7-Collect Money

		Merchant Accounts: A merchant account is a third party processing service which:  collects the necessary information from your customer   validates their credit card (or not),   collects the money   credits your account.   This process happens in seconds, whenever your customer clicks on your “BUY NOW” button. Funds are deposited into your bank account through use of the bank’s routing number for your bank account.   Why should you have a Merchant Account?   The most important reason is that your business will be able to accept and process credit cards.   Records show that 80% of the business done on the Internet is by customers using credit cards.   It will allow your business to offer fast and hassle-free transactions, enabling your customers to buy more because it is easier.   It will also give your business credibility because you are using “state of the art” payment methods, giving customers the security and knowledge that their personal information is protected from fraud.   It offers a wider range of payment options, improves your service, and because you are not limited to the 20% who do not use credit cards, it will improve your sales volume.   Lastly, it will improve your cash flow because the ability to transfer funds electronically means you get your money faster.   Why not deal with credit card customers thru your regular bank?   Regular banks handle credit card transactions only when there is a face-to-face sale where you physically validate with a credit card machine or terminal.   In other words, you need a storefront, with live transactions.   To get a Merchant Account, you can apply to any one of a number of merchant account services.   There is a fee for a merchant account, usually a percentage of the dollar volume, and a nominal fee per transaction, and it pays to shop to see what the fees and differences are.   Other fees which may apply are a fee to join, and a monthly service fee.   We recommend:   See Step 6 for:   SEE COMPARISON BETWEEN PAY PAL AND MERCHANT ACCOUNTS

Ways to Pay: Besides accepting credit cards through a merchant account, there are several other way of collecting payment for your sales or services.  These are ways of tapping in to the 20% of customers who do not use or prefer credit cards. Most customers are leery of sending cash through the mail, because they have no receipt or proof and must put their trust entirely in the merchant and the mail service.    There are exceptions, and some people do not mind sending a few dollars this way, to keep it simple.     The majority of buyers who do not use credit cards will prefer to use either money orders or checks.     There are pros and cons for both you and the customer.    With either method, you do not require a merchant account (and the account and transaction costs) to accept payment. With money orders, it consricts the customer's time and money to obtain one, and for you, they are not as easy to redeem as checks. Checks are easily written, and easily deposited by you, but the buyer must wait until the check has been received and cleared for payment by your bank, which may take a week to ten days before making the shipment. If the customer uses a cashiers check, this will shorten the wait by several days.  For all three of these methods, there is more detail in keeping track of payments and shipments than with a merchant account, which does all this tracking for you, but at a price.   We recommend that you do not accept C.O.D.'s (cash on delivery) as the risk is your entirely. One other method of accepting payment is through an escrow account, where an escrow company, acting as a third party, accepts and holds the customers payment, until the shipment is made, accepted and approved, then pays you the funds.  This method is more common in auction sales, and for high dollar cost items, as the minimum transaction fee may be over $20 and can be much higher, depending on the amount of the transaction.  Recently there have been cases of mis-use and mis-appropriated funds, including outright scams, with escrow funds, so we recommend a healthy dose of caution before selecting one.

		Shopping Carts: Why do you need a shopping cart? To encourage customers to buy your products and services and to make it easy for them to do so.    The easier you make it, the more likely they are to buy - so you can make more money.  When your customers go into your site and sees something they like, the first thing they will look for is a button to click to BUY it.  This is what your shopping cart will do - an easy solution to getting them through the process of purchasing.  Think of it as an easy way to process what they buy.   If you have made it simple to find products, then make it easy to process their credit cards, they will continue to buy more and bigger amounts from you. You can add a "SHOPPING CART" function to your website, by purchasing the software from any of a number of supplies.  A simple solution is to go here:      They offer a complete package which includes a FREE WEBSITE with Hosting,  along with this can be a Merchant Account and shopping cart if you choose these.   You will find this system is very easy to use and lots of support.  We have been able to build our complete website with it and have been very pleased.

		E-Tailing: Simply put, E-Tailing is electronic selling, by making sales over the internet instead of storefront or catalog sales.  You can probably buy almost anything on the internet that you can buy from the other methods.  There are several general classes of E-Tailing, but the type we are generally involved in is Business to consumer or Retail sales.  E-Tailing also includes buying and selling through internet auctions.

