BottomsUp had a problem. The company was having difficulty keeping up with orders from its website -- it had inventory, but filling orders consumed too much time.
BottomsUp.ca Inc. designs, manufactures and sells "shape enhancing" undergarments and accessories for men and women, says Jack Timlock, director of development for the company, which is based in Toronto. Mr. Timlock was taking credit card orders by phone, fax and e-mail and processing each order manually.
When an order was received, he sent an acknowledgment e-mail. If the information was incomplete, he had to contact the customer and fill in any blanks about size, colour or quantity. He then called the credit card company to authorize the sale. Once the transaction was approved, he e-mailed a receipt. Then he wrote up a shipping label and picked, packaged and shipped the product.
In addition to the time it took to process orders, BottomsUp had to pay a portion of each sale to the credit card company and to the credit-card processing company. This ate into profit.
"For a small business, the credit card processing fees were just too exorbitant," Mr. Timlock said.
As small businesses grow, they often need to take steps to become more efficient. On-line retailing operations do this by adding "shopping carts" that automate order processing. They also can cut credit card processing costs by picking the right payment processing company.
BottomsUp decided to scrap its costly credit-card merchant account and turned to PayPal, which charged less than the combined transaction fees it was paying.
Small businesses also often turn to third-party credit-card processing companies such as Payment Services Interactive Gateway Inc. (PsiGate), based in Mississauga, Ont., which charges a monthly fee, takes a bite out of each transaction and holds back a portion of each payment in reserve for several months. (This reserve replaces the security deposit charged by credit card companies.) PayPal, located in San Jose, Calif., and owned by eBay Inc., eschews the monthly charge but takes a higher fee for each transaction, enabling companies, and even individuals, with low sales volume to accept on-line payments.
Once an on-line merchant has sorted out how to process payments, the next step is to set up a secure shopping cart and automate the processing of orders, said Paul Patience, director of Sunny Oasis Internet Corp., an Internet consulting, programming and electronic commerce company that is based in Ottawa but conducts business around the world.
"Selling your products or services on-line is like having a shop that's open 24 hours a day, seven days a week, all year round," Mr. Patience said. Without such a shopping cart, on-line businesses have to process incoming orders manually, as BottomsUp was doing.
The shopping cart ensures that the customer has filled out all information required to place the order, Mr. Patience said. It can automatically apply any promotional discounts and calculate taxes and shipping, even allowing the customer to choose from a variety of shipping methods. Shopping carts can be customized to accept multiple orders, special orders and even annual subscriptions.
Credit card information is automatically and securely sent to the payment processing company's computer system and is processed in seconds. Once the transaction is completed, order details are sent by e-mail to the merchant and a confirmation receipt is sent to the customer.
At BottomsUp, Mr. Timlock now receives all the information he needs to process orders. He no longer has to contact customers for details they might have left out, nor does he have to call credit card companies to approve transactions.
And he no longer e-mails receipts. In addition, the customer's shipping information is sent to a Canada Post website where Mr. Timlock pays for postage on-line and prints shipping labels. No more writing out labels and licking stamps, he said.
