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Configuration
How to configure your shop
Configuring your shop correctly is a very important step and should be done before you do anything else.
- Site Url - Enter the url to your site, including the http://. This is used for several things(paypal forms, emails, etc.) so it is important that it is correct.
- Site Title - This is used in the title bar to identify your site (standalone only).
- Theme - This will list any folders in your templates directory for you to select. You should avoid directly editing the default template. Make a copy of it and name it something else.
- Single Item Mode - Selecting yes can allow multiple users to sell items in your shop and is good for selling items that are usually bought 1 at a time. Selecting No will enable the Shopping Cart allowing users to purchase multiple items in one transaction.
- Items Per Page - This limits how many items show per page when browsing the shop.
- Show Category Item Count - This will count and show how many items are in a given category, including sub-categories. This can be turned off because it can slow down your site if your shop has alot of items and traffic.
- Enable Coupon Codes - Use this to turn on coupon codes. Even with the coupon codes turned off it is still possible to add/edit/delete the codes. The coupon form will not show to customers unless you enable this setting.
- Auto Start Uploads - If set to yes, the uploads on the Add Item page will automatically start in the background when you select a file from your computer. If set to no, you will have to click a checkbox for the upload to start. See the Adding Items section for more info.
- Show Template Vars to Admins - When this is enabled, admins will get a popup window with a list of all variables used on the current page. Very helpful for customizing your template.
- Show on Main Page - This give you options to show certain types of items on the main page of your shop.
- Show on Main Page Limit - Limits the number of items shown from the above option.
- Approve Purchases Manually - If enabled, will require that admins approve each purchase in order to prevent fraudulent purchases. Otherwise purchases are automatically approved so the user can download their files instantly.
- Enable Captcha on Free Downloads - Require users to enter a security code to download free items. (You can add your own fonts to the fonts/ folder. The captcha system will randomly select fonts from that folder when generating the captcha code.)
- Item File Path - This is the protected folder that all shop files are stored in. It is highly recommended that this folder is not accessible from the web. This can be a relative path (../somefolder) or the full path (/home/user/somefolder)
- Item Image Path - This should be accessible from the web and should be a relative path.
- Category Image Path - This should be accessible from the web and should be a relative path.
- Use Paypal Sandbox - This will allow you to make test purchases in paypal's sandbox environment. You must have a developer account with paypal to use their sandbox.
- Owner Paypal Email - This should be the shop owners paypal email address. This address is used for all shopping cart purchases and for any item that does not have a paypal email explicitly set.
- Currency Code - The default currency code used for transactions and is used if the item does not have a currency code set. See paypal's website for supported currencies.
- Currency Symbol - The currency symbol displayed. Use html entities when possible (eg. € ).
- Payment Notification/Receipt - Turn payment receipts on or off. When enabled, emails are sent for all types of transactions.
- Payment * Subject - Subject for emails sent to user. {$item_name} is replaced with the item name in Single Item Mode and is replaced with "Cart" in Cart Mode.
- Paypal Connect Method - How to connect to paypal. The default is fsock and is fine for most setups.
- Use Proxy to Connect - Some hosts like GoDaddy.com require using a proxy to make secure connections. This setting only applies if the above is set to cURL.
- Proxy URL - If above setting is set to yes, enter the proxy's ip address or url including port if applicable. This setting only applies if the above is set to yes.
I would say the rest of the settings are self-explanatory 
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