		Shopping Malls: An internet shopping mall is, as the name suggests, the electronic equivalent of a physical shopping mall, where you can find almost anything you want, by going from store to store.  A big difference between the two malls is that in a regular mall, the customer is pretty much captive within that mall.  In an internet mall, however, they are only one mouse click away from leaving.  This difference is critical. Setting up an internet mall is fairly easy. You can team up with any of a number of companies with extensive catalogs, so that you can have thousands of products available, but so can anyone else.  The problem, which we cannot answer for you, is how to hold your visitor in your mall.  Visitors to electronic malls are probably only comparison shoppers. Someone looking for a specific product will likely search under that product, rather than scroll through long lists, to find it. Unless you can devise a novel way to catch and hold a visitor's attention, starting up a shopping mall website is probably not a good idea.

		Drop Shippers: Depending on the products you sell, and the sources, DROP SHIPPERS may be of some important. They are the order fulfilment service of a discount club.  Discount clubs can carry a wide range of products, often in large volumes at substantial discounts for many name brands, and their catalog pages give good graphics and descriptions of the products. If you work with one of them, all the physical aspects of picking, packing and shipping are handled by their drop shipper, so you never see or are involved with any of the merchandise.  Since all order placements, billing, and collecting are handled electronically, it makes it a neat and clean operation for you. DROP SHIPPERS LINKS:  WARNING: Be cautious about which one you choose because there are many questionable ones out there. World Wide Brands offers a   FREE 84 page E-book on how to set up your business the right way. Check this out:    http://www.worldwidebrands.com

		Wholesalers: Wholesalers are very similar to drop shippers, in that they can provide a large catalog of items for you to sell, and many offer the same shipping, billing, collecting and payment services.  Generally, they will give a suggested retail price, and their price to you, and you have the option of setting whatever price you feel the market will bare.  The difference being your profit.  They will also spell out the weight, with shipping and handling costs. A downside is that there are probably thousands of merchants offering the same product, so that your advantage will boil down to price, and how you promote the particular products.  To find potential wholesalers to work with you can search under "wholesalers"  for an extensive listing.

		Sales Tax Policy: There are very definite rules on sales taxes, though the rules and percentages vary State by State.  In general, if you sell and ship a product to a customer within the same State, you are required to collect the sales tax due for the amount of the sale, not including shipping and handling charges.  You must keep a record of any such tax collected and send this to the appropriate State department, on a regular basis.  This means that if you are likely to collect sales tax monies, you should be registered with your State as a tax collector. Proper record keeping is important here.  How often you must submit tax collected will depend on the amounts, and your States rules.  You may be required to submit monthly, quarterly or annually.   One downside is that there is usually a fee, $50 to $100, depending on which State, for registration as a Tax collector.  To not collect taxes due, or to collect and not submit such monies, could land you in a heap of trouble, if caught. Generally, while a sales tax can be levied on many products, services are exempt from being taxable.  Find out your States rules, to avoid later risks.

		Return Policy: If you deal in any saleable products or services, you should have, and show on your site, your policy for handling any returns. This both gives your customers confidence and credibility in your company and products, and has led you through the thought process of what you will do when you have returns.  Returns are a fact of life in any retail business. Your return policy will differ, depending on whether you are shipping your products, or your products are ordered and shipped from a catalog house, dropshipper or wholesaler.  If you deal through any third party supplier, you must find out what their policy is; it may be that any returns are your problem, physically.  If so, what will you do with the returned items. Keep in mind, that internet sales are much more prone to a high return rate, than store front sales, because the customer cannot see and touch the item before the sale, and so is more prone to returning items. Since this can be a major cost, try to find suppliers who will take returns for credit. Also be aware that returns of items bought through credit card transactions will require a debit transaction. Many merchant account services will require a substantial reserve in your account, to cover such debits. A "money back" guarantee is just about the same thing; this should be stated clearly in your site, so that your customers have trust in you. While "money back" is always implied in product returns, it can also apply to services which the customer thinks are unsatisfactory.     Back to Top                                                 OR                                                                          BACK TO HOME