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By Jim Collins

Selling products online is a great way to establish or expand a business. Today, many companies substantially increase sales using the Internet to attract customers from beyond their traditional boundaries.

Unfortunately e-commerce can be a confusing world, filled with unfamiliar acronyms and service providers who make claims that aren’t accurate. There are some basic concepts that you must familiarize yourself with before venturing into e-commerce. It's a good idea to understand their precise meaning, even if you’ve heard them over-and-over again.

The term "e-commerce" generally refers to the sale of, and collection of payment for, products or services over the Internet. Frequently, small businesses only want a web site that functions as an online brochure that provides information about the business--but doesn’t actually sell products. In this case, only a basic or standard web hosting account, otherwise referred to as "brochure ware," is needed.

E-commerce, on the other hand, deals exclusively with selling products and services online. Establishing an e-commerce web site, or online business, requires five key components:

• The e-commerce web site hosting account.
• Product catalog.
• The shopping cart.
• Payment collection.
• Online marketing.

These five components are not only essential to e-commerce functionality. They can be the difference between success or failure online. This column will discuss the first four of these topics. The all-important marketing category will get its own column in the near future.

Selecting your e-commerce web hosting account : Every online store requires a Web hosting account. While discount solutions are available, a rule of thumb is that the better services--those that enable e-commerce--cost between $30 and $100 per month, depending on the scale, reliability and level of service delivered. Most web hosting companies sell easily identifiable e-commerce bundles containing everything you’ll need, including a basic Web hosting package (bandwidth, disk space and email access) and an e-commerce component (such as Miva Merchant) that offer the catalog and shopping cart functionality. Higher-end solutions add a payment gateway and merchant accounts.

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Jim Collins is the CEO of Affinity Internet.
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