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The True Cost of Selling Online

Following from my last blog; The importance of Payments for an eCommerce Business, I wanted to discuss payments in more detail, especially when it comes to the cost of selling online.

I know that a lot of eCommerce businesses try and ignore or disregard the importance of managing the costs of selling online but it is something you MUST do before even considering selling online. By costs, I don’t just mean your website build, there are so many additional costs you need to consider;

  • SSL Certificate

  • Monthly fee to Payment gateway

  • Monthly fee for Merchant account

  • Fixed transactions fee

  • % per transaction fee

You are going to have to face the facts when it comes to selling online, there are no two ways about it; you need to accept online payments and to do this, you need to use some form of payment provider.

You have two options when it comes to online payments. You can either take payments immediately without having to create a Merchant ID or, create your own Merchant ID, which can take anything from 2 days to 6 weeks, with companies like SagePay or Worldpay and pay a monthly fee and/or percentage per transaction.

If you DON’T want to create a merchant account, you can work with providers like Stripe, Google Checkout, Amazon Payments and PayPal, which allow you to start taking payments from Visa and Mastercards almost immediately. With Stripe however, your consumer will be kept on the same page and will not be diverted to another website, giving your customer a greater user journey.

Regardless of the company you use, you will be look at a charge of upto 3.4% on the processing fee and a 30p transaction fee for every item sold. These costs vary according to your monthly turnover. Here is a great converter, giving you an overview of all the options in the UK and the total costs per month. Be Careful of the hiddens costs, like 3D secure, mobile terminal, quick checkout all of these might be an extra charge.

Lets say you bought a Necklace from a wholesaler for £1.00 + VAT = £1.20, if you sold the item for £3 on your website, you have to pay 20% VAT leaving you with £2.40. The cost of processing the sale would be 10p (3.4%)+ 30p, leaving you with £2.00 and lets say your shipping to the customer was free of charge and cost you another 40p, leaving you with £1.60.  You are left with 60p profit, and out of this you have to pay, website costs, wages, warehouse etc etc. Can the business exist on this type of profit margin?

If you go down the Merchant ID route, you will still need a gateway to take payments. Some PSP (payment service providers) and ISO (independent sales organisation) can charge a small business up to £25 as a monthly minimum fee and for this you will get between 350 and 1000 transactions depending on the company you go with. The likes of SagePay, PaymentSense, Authorize.net, Realex, eWay, Securetrading, Paypoint and Ogone, to name a few offer a payment solution for those wanting to go down the Merchant ID route. If you are looking to set up a merchant account but unsure how to do so, here is a great blog to help you.

I know that it can be scary when thinking about the cost of selling online but you really need to consider the best route for you, your business and most importantly, the smoothest journey for your consumer.

The Importance of Payments for an eCommerce Business

As a startup or small business the payment provider you chose for your eCommerce site is of high importance. You should be thinking about the user and the smoothest payment journey possible.

At Gloople, we saw the importance of the perfect payment provider from the beginning. We have met with over 18 different PSP, ISO and Acquirers from the new kids on the block; Stripe, Paymill, Braintree all the way to HSBC, Securetrading, Ogone, Skrill, Paypal, Realex, Google Checkout, Amazon Payments and many, many more.

Generally, as a small business, payments fall into the below categories;

  • Credit and debit cards

  • Electronic payments

  • Direct transfer

Before you can choose the right payment provider for your business, you need to think about the kind of goods and services your business is selling. Credit and Debit card payments are the most popular type of payment method as the online world has developed over the years.

If your business trades online and has a physical store, you should offer credit and debit card payments. If your store is online only, you should be using payment systems like PayPal to make sure the checkout process is efficient. If your business sells to other businesses, you should look at credit transfer via the BACS system.

If you are spending your time searching for the perfect payment gateway, you should ask yourself;

  • Have I read the small print? – make sure you’re not getting yourself into a long term contract with extra payments that will crop up. A lot of businesses will try and hide the information which you may disagree with in their small print.

  • What’s the support like? – With the eCommerce world in constant action, you need support to be there when you really need it.

  • Is my online payment gateway and shopping basket compatible? – You will need to check this to make sure your shopping cart can be integrated.

  • Are there going to be hidden costs? – This can sometimes be overlooked so you need to be aware of any potential hidden costs such as multi-currency payments ect.

  • Does my payment gateway come with anti-fraud? As you develop your site, you need to pick a payment provider that can provide the basic anti-fraud tools.

  • Can I see the sales figures? – you should be looking to analyse your sales data all the time so chose a payment provider that will help manage your sales data.

The process of finding the right payment system has taken over three months of preparation with meeting after meeting followed by proposals. I am now in the process of sitting down with the Gloople team where we will, collectively chose the right partner for OUR customers. As a platform it is important that we give our merchants (brands and retailers) the simplest and quickest solution to help them start selling the day they sign up.

I hope when that when the time comes, you will have the right information to pick the payment provider suitable for your eCommerce site. In next weeks blog I will be going into more detail around the positives and negatives, to the various payment providers I have mentioned and their monthly fees, percentage and fixed fees per transaction.

