Pricing is foundationally important to your business, and that careful dance between your product and its price is both an art and a science. Price too high and you might not see the sales you deserve; price too low, and the undervaluation of your product sends the wrong message to consumers and may cut into your profit. What’s a savvy business owner to do?
Be smart about pricing!
Do your research, analyze trends, and demonstrate flexibility. Pricing is foundational and it needs your constant attention.
Before You Set Your Price, Know Your Costs
It might seem simple in hindsight, but some business owners don’t know or haven’t calculated the cost of making (or obtaining) their products, and you can’t set a price without knowing that crucial detail. Period. The cost of goods sold includes everything from the material costs to labor and everything in between. (Don’t forget to factor in all your overhead, too. Rent. Electricity. WiFi. Shop fees. Advertising.) If something is priced correctly, the sales cover the cost and turn a profit. Priced too low, you lose money (or your product loses esteem!); priced too high, you may lose sales altogether. Meticulous budgeting is necessary if you want to step-up your pricing game.
Creators of lists and lovers of spreadsheets will rejoice at the chance to employ those skills to run cost analysis. Be judicious and thorough, and once you have the bottom-line for all your products, then you can develop a pricing strategy that fits with your business.
5 Types Of Pricing Strategies You Can Use
Each pricing strategy has its own pros and cons depending on several factors, including (but not limited to) the type of business you own, your cost of goods, and how many products you sell. Remember that the key to any pricing strategy is to research your options, analyze the numbers, and adapt and show flexibility if sales are stagnant.
This is the most common method of pricing. Once you have calculated your cost of goods (material, labor, overhead costs, etc.), from there you add a percentage of sales on top to calculate your listed product price. There are differing theories about the best way to calculate the “plus” (the markup) part of the cost-plus system. Markup largely depends on the market and your competition. The retail industry standard is 50%.
As an example, we’ll use cost-plus pricing to look at a product I sell: paperback books. I have a paperback book that I print through a third-party distributor. Author copies of this book cost me roughly $5.00. That’s the material cost: $5.00. But I still need to add in other costs: labor, advertising, convention fees. Let’s round and say the cost of goods is $7.00. I know my industry and know that a full 50% markup on this paperback would be a hard sell. I sell the books at $12.99 for a $5.99 profit.
From there, depending on where I’m selling the books (my website, an online store, a convention), I can calculate how many books I need to sell for my bottom-line and how many I need to sell to make a profit.
Cost-plus pricing has a lot of advantages. It lowers your risk for loss, is easy to calculate, and makes it easy to navigate price increases as costs change. Additionally, cost increases are passed on to the customer, and these price changes are easy to explain to suppliers and customers. It works well for stable industries where material and overhead costs don’t change. The disadvantages? A set markup ignores demand, determining the cost of goods may not be exact, and there’s no incentive to cut costs or streamline on the supplier end.
A loss leader is a product offered at a profit loss in order to encourage customers to buy additional products or services. This is also an industry pricing strategy in publishing and many other businesses that have a consumable or buildable client base. So, giving away a free copy of book one of a series is a great way to grab readers who will subsequently spend to buy the rest of the books. This also works for game consoles or other technology: often, you can get a console at a reduced price because buying individual games is how the company turns a profit.
There are also more predatory ways of using loss-leading, which is why it’s banned as a pricing practice in 50% of the United States. (And it may not be illegal, but restricted, in your state, so if you have a question about the legality of your pricing model, please contact an expert.)
The advantages are that it works well for industries that want customers to keep coming back for repeat sales, and it’s a safer model for a company that is large enough to absorb the initial loss. The disadvantages? Predatory practices ruin it for everyone.
“Riding down the demand curve.” Skim pricing is when you start off with a high price and lower it slowly to reflect competition/market over time. Game consoles work as another great example of this pricing model. When a console is first released, it’s marketability comes from anticipation and a feeling of scarcity. However, the product can’t sustain itself at that price and will come down over time to reflect a competitor’s prices more effectively.
The advantages to skim pricing are that it creates a high-profit margin after launch and helps recuperate costs quickly. But if you don’t have the clout or product to pull off the high price, this pricing model could backfire. Also, businesses need to find a way to incentivize the product if consumers know price skimming is coming and subsequently wait for the lower price.
Also called competition-based pricing, this pricing model relies on an understanding of what else is currently available from the competition. Based on knowledge of the market, a company will price its product higher or lower, depending on the needed strategy. Does your company want to offer the same service or product for less? Or do you want to advertise your superiority over the competition to prove why your brand is worth more? Researching your competition and their prices is an absolute requirement.
The advantage of market-oriented pricing is that you get a leg-up over the competition — and it’s fairly simple to price yourself based on what the competition is using. The disadvantages are that not knowing why a product is priced that way is a short-term solution, and following the crowd doesn’t always pay off (remember that time you copied another kid’s math worksheet answers and they got all the questions wrong?). If you want to price an item based on a market-oriented pricing model, that’s fine, but make sure you are running all the numbers, too, and that your decision is rooted in your long-term business needs.
Price anchoring has a lot to do with human psychology. (Pricing, in general, is often based on psychological research; human beings aren’t exactly the most rational of consumers.) The psychology is this: Humans tend to place importance and value on the information they hear first. So, if the perceived value of a product is $1000, slashing its price to $399 induces a great feeling of savings for consumers. But shhhh…the price was going to be $399 the whole time. (It’s like magic. Ooooh. Ahhhh.)
In retail, we see listed prices all the time that are pure invention: no one was going to pay that price. But if you see the original price connected with savings, your brain will be more likely to make a purchase. Anywhere you have a listed price and a sale price, you’re seeing anchoring in action.
Anchoring is also seen when you price a luxury item significantly more expensively than your target product. People will buy the target product feeling like they received a deal.
With anchored pricing, people will feel like they are getting a deal, and the product benefits from a perceived higher value. It’s not all good, though. People can become loyal to price and not company, and consumers may be annoyed at the tactic.
4 Major Considerations For Setting Prices
Pricing psychology is a major factor in your pricing decisions. There are copious books, research papers, and websites dedicated to the exploration of how the human brain works during purchasing decisions. You may or may not have known the names for the different tactics, but once you learn them, you see them employed everywhere.
One thing popular in the United States is charm pricing. Charm pricing is where you price something ending with a 9 or 99. For example, $19.99 instead of $20.00 or $5.59 instead of $5.60. It is one of many psychological pricing tools you can employ.
I would highly encourage you to check out additional resources, as we can only scratch the surface here. However, beyond the psychology of pricing, there are four other specific considerations you should keep in mind when setting prices:
Know Your Customer
It might be simple, but it cannot be understated.
Do. Your. Research.
Who is buying your product? Who buys your product generally? Who are your repeat customers? What pricing strategies worked in the past? Knowing your customers is knowing the psychology of their purchasing habits and understanding the marketing tools that would turn them off.
Know The Competition
Even if you don’t use competition-based pricing, you should still research your competition’s prices on the regular. Informed pricing is empowered pricing, and you cannot be informed unless you know what your competition is selling their product for.
Have A Financial Target
Don’t forget to consider a financial goal as you set your product pricing. Even if your goal is to break-even, that should translate into numbers. How many of X do you need to sell at what price to cover your costs? To make a 20% profit? To be able to take your family to Disneyland? Whatever the need, make it a goal, and give it numbers.
Know Your Worth
Heart-to-heart moment: it shows great respect for you and your product to price your work well. Both over-valuing and under-valuing yourself is a mistake. When you implement a pricing technique, it needs to come from a place of understanding: what does this cost to make and how much is it valued? You are worth more if you are in demand, it’s true, but humans will also pay more for things made with careful love and quality.
How A Good eCommerce Platform Or Point Of Sale System Can Help You Track Costs & Profitability
Math and spreadsheets are fun! For some people. For a few people. Select people, perhaps. But for the rest of us, there’s good news: eCommerce and point of sale systems now have reporting tools that can calculate pricing factors with a click of a button. According to our Merchant Maverick eCommerce and POS experts, any good software will include the cost of goods sold and profitability reports. Advanced reports can even track prices over time or specific vendor costs; employee labor costs and job costing.
POS products like Lightspeed have specific reports for businesses to manage markup and margins, and creating promotions.
Accounting software may also have access to reports that manage pricing tools. Check out our top accounting software picks post to see if there is a good fit for your small business needs.
Don’t Forget To Keep Testing Prices
Markets and products change all the time, and if you aren’t staying current on pricing in your industry, you won’t be able to navigate the shifting tides. Test a price and monitor its sales over time. If patterns emerge, use that knowledge to set a more permanent price.
Your pricing model is a guide, but prices and strategies shouldn’t grow stagnant. Being flexible and understanding the market, your bottom-line, your markups, and your margins will all help create a successful business.
The Bottom Line: Pricing Your Products Is Key To Building A Sustainable, Profitable Business
Pricing truly is the most important business decision you can make. There are things you can control about how you run your business, and one of them is the price. Your pricing should drive profit, and long-term profit, too — not just short-term sales. A good boost of sales during a promotion is nice, but it’s not a sustainable pricing model.
Know the competition, but don’t venture blindly into pricing without a clear understanding of your costs and market, too. If your current situation limits experimenting with building up an inventory or investing in advertising new pricing, you can look into a working capital loan to jump-start or renew your business growth!
No matter what, research, analyze, and demonstrate flexibility.
The post How To Price A Product The Right Way: Pricing Strategies & Smart Tips To Succeed appeared first on Merchant Maverick.
If you are looking to expand fundraising possibilities for your charity and are considering Square to process payments for your nonprofit, you may have a lot of questions. Fortunately, you’ve come to the right place; this post covers all the information you’ll need to make an educated decision. We’ll look at the costs, fees, and all of the features that wait for you behind the curtain of Square’s processing. Square constantly updates what they offer, so there’s a good chance that within the next year, Square will offer even more features for nonprofits. That’s not to say that Square isn’t already a viable option for charities to take paymentsâyou’ll find that from setting up a free online shop to engaging your donors throughout the year, Square provides all the tools you need to get going, with options to integrate or add features as you need them. Let’s get started!
How Do Nonprofits Benefit From Using Square?
One of the biggest reasons I have a sweet spot for Square is that they have competitively-priced processing rates, and your nonprofit organization won’t face any surprise fees or markups on the backend. In addition to a straightforward fee structure, Square offers a considerable amount of free software.
Not only that, Square is so easy to set up that you can get your account up and running to start taking donations, sell merchandise, and even set up your website all on the same day.
While Square for nonprofits offers a plethora of benefits, it’s not without some potential hiccups, however. In the world of payment processing, one merchant’s dream is another’s frustration, so let’s take a look at what Square has to offer and discover if this solution is right for you.
The Limitations Of Using Square for Nonprofits
It’s important to understand that Square isn’t a traditional merchant account provider. As a third-party processor, Square offers greater accessibility to a wider amount of businesses, but there’s inherently a bit more risk involved as far as account stability with this model. When a business or charity raises a red flag, sometimes it’s hard to make things right again.
One of the most important ways to avoid issues is to accurately disclose your type of business and ensure that you don’t sell anything on Square’s prohibited goods and services list that would throw you into the high-risk merchant category.
