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Hidden 'extras' of e-commerce
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Hidden 'extras' of e-commerce

Are you considering e-commerce, or online selling?

Fortunes have been made using the internet to sell, but there are a number of pitfalls you must plan for, or around, if you intend doing this.

- extra costs involved in real-time card transactions
- credit card security and online fraud
- packaging and shipping for offshore sales
- sales tax issues

Bank setup fees and ongoing account plus processing charges can be prohibitive to small businesses and those who use the internet to sell only small quantities, irregularly.
It can be hard to fully cost out what a real-time transaction website will cost in ongoing fees because the of the many ways that banks etc bill their services.
Our page E-commerce on the Cheap looks at these costs, and ways to keep them down.

Online fraud is real, but it needn't stop you using the internet for selling. You *do* need to consider how to plan against fraud though.
Real-time credit card processing comes with various levels of credit card checking, but the most foolproof of these is expensive. Without it, you could get caught with someone using stolen card numbers and forged delivery address, or with charge-back costs.

Ways around fraud
For instance you might only post items after a transaction has properly cleared, or use online payment methods such as Paypal. Or you may choose to have people place their orders but pay by cheque - again you'd need to wait for cheque clearance before shipping.

If you are selling downloadable products (software, mp3 music, or text files etc) you also have to consider the potential for pirating and reselling of the product. Prosecuting someone for reselling your software overseas will be slow and costly, but there are low(ish) cost systems for limiting such theft.

Shipping to overseas addresses can be expensive for bulky items, but quite reasonable for small objects. If you are selling software online you will only have this additional concern if you ship disks or manuals.
Make sure you are aware of the cheapest and quickest ways to ship your product, so that this can be included in the shopping-cart setup on your site. Some countries might include their own sales tax or duties when items enter the country so you need at least to have a disclaimer that your cost doesn't inlcude any local taxes that might have to be paid.

Sales taxes can complicate costing and billing. In theory, overseas purchasers are able to buy NZ goods GST-free while most NZ purchasers must pay 12.5% GST on sales and services, but it is probably best to check with Inland Revenue for your specific situation first.