HOW TO SELL AN ITEM ONLINE
Many online business owners spend countless hours improving their web pages and neglect one of the points that will define if they will succeed on their business or not:
If you want to sell an item online make it EASY to buy it!
- Do you know that 90% of the Internet payments are made by credit cards?
- Do you accept credit cards on your web site?
- What other additional payment options do you offer?
- Which of the different payment options fit better for your business?
It´s not a mystery that if you give more options, you can get more sales, so let´s see what are the options to sell an item on line today.
TO SELL AN ITEM ONLINE ACCEPT CREDIT CARDS
No doubt option one should be to accept credit card payments, because once you do it, your business will increase 100%, 200%, 300% and more!
Why?
- Because people on the Internet are looking for INSTANT access to everything
- If you accept credit card payments, that will show your business as an important one, and build your credibility in the minds of your potential buyers.
- It makes it easy for buyers to make impulse purchases
- You don´t have to go to the bank (loosing time to promote your business)
And if you sell an item online accepting credit cards...
- That will make your business look as your customers want it to be
- You will be able to capture impulse buyers
- You can have a full-automated payment system
Getting set up to take credit cards online will also... * Give your business a degree of credibility, * Allow you to capture the sales of impulse buyers, and * Provide you with a fully-automated payment and tracking system.
How can you sell items online accepting credit cards?
You must apply by contacting a Merchant Account Provider who will give you the software needed to sell items online accepting credit card payments right on your web site. And the process can be made:
- Becoming an authorized credit card merchant
- Using a broker
- Using third party processors
BECOMING AN AUTHORIZED CREDIT CARD MERCHANT
Direct processors as banks can give you access to their credit card processing centers that will transmit the complete order form to your site through a secure server.
But in order to achieve the Credit Card Merchant status, most of you transactions should be personally signed by the cardholders, so if yours is an Internet business, forget it.
And many banks will charge you a deposit of thousands of dollars, plus a minimum monthly fee whether you sell or not.
USING A BROKER
The brokers are intermediary between you and the banks, they usually give a good service and you can choose among many different.
On each sale they will charge you a Discount Rate (look for a discount rate of 2% or 3%) for providing you with the payment service
In other words, if you get a 3% discount rate, that means that if your product sells for $60, the broker will keep $1.80 of every sale and you will receive $58.20
You will find that brokers have a higher approval rate than banks, they are more affordable than banks and are ideal if you want to start selling an item on line in as little as 48 hs.
USING THIRD PARTY PROCESSORS
The third party processor will send the credit card payments from your web site´s order page to the direct processor.
Third party processors can be divided into two categories:
a) Fulfillment houses that will take order for your products with a live operator and their own 1-800 number. They will also package and ship your goods, and provide your with complete online records of your transactions.
This is ideal for those netpreneurs that have started doing all the work themselves, and want to concentrate on the promotions rather than the chores.
Fulfillment house usually charge a 5% discount rate.
You can find hundreds of Fulfillment houses at Yahoo!
b) Service Providers that will process your buyers payments with their own credit card merchant account
This is the ideal choice for the small online just started business.
Advantages:
- you don´t need to qualify for credit card merchant status
- there is often no minimum monthly service charge
- you won´t have a hefty deposit requirement
- you are only charged for the sales you make
- some Service Providers will allow you to accept not just credit card payments, but also only checks and payments by phone
Disadvantage:
- The transaction fees are usually higher than the Fulfillment houses one
Some of the best Service providers to sell an item online are:
- iBill (http://www.ibill.com)
- CC Bill (http://about.ccbill.com)
- Authorize.Net (http://authorize.net)
- CyberSource (http://cybersource.com)
Should you use a Direct Processor or a Third Party Processor?
You are the only one that can answer to that question, because it depends on your monthly sales volume.
- With a monthly sales volume under $1,000 a third party processor will be the best choice
- Once your sales go over $1,000 each month you can look at switching to a direct processor with a lower discount rate
TO SELL AN ITEM ONLINE ACCEPT ONLINE CHECKS
Accept Checks Online or e-checks!
