website complies with all relevant laws.
The following is a useful list of items that you need to consider providing to your end users:- full contact details of your business
- details of any relevant trade organisations to which you belong
- details of any authorisation scheme relevant to your online business
- your VAT number, if your online activities are subject to VAT
- clear indications of prices, if relevant, including any delivery or tax charges.
Delivery/Shipping Costs
You should carefully think through how you intend to handle postage and packaging charges as this is an area that can easily cost your organisation in one of two ways:
1. By undercharging postage and packaging (taking into account the time to package the item) resulting in a hidden cost that can easily affect your profit
2. By overcharging postage and packaging! Whilst less obvious this can easily make you less competitive and drive business away.
Other considerations.
- Do you want to display prices with delivery costs built in or have them calculated at during the check out process?
- If delivery is to be added during the checkout you must consider how the system will calculate the cost.
- In general if there is a logical delivery cost such as 'orders up to £20 = £5 delivery' this can easily be configured by most systems
- Do you offer or want to offer recorded delivery, courier etc?
- If shipping is calculated by weight, then the packaged weight of each product will need to be known and stored with the product data
- Are any of your goods of high value and expensive to insure?
- Are any user groups exempt from paying VAT on products?
Are your goods suitable for export?
If so does your site need:- Translation?
- To comply with Import /export regulations?
- Additional carriage and taxation costs?
Website Structure
Most current e-commerce websites use some form of hierarchical structure which is used to organise your product or service data.
For example a sports store might have a structure such as:
male > sports shoes > tennis > Nike
The above example looks like a good structure BUT it doesn't actually tell the whole story. Can you actually buy a Nike tennis sports shoe? The answer is NO not until the size, colour and model is known. This seems obvious in the context of a sport store but we have been surprised at the number of times this is not thought about properly. When in doubt ask yourself what is the actual product or service that you could, were you in that store, actually put into your basket and pay for!
Question: are your products available in standard form or do they have a lot of variations or options, such as size or colour that a customer has to specify?
The next question is this how do people actually want to use your website? For many companies the way in which they refer to their products is a far cry from how customers think of their products.
THINK ABOUT YOUR INTENDED AUDIENCE, INVOLVE CUSTOMERS, SUPPLIERS, PARTNERS, ASK THEIR OPINIONS!
OTHER SOURCES OF INFORMATION REGARDING LEGISLATION
You can contact the DTI at:
Department of Trade and Industry
International Communications
Bay 202
151 Buckingham Palace Road
London SW1W 9SS
Tel: (020) 7215 1853 Fax: (020) 7215 4161 E-mail: ecom@dti.gsi.gov.uk
Trading Standards Offices
You will find the address and telephone number of your local Trading Standards Department for England, Scotland or Wales in the telephone book under 'Local Authority' or on the internet by visiting www.tradingstandards.gov.uk and entering your postcode.
The address for Northern Ireland is:
Trading Standards Service
Department of Enterprise, Trade and Investment
176 Newtownbreda Road
BelfastBT8 6QS
Tel: (028) 9025 3900 Fax: (028) 9025 3953 E-mail: tss@detini.gov.uk
Office of Fair Trading
You can contact the Office of Fair Trading through its website, www.oft.gov.uk or at:
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX
Tel: (020) 7211 8000 Fax: (020) 7211 8800 E-mail: enquiries@oft.gov.uk
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