While representing a very small fraction of all Square’s accounts, the largest complaints against Square involve account freezes and terminations. No matter what processor you go with, you’re going to have this risk, however. That’s why we encourage all of our readers to learn how to reduce their risk of termination or funding freezes.Â
Beyond this, Square offers a lot of useful tools for a very low price, but it’s certainly not all-inclusive. When it comes to SaaS (Software as a Service) for a charity, you can find other options that cover the basics for next to nothing — and there are also more complex solutions that go as high as $15K for mid-sized charitable organizations and above. It really depends on what your organization needs in ancillary tools.
With that in mind, let’s take a look at what to expect with Square, and then look at how your charity can make the most of this low-cost option.
What Are Square’s Fees For Nonprofits?
As I mentioned before, what you see is what you get as far as payment processing costs. You won’t have any other additional monthly fees: no authorization fees, statement fees, refund fees or PCI compliance fees. You’ll also pay the same fee no matter what type of card your customer uses.
Be aware that accepting in-person payments versus web or invoice payments varies slightly, however.
Here are the Square fees for nonprofits:
2.6% + $0.10 for any tapped, dipped or swiped cards you take in person
Â 3.5% + $0.15 when you enter in a credit card number manually from the SquarePOS app, take payment in your Square Virtual Terminal, and process card-on-file transactions, including recurring invoices.
2.9% + $0.30Â for Square Invoices and eCommerce donations as these are both web-based transactions
You can also learn a bit more about Square’s Pricing in our article, How Much Does Square Charge?
Note that Square’s fees for nonprofit organizations are exactly the same fees that small businesses pay, and they’re designed for organizations that process less than $250,000 per year. Does your charity have higher projected donations coming in? Square may design a custom pricing package for charities and small businesses that process more than $250,000 per year in sales, but they consider that on a case-by-case basis rather than offering any sort of standard pricing for nonprofits.
Now that we’ve got the fees out of the way, let’s see what free goodies and other options await with Square for charities.
8 Ways Your Nonprofit Organization Can Make The Most Out Of Square
Square offers more than just payment processing for the nonprofit organization. Let’s take a look at the free tools Square offers that could support your charity in several ways.
1. Accept Donations Online
You have quite a few options to accept donations online with Square. The easiest option is to create a free Square site with ready-made templates that make it easy to build a simple web storefront. You can create a space that explains your mission and lets your donors contribute to the cause, or make a fully functional eCommerce store that allows you to sell things like t-shirts and other merchandise to support your organization and mission.
To start accepting donations, simply click Donations from your online dashboard and add the details. You can also allow custom donation amounts to let your donors give the amount of their choice, up to $1,000.
If you have multiple focuses for your nonprofit, you can create more than one campaign on your site. Just repeat the process in your dashboard from the donations area. That way if you want a focused fundraiser, you can do so while still maintaining the ability to accept general donations.
Below is an example of a storefront using Square’s free site template. You have a range of colors, but customization is limited. Also, take note that you do not have a custom domain with Square’s free site.
You can also upgrade the free site to a premium option through Weebly â it’s all easy to navigate and choose through your Square dashboard. This way you’ll get a custom domain and other bells and whistles that help you create a site you want for your cause.
If you already have a site, you can choose from one of the plugin integrations for Square at your Dashboard for a pretty easy setup.
If you’ve got some expertise when it comes to code (or have a developer on staff) you can build a branded checkout flow with Square Transactions API that allows you to accept digital wallets, too. Check out How To Accept Online Payments With Square for a full, in-depth explanation of each of these possibilities, and a few more (like in-app purchases).
2. Accept Donations In Person
Hoping people have cash on hand or the even more archaic option â a check â can really limit you. When you set up your Square account, you’ll get the free magstripe reader, but we strongly suggest that you opt for the Square Reader for contactless and chip. Square’s chip reader is the best way to protect yourself from chargebacks and give people more options (and convenience) to donate. That’s because chip readers better meet current security standards. The chip reader is competitively priced under $50.00. This little reader is an important tool to keep your costs down in the long run.
You have even more options in hardware, however. Whether you need something mobile or you need something a little sturdier for a kiosk or desk setup or both, you can find what you need to accept payments in person.
Want even more information on Square’s hardware options? Check out The Complete Beginner’s Guide to Choosing Square POS Credit Card Readers And Cash Register Bundles.
3. Take Donations And Orders Over The Phone
Like most point-of-sale software, Square comes with a virtual terminal right on your dashboard that allows you to take a payment over the phone or manually key in credit card data. What’s important to understand here is that a virtual terminal is really the only way to safely process credit card data. That’s because when you receive credit card information, security has to be considered during transmission and storage.
Jotting credit card information down a piece of paper or worse â keeping this information on a spreadsheet â is a big no-no. You’d be surprised to find out how many organizations store credit card data this way, but in the event of a breach, your business will face expensive fines (not to mention a huge PR issue).
Taking donations for your charity over the phone is really easy with Square. You simply enter in the credit card data on the form. Since the full credit card number isn’t visible once you key it in, you never have to worry about this information being vulnerable.
4. Recurring Donations
As a charity, there is probably nothing that feels better than an ongoing commitment from your supporters. These folks help you keep up your daily operations and allow you to plan for future growth.
Square makes setting up recurring donations super easy for your charity. Whether you’re on your mobile device or at your full Square dashboard on your PC, you can create what you need.
I’ve included the screenshot below so that you can how easy it is to set up and schedule your invoice for delivery on whatever recurring plan you want.
If you desire more consistent branding for your charity, you have some options. Check out the full post How To Use Square For Recurring Payments and Invoices for information on integrations or a pre-built workflow.
If you’re wondering about any additional cost regarding invoice scheduling for charitable donations, I have some good news: Setting up recurring donations for your charity doesn’t cost anything extra beyond the processing charge (3.5% + $0.15).
5. Sell Merchandise
Ready to sell merch at your event or want to offer online sales? As mentioned earlier, you have some options when it comes to setting up an online store via Square’s free store or upgrading for more space or design freedom.
Selling in person couldn’t be easier, either. Square’s free Point of Sale app works as a cash register or mobile app, so you can run a gift shop or merch table at a fundraiser. You can even accept payments for charity auction items right then and there (or send an invoice for payment after the event).
Whether you sell merch at an event, through your online store, or you take a phone order through your virtual terminal, Square syncs the sale at your dashboard so everything stays up to date. All your inventory is tracked across all your sales channels. When it’s time for a sale, you simply select the item from your inventory and you’re all set to make a sale. You’re also free to just enter in any amount and charge a card that way as well. After entering their email, your customer receives a digital receipt, and you now have their info.
You can also set up alerts at your dashboard to stay on top of dwindling t-shirts or other fundraising merchandise you offer. That way you can re-order supplies before stock drops to zero!
6. Manage Events And Registration
Planning an event for your charity can help you connect with both your supporters and those who become one. That’s why I’m glad to see that through Square, you can also find what you need to sell tickets for any event you have in the works. You’ll do this through your online store. You can set up your tickets for electronic delivery or you can print for shipping or in-person pickup options. Square gives step-by-step information on how to sell event tickets through their help center.
Square also has a partnership with Eventbrite so it’s that much easier to organize, manage your event, and sell your tickets.
The great thing about selling with Square is that your sales for tickets, merch, and donations all seamlessly sync to improve your record keeping. Whether you take a ticket at the door with your POS or sell a ticket online, everything stays up to date.
And that brings me to my next point: Square’s donation and sales tracking can improve your bookkeeping.
7. Track Your Income And Improve Your Bookkeeping
Square offers simple income tracking. You can download sales history, view deposits, and view everything that’s happening over a set period of time.
View income by categories like merchandise sales, donations, or ticket sales. You can also compare new givers with long-time supporters, as well as average donation size. While you’re not going to see more advanced reporting features with Square Analytics, we feel it delivers more than expected considering these features are completely free.
Need something more? One thing to note is that Square integrates with Quickbooks so you can sync sales data here and get the sales or expense reports you need all in one place. QuickBooks has some specialized accounting features for nonprofits, which can make it a must-have piece of software.
8. Collect Donor Information And Engage
You can export a list of your donations or the details about your donors from your online store at any time. All of this is accessed under Order Management right from your online dashboard.
As you collect donations, you can also manually enter any notes about your supporters. Because electronic receipts are delivered when your customer shares their email, you can also build a robust email list for future marketing.
Square has a few customer engagement features that are completely free. The emails that you collect during transactions are yours to add to a separate email campaign service, of course. You can also create, import, and manage all of your customer profiles within your Customer Directory, which you can then use to get more insights into your donors and plan future giving campaigns based on that information.
You don’t need to find a solution outside of Square for email marketing tools, however. Square Marketing gives you some pre-designed email templates with campaign suggestions and scheduling tools that help you create and manage your email list and marketing campaign. Square Marketing Starts at $15 / month. In the screenshot below, this particular campaign provides those on your list with a special offer. To the right, you can see that you have a selection of templates and themes to create something in line with your branding. Though it’s not fully customizable, you can add your logo, business name, and other images where desired.
Email remains one of the most cost-effective marketing tactics, so it’s nice to see that Square makes it easy to collect emails or opt for this relatively low-cost email marketing tool.
Is Square Right For Your Nonprofit?
Square remains a strong option for most nonprofits. You can start taking donations — and even have access to a few ways to grow — without having to spend any extra money right off the bat. However, for advanced reporting features, marketing, and other integrations you may need, you’re going to pay more each month. And in my mind, that’s okay. Square provides basic reporting features so you can gain insight into patterns of giving as well as set up multiple ways to give on your site and more ways to connect, and that’s all free.
While Square does not offer any special discounts for charities, the processing fees are competitive. And with all of the freebies, it’s a bit remarkable for a processor overall. Be aware that account stability issues exist, however, but they aren’t unique to other processors by any means. Be sure to review each section or check out our full Square Review so that you understand how to make the most of this option.
Not sure if Square is right for you (or already sure it isn’t)? Read Become A Hero & Save Your Charity Money With Discounted Credit Card Processing For Nonprofits or check out the Top 7 Square Alternatives.
Want to get started with Square and open an account? This step-by-step tutorial shows you how to set up an account, navigate your dashboard, start accepting donations or selling merchandise. Have any questions? We’d love to hear from you.
The post Square For Nonprofits: Everything You Need To Know About Seamlessly Accepting Donations, Running Events, & Selling Merch With Squareâs Platform appeared first on Merchant Maverick.
WooCommerce is the most popular ecommerce plugin for WordPress, which is the Internet’s most popular content management software.
Explore WooCommerce’s Feature Set
Explore my WooCommerce Setup Guide
WooCommerce was originally developed by a small theme / web design firm in 2011. It grew rapidly among the WordPress community due to its feature set, but also due to its business model.
Same as now, you could download & use the full WooCommerce plugin for free from the start. WooThemes made money by selling compatible designs, support, and from specific extensions (e.g. to connect to a credit card processor).
In 2015, Automattic bought WooCommerce from WooThemes. Automattic is the software company run by Matt Mullenweg, the original author of WordPress software.
Ever since, the development of WooCommerce has been tightly coordinated with the development of both self-hosted WordPress and Automattic’s hosted WordPress.com software.
So that’s enough introduction. The point is that WooCommerce is legit, WooCommerce is growing, and WooCommerce can be a great fit for many storeowners…but not all.
Disclosure – I receive customer referral fees from companies mentioned on this website. All data & opinions are based on my experience as a paying customer or consultant to a paying customer.
What is WooCommerce?
To run an ecommerce website, you only need a few additional features. You need a product listing, a shopping cart, a payment processor, and order functionality that will merge & manage all the order information within a database. That’s it.