E-checks allow consumers to pay by check trough the Internet filling a form online. Once they send the form, the information will be sent to you or to your transaction service provider.
Most of your buyers will use credit cards, but 11% will want to pay you with a check, so if you offer to them the option to pay with online checks that should be a profit booster for you.
You need to have a special page where you need to explain to your customers that using online checks is secure and how online check payments work.
You can use online checks on two ways:
a) The "Print & Pay Method" where you need to buy a special software that will print checks that you will have to deposit on your bank to receive your pay (Make sure your bank will accept this checks ). Then you need to wait until each check clears to be sure it is good.
b) A Transaction Service where all the information is encrypted and transmitted to a clearing house. Once cleared, the funds are withdrawn from the purchaser´s account and deposited into the merchant´s account. (This way of processing online checks is faster than the Print and Pay one)
TO SELL AN ITEM ONLINE ACCEPT DEBIT CARDS
When a payment is made using a Debit Card, the funds are immediately withdrawn from your customer´s bank account.
Advantages:
- you immediately know if your customer has enough funds to make the purchase
- the purchase it will never be charged back to you (like checks without funds)
This payment method is not yet widely used but is gaining popularity according to AllBusiness.com (http://www.allbusiness.com), credit card purchases are expanding by about 15% each year, but debit card purchases are expanding by more than 50% per year.
If you're already taking credit card payments online, check with your merchant account provider because you should be able to allow this form of payment as well.
TO SELL AN ITEM ONLINE ACCEPT E-WALLETS
There are different kind of e-wallets, come of them store debit and credit card information, then the information can be copied from the e-wallet and pasted on the online order form, so you do not need to add any additional software to your order form.
Other e-wallets use a software to automatically fill out the order forms with the customer´s credit card and contact information that´s store at the e-wallet. Microsoft´s Password works like this, so you can download the Password software if you want to accept payments from their subscribers
Other e-wallets store not only card numbers but cash too, and once the wallet has digital cash stored (that has being transferred from a debit card, a credit card or a check inside the e-wallet) you can make purchases with it. This is like having a virtual savings account where charges are made for ongoing purchases, but although the concept has been around for several years, it is not very popular, so you don´t need to concern about accepting digital cash.
TO SELL AN ITEM ONLINE ACCEPT PERSON TO PERSON E-MAIL PAYMENTS
People can use their bank account, credit card or debit card to make payments over the net sending the link to the recipient. Then with that link the recipient can transfer the funds to his bank account or credit card, ask for a check, or use the funds to make purchases or payments.
Advantage:
- Neither party has to reveal their account information to the other party
- Absolute privacy: you only receive the customer´s e-mail address
- There isn't any money transferred through e-mail
- Less expensive than wiring funds bank-to-bank
You will find person to person e-mail services at Yahoo!, the US Postal Service, the Citibank, Mastercard, and the most popular of all of them PayPal an already established network of over 64 million accounts in 45 countries.
PayPal is secure, accepts payments by credit card, bank account or PayPal balance, it supports selling items online in many currencies, you can set it up fast, and it charges you 1.9 to 2.9% of the transaction plus 30 cents per order, and there´s no setup or monthly expenses.
And with PayPal you will be able to accept credit cards, debit cards, and bank account payments
WHEN TO SELL AN ITEM ONLINE IS IMPOSSIBLE
Many people are still nervous about using their credit card online, so you must provide your customers the option of ordering and paying off-line to capture the maximum number of sales.
Some others will insist in speaking with "a real person" and it will be very usefull if you have a 1-800 number available 24/7.
And... offer printable order forms that your customers can send to you by regular mail.
FINAL THOUGHT ABOUT HOW TO SELL AN ITEM ONLINE
Make it easy for your customers to buy your products if you want to have online success.
There are millions of consumers who don´t own credit cards or feel afraid to use them on the Internet, so...
If you offer more than one payment option, you will close more sales
Written by Dr. Roberto A. Bonomi
