Paypal, Merchant Account, or Both?
People often ask me if a Paypal account on their ECommerce Store is all they need in order to collect credit card payments from their customers.
After all, people can pay you through Paypal, using a credit card, whether they have a Paypal account or not. Since Paypal is essentially free to set up and easy to use, why not just go with that, and forget about using a Merchant Account?
Well, there are reasons, and they’re important ones.
In my ECommerce businesses, I use both Paypal AND a Merchant Account. I find that about 30% of my payments from customers come through Paypal, and about 70% through the Merchant Account.
Why the difference? Well, Paypal tends to make it a little difficult for people to pay if they don’t have a Paypal account. That leads to a higher percentage of shopping cart abandonment. For example, if your customer does not have a Paypal account, and Paypal is all you offer them, many customers will back out of the purchase even if you tell them they can use Paypal without an account.
Those that don’t back out have a harder time paying than they should. Paypal will ask them if they have a Paypal account. The customer will have to respond “no”. Then Paypal will ask them if they WANT to have a Paypal account. The customer will have to respond “no”. THEN Paypal will tell them how wonderful a Paypal account is and ask them if they’re SURE they really want to go through life missing out on all the wonderful things a Paypal account will do for them. Again, the customer has to respond “no”.
Okay, that last one was a bit of an exaggeration, but you get my meaning here. When you have a customer who has their wallet out and is trying to pay you, that’s the worst time to start asking them questions about joining this or that or opening accounts with payment companies. For goodness’ sake, just let them pay you without letting Paypal frustrate them into leaving your shopping cart!
A Merchant Account will allow your customer to simply choose MasterCard, Visa, Discover, etc., as their payment method. It allows them to simpy enter their CC info and get the payment made without being pestered and getting frustrated.
The smartest thing to do here is to offer both Paypal AND a Merchant Account for your customers to choose from. Those who have Paypal accounts and like to use them will appreciate the convenience, and those who don’t will appreciate not being hassled.
A Merchant Account does NOT have to be expensive and difficult to set up. In fact, Intuit has come our with an excellent Merchant Account solution that is remarkably affordable and extremely reliable.
The Inuit Merchant Accounts, unlike others, has no setup fee, no contract length, no cancellation fee, no statement fee, no annual fee, no gateway fee, and is very competitive when it comes to rates. This is almost unheard of, and really is an excellent deal. You can find them at http://payments.intuit.com if you want to check them out.
So, offer both Paypal and a direct Merchant Account on your site. Your customers will do more than thank you for it…they’ll complete their purchases much more often!
5 Market Research Tips from Matt Hedges
What does a talking starfish know about figuring out what to sell online?
Well, when that starfish happens to be Matt Hedges, the Market Research Guru of www.SimpleMarketResearch.com, the tips and information start bubbling to the surface!
Check out the video below…starfish are smarter than they look!
EBiz Credit: Why Do They Want Your Social?
When you start an EBiz as an LLC (Limited Liability Company) or a Corporation, you might think that your business can get credit on it’s own, without using personal information like your Social Security number, for example.
Well, it’s true that a Corporation is supposed to be an independent “entity”. Almost like creating an actual person. So why wouldn’t that “person” be able to apply for credit cards on it’s own merit, or get credit from wholesale suppliers, without involving YOUR personal information, banking history, credit references, and so forth?
Think of it this way. If a teenager who’s just turned 18 applies for a credit card, that teenager has no previous history with credit. No record to show whether they pay on time. No past history to show income, reliability, and all those things that banks want to see before they extend credit. So what happens when a teenager applies for a credit card, or a car loan, etc? It’s Mom and Dad to the rescue, of course. The bank wants Junior to have a co-signer to guarantee the loan.
Your Corporation is that teenager, and YOU are Mom & Dad. The new business has no past record of credit, so the bank basically wants a co-signer, so to speak. The bank needs someone with a good credit history to personally guarantee that the money charged to the credit card will be paid back. Wholesalers want someone with a good credit history to personally guarantee that the credit they give you for buying bulk products will be made good.
I hear from a lot of people who get upset about banks and vendors (like wholesalers) asking for their personal banking info and Social Security number when they apply for business credit. Don’t get upset about it. It’s going to happen, and if you want that credit, you’re going to need to supply that info.