Because of that, ecommerce platforms are very similar to general website software…with just a bit of added functionality.
And like general website software, your choice of software depends on your personal desire for control / customization vs. convenience.
It’s a bit like real estate. A house provides maximum control. But you have to deal with maintenance, contractors, and random issues. A hotel offers zero control or customization, but they take care of *everything*.
WooCommerce lives on the more control / customization end of the spectrum. If Etsy & Amazon are hotels, then WooCommerce is a house.
WooCommerce is a software plugin that adds ecommerce functionality to WordPress, which is general website software (aka “CMS”).
And WordPress is part of a 3 part bundle that “makes a website” –
domain (your address on the Internet)
hosting (where your website files live)
software (what generates the files & pages that make up your website)
In other words, WooCommerce can help WordPress build a stand-alone store instead of a single-family home.
Now, this leads to the first overarching choice with WooCommerce.
Your choice is that WooCommerce is *part* of that 3 part bundle. It directly competes with other WordPress ecommerce plugins.
But…it also competes with other big bundled ecommerce solutions. And many big competitors deliberately bundle domain, hosting, software & ecommerce into a single, simple monthly price.
That’s great – and there are plenty of upsides & downsides to that bundling. But it’s important to be aware of since exploring the pros & cons of WooCommerce is a bit like comparing apples & oranges with other ecommerce solutions.
But – we’ll do it anyway. I love WooCommerce for what it is, but it’s not for everyone. Here’s a few pros & cons of WooCommerce both in comparison to direct & indirect competitors.
Pros of WooCommerce
Most ecommerce platforms have a series of strong advantages, and WooCommerce is no different. Here are a few reasons to use WooCommerce, not only instead of other WordPress plugins, but also instead of other ecommerce solutions.
Long-term Cost & Value
WooCommerce is free to download & free to use. If you have WordPress installed on your hosting account, you can navigate to Plugins –> Add New and add it to your website right now.
Explore my WordPress Ecommerce Setup Guide here.
WooCommerce is also fully functional with no add-ons or extensions.
That means that your annual website costs could be as low as ~$120/yr, depending on what hosting plan you have.
For contrast, the average low-tier ecommerce bundle with a hosted service like Shopify (review), BigCommerce (review) or Wix (review) will run around $360/yr for a single website.
But it gets even better for WooCommerce.
Since your main annual cost will be for a hosting plan, you can maximize the value of your hosting account with multiple websites.
If you had 4 small WooCommerce powered websites on your hosting account, then your annual per website costs would be $30/yr.
To run 4 small ecommerce websites with Shopify or Wix, your annual per website costs would be at least $1,440/yr.
For example, one of my earliest clients had a personal website, a home decor blog, a cat collar store, and an embroidery store – all on her same hosting account.
All 4 sites used WordPress, and the 2 store used WooCommerce. It helped her defray the costs and keep her 2 stores profitable – since they were side-hobbies anyway.
But it gets even better for WooCommerce.
WooCommerce comes fully-featured and fully supported with no transaction fees of any kind. There’s no “premium tier” to move to. Your long-term per-feature costs will always be lower with WooCommerce.
Also, almost all of WooCommerce extensions are flat-fee and under $100. You have access to a huge and rapidly expanding library of advanced, complex ecommerce features for flat-fee optional cost.
And, lastly, since WooCommerce works within WordPress, you get a double cost benefit for any free or premium plugins that you already want to use with your website.
For example, the most popular Redirection plugin for WordPress is free. And it’s free for WooCommerce too, since WooCommerce is integrated with your website.
If you are already paying for speed, security, and anti-spam for your existing WordPress website (with something like JetPack), then you can simply extend that subscription to cover your store as well.
And, you can piece together any 3rd party software based on cost, need, compatibility, etc.
If we stick with the housing analogy with WooCommerce, you can sub-lease rooms to help with the rent, your home office can benefit from your general security bill, and you can add-on *exactly* as your budget allows.
Now…all these massive cost benefits for WooCommerce comes with a few massive caveats, which I’ll cover in the cons. But on face value, WooCommerce is an incredible short-term and long-term value for any storeowner.
Integration with WordPress
WordPress software powers more than 1/3rd of the entire Internet. And it’s popular for a reason – it works well, it’s incredibly versatile as software, and it has a huge community (both for-profit and non-profit) supporting it.
And WooCommerce benefits from all three reasons as well, since it’s been a part of the broader WordPress community for years now.
This seamless integration with WordPress is important because WooCommerce can pull features in from an entire universe of plugins, themes, tutorials, and values that simply does not exist anywhere else.
For example, Yoast SEO has long been a hugely popular plugin with lots of international translations, advanced SEO feature support, and good usability.
There is no hosted platform with anything like it (or like any of Yoast’s excellent competitors). But since WooCommerce is integrated with WordPress…Yoast is integrated with WooCommerce as well.
The same goes with popular themes. Themes will support the same PHP structure as WooCommerce. In fact, developers will often go ahead and add bonus features to WordPress themes to make it extra appealing to WooCommerce users.
Plus, WordPress has long upheld the values of the Open Web with full RSS support, nice permalinks, W3 valid code, cross-browser compatibility, and full control over your code, content & data.
f you want to leave WooCommerce, it’s easy and well-supported. Your data is only accessible to you – and anyone you grant permission to (not the other way around).
Lastly, if you have an existing WordPress powered website and want to add ecommerce, WooCommerce makes it as seamless as any other plugin so that you don’t have to style & support a store on a completely different platform.
Support from Automattic
Automattic is a company founded by Matt Mullenweg, who is also the author of WordPress software.
WordPress software is free, open-source and community supported. But Automattic is the for-profit company that makes & sells tools for WordPress software.
They run WordPress.com, a bundled hosted service for WordPress software in addition to JetPack, a speed / security / utility kit for WordPress websites, and WooCommerce.
Now, there’s a whole universe of for-profit companies offering WordPress plugins, themes, support, etc. They all do great work, and I recommend many of them.
But for longevity, consistency, and building more 3rd party integrations, I think it’s in WooCommerce’s advantage to be owned by Automattic.
There are plenty of WordPress software companies, and plenty of good ecommerce plugins. In fact, some have features and setups that I like a bit better than WooCommerce (mainly for digital goods only).
But the bottom-line when comparing WooCommerce not only to other plugins, but also to Shopify, Squarespace, Wix, etc – is that you need a large company that will be around and have an financial interest in keeping the software cutting-edge.
Additionally, since Automattic is still private and venture-funded – they are still in “growth” mode, which only means more investment in features & customer service.
WooCommerce’s ownership is a huge advantage for choosing WooCommerce over other ecommerce plugins, and put it at parity with other ecommerce solutions offered by large, stable companies.
Versatility & Compatibility
A few fun facts about WooCommerce –
You can use it to sell memberships
You can use it to sell recurring licenses
You can use it to sell digital goods
You can use it to sell apppointments
You can use it to sell affiliate, drop-ship, or even Amazon products
You can “hack” it and combine to sell really anything you can imagine
The actual plugin is incredibly versatile and compatible with a huge range of uses. Like WordPress, your imagination is likely more limited than the tool is.
The plugin automatically creates & manages a range of page types including products, product categories, orders, confirmations, etc
It’s compatible not only with most single-use WordPress plugins but also with large site-type plugins like the BuddyPress social network plugin and bbPress forum plugin.
In other words, you can create a niche social network with forum and online store all with the same WordPress install.
3rd Party Integrations
WooCommerce has a large & growing Apps & Extensions store. It’s a library of premium extensions that allow you to harness powerful 3rd party software for things like payments, shipping, cross-product listings, inventory management, marketing, bookkeeping, and more.
If you are an offline merchant who loves a 3rd party processor (like Square), then you can use an extension to add it to WooCommerce.
If you love your 3rd party shipping or inventory software, it will probably integrate with WooCommerce.
Ease of Use & Onboarding
This pro has a caveat – I’m assuming that you have worked with WordPress before. If not, this will actually appear in the cons section.
But, if you have, WooCommerce’s onboarding is amazing. They’ve upgraded the process to the point where my WordPress Ecommerce Setup guide isn’t nearly as useful as it used to be.
When you add the WooCommerce plugin, you are instantly moved into a setup sequence that will help you list your first product, set up your page types, and get all your basic settings ready to roll.
You really can be set up to sell in minutes. And unlike some plugins that create a dedicated section for use, WooCommerce automatically folds pages, media and options within the existing WordPress install so that everything appears where you think it should be (e.g., media settings, categories, etc).
Control & Customizations
Since WooCommerce is a PHP-based plugins that integrates with your WordPress install, you have direct access to the code via browser and FTP.
You can add, remove, edit scripts and bits of code to your heart’s content. If you want to edit your checkout flow or your error codes or your analytics script or your CSS – then you just do it.
You are not limited by a platform’s plan or code access or script limitations. If you want to hire a designer or developer or marketer, you can hire from a huge pool rather than a narrow field.
There are even custom extension developers who will create whatever extension for WooCommerce that you want.
Do you run a store than needs to accept Dogecoin? Or a very specific shipping option? You’ll need to use WooCommerce – because no major ecommerce platform will be building that anytime soon.
Cons of WooCommerce
Every ecommerce platform has natural disadvantages since there is an inherent tradeoff between control & convenience. You’ll likely find a lot of WooCommerce complaints and issues around the Internet.
Here’s a few of the key disadvantages you’ll find with WooCommerce – and using WordPress as an online store in general.
Ease of Use & Onboarding
WooCommerce & WordPress both try to make ease of use & onboarding (i.e., moving a new user to an active user) simple, straightforward and intuitive.
There are plenty of guides around the Internet, along with prompts, Q&As, support, and more.
But the bottom line is that there is still a basic tradeoff between control and convenience.
For a beginner, WooCommerce has a learning curve that is even steeper than WordPress’ learning curve. When you install WooCommerce, you not only have to learn the basic jargon of an ecommerce store (listings, checkout flow, payment tokens), but you also have to learn the basic jargon of WordPress (permalinks, posts, pages, plugins, etc) and the basic jargon of any self-hosted website (difference between HTML & CSS, page load speed, etc).
For a beginner with zero experience with WordPress or running a website, WooCommerce will require a steep learning curve. Now, it might be worth it if you have the time & patience to learn everything.
But compared to drag & drop basic online store builders like Weebly or Wix or even comprehensive ecommerce platforms like Shopify, WooCommerce’s onboarding & setup is a huge downside.
Sticking with the house / apartment analogy, you know how you can just call the landlord when something goes wrong?
Yeah, you can’t do that with WooCommerce. There is some semblance of support via your hosting company and Automattic (if you are a premium JetPack subscriber) and the WooCommerce community. But there’s no single place to just call and get something fixed.
In fact, like a landlord, there’s no one who will come by and just check on the HVAC filter, the roofing, and basic structure.
Running WooCommerce is really like owning a house. There are plenty of people who will help you maintain it. In fact, many are quite reasonable and even quicker than a landlord.
But…when it comes down to it, *you* and *you* alone are in charge of keeping your website maintained, available, and operating.
Plugins will notify you of security updates, but you will need to install them and manage any new conflicts. Your hosting company will give you support, but you need to know what questions to even ask. You’ll need to know how to troubleshoot.
This downside comes directly from the benefit of maximum control. With maximum control & freedom comes maximum responsibility.
