Nothing New Under the Sun?

What’s the weakest link for the small online business?

Chances are it’s shopping-cart software.

While consumers may complain about carts that don’t confirm purchases or hide shipping fees until the last moment, store owners complain about setting them up.

Even if you have a merchant account and take credit cards in your store, you may need a separate account when you go online because your bank or processor may not support the software you’ve bought.

The costs and hassle can be extreme, but Mike Bernardi says he wants to help. Bernardi is CEO of OrderButton Inc., in Louisville, KY, and for just 7 percent of your gross, he’ll take all the hassles off your hands. (High-volume customers get rates as low as 5 percent.)

If the price sounds high, remember that standard Visa and MasterCard processing discounts are 3.5 percent and can vary considerably depending on both your history and the industry you’re part of. Then there are transaction fees, software installation — the list goes on and on.

OrderButton claims to deal with all of these hassles — software hassles, integration hassles, and bank hassles. Best of all, consumers can fill their carts at multiple OrderButton sites and pay just once, Bernardi said.

“We’re trying to deliver everything you need for online transactions without worrying about SSL [secure sockets layer] and merchant accounts that you need while doing things online,” he said.

When you process through OrderButton, you’re actually using Bernardi’s own merchant account, which he got from Credit Card Solutions Inc. in Richland, WA.

“The only thing we’re asking when you sign up is that you put down a valid credit card for us to check and authorize. We’re mainly checking to see if you’re a valid business. We authorize the card and then watch the vendor at that point.”

Bernardi was in the construction business before launching a Web-hosting firm, Web Rebel, a few years ago. His partner and vice president of finance, Bill Wooldridge, sold a medical-billing outfit in 1998 and was looking for a new challenge.

The two men are among the new breed of Web start-ups with lower costs and more reasonable expectations.

“We’ve outsourced our server, programming was done around the world… we kept our costs under control because that’s what got people in trouble,” said Wooldridge.

Advertising so far has consisted of discrete contacts with about 1,000 Web-development firms specializing in small businesses.

Wooldridge figures that if OrderButton gets half the number of customers that the competing firm iBill gets, and those customers’ transactions are just two-thirds the size of iBill’s, “this gets profitable pretty quick.”

There are all sorts of risks here. OrderButton is taking on banking risks, since banks pay merchants before consumers pay them. Many small merchants will find that 7 percent price high. Then there are the usual risks of software, processing, operations, and scaling to contend with.

But Bernardi and Woolridge seem clearheaded about the risks. The next time someone tells you the dot-com start-up era is over, that there’s nothing new under the online sun, point him or her toward Louisville. He or she might be surprised.

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