Your business is still young, after all, and doesn’t have the credit and trade references it needs to get credit on it’s own. In fact, it could be many years before your business does have the ability to get credit on it’s own, if it ever does at all.
Even if a bank offers you a credit card with your business name on it, they are still going to hit you up for your personal guarantee to back that card up.
During this tough economic period, they’re even more strict in these areas, making it tougher for us to get credit of any kind. That’s a good deal for them, huh? They played a big part in getting us into this financial mess, and now they’re making it tougher for us to get out of it.
Well, that’s the banking business. Never expect any favors from them no matter what they tell you, and always expect to have to give up your personal info and guarantee for any kind of business credit.
We all wish it was different, but you need to hear it like it really is.
Website Logos - Your EBiz’s First Impression
There was a short discussion on my Private Forum the other day about the importance of having a professionally designed logo on an eCommerce website. I’ve come across this issue many times, in fact I teach about it in my Workshops.
Is it important to have a professional logo on your site? Yes, absolutely. Why is it important?
It gives the impression that you are a larger, more professional company.
A logo is usually placed in the top left corner of a web site’s header. That’s the top left corner of the page. The header, which is usually a strip across the top of a web site that identifies what the web site does, is extremely important for establishing two things: Professionalism, and Legitimacy.
Have you ever been shopping online and come across a site that simply has it’s name in text in the top left corner? Of course you have. Think about it. How professional does that look to you? Does it make you feel like the company is large, stable, and trustworthy? Or does it look like a cheap, quickly thrown together site owned by an individual?
For most people, sseeing the site name in text at the top left of a web site simply leaves the impression that the business is small and unprofessional. That’s not good.
We know that first impressions are important, right? Well, in English speaking countries (and many others, for that matter) we read from left to right, top to bottom. So, we start reading web sites at the top left corner. That top left corner is the very first impression your site page makes on people. It needs to be a good one.
We have about 6 seconds to capture the short attention span that belongs to the Internet Shopper. Anything that gets in the way of making a good impression can instantly lose that short attention span and cost you potential sales.
A well-designed logo at the top left of your web pages goes a very long way toward increasing your sales conversion. While your site visitors won’t dwell on the logo, they WILL see it, and it will leave a lasting subliminal impression.
If you’re a graphic artist, go ahead and design your own logo. If not, find a graphic artist to do it for you. Do NOT use one of those free logo design web sites where you click a few clicks and create your own. A badly designed logo can actually do more harm to a visitors first impression of you than no logo at all.
The best way to get a very well designed logo for your business is to go to a site like ELance.com, where you can actually have a real graphic artist design and create a good logo for a fraction of what it costs to have it done by a professional design company.
That little space at the top left corner of your web site may seem small and unimportant, but it packs a lot of punch when it comes to leaving a good, strong, lasting impression of your business on your site visitor. That, in turn, goes a long way toward increasing your sales conversion.
Wholesale Backorders - Why So Often?
I’ve been getting a lot of questions about wholesaler backorders over the last few months, especially
related to drop shippers.
When you use a drop shipper, you place images and descriptions of a product on your site, make the
sale and collect the money from your customer, and then pay the wholesale price to the drop shipper.
The drop shipper then delivers to your customer, and you never touch the product.
What happens, though, when you make a sale, place the order with the drop shipper, and that wholesale drop shipper is ‘out of stock’ all of a sudden and can’t send the product to your customer?
The First Thing To Understand
The first thing we need to understand as retail business owners is that there will always be
situations in which our suppliers run out of stock and can’t deliver something to us or our
customers. It goes with the territory, and is a normal part of the retail business. (In case you
hadn’t considered it…if you’re selling products online, you’re in the retail business!)
So, backorders and out of stock situations are something we will always deal with in retail.
Why So Much More Of It Now?
The thing that has both offline and online retailers concerned right now is that there are more
wholesale and drop shipper backorders than usual. For some of us, it seems that every other order we
place with a supplier gets answered with “Sorry, we’re out of stock at the moment”.
Why is that happening more often these days?
Well, keep in mind that our Federal Government has gotten together with banks, credit card companies
and Wall Street and has decided to throw us a giant Recession. Aren’t we lucky!
Think about how you’re dealing with the recession in your own household. If you’re like most people,
you’re cutting out non-essential services, watching your budget carefully, and holding on to more
cash instead of spending it.