Again, you can get customer support for WooCommerce. In fact, some hosting companies offer “WooCommerce Hosting” with management included.
But compared to online store builders like Wix & Weebly or ecommerce platforms like Shopify & BigCommerce, WooCommerce is lacking in simple technical maintenance.*
*The one caveat here is the WordPress.com option – they are a hosted version of WordPress run by Automattic. Since they bundle hosting, software, support & more – you can get many of the benefits of WooCommerce without this downside. They’ll take care of all the maintenance…at an extra price.
Speed & Security
With the continued growth of mobile and the profitability of hacking, website speed & security are more important than ever.
Like the situation with technical maintenance, WooCommerce leaves you basically in charge of speed & security – even though there are plenty of native & 3rd party options to help you.
WordPress & WooCommerce are inherently secure when installed with a good hosting company, maintained, and used with basic security best practices.
Additionally, WordPress & WooCommerce are inherently fast when installed with a good hosting company, maintained and used with basic speed best practices.
But your weakest link is the toughest part with both speed & security.
For hosted platforms like Weebly, Wix, Shopify or BigCommerce (and the WordPress.com option) – this is an area where they truly shine. Your website lives on their infrastructure with their team of professionals watching constantly for issues and keeping software cutting edge.
In fact, several have bounty programs where they pay hackers to deliberately seek vulnerabilities in their systems. They will also have direct partnerships with payment processors for real-time fraud alerts.
Overall, speed & security should not be an issue for WooCommerce storeowners – including beginners. But, like with owning a house, you are still the one responsible for any issues.
It remains a key downside of WooCommerce, especially if you store starts growing rapidly from hundreds of visitors to hundreds of thousands of users – which brings us to the next downside.
Growth & Scaling
Since WooCommerce is a plugin for WordPress, it has to work within WordPress’ basic functionality.
And WordPress’ basic functionality is not built specifically for ecommerce, it’s built for versatility.
This issue means that the way WooCommerce works starts to break down when you get above a certain threshold of “queries” – ie, requests of the database.
And unlike browsing content, or really any other type of functionality, ecommerce can generate *a lot* of queries, very quickly, and in a short space of time.
Imagine WooCommerce is a single dude standing between a group of customers and a library. Imagine they all need to request books and return books before paying you, getting change, and then leaving. Now, if they go one at a time, it’s fine. In fact, you can probably push the guy to handling several returns and new books at once.
But imagine they all show up at once, say, on Thanksgiving, and start shouting out lots of book orders. And they start giving books to put back…and they all want to pay all at once.
Well, the dude is going to get really confused, tired, and crash. Not because he’s not good but because it’s a not-ideal system.
That’s WooCommerce’s core problem – handing *lots* of add to cart and checkout events all at once.
Ecommerce platforms that are built from scratch for ecommerce like Shopify and BigCommerce do not have this issue. They use a completely different set of technologies to avoid WooCommerce’s inherent issues.
Now, before a bunch of WordPress folks’ start sending me emails, WooCommerce can absolutely scale to hundreds of thousands of orders. WooCommerce says that the issues is a myth and has examples to prove it.
All true. But it take a lot of work & expertise to make that type of scaling happen. Here’s an interview with a top WordPress expert on making WooCommerce scale…and even he discusses it like a huge project, not something built-into the product.
If you have a small, growing store, this is a non-issue. You can solve problems as they come.
But if you are starting what will be a large ecommerce site very quickly, it’s a critical disadvantage to be aware of – especially when looking at other Enterprise ecommerce options.
Potential Long-term Costs
WooCommerce’s price (free!) and potential long-term value are amazing for beginners and anyone on a budget.
However, you may have noted the potential need for 3rd party help, WooCommerce can become quite expensive.
One of my earliest clients back paid me $1200 to fix several emergency issues that she simply could not figure out before her sales deadline.
She had chosen WooCommerce specifically to control costs (rather than integrate with an existing content site). But it will take several years of no issues to recoup those costs compared to a Shopify plan.
Since WooCommerce is not bundled with hosting and other software, it’s also easy to let regular costs get out of control. Once you start paying for automated backups, security scanning, managed hosting, CDN, premium plugin extensions, and more – your monthly costs may be much higher than anticipated (again, just like homeownership vs. renting).
Now, all these costs are *potential* costs. And if you have the time and patience, many storeowners would rather than potential costs that they choose rather than an high guaranteed cost. But it’s a potential downside to be aware of.
Future of Ecommerce
Ecommerce is changing rapidly. And the speed of change is happening faster everyday.
Apps like Poshmark, Depop, Pinterest, and Instagram are moving more ecommerce to happen seamlessly within apps via “headless” ecommerce backends.
In other words, some ecommerce platforms are simply inventory & order tracking systems where the actual shopping, cart, and payments happens within a 3rd party app.
In some ways, WooCommerce’s open structure should be an advantage. And yet, cutting edge ecommerce relies increasingly on APIs and direct integrations, which are not WooCommerce’s specialty.
Shopify is able to leverage its size, infrastructure, and tech team to create cutting edge integrations. Same with MailChimp, Square, and a whole universe of similar marketing tools.
And all that does not even start to discuss Amazon.
All that to say, WooCommerce does have a current disadvantage with ecommerce as it is currently evolving.
However, it could have a huge advantage as content becomes more important. And it will forever have an advantage as somewhere that you truly own & control. It’s this bet that Automattic has their money on.
It’s a potential downside to consider. There’s no right answer, it all depends on your goals, expertise, and view of the future. There’s a reason why so many website builders like Wix, Weebly, Squarespace, WordPress.com, and GoDaddy GoCentral are adding basic ecommerce functionality.
All of which leads us to a few direct comparisons.
There is a whole universe of ecommerce solutions on the Internet. Compared to 2003, this is a really good problem to have. But as an online storeowner, navigating choices is still an issue. Here’s a quick rundown of the main alternatives to WooCommerce, along with links to further posts.
WooCommerce vs. Other WordPress Ecommerce Plugins
There are lots of ecommerce plugins, but most are pretty terrible. WooCommerce’s main direct competitors are –
Easy Digital Downloads – a focus on simple digital goods.
WP Easy Cart – a focus on simplicity but limited add-ons.
WP Ecommerce – a non-Automattic comprehensive option. Meant for developers due to limited support options & simple extensions.
NinjaShop – a focus on simplicity but limited add-ons.
WooCommerce can also run on WordPress.com as part of a hosted bundle. This option removes a lot of WooCommerce’s negatives, but also increases WooCommerce’s costs & removes some of the self-hosted freedoms.
WooCommerce vs. Shopify
I wrote a full comparison of WooCommerce and Shopify here. The short version is that unless you have a specific reason to use WooCommerce and plan on running a growing ecommerce store, then you’ll probably do better with Shopify.
WooCommerce vs. BigCommerce
I wrote a full comparison of WooCommerce and BigCommerce here. The short version is that unless you have a specific reason to use WooCommerce and plan on running a growing ecommerce store, then you’ll probably do better with BigCommerce.
WooCommerce vs. Wix
Wix is much more user-friendly compared to WooCommerce. However, Wix also constrains your options more than even WordPress.com and hosted ecommerce platforms like Shopify. If you have a small store and want drag & drop convenience, then use Wix.
WooCommerce vs. Magento
Magento used to be a much tougher competitor to WooCommerce until Magento’s sale. Now, self-hosted Magento is going away. If you run an enterprise site, then scalability will likely make your choice for you. You’ll want Magento (or other Enterprise options). If you have a small ecommerce shop, then WooCommerce will be a better option.
WooCommerce vs. OpenCart
OpenCart is well-respected open-source ecommerce software. If you are building a ecommerce store from scratch and you want to host it yourself, then OpenCart is a solid option. However, it is declining in use (and with that, apps & extensions & developers). Unless you have a reason to use OpenCart, WooCommerce will give you access to a larger open-source community.
WooCommerce vs. Ecwid
Ecwid is less an ecommerce solution and more of an “anywhere shopping cart”. You can quickly add it to an existing website (ie, a plain WordPress website) and provide an ecommerce experience of a sort. However, it does not integrate with your backend. You also will have trouble competing for inbound marketing. It’s a good option to quickly add ecommerce functionality to your website without going through the WooCommerce setup process.
WooCommerce vs. Prestashop
PrestaShop is well-respected open-source ecommerce software. If you are building a ecommerce store from scratch and you want to host it yourself, then PrestaShop is a solid option. However, it is declining in use (and with that, apps & extensions & developers). Unless you have a reason to use PrestaShop, WooCommerce will give you access to a larger open-source community.
WooCommerce Review Conclusion
WooCommerce is the best ecommerce solution for 3 types of storeowners –
Storeowners with technical resources who want to heavily customize their store or use unique functionality.
Website owners who have a content-driven website and want to add-on a complementary, but seamless store.
Storeowners who are highly cost-conscious and feel comfortable investing time rather than money into running their own website.
If you fit those buckets, I’d highly recommend checking out the main WooCommerce website and using my guide to setting up your WooCommerce-driven ecommerce store.
If you don’t fit in those buckets, I’d highly recommend checking out a hosted solution. Explore my ecommerce platform quiz here. Or if you are building a small store (a dozen products), explore my online store builder quiz here.
Lastly, be sure to explore my guide to marketing your ecommerce store. So many stores fail, *not* because of platform…but because of a bad marketing plan. Spend as much time planning your marketing as you spend researching your store software.
The post WooCommerce Review: Pros & Cons of Using WooCommerce for an Online Store appeared first on ShivarWeb.
Directly after the Back to School rush, businesses start to shift their focus to the holiday season, and before Halloween is even over, the madcap spending season starts en force. We can complain about the holiday creep, but it exists because consumers are in the headspace to spend over these next few months, and preparation equals profitability. Thanksgiving is right around the corner, and with it arrives our extended dedication to shopping: Black Fiveday (the new Black Friday which includes Small Business Saturday and Cyber Monday). Whether you have a brick and mortar location or are an online retailer, here are Merchant Maverick’s top 10 tips to prepare for the holiday season.
Get Organized Before The Holiday Rush
Don’t wait until the last minute to make a detailed game plan for the holidays. I don’t know about you, but during stressful seasons of life, the longer my to-do list grows, so grows my anxiety. Whatever you are putting off or saving for later, take care that your to-do list does not become an albatross around your neck during the busiest shopping time of the year.
Getting organized could include updating your website, changing vendors, or stocking up on inventory. Do you have a plan for employee scheduling? Are the invoices are piling up?
Don’t wait to figure this stuff out. Get everything current and unload those worries from your brain because the time to make any needed organizational changes is now: delays could cost you in more ways than one.
If you run an eCommerce business, we have special tips just for you on how to get your online store ready for the holidays.
Analyze Your Current & Past Cash Flow
Small businesses need to crunch numbers and analyze cash flow in order to make smart financial holiday decisions.
First, look at last year’s sales and numbers: when were your busiest shopping days? How much did you earn during the holiday season? What kind of holiday expenses should you prepare for? Once you have an understanding of your cash flow history, you can plan and set important holiday sales goals.
Analyzing cash flow means asking yourself the following questions:
How much do I expect to earn?
What inventory needs stocking?
How much more can I add to my marketing campaigns?
Do I have enough to offer employee bonuses or gifts?
And finally, look at your January sales. There might be a slump coming, so prepare for it now by knowing how much you’ll need to earn to get through any potential slowdown. Read our post about The Top 10 Strategies To Improve Cash Flow for expert tips and advice.