The Importance of Mobile Commerce

Between summer 2011 and summer 2012, traffic to eCommerce sites were stemming from smartphones and tablets, growing by up to 200%. Its time to face the facts, Mobile Commerce is becoming more, and more important every single day.

“Something had to be done to cater to mobile shoppers”. Richard Sejean – Director of e-commerce.

I was recently with a new client who sells men’s clothing, and the first thing I helped them with was to understand their online customers through Google Analytics. To their surprise, not only had they seen a massive increase in mobile and tablet visitors and customers, but the mobile customer was spending at extra 10% than any other customer. This is definitely not an anomaly, this is something we are seeing time and time again and now, its time to finally listen.

The biggest turnoff for mobile shoppers is the difficult Customer Acquisition Journey. This is the step by step process your consumer will go through to the point of purchasing a product. Some online stores will lose sales due to the fact that their website is either archaic or non-responsive, meaning that the journey of purchasing a product is intolerable leading to the customer leaving the website, without purchasing a product. To solve this problem you can either build your website responsive (here is a great example) or build a native mobile app.

The way people purchase goods has changed since the days of going to a store and paying cash for it. Don’t get me wrong, in-store shopping is still leading in sales however, most people will no longer drive hours to a store to find that what they want no longer exists.

Recent statistics show that you save 78% more time shopping online than you do in store along with saving a lot of money in travelling to and from stores. eBay alone, have 300-400 employees working on mobile solutions with reportedly 50% of their sales closing on mobile.

Our mobile devices are becoming a central part of our lives and it should be used as a tool to help shop and pay. With most mobile phones now coming with either 3G, 4G or the ability to connect via wireless, there is no excuse in avoiding the inevitable; Mobile Commerce is the future.

I will be holding a Webinar on Tuesday 16th October on 10 Secrets to a Successful Online Business, where I will discuss in more detail the importance of Mobile Commerce. You can book your free place here. Limited spaces, so be quick.

Facebook for Business

With over 900 million users on Facebook, there is the potential to reach more customers when using the right tools on Mark Zuckerberg’s social network. The ‘Like’ button or ‘Comment’ box is used around 3.2 billion times each day. Yes, 3.2 billion. Don’t forget the 300 million photo uploads each day.

When I hold my keynote seminars at various events/tradeshows I always ask the audience to raise their hand if they have a Facebook account. At least 90% of the audience raise their hand. When I ask them if they have a Facebook Business Page, only 50% of that original 90% raise their hand. Why? Because they don’t see the potential Facebook has to offer.

Holding the largest tech IPO in History with acquisitions like Instagram and LightBox, Facebook has proved its worth to its users. Despite the slight drop in shares, Facebook is still at the top of the Social Network Hierarchy.

Did you know you can create an online shop within Facebook? Take your business to your consumers and let them buy your products where they feel most comfortable; inside of Facebook.

If you would like to find out more about Facebook for Business, I will be holding a free webinar on August 23rd at 4:00pm. You can book your place here. Limited to 100 spaces so be quick!

I will also be speaking at Pure London from 19th – 21st August. On the 19th I will be holding a Facebook Workshop, on the 20th I will be holding a Social Media for Business Seminar and on the 21st I will be holding a Pinterest Workshop. If you would like to see my talk times, please click here and if you would like to book your free ticket to this event, please click here.

Do you have a Facebook business page?

Virtual Trade Show 365 Days of the Year

Back when I used to do trade shows all around the world and especially in Hong Kong and China, we would spend at least £10,000 on the stand, an extra £600 per person for the flights along with accommodation, food and entertainment. As you can imagine, this got very expensive; but we are in a new era where you can avoid paying extreme amounts of money, as I introduce you to TheTradeshow.co.uk

TheTradeshow.co.uk is a brand new take on the traditional tradeshow but, unlike ordinary tradeshows, TheTradeShow.co.uk is online meaning it is open 365 days a year.

With the ability as an exhibitor, to build an online stand in less than 10 minutes, this type of exposure could be great for your businesses’ online presence. You can present an unlimited number of products with your company profile brands and any special offers you have on your products. Not only can you show your products, you can also stage your best selling products which can be shared to either new or current customers via Facebook, twitter or email.

If your business position changes, you can also adjust your ‘virtual stand’ accordingly. You are given an exhibitor dashboard which allows you to monitor page visits along with various other statistics.

Using TheTradeShow.co.uk is a great way to avoid the hours of walking around an exhibition centre as a visitor and even for the exhibitors who spend 2-3 days of their time showing their products.

TheTradeShow.co.uk offers Visitors superior search facilities to ensure they will find exactly what they are looking for, user friendly browsing pages to make finding new products enjoyable and, best of all, the ability to walk the halls without getting sore feet.

As a spectator, a trade show may seem easy to prepare for however, this is not the case. There are a lot of crucial elements to take into consideration when preparing for a physical trade show so avoid all of the hassle, and set up your only stand today.

Are you frustrated with travelling in rush hour across London to spend valuable work time at a trade show, only to walk away with daily emails from those who unnecessarily scanned your badge?