The exact same is true of your wholesale suppliers. For a wholesaler to stock a warehouse full of
products, they need to have ‘Positive Cash Flow’. Money coming in at a rate that is greater than money going out. In a recession, consumers are buying less, so wholesalers are unsure how much product they’ll be able to sell, and the result is that they don’t stock as much product as they normally would in a good economy. They’re doing the best they can to minimize their own risk and maintain a positive cash flow.
So, you have more backorders because wholesalers have to be careful with their money, and stock fewer products.
You’ll continue to see this kind of thing across the board for a while to come. It’s not your
wholesale supplier’s fault. They’re doing what they have to do as a business in order to survive.
You’re not to going to be able to switch wholesalers and eliminate that backorder problem. All
wholesale companies are dealing with this, as are all other businesses of all kinds.
When will it get better?
Well, the obvious answer is that when the recession finally gets better, the backorder situation will
get better. But, there’s another answer in the short term.
Why? Because the Holiday Season is coming. The summer months are typically when wholesalers plan what they think they can sell throughout the Holidays at the end of the year, and start finalizing their
orders and filling their warehouses. The earlier they stock up for the Holidays, the less that stock
tends to cost them. After July, you’ll start to see the backorder situation easing up a bit as
wholesalers start to load up their warehouses for the biggest retail season of the year…the Holidays.
What Do We Do In The Meantime?
While we’re waiting for this recession to end, there are three things we can do to help our
businesses through product backorder situations. They are (1) Customer Service, (2) Customer Service, and (3) Customer Service.
I’ve been in business in one way or another through three recessions, and I can tell you that nothing
will keep you in business through this better than bending over backwards for your customer. If you
have to notify a customer of a backorder:
- Contact the customer immediately and explain the situation. Don’t wait.
- Be apologetic and understanding. Offer to refund the order if they don’t want to wait until the
item comes back into stock. Being proactive and offering the refund before it’s asked for often defuses any bad feelings your customer might have toward your business.
- If the customer acts like they want a refund, go find the product somewhere else, buy it and send
it to them. Yes, even if you lose a couple of dollars. I’ve done this before, fairly often, and I can tell you for a fact that the couple of dollars I’ve lost in those situations has been paid back thousands of times over in customer satisfaction. When you do this, and let the customer know you’ve done it for them, you not only have a customer for life, you have a customer that will tell everyone they know about what you did. That brings you more customers.
This recession will end. They always do, no matter what the doom-and-gloom idiots moan and cry about to in order to sell newpapers, and sell commercials on the TV news shows. Soon enough, we’ll be happily spending our way into the next recession, and things will be back to ‘normal’. In the meantime, understand that in the short term you will see more backorders than usual.
Turn it into an opportunity to let your customer service shine, and your backorders can actually help
more than they hurt, by gaining you more committed customers and more new business.
What To Sell Online - It’s not all about the Math
I recently responded to a question about deciding what to sell online in my Private EBiz Forum. One of my Private Forum Members that I have a great deal of respect for said that my answer had ‘opened his mind’ when it came to choosing products to sell.
He’s already doing very well online, and if what I talked about opened his mind to something new, I thought it would be a good idea to share that info with everyone.
Deciding what to sell online is always the toughest stumbling block for anyone starting an online business. Most people, after reading the generally available material that’s out there on this question, decide to approach it as a math problem. How many searches does the product get in the Search Engines, what’s click-through rate, what percentage of advertising saturation, etc., etc., etc.
That’s all well and good, and a certain amount of this decision is based in that math-oriented research.
However, what most people fail to consider is the marketing aspect of this “equation”. The marketing aspect can’t be quantified as math. It isn’t math. But is IS a critical part of this decision.
Much more important than the math, are the ways we come up with to present products to people. The presentation, or ‘marketing hook’, can be more important than the actual product choice itself.
Let’s say we’re considering selling GPS units. We don’t just put up a web site that offers every GPS unit under the sun and hope people find us. We go out and find them with the marketing hook we create.
For example, we put up web sites geared toward boaters that offer Marine GPS units, and talk about using the GPS to mark the best fishing holes, and to boat around lakes and off the coasts with pinpoint accuracy.