If you’re not sure how to calculate your cash flow, check out How To Calculate and Analyze Business Cash Flow.
Stock Up On Inventory
The favorite items in your shop will fly off the shelves (that’s the hope, right?), so when those customers and clients arrive at the last minute looking for that favorite item, have it available.
If you are advertising a specific item, stock up. Suppliers and vendors are in the same boat as you as things get busy. Go and write down shipping deadlines for your vendors and suppliers, and prepare for being busier than you imagined. Do you need some financial help to get you up and running? Check out our article on how to finance your holiday expenses.
Optimize Your Online Store
eCommerce is a crucial component of holiday shopping in general, and every year the amount of money spent shopping online grows. For example, according to statistics from Shopify, online shopping accounted for nearly $124 billion holiday shopping dollars in 2018. (That’s up from only $80 billion in 2015.) An updated, clean, and friendly website with clear shipping information should be a priority.
This is a great time, too, to check and make sure the process is streamlined and quick for your customers. Run trials, tests, and work out any technical problems before the holidays get too busy. Check out our post on How To Prepare Your Online Store For The Holidays for more website tips.
Create A Holiday Marketing Strategy
It is never too early to start thinking about a holiday marketing strategy. Consumers are bombarded with advertising these next two months because most major businesses know this is the time to make some major revenue, but the influx doesn’t mean marketing isn’t effective. Your buyers are out there. Your marketing strategy needs to find them.
Your business can use a holiday marketing strategy for branding, and the message should be personal and unique: what is something about your business that is different than all the others?
Be sure to design your marketing materials to include information about shipping deadlines or sales. Consumers are frantic to know where they can get items they need, fast, and without expensive shipping. Don’t make them hunt for the info! Make those details part of your marketing strategy.
Show Your Employees Some Holiday Cheer
There is a very famous Victorian story about someone who seriously lacks holiday cheer and has to go on a journey through time to learn an important lesson about how that’s not very nice. (And if your favorite movie version of the classic doesn’t star the Muppets, then meet me in the comments section. Second-favorites must have Bill Murray.)
Mr. Dickens’s timeless classic teaches us an important lesson: There is one name synonymous with holiday grumpiness and no one wants to be a Scrooge. Scrooge, of course, learns in the end that a Christmas ham goes a long way.
Any type of recognition to your employees that 1) the season is stressful and 2) you are thankful for them, shouldn’t be an afterthought. Also, don’t assume you know what kind of holiday cheer your employees need! Be inclusive to all holiday celebrators (or non-celebrators) and talk to your employees about their plans and wishes.
Don’t Forget To Give Thanks To Your Customers
You work hard. You do. We see it. But your customers also make your business thrive, so why not take this time to thank them for their contribution! Little thank-yous can go a long way, but there are also ways to incorporate those thank-yous into your marketing strategy. For example, offering coupons or discounts to returning customers establishes two-way gratitude. You are thankful they shop with you; they are thankful for the discount or freebies and will come back.
If you run a brick and mortar store, a “Thank You!” event where you serve drinks or snacks is a great way to show your gratitude and pull customers into your shop. At the very least, include a small thank you postcard/email with information about your business with every purchase.
Embrace The Spirit Of Giving
There are several ways you can embrace the spirit of giving this holiday season. One option is to dedicate a certain percentage of sales (or sales on a certain day/during specific times) to a charitable organization of your choice.
Another option is to match employee charitable giving contributions. Small businesses are the backbone of the community, and reaching out into that community to help only strengths you and the people you serve. It’s an added bonus that Millennials make shopping choices based on a company’s record of charitable giving (70% say charitable giving factors into purchases). It’s a second bonus that your giving is tax-deductible.
Buy New Business Software
If you need to change your business software to upgrade your holiday shopping experience, now is the time. Maybe purchasing a new payroll system, bookkeeping, or inventory software is a little holiday gift to yourself, and you’ll find many software businesses offer major discounts during the Black Fiveday Shopping Event.
At Merchant Maverick, we keep an ongoing list of the best Black Friday, Cyber Monday, and other holiday deals for small businesses. Whether you need a new payment processing, POS, accounting, eCommerce, website builders, time tracking, we’ve got you covered.
Make Time To Enjoy The Holidays
Last, but not least, enjoy the season!
Whether you are looking forward to Christmas, Hannukkah, Turkey or Boxing Day, don’t forget to take some time for you and make space to slow down. Spending time with the people we love, eating great food, laughing and embracing old and new traditions: the season is special because of all the amazing things we celebrate. Cherish the moments that bring you joy amidst the craziness of this year’s holiday shopping madness.
No matter what you need to do to get ready for the rush, take some moments to breathe. Then take notes on your successes and struggles this year to help you plan for next year.
The post Prepare Your Small Business For The Holiday Season With These Top 10 Tips appeared first on Merchant Maverick.
If you’re looking to get your business in shape for upcoming holiday sales, begin your training and flex those small business muscles by participating in Small Business Saturday. After all, this is your holiday! Black Friday may be about mindlessly shoveling bags of money into the big box stores, but Saturday is a day for the little guys — and in 2019 more than ever.
Over the past few years, foot traffic at major retail stores has dipped on Black Friday. Some of that is because of an increase in online spending, but some can be contributed to the fact that consumers are becoming more conscious spenders. Small business owners can ride this shifting wave of public opinion by using Small Business Saturday to engage their communities, find new clients and customers, and invigorate their regulars!
Keep reading to find out how.
The Ins & Outs of Small Business Saturday
After a day dedicated to gratefulness for what we already have, Americans can’t wait to score great deals on more stuff on what is traditionally the busiest shopping day of the year. We all know about Black Friday frenzy. But did you know that the Saturday following Black Friday is the second busiest shopping day of the year? In fact, in 2010, it became its own holiday dedicated to spending at small businesses. American Express was the big advertiser behind making Small Business Saturday a success (buy local, with our credit card). And it worked.
While Black Friday is still a big revenue booster for big chain companies to roll out their holiday must-haves (shopping hint: apparently, a mechanical owl you teach to fly is already destined to be this year’s version of the Tickle-Me-Elmo), Small Business Saturday is equally important for the small business sector. Local businesses might participate with sales to get foot traffic, but online stores can also take part in the fun (even if eCommerce sites also get their own Cyber Monday holiday). The goal is to direct hard-earned money toward brick and mortar small businesses in local communities. And in recent years, the consumers have answered by making the act of shoppingsmall and local a part of their holiday spending.
With past and future customers and clients already in the frame of mind to spend, use Small Business Saturday to boost revenue, attention, and loyalty for your small business.
Should Your Business Jump On The Bandwagon?
Yes! Jump on this bandwagon! Consumers enjoy shopping at local businesses and getting to know the people in their communities. It is an interaction that feels nostalgic and possibly outre, and yet in today’s world, our abilities to connect with businesses and makers in our community have never been better. In many ways, Small Business Saturday is a rebuttal to Black Friday: people might love savings, but they love feel-good shopping, too.
Independent businesses make our economy thrive and this holiday provides an amazing chance to grow your business.Â Many shoppers are relational and will drive longer or spend more to purchase something from someone they know, respect, and understand. Use Small Business Saturday to encourage this kind of relational economy.
How To Market Small Business Saturday: 10 Tips For Success
In all the best ways, Small Business Saturday is already a phenomenon, with local businesses teaming up for a carnivalesque experience down the main streets of America. American Express’ free advertising helps. (Some places have bouncy houses and live music and wine tastings.) Some shopping communities already have events recurring for Small Business Saturday, but what if your business is online or located in a less-trafficked location?. No matter the situation and type of business you run, here are some tips for success.
#1: Start Promoting Now
People start thinking of their holiday spending at the exact moment that summer melts into fall. People start talking about Thanksgiving plans as the holidays are on everyone’s mind right after Labor Day. When you head into these prime shopping months, take advantage of opportunities to promote your participation in Small Business Saturday. If there are events for the day, maybe create an event page, or run advertising that showcases your business story and what services you offer. Maybe include a free/exclusive item to anyone who makes a purchase over a certain amount. Promote those offers and extend your reach during the weekends leading up to Small Business Saturday.
#2: Be Yourself
Shoppers on Small Business Saturday are stoked to find deals and items for sale. However, the spirit of the event is really about focused, local spending and being the antithesis of big stores. So, again, making a relational connection to people will go a long way for your business versus merely cutting prices (which you may not be able to truly afford). Think of Small Business Saturday as a moment to tell your story. With that…
#3: Tell Your Small Business Story
There are so many reasons that your small business story is an integral part of your business, so if you haven’t thought about writing it down already, do it! Who are you? What inspired you? If you run a small business, that small business reflects your heart and your blood and your sweat and your tears. I’ll say it again: shoppers are relational. People want to spend money in their local communities and they want to know how their money supports others, so tell them! Create a flyer, post your story on social media. Encourage people to come meet you and the people you employ in person. (If your business is online, you can conduct live interactions with customers during specified times through any number of social media platforms!)
#4: Exploit Social Media
Exploit is such a harsh word. But I mean it. The Small Business Saturday hashtag will be flying and consumers are on the lookout for places to spend money. Small businesses can use a program like Rafflecopter to set up rewards and incentives for following social media accounts or sharing information (in general, it is frowned upon and against terms and conditions to link giveaways to making a purchase or leaving reviews). Engage your social media followers with a countdown or highlights of the things available for sale. Introduce employees. Use social media not just for promotion but for engaging with customers and potential customers.
#5: Get Involved In The Community
Even online businesses have their own niche communities. So, whether you’re in a business complex or online, there are ways to team up and help each other. Share about other small businesses on your social media pages and find ways to promote your community as a whole. (You could even invite a local celebrity to visit!) Remember: The people shopping Small Business Saturday are locals or people online looking for a specific type of small business to support. By making it more about the community or teaming up with other businesses in the community, it builds your identity and expands your customer base.
#6: Be Ready
If you run a brick and mortar store and you are advertising a specific item, make sure you have enough in stock. If your online store is promising speedy delivery, don’t get overrun and let people down. This is about customer service and professionalism. Prepare your staff and plan ahead for emergencies. Whatever promises you make for customers on Saturday, be ready to make those a reality or you may face a backlash and lose repeat customers.
#7: Support Local Charities
Feel-good shopping begets more feel-good shopping. If you sell pet supplies, think about pairing up with a local animal shelter or a restaurant that supports meals for those experiencing homelessness. Giving a percentage of sales to a charity or non-profit is a great way to incentivize spending, yes, but also it’s a great thing to do, period. Giving back shows what matters to you, creates bonds in your community, and increases awareness.
#8: Give Customers A Reason To Come Back
A coupon for next time or a chance to enter a drawing in exchange for their email address are certain options you can employ to get your customers to come back. Whatever methods you can use to help customers remember you the next time they are shopping, employ them. Send everyone home with a flyer with your story and a discount; plan a special sale with invites going to all customers who make a purchase that day; issue a December coupon. These are all ways to get your information into the hands of customers and act as reminders to make a trip again.
#9: Offer Something Exclusive
It’s true: A Small Business Saturday Exclusive has that flair buyers want. Special deals only for Saturday, doorbuster discounts, a free item with a purchase, a selfie with you? No matter what you offer, make sure it’s something that fits your business, tells your story, and appeals to your customers. Whether it’s a giveaway or an offer, the allure of something rare and exclusive is hard to ignore.
