How Does an eCommerce Website Work and What is an eCommerce Website?

Author Justin Smith
by Justin Smith
Updated

eCommerce stands for Electronic Commerce, which is in itself a broad term for selling on the internet through a website, electronically. With the ability to process credit cards electronically on the internet, just about anything can be sold on the web. More and more people are buying online and enjoying the benefits of convenience and often lower prices (still no tax in most states). Online stores are often able to reduce prices because they are able to eliminate overhead such as having to pay employees to run a brick and mortar store. In a busy world like ours, convenience is everything! Shipping times are so fast now that when an item is ordered online it can often be at the buyer's doorstep the next morning. Amazon, and specifically their service Amazon Prime, has built their whole business model around easy shopping and quick shipping.

An eCommerce website does the following:

eCommerce works through a series of steps utilizing website code, the database, and 3rd party applications such as a payment process or payment gateway. eCommerce website use an SSL certificate to secure all data that is being transfered. Important data, such as credit card numbers, should never be stored within the websites database unless they have the proper PCI compliance.

An eCommerce website follows these steps:

  • A shopper lands on the website. The website shows categories and products that are loaded in the eCommerce website database.
  • A customer can add items to their cart and create an account. Again, all information is saved in the database, even if temporarily.
  • Once in checkout the website should now be secure showing a lock symbol and using an SSL certificate.
  • During checkout the website may use third-party software to get shipping rates
  • When you enter your credit card number the information is passed to a payment gateway such as PayPal or Authorize.net
  • Your order is now completed. The eCommerce website should not have your payment information in their database. All sensitive information is stored with the payment processor.
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If you see an "add to cart" button you'll know you're on an eCommerce website.

eCommerce websites are built differently, but they all use the same basic functions. The ability to accept credit cards is clearly a defining factor. Most times the credit does not actually process through your website, for security reasons, but processes through a payment gateway. A payment gateway is a company that works with the credit card companies to be sure that all credit card transactions are processed securely and credit card numbers are not stored by small businesses. You must have an account with a payment gateway (we'll show you how to do this) to accept credit card on your website. Although your transactions will process through a gateway, the viewer will never know or be directed away from your website. Your website will be guarded with 128-bit encryption using an SSL certificate, making fraud nearly impossible. When a purchase is made the money will be transferred directly into your businesses' bank account.

When an order is placed, the customer's purchase and payment information will come into your administration section. You will login with your desired username and password to view this information. Through the admin section you will also be able to add new products, update products, and maintain your whole website.

OuterBox is a leading provider in eCommerce website design solutions. For more information, feel free to contact us at 1-866-647-9218.

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