This method has the benefit of being very quick and simple. But it does not permit custom designed web sites. Security is handled by the catalog vendor. The merchant purchases hosting services as well as a shopping cart service from a vendor. The merchant is responsible for designing and building the web site, and uses special codes to integrate the shopping cart features into their web site.
Security is handled by the hosting service.
When a merchant has an existing web site, and wants to integrate a shopping cart into this site, an offsite shopping cart service can be purchased. This is very similar to the previous method, except that the site resides on one server, and the shopping cart resides on the offsite services server. Security is handled by the shopping cart service. If your product is software or MP3 files, or some other downloadable file, then you may want to work with a vendor that can handle not only the shopping cart, but also the storage and downloading of the files. Typically, the purchaser is transferred to the fulfillment vendors site to complete a transaction, and then downloads the product.