#10: Make It An Event
Don’t limp into Small Business Saturday with the enthusiasm of a young teen being forced to take pictures with their parents in public. If you aren’t excited about the holiday, you won’t be able to sell that excitement to your customers. And excitement sells. So, make Small Business Saturday an event. Make it a moment. Help make the people who come and visit you on that day feel special and wanted and important. Because they are! How often does a small business get a holiday to roll out the red carpet for the people who support them? Create a tradition, a memory, and an incentive to return.
What’s Your Real-Life Small Business Saturday Story?
Are you a small business owner who has participated in Small Business Saturday in the past? What are your tips and tricks for surviving and thriving? And what are the best ways you’ve found to make the day meaningful and successful? How does your community celebrate? We want to know. Share your Small Business Saturday stories in the comments.
The post The Entrepreneurâs Guide To Small Business Saturday (Why and How Your Small Business Should Be Involved) appeared first on Merchant Maverick.
So you’re looking to take advantage of everything that online commerce has to offer and enter the world of ecommerce? Good for you! Of course, this will require you to be able to accept online credit card payments. To do this, you’ll need an internet merchant account.
Sounds simple enough, right? If only! Not all merchant accounts are created equal. When choosing an internet merchant account for your ecommerce business, you’ll need to understand how a merchant account interacts with the other elements necessary for selling online, like payment gateways, payment processors, and shopping carts (not the kind you push around). Some services combine one or more of these elements, but it’s still important to distinguish these elements from one another.
Confused yet? Don’t worry — we’ll spell it all out for you!
What Is A Merchant Account?
A merchant account is a specific type of business account into which your customers’ money is deposited after they use their credit or debit card to make a purchase from you. After these payments are verified, the money is transferred to your own business bank account, which is entirely separate from your merchant account. You have no control over the merchant account — it is merely the middleman between your customers’ money and your business bank account.
So, why include this middleman at all? Wouldn’t it be easier to simply accept credit and debit card payments directly and get the funds deposited directly into your business bank account?
Unfortunately, credit card processing doesn’t work that way. When your customer pays you, the transaction ultimately still involves two other major parties: the issuing bank (which grants the customer cards and is responsible for collecting any payments from the customer) and the acquiring bank (which requests and then collects payments from the issuing bank and then releases them to the merchant). Because the payment process is so complicated — the acquiring bank has to ask for the funds from the issuing bank, which has to verify that the customer has those funds available and then transfer them — the merchant account essentially functions as a holding space or even as a sort of line of credit.
Merchant Account VS Third-Party Processor
When selecting a service to process your customers’ card payments, you’ll be choosing from between two different categories of services: direct processors (the providers of merchant accounts like the kind described above) and third-party processors (also called aggregators) like PayPal, Stripe, and Square.
Read our Review
Setting up an account with a third-party processor is simpler and less time-consuming than setting up a merchant account. This is because third party processors don’t set you up with your own unique merchant account. Instead, the third-party processor aggregates all of its merchants into one enormous merchant account.
What do these differences mean for you, the merchant? For starters, the merchant accounts offered by direct processors typically provide you with a higher level of account stability. This is due to the extensive underwriting and risk assessment you have to undergo to get your merchant account. With third party processors, you are subjected to very little underwriting beforehand. Therefore, the processor scrutinizes your activities much more intensely, making it more likely that you’ll experience an account hold or termination.
The flip side of this is the cost advantage of third party processors. These services typically feature flat-rate pricing and pay-as-you-go agreements. There are few (if any) monthly or annual fees to pay, and you don’t need to meet a monthly minimum in card transactions, making it easy to start taking credit card payments with no established business history.
With direct processors, you’ll be paying monthly and potentially annual fees, you’ll need to be processing at least $5,000 to $10,000 per month in card transactions, and the pricing is not normally flat-rate — your rates may vary depending on the nature of your business model and your industry. Many merchant accounts still require you to sign a multi-year contract. (That said, many of the best processors in the industry have done away with these 3-year contracts and early termination fees in favor of month-to-month agreements, and we recommend that you not settle for a multi-year contract until you’ve explored all your options.) Still, above that $10,000/month mark, merchant accounts do offer cost savings and as your volume increases you’ll qualify for even more discounts.
For more on third-party processors and how they stack up against traditional merchant accounts, check out these articles:
The Best Online Credit Card Processing Companies
The Truth About Third-Party Payment Processing
What’s A Payment Gateway?
We’ve established what a merchant account is, so let’s move on to payment gateways.
While a merchant account is the account into which your payment processor sends your customers’ payments before they are transferred to your business bank account, a payment gateway connects your online store to your payment processor, facilitating your customers’ online transactions.
Payment gateways enable online transactions like so: the gateway integrates with your ecommerce store to securely capture the payment details for customer transactions. The gateway then routes that information to your payment processor or acquiring bank, which assumes control of the payment process. The gateway will then send an approval or decline message back to the merchant based on whether or not the processor/acquiring bank accepts the payment.
When you use a third-party processor, a payment gateway is typically included in the service. With direct merchant accounts, a gateway service may or may not be included for an additional fee. Some processors do offer gateways as part of their services, at no additional cost. Ultimately you’ll need to check with the processor to find out.
PCI Compliance With Online Merchant Accounts
What is PCI compliance, and how do you achieve it?
PCI compliance refers to a set of safety practices established by a council (the Payment Card Industry, or PCI) sponsored by the major credit card companies to ensure that a consumer’s payment information is secure when making a purchase using a credit or debit card. These standards, which apply to all businesses that accept credit and/or debit cards, are meant to standardize the securing, processing, and transmission of cardholder data.
If your merchant account provider deems you to be PCI non-compliant, you’ll be subject to a PCI non-compliance fee of around $30 per month until your account is compliant. What’s more, if your non-compliance results in a data breach, you can be fined anywhere from $5,000 to $500,000!
You’ve probably gathered by now that it’s a good idea for your business to be PCI compliant. For most small businesses, that means being Level 4 PCI compliant. Level 4 is the PCI standard that applies to businesses up to a certain size — it’s essentially the lowest bar to clear. Larger businesses must comply with higher PCI standards, with Level 1 standards applying to both the largest businesses and businesses that have suffered a data breach.
When choosing a payment processor, you’ll want to make sure your provider offers features such as PCI compliant processing hardware and software, quarterly network vulnerability scans, and assistance with completing and filing a Self-Assessment Questionnaire (SAQ).
Most third-party processors handle the entire process of PCI compliance for you, but with a merchant account, you should be expected at minimum to have to complete the SAQ.
If you’re running a brick-and-mortar business with no ecommerce component, you might think PCI compliance has nothing to do with you. However, if your business accepts credit cards, it almost certainly utilizes the internet to do so at some point in the process, so you’ll still need to be PCI compliant. It’s easier for physical-only businesses to establish PCI compliance than it is for online businesses, though.
Some PCI best practices are no-brainers. For instance, you don’t want to store your customers’ card data on your own hard drive or server, you should never use default passwords, and you’ll need to use a firewall on your network and computers. There’s more to PCI compliance than these obvious measures, however. For a detailed explanation of what PCI compliance means for your business, I highly recommend reading our comprehensive article on the subject, The Quick Guide To PCI Compliance For Small Businesses.
How Much Does An Internet Merchant Account Cost?
When choosing a merchant account, it’s important to know the different pricing models offered by payment processors:
Flat-Rate Pricing: This pricing model has the advantage of being predictable. You’ll pay a fixed rate for each transaction, making it easier to predict your processing costs. While you’ll usually pay more on a per-transaction basis than with other pricing models (and you donât know how much the processor is making off a transaction), you probably won’t have to pay monthly fees or other types of fees charged by processors offering other pricing models. Third-party processors like PayPal, Square, and Stripe use this pricing model. To learn more about flat-rate pricing, check out our flat-rate credit card processing explainer.
Interchange-Plus Pricing: Also known as cost-plus pricing, interchange-plus pricing is the pricing model preferred by Merchant Maverick. Why? Because it’s the most transparent model and it makes rate comparisons between processors easy. With interchange pricing, the processor passes on the interchange fees (fees charged to the merchant’s bank account and paid to the bank that issued the card) and assessments (fees paid directly to Visa or Mastercard etc.) while charging a small markup above that (often a percentage and a flat fee). Check out this article for more on how interchange-plus pricing works and why we prefer it.
Membership Pricing: This is the pricing model used by subscription-based payment processors like Fattmerchant and Payment Depot. Under this pricing model, you’re charged a single monthly subscription fee instead of the assortment of fees other pricing models feature. You’ll also likely pay a flat fee of between $0.08 and $0.15 per transaction as well as interchange fees. Higher-volume businesses can find themselves saving money under this pricing scheme.
Read our Review
Tiered Pricing: Tiered pricing is an older pricing model not commonly used by modern businesses. We don’t recommend it. All transactions are grouped into two or three tiers of transactions, ranging from the lowest-priced transactions to the highest-priced transactions. Essentially, the problem with tiered pricing is that processors can categorize transactions assumed to be in a lower-priced tier as higher-priced transactions, thus charging you more and leaving you little recourse. You should avoid tiered pricing arrangements.
For most small businesses, using a third-party processor with flat-rate pricing like Square or PayPal may be more affordable than using a full-service merchant account. Of course, this entails a much greater risk of having your account frozen or terminated, which is, in itself, a very costly thing to happen to any business.
One thing that affects what your internet merchant account will charge you is the fact that CNP (card not present) transactions, including online purchases, cost more to process than do in-person transactions. This is due to the fact that the chance of chargebacks and fraud is higher with transactions where the card is not present, and this is factored into the cost of processing the payment.
Other fees you may (or may not) have to pay include PCI compliance fees, payment gateway fees, and fees for ACH acceptance if you want to offer customers the ability to pay with their bank accounts in addition to cards. To learn more about the complex and relatively opaque world of internet merchant account pricing, read through our Complete Guide To Credit Card Processing Rates & Fees.
Features To Look For In An Internet Merchant Account
Let’s go through some of the features that may be included in your internet merchant account package.
One benefit of third-party processors like Square is that a payment gateway is included as part of the service so you won’t have to go looking for one yourself. Of course, third party processors have their drawbacks as well, so you’ll be glad to know that some direct processors include a payment gateway in their services as well.
Remember, if you plan to do business online, whether it be through selling goods, offering SaaS, or what have you, you’ll need to be able to accept online credit card payments. To do that, a payment gateway is an absolute requirement.
Multiple Payment Methods
We’ve established that you’ll want to be able to accept credit and debit cards. However, there are other payment methods your customers may want to use, and you want to be able to accommodate them. From mobile wallets like Apple Pay on the web to ACH payments, the more payment methods your payment gateway (and payment processor) supports, the better.
Global Payment Support
With some merchant accounts, you can only accept payments in USD. If you expect to be able to attract any international business, that’s obviously not going to be good enough. Thankfully, many merchant account providers can set you up with a multi-currency ecommerce merchant account so you can expand your global reach. Just be aware that you’ll likely pay currency conversion fees (if they aren’t passed to your customers). PayPal and Stripe do very well in this regard, and Stripe actually supports many localized payment methods across Europe and Asia.
As an added note — some processors offer a feature usually referred to as dynamic currency conversion or localized currency displays. This means that your website will automatically convert the price from USD (or your default currency) to whatever currency is most common in the customer’s region. This can improve the shopping experience for international customers and potentially increase your sales.