We put up web sites geared toward mountain hiking that offer Personal GPS units, and we talk about the GPS being an essential safety product so that we don’t get lost in the mountains, and as a way to go off the beaten path and find the best trails.
We put up web sites geared toward off-road four-wheeling that offer the more rugged-looking Car GPS units, and we talk about the GPS being essential to avoid getting lost in the desert, and for finding those legendary off-road party spots that people will remember for a lifetime.
A product niche without a marketing niche in mind solves nothing. Try to think of it in terms of what people like to do and what they use to do it, not just as a strict numbers game that has a definitive answer.
Every product market has tightly focused subsets of products that people use for widely different activities in their lives. This is not just math, it’s a creative imagination process.
Get creative with your marketing ideas, and the products will sell.
Your EBiz - Know It Well
As someone who’s successfully owned and operated businesses of all kinds for more than 30 years, I can tell you that one thing that most often separates successful people from those who fail is this:
The people who fail are the ones who don’t learn how everything in their business works. These are the people who are always trying to outsource their work. Always looking for someone else to do the down-and-dirty work while they sit back and collect the money. Never bothering to learn the details of their operations.
In my business, I can step into any job in that company and do it for a day, a week, or a month if I have to. I can be a Researcher, a Customer Service Rep, a Marketing Director, a Technical guy, a Web Page designer…you name it, if the job exists at my company, I know how to do it.
I’m not saying that my employees are expendable. I have several key people who do excellent work. They can do their jobs better than I can do their jobs, because they were hired for those specific jobs due to the skill sets they have.
However, when I started the company, I didn’t have employees. EVERY job was mine. I didn’t run around looking for people to do the work for me. Never in my 30+ years of business ownership, in any of the businesses I’ve owned, have I ever done that. I have always learned every job that needed to be done, and then have done those jobs myself. When each business grew to the point where I was too busy to do all the work myself, I then hired people to fill those positions for me. But it always left me with the knowledge and skill set to do the job myself if need be.
WHY is this so important? Look at it this way. The people in my company who have the responsibility to help grow the business have to come to me with new ideas for approval before they can start to implement them. If I don’t know how and why those new things work, how they affect my business, how they might be perceived in the marketplace and whether the time and cost is justiified, I can’t make a reasonable decision. I simply would not know whether my employee was right or wrong if I didn’t know my own business and my own marketplace inside and out.
If I don’t know whether my employees’ ideas are good ones for my business or bad ones, I won’t have a succesful business for very long.
Here’s another example. If I have two people in my company, let’s say a Marketing Director and a Sales Manager, arguing about the best way to promote a new product or service, they’re going to bring that argument to me. I have to decide who’s right. If I don’t know the core marketing of my own company, and I don’t know the core sales processes, I can’t tell who’s right or wrong. Then it’s simply a guessing game, and whoever argues the loudest would probably win.
If I didn’t know my own business well enough to take those two points of view and potentially come up with a third option that would work even better, I’m not doing my job as an Owner.
So, if you’re going to own a business, OWN the business. All of it. All the operations, the processes, the ideas, the hard parts and the easy parts. Know how they work and WHY they work BEFORE you turn them over to someone else.
If your business has a blog, write the blog yourself. If your business puts out article marketing, write the articles yourself. When you do Search Engine Optimization, learn enough about it to start doing it yourself. When you build a web page, lay it out yourself. Take your own customer service calls. Work with your suppliers yourself And so on, and so on…
You don’t ALWAYS have to do all this yourself. You just need to get your business started and running yourself. Once you do grow and start to outsource, you’ll have the knowledge you need to understand whether those people you outsorce to are doing a good job, or a bad job. That understanding is absolutely critical to your success.
If you must outsource parts of your business, you MUST make sure that the outsource partner is TRAINING you in every aspect of what they do for you, so that you can effectively step into those positions and do that work yourself once the outsourcing work is done, and effectively understand and run that business.
The better you know your business, the greater your chances at success.
Your EBiz Name…is it Right?
People starting an Ebiz often get confused when it comes to naming their businesses. If you plan to build a web site, there are actually two names you need to figure out: The name of your business, and your Domain Name (the name of your store/web site). They should rarely, if ever, both be the same.