Included Shopping Cart (Or Other Software)
An online shopping cart integrates with your website to facilitate ecommerce. The shopping cart enables your customers to look through your available products, select different options for each product (size, color, etc.), select the quantity of the products they want to order, and more.
Most merchant accounts can be integrated with major shopping carts, but if you can find one that includes a good shopping cart already, that’s even better, as you’ll be saving money.
Other handy features to look for include a customer credit card vault that allows you to securely store your customers’ card information while keeping it off your own equipment and subscription tools that let you create and manage customer subscriptions. Stripe is an example of a processor with built-in subscription tools and a card vault. However, you can also opt for a third-party provider to get recurring billing functions.
Processors with integrated developer tools, like Stripe, allow developers to use APIs (application programming interfaces) to integrate the payment platform using a variety of different programming languages. For the business with developer talent, integrated developer tools can help you build custom solutions for your ecommerce outfit.
Good customer service and availability is critical in an internet merchant account. Your ability to do business is reliant on all your systems working correctly 24/7, so reliability and quick response times are crucial. Do some research on merchant account providers to weigh the experiences of other merchants when dealing with any issues that pop up, and make sure that the available support channels jibe with your preferences.
How To Choose The Right Provider For You
That was a lot to take in, wasn’t it? If you’re feeling overwhelmed, don’t worry! Merchant accounts are Merchant Maverick’s original specialty, and we’re here to help you delve into the nitty-gritty of merchant account pricing, features, and provider options.
Here are some links to help you learn more about merchant account options, features, and more:
The Best Online Credit Card Payment Processing Companies
How To Choose An eCommerce Merchant Account
The Complete Guide To Online Credit Card Processing With A Payment Gateway
How To Accept Credit Cards Online
The post The Complete Guide To Finding An Internet Merchant Account appeared first on Merchant Maverick.
Instagram holds a world of infinite interest. You can scroll past picture-perfect destinations, see curated fashion trends, and ogle delicious confections, all with the touch of your fingertips. But there’s one thing you can’t do. You can’t click on just any Instagram post and be redirected towards an outside site like you can on Facebook, Twitter, or Pinterest. For most Instagram accounts, there’s only one measly way to explore a particular business, person, or organization more on Instagram â by clicking the link in the bio (if they’ve supplied one).Â Sure, some larger channels with thousands of followers can add a link to swipe up within Instagram Stories, but not everyone can attain those levels of popularity immediately — or ever!
What’s more, I’d be willing to bet that many of you who are reading this post have never even actually clicked the bio links of your favorite Instagrammers.Â And all that is by design. Instagram is structured to keep you engaged and interested by scrollingâand stayingâwithin the app itself. Historically, Instagram has kept a tight leash on outgoing links, and the reason for that is now becoming clear; by limiting outside link clicks, Instagram has created an ideal scenario to introduce shopping right on its own platform.
Shoppable Instagram posts are an entire ecosystem just ready to flourish. But will they? What do shoppable Insta posts mean for small businesses in general, and how can you make them work for your business? In this post, we’ll explore what you need to do to sell on Instagram and show you some options for getting started. Let’s get going!
Ready to sell on Instagram? Shopify makes it easy.
Mobile App + Free Card Reader
Point of Sale
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Low-cost POS for iOS and Android with free hardware
All-purpose POS integrated with all sales channels
Build a store or integrate with your current website
Unlike the typical Instagram post where you can look but not “touch,” a shoppable Instagram post is one that is connected to a seller’s inventory and available for purchase. A shoppable post may keep you entirely within Instagram for in-app payment, or you may be redirected to that particular product on the seller’s outside website. We are going to take a look at both of these scenarios by examining both Square and Shopify â two platforms that take different approaches to reaching customers on Instagram.
Want to see some examples of shops that sell directly within Instagram? Start by going to Search, which on Instagram is the magnifying glass icon located at the bottom ofÂ the screen. Once you are in the search function, you’ll find general categories lining the top, as well as a random conglomeration of posts like those below. Since we’re only interested in shoppable posts right now, we would click Shop at the top.
Once you select Shop, you’ll find shoppable categories along the top of your feed. In the screenshot below, category buttons (such as Beauty and Clothing & Accessories) line the top of the screen. Note:If you’re just scrolling around on Instagram and happen to see a post with a little purse icon at the bottom right, you can be sure it’s shoppable. Every post shown below is shoppable because I’m within the Shop section on Instagram.
In the example below, you can see that each item for sale is also tagged with a price. Moving your attention to the bottom left, you’ll see the little purse. You can pull up even more available items from that seller by selecting the View Products button.
Before we go too much further, I want to point out that there are two different types of shoppable Instagram options: One confines the purchase entirely on Instagram, and the other involves a tagged post that’s shoppable by a link that takes your shoppers directly to your online storefront. Let’s first take a look at the in-app purchase flow.
For the customer who is ready to make a purchase, the checkout flow within Instagram’s app is short and sweet. After supplying my name in one screen and shipping information in the next, I am now ready to give my payment details. When I do this, Instagram saves my information so that I don’t have to ever enter it again in any other Instagram shop. Instagram Checkout accepts all the major credit cards, plus PayPal.
Screen capture of Instagram checkout 2019
Selling on Instagram with a completely in-app payment flow requires integrating with an existing eCommerce platform such as Shopify, 3dcard, Big Commerce, or Magento. We are going to take a close look at connecting Shopify with Instagram in just a minute. With this option, you actually don’t even need a separate website to start selling on Instagram, but if you do, everything syncs automatically for you.
As mentioned a moment ago, your other option to sell on Instagram is by creating a tagged post that goes directly to your site. The shop below is an example of what that looks like. Customers can check out the items you’ve connected to Instagram by clicking on View Products, or they can click on a tagged product and go directly to that product’s page on your own site. What we are looking at below is inventory that this particular seller created and added to their Product Catalog. We’ll talk more about this catalog in a moment, as it’s the gateway to selling all things on Instagram.
But first, let’s see what happens if we like an item in this seller’s catalog. I like the look of this art print, so I click on it. The button below tells me I’ll be redirected to the seller’s outside site.
Now that you have an idea of how customers may find and interact with shoppable posts, you probably are getting excited to sell your own items on Instagram. Let’s keep going and find out how to do it!
How Do You Become Eligible for Shoppable Posts?
Becoming eligible for shoppable Instagram posts starts with setting up a business account, but not just anyone can sell on Instagram. Instagram has an easy little checklist for those who are thinking about setting up shop.
Is your business located in a supported market?
Does your business sell physical goods?
Does your business comply with commerce policies?
Is your Instagram account a business account? (I’ll show you how to switch to a business account in the next section.)
Is your account connected to a Facebook Page? (We’ll also show you this!)
If you haven’t noticed yet, Facebook (the parent company of Instagram) is the official gatekeeper to all Instagram selling. You can’t create an Instagram business account or sell on Instagram without having and connecting to a Facebook Business page. That also means you’ll need to create a business profile on Facebook for your business.Â Within your business dashboard, you can easily connect Instagram and get into the nitty-gritty when it comes to setting up shopping.
For those who haven’t set up a Facebook Business Page, it’s simple to start. At the top of your Facebook page, you’ll see buttons labeled HomeÂ and Create right next to the search bar. Select Create and your business type as seen below, and you’ll be guided through the process.
Screen Capture of Facebook’s Create a Business Page Flow
Now that you have a Facebook business page, let’s keep the ball rolling so we can start selling on Instagram!
Set-Up Requirements For Selling On Instagram
To start selling on Instagram, make sure you also have an Instagram business account set up rather than a personal account. You can easily change an existing account to a business Instagram account by heading to your Instagram profile and tapping the “hamburger” icon (three horizontal lines).
From there, you’ll select settings (circular gear icon), and then tap Account where you can select Switch to Business Account. You can also add details about your account, such as contact information and your category here, too. Make sure you tap Done as that saves your updates!
The next thing you’ll need to do is create a Facebook Catalog because this houses all of your products and connects with Instagram. You have a few ways to create your catalog for syncing with Instagram. The next section shows you how to create your catalog manually so you can start enjoying shoppable posts. We’ll also explore some other options, like integrating apps or using a payment processor like Square to link directly to an existing Square site.
How To Create Shoppable Posts On Instagram
Selling on Instagram all starts with your catalog you create back within your Facebook Business Page. Here’s what a Facebook Catalog workspace looks like; it’s nice and simple to get started.
Screen Capture Instagram Catalog Creation
We are going to select Add Your Products underneath the Instagram Shopping section. If you haven’t yet, you can also connect your Instagram and Facebook Business account right back here, too! That’s another necessity to get everything set up correctly.
If your inventory is small, adding products manually here is probably the choice for you. However, you can also opt to upload data feeds or connect with Facebook Pixels by clicking those options. In upcoming sections, we are also going to explore how to use Facebook Partnersâapps like Shopifyâthat can sync all of your inventory, so you don’t have to do anything manually. For now, let’s keep moving with manual uploading, however.
Manually creating products is actually easy, as long as you have manageable amounts of inventory. Simply fill in the form, add an image and you’ve got a product added to your catalog!
Screen Capture of Manual Product Creation
While it’s a straightforward process, this manual product entry option may not be for you. Perhaps you have an extensive inventory, or you want to integrate with a platform that gives you more control or better features. By choosing the Connect with an eCommerce Platform, you have options that may simplify your process considerably.
Regardless of whether you manually create your catalog in the back end or you have integrated an eCommerce platform (more on that soon), you’ll create your shoppable Instagram post the same way:
Upload your image to Instagram
Tap where you want a tag
Search and select for your product from your catalog that’s synced to Instagram
Tag up to five items for a single post, or up to twenty items for a multi-image post
Publish your post
Let’s not forget that before we go live with our Instagram post, we need to have Instagram approve our shop.
Getting Approved To Sell On Instagram
Once you’ve got your catalog created, you’ll need to head back into your Instagram profile’s setting and tap Business, and then select Shopping on Instagram. Here you will submit your account for review. You can’t start selling on Instagram until you get approved. Instagram may take a few business days or more to review your catalog, so don’t panic if it doesn’t happen as soon as you expect.
How To Simplify Your Instagram Sales
Screen capture of eCommerce Options
Choosing to connect to an eCommerce platform that’s partnered with Facebook (pictured above) means that you can automatically import products and save yourself a lot of time. It also means that your customers can search for and complete their purchase all without leaving Instagram.
Your inventory syncs across any platform that’s set up through one of these third-party apps. So whether they shop on your site directly, or on your Facebook shop, Instagram feed, or anywhere else, you know that your inventory stays seamlessly updated. We are going to take a closer look at Shopify as an option for selling on Instagram.
Selling On Instagram With Shopify
Although I just hyped you up with the fact that Shopify syncs with your site and a multitude of platforms, you can actually set up a Shopify account and start selling in person and online without having an eCommerce site at all! With the Shopify Lite option for only $9 a month, you can get your foot in the door selling on Instagram (and all over the web) without having a site. Of course, people who have a higher-tiered Shopify plan can enjoy selling on social channels as well, too! Check out our full Shopify review for all of your options, features, and pricing details.
Mobile App + Free Card Reader
Point of Sale
Social Media Selling
Low-cost POS for iOS and Android with free hardware
All-purpose POS integrated with all sales channels
Build a store or integrate with your current website
If you go the Shopify (or any other Facebook partnered eCommerce) route, you don’t have to set up a catalog for Instagram manually. Once you’ve linked your Instagram and Facebook and have your eCommerce platform selected (push of a button as seen above), your audience can click any post you have tagged. They can make all of their purchases with you in-app right through Instagram, while your inventory all stays synced and up to date.