Your Overall Business Name
If you’re going to do business, you need to be in business. That means you need to form a legal business in your State. Sorry, but that’s a fact, Jack. If you don’t do the legal stuff, you cause yourself all kinds of problems with taxes, you can’t collect money from people’s credit cards, and lots of other bad stuff. So grit your teeth and form a Sole Proprietorship, an LLC, or a Corporation. It’s not as bad as everybody thinks it is, and it turns your online stuff from a hobby into a real, moneymaking business.
When you name that overall business, it should be something very generic. Like Smith Enterprises LLC, for example. The business name is not going to be a name you publicize. It will not be the name of your web site.
However, it will appear at the bottom of your web pages, as in “Copyright Smith Enterprises LLC. All rights reserved”.
It will also appear on your customers’ credit card statements when they order from you. That’s one of the most important reasons why your business name needs to be generic.
Say, for example, that you plan to open an internet store that sells Bowling Shoes. Let’s say you make the mistake of naming your overall business “Bob’s Bowling Shoes, LLC”, and you make your web site (domain) name “BobsBowlingShoes.com”.
Seems logical, right? People come to BobsBowlingShoes.com and buy their bowling shoes from you. They get their email receipt from Bob’s Bowling Shoes, LLC, and when they get their credit card statement later in the month, it shows a charge from Bob’s Bowling Shoes, LLC. So far, so good.
But what happens when you open your NEXT web site, and you sell Pool Toys on that site? You choose the domain name ReallyCoolPoolToys.com, but you still have to put “Copyright Bob’s Bowling Shoes” on the bottom of the site pages because that’s your legal business name. What happens when your customers buy something from ReallyCoolPoolToys.com and get a credit card statement showing a purchase from Bob’s Bowling Shoes, LLC? (They dispute the charge, that’s what happens).
So, if you use a generic business name like Smith Enterprises LLC, you can build as many web sites under as many domain names as you like, and that generic business name makes sense on all your different web site Copyright notices and all your customers’ credit card statements no matter which one of your web sites they buy from.
Don’t get too hung up on what your overall business name shoud be, either. I’ve seen people agonize over this needlessly. Keep it simple.
Your Domain Name
Just like the web site domain names I talked about above, your web site domain name (your “dot-com” name) needs to be specific to the products you sell. Don’t name your bowling shoes site “SlideAndStrike.com” Don’t name your pool toys site “SplashAndPlay.com”. Cute and clever names and terms have their place in your marketing, but this isn’t one of them.
Your domain name for your web site needs to contain words that describe exactly what you sell.
How They Work Together
It’s important to understand that you do NOT have to set up a separate legal business for each different web site name. Set up your overall legal business (like Smith Enterprises LLC), set up your business bank account with that business name, and then you can buy all the different web site domain names you want with that bank account, and they ALL belong to Smith Enterprises LLC.
What The Search Engines REALLY Want
In the dim recesses of internet history (about 5 years ago) the way to get the all-important internet search engines to find your web site used to be all about on-page optimization. That meant that the more times your site pages repeated certain words that people searched on to find your products, the higher you rose in the search engines.
However, like everything else on God’s green earth, all the mental midgets out there who would rather cheat than work spoiled all that for us. They started stuffing unrelated, but popular ‘keywords’ into their web pages in order to bring people to their web sites. Someone would search on ‘DVD player’ (a very popular ‘keyword’) and end up on a web site that sold bowling balls. Because the owner of the bowling ball site had stuffed the keyword ‘DVD player’ into their bowling ball site so many times, trying to being in visitors that really didn’t belong there in hopes of making a sale.
The search engines figured this out and decided that on-page optimization was only going to be a small part of the way they ranked web sites. Instead, they turned to inbound links to give sites authority in their search rankings. While on-page optimization is still important, inbound links are now more important.
What’s an inbound link? It’s another web page somewhere online that talks about a subject, and links to your web site as an authority on that subject.
I’ve been a musician for nearly 40 years, since I was a kid. If I’m at a party playing my guitar, and somebody walks in the door and asks if anyone knows how to tune a guitar, everybody in the room is going to point to me, right? I’m right there playing the guitar and I obviously know how to tune one. Those people pointing to me are my ‘inbound links’. They’re giving me the ‘authority’ in the room for being the one who can answer that person’s question or solve their problem.
So, the search engines turned to counting inbound links to a web site in order to decide how much authority it had for its subject. Once again, though, the mental midgets outnumbered the real businesspeople, and created ‘link farms’. These are places where you can pay by the month to have them point thousands of links to your web site. Unfortunately, the vast majority of those links were (once again) completely unrelated to what your web site was about.
The search engines figured this out too, and decided that link farms were a no-no.
What to do now? Well, the mental midgets are still trying to come up with flavor-of-the-week tricks to beat the search engines, and they’re still out there trying to sell those secret tips and tricks (that will only work for a couple of months or so) for outrageous amounts of money.
On the other hand, people who understand that you actually have to do the work when you’re in business, and that shortcuts and tricks are not the basis of a real business, are simply doing things the right way.
What’s the right way? Create real inbound links to your web site. It’s that simple. The search engines are like newspapers. They need a constant fresh supply of new information in order to keep people coming back to them. They need to keep people coming back to them so they can sell advertising, which is how they make their money, just like newspapers do.
The best way to get the search engines to ‘feature your story’ in their ‘newspaper’ is to simply give them what they want, instead of constantly trying to fool them.
The best way to create inbound links for your web site is to write a blog, write articles for EZines, and use social marketing tools like Twitter, Facebook, YouTube and so on. Whenever you use these social marketing tools, you’re creating content-rich pages online that link back to your web site, and you’re raising yourself higher in the Search Engines because you’re building real, authoritative inbound links back to your site, just like the Search Engines want you to do.
If you really want to be successful in business, there’s no substitute for doing things the right way. Trying to trick your way into high search engine rankings is only going to work for a short period of time if it works at all, then the search engines are going to figure you out and banish you to never-never land, where your site will never be seen again.
So do it right with social marketing, and let the mental midgets fall by the wayside as you climb the rankings to real Ebiz success.
It’s News Years…They’re Coming for Your Wallet
Welcome to 2010! Another New Year, and thank goodness. Like most of you, I’m certainly glad to get rid of 2009.
Let’s face it, it was a crappy financial year, due to circumstances beyond our control. Unless you happen to control the credit card companies, the insurance companies, the banks and the politicians that put us in that stinking mess.
The good thing about a brand new year is that even though it’s just the tick of a clock into another day timewise, it’s a new calendar year. People look at a new year as a chance to start over and do better. This helps to give consumer confidence a shot in the arm, which is something we seriously need in order to get the economic recovery moving faster.
HOWEVER, a New Year means something else as well.
Watch out…the online marketers are coming, and they’re coming at ramming speed, heading straight for your wallet.
This past year was a tough one for most of the big-name internet marketers who sell fluff information online. All those guys who have the secret clubs and the foolproof plans and the just-pay-for-shipping-and-we’ll-make-you-rich DVDs and the incredible new systems that fool the search engines and all of that other crapola had a really tough time last year. They’ll never admit it, but the word at several of the larger marketing conferences was that most of them were dropping unfortunately maloderous bricks in their pants all year. Why? Nobody was wiling to part with the cash or credit to cover the multi-thousand dollar price tags these guys throw on their ‘amazing systems and secret clubs’.
They know, though, that the promise of a New Year brings renewed hope to most, and they know that YOU ARE VULNERABLE RIGHT NOW. They know this is their best shot to get you to part with thousands of dollars on your credit cards if they promise you easy ways to make lots of money in the New Year.
This coming Monday, January 4th 2010, you are going to see an onslaught of marketing email that’s going to make your email inbox beg for mercy.
Every one of these ‘instant success’ jokers has taken all of their same old stuff, dressed it up in shiny new suits, renamed it, come up with new and different amazing claims about it, and will be launching it straight at your wallet on Monday the 4th.
If I thought you’d actually do it, I’d tell you to simply delete every single email you get on Monday without even looking at it, but I know you won’t do that. So what I am telling you is this:
-Do not make rash decisions.
-Do not order ANYTHING without typing it’s name, plus the word ’scam’ into Google first.
-Do not accept any ‘free’ offers. Nothing is free, and most of that stuff leads to huge price tags.
-Do not let yourself get caught up in all the enthusiastic hype.
-Put your credit cards away for the day, and sleep on anything you are tempted by.
-Carefully research anything you’re thinking about, before you buy.
If you can stick to those rules during the next few days, you’re going to save yourself from wasting thousands of dollars.
Don’t let these people make the beginning of the New Year, the end of your financial security.