A few important things to remember about using Shopify and Instagram:
As mentioned in the Getting Approved To Sell On Instagram section above, you can’t start selling on Instagram until Instagram approves you. You won’t be able to start tagging Instagram posts with your Shopify inventory until you see the notification in your Instagram business profile that you’ve been approved. And keep in mind that can take a few days.
Products need to be available in your Facebook Catalog and Shopify store. So make sure you sync them both, which you can do from your Facebook Business catalog page.
Once you’re set up and you tag an item in your Instagram post, you’ll see your catalog products appear and you can make your selections. If you have more than one variant in Shopify, you’ll need to choose which variant for that product tag as well.
In Instagram stories, you can tag products with a shopping sticker, but only on images, not videos at this time.
If you are interested in learning a bit more about using Shopify to sell your wares in more online channels, take a look at Shopify Facebook Stores: The Cheap And Easy Way To Sell Online for a closer look.
If a consistent, in-app experience within Instagram is something that appeals to you, the only way to do that is to link with one of the eCommerce platforms. If you would rather that people click directly to your site rather than finishing their sale on Instagram, you have options, too! You’ll need to manually create products and link to your site from your catalog unless you use Square, which just recently announced that you can now sell on Instagram easier while fully syncing the inventory from your Square site!
Selling On Instagram With Square
Setting up Shoppable Instagram posts with Square is a little bit different. You’ll start the process back on Square’s end rather than the other way around. Essentially, you’ll follow a very simple and easy-to-follow flow that clearly walks you through the connection process.
As with all of the other option, you still need to have:
An Instagram Business Account (and be eligible to sell)
Facebook Business Page
Approval from Instagram
You’ll also need:
A Square website
At least one product in your inventory
Haven’t decided if Square is the right choice to help you sell online yet? Check out our full Square Online Store and eCommerce Review and find out everything you need to know about pricing, features, and all that awaits you as a Square merchant.
Back at your Square Website Dashboard, you’ll be ever-so-gently walked through the complete flow to set up your Instagram account through Facebook Business Extension. Don’t be intimidated, because you won’t need to know any code whatsoever. As you are guided through the relatively short steps, Square even automatically installs the Facebook Pixel, which tracks everything for you. That means you don’t have to even think about code to track any future ad campaigns you want to create to promote your Instagram or Facebook shop. You’ll also get insight into how much business your Instagram shoppable posts are bringing in. You’ll get all that information automatically and right from your dashboard. The image below is taken from Square to illustrate what I mean about the whole thing being very user-friendly.
Screen Capture of Square Online Set Up Shopping on Instagram
Remember, you need to make sure that you head back into Instagram and request approval before you can start selling. We cover how to do that in a previous section within this post. Also take note that with the Square option, your shoppers don’t pay within Instagram; instead, they’ll go to your site to finish their purchase after clicking on a tagged post.
Extra bonus: Businesses that offer appointments can now integrate Square Appointments with Instagram to book with followers. Just like creating shoppable posts, you need your Instagram profile set to a business account to reap the benefits of appointment booking. You’ll also want to turn on Square Appointments online back in your Square dashboard. When you link your Instagram to Square, the Book button will automatically show up in your profile!
Are Instagram’s Shoppable Posts Right For You?
If you have a physical product and even just a small loyal following, merging the two with shoppable Insta posts is probably the smartest business move you can make. Whether you go the manual route, integrate with an app, or sync with an existing Square site, the effort required to get everything going is very minimal. Once you choose an option, getting things connected at your dashboard really couldn’t be any easier. Every solution we explored today is for those who have very little technical expertise or who just don’t have time to fuss with a lot of details.
Selling on Instagram connects you to more people. By using hashtags and networking in similar circles, you can potentially tap into greater success for your business. And that’s the ultimate goal! If you’d like more information about setting up an eCommerce site to complement your social selling, check out How To Accept Online Payments With Square.
The post How To Sell On Instagram With Shoppable Posts appeared first on Merchant Maverick.
We at Merchant Maverick like Square. Itâs a great service that opens up the ability to process credit card payments to many small businesses, and weâve written a lot of articles about Square’s point of sale, payment processing, inventory, booking, and invoicing features. These articles can be prohibitively in-depth to the uninitiated, however, so you might want to read this quick overview of Square for a summary before digging into the details.
A Brief History Of Square
Square was founded in 2009 when Jack Dorsey (also of Twitter) tried to help his friend Jim McKelvey take a credit card payment of $2,000.00. Squareâs first product was a magnetic stripe credit card reader that could be inserted into a smartphoneâs headphone jack to take credit card sales.
Square became a public company in November of 2015, and its stock is traded on the New York Stock Exchange under the ticker symbol SQ. While Square does bring in a lot of money ($3.3 billion for the year 2018), it still has not made a profit. For the moment, the company seems to be more focused on growing by adding new services for its customers.
While Square’s main focus continues to be helping small businesses quickly and easily set up taking credit card payments, it has also expanded its services to point of sale, inventory, and employee management — giving small businesses the ability to run more like large ones (more on these services below). To this end, it has bought the food delivery business Caviar, the catering service Zesty, and the website building service Weebly. It also owns a consumer-centric digital wallet called the Cash App, where users can send money to each other and even buy from any store with the money in the app.
In the span of about ten years, Square has grown from a startup focusing on one aspect of helping small businesses grow to a large business providing a suite of services that help small businesses expand. With so many additional services, what exactly does Square do these days?
What Does Square Do?
At its heart, Square is still a credit card processing aggregator (also sometimes called a third party payment processor or a payment service provider (PSP)). We have a great article on the difference between a merchant account provider and an aggregator, but below is a quick explanation.
Square’s Credit Card Processing Services
Traditionally, if you want your business to take credit card sales, you would work with a provider to set up something called a merchant account. To get a merchant account, you typically undergo a long application process and provide a lot of financial information before you are approved. These providers want to make sure that, based on your businessâs existing history, you don’t present a huge financial risk.
Credit card processing aggregators take more of a see-as-we-go approach and assume financial risk for bad accounts. Aggregators merely need to verify the identity of the applicant before authorizing a new account, and generally don’t ask too much more information. They have more freedom on who they sign up and how they do business with those they sign up.
While this means aggregators can quickly set your business up to take credit card payments without needing an established history, they tend to be cautious afterwards. These types of payment processors have advanced systems in place to analyze each transaction for any red flags. Suspicious transactions can cause the processor to hold funds until it has more information. Worse, third-party processors often have a clause in the contract that says they can terminate your account if they see fit. Usually, this happens to businesses that have high numbers of chargebacks or fraudulent transactions.
Square is an aggregator, so essentially the above is its business model. You can sign up for Square within minutes and without providing detailed financial information. In addition, Square gives you a basic set of free hardware and software so you can start taking credit card payments almost right away. The free items include:
Square Point Of Sale Software: Square’s free POS software is incredibly advanced for being free, though it’s certainly not a full-fledged POS. Still, for most small businesses it is more than sufficient. Square also offers premium iPad POS systems for a monthly fee if you need more advanced features.
Credit Card Reader: You can get a basic magnetic strip reader for free, but if you want support for chip cards, you’ll have to upgrade to another reader, which will cost you.
Invoicing: For those businesses that bill a larger amount but less often (e.g. lawn care services), Square offers an electronic invoicing function. The invoices are free to send, but you will pay a transaction fee when your customer pays with their card.
Square’s Value-Added Services
As mentioned earlier, Square has been adding more services to its core credit card processing business. Some of these services are for free, but others are available for a small fee. These services include:
Employee Management: With this service, you can manage your employees from anywhere. You can add new employees to the system, track their hours, track their register/sales (at either single location or multiple locations), edit and close employee timecards, and give selected employees selected access to various parts of this software (e.g. so they can enter their own hours but not see your weekly sales numbers).
Payroll Services: This service imports data from the employee management software so that you can easily pay your employees and contractors. Square will handle tax filings and withholdings, and they can handle the payments to other employee benefits such as health insurance and 401(k). You can even offer direct deposit to your employees.
Inventory Management: Square offers basic inventory management in its Point of Sale app for free, but the premium iPad POS systems offer a more detailed system that can track and analyze your business’s inventory across multiple stores and multiple registers. You are notified when inventory is low, and items are automatically removed from inventory when they’re sold, whether at one of your physical locations or online.
Business Debit Card (Square Card): When you are paid by your customers through Square, the money goes to an account kept by Square. Rather than moving the money to your bank, you can use it immediately with the Square Card. The Square Card is a debit card sponsored by Mastercard, and you can request it from Square for free. Check out How Does Square’s Instant Deposit Work?Â for more information about how to access your funds.
Appointments: Square provides a booking calendar for professional service businesses (like hair salons). The calendar not only tracks and moves appointments, but it can also send appointment reminders to customers. The POS and booking system is free for a single user, but if you have multiple users you’ll need to pay a monthly fee.
Square Online Store: Pretty much every business needs an online presence, and Square can help you build a professional-looking website even if you’ve never done it before. Square provides tools that can help you track your inventory sold through your online store and helps you with shipping (printing labels, discounted rates). Best of all, when you sell out of state, it tracks all the different sales taxes that you might owe. There’s a basic free webstore, but if you need more advanced features, you’ll need to upgrade to one of the other plans.
Other Services: Square offers many more services designed to make a small business owner’s life easier. For instance, Square offers marketing software to help you build email and social media advertising campaigns. It has an installment payment service for certain businesses so that a customer can buy a big-ticket item and pay Square in installments while you get paid right away. Square can help you build a loyalty program where customers can redeem goods or services with points. You can get your own branded gift cards to sell to your customers. Square even provides online store owners with a product photography service so that the items sold through webstores are presented in their best light.
As can be seen above, Square is well on its way to offering an entire suite of software and services that not only help you take credit card sales, but also help you manage your entire business’s operations.
What Are The Advantages of Square?
Every successful business has a few things it does extremely well, and Square is no exception. Square basically provides you with a free, fast, and easy-to-get-out-of way to start taking credit card sales. To elaborate a bit, the following are some advantages for signing up with Square:
Fast Setup: You can sign up for Square within minutes and get a credit card reader shipped to you very quickly.
Easy Termination: If you sign up and find that you don’t like Square, you can stop working with Square any time you want. There are no penalties for leaving, so you can sign up without fear. (There may be loose ends to tie up, but you can still terminate the services at will.)
Easy To Use: Square is focused on small businesses that are just starting out. They provide a simple piece of hardware and intuitive software to help you run your business and help you grow.
Simple Fee Structure: Compared with other pricing models, Square has an easy-to-understand flat fee structure so you can better predict your profits.
Fast Payment: With Square, you can get paid almost right away after a customer makes a charge. You can instantly deposit these funds into your outside account or use the funds directly with the Square Card debit card. In contrast, traditional merchant account providers typically hold the funds for at least 24 hours before releasing it to you. For a small business with tight cash flow, Square’s fast payment can make a difference to the business’s survival.
No Minimums Or Monthly Fees: A small fee here and there might seem insignificant, but they can add up in the long run. Square’s credit card processing service (and a lot of their other services) have no minimum or monthly fees, so a small business doesn’t have to worry about paying for anything other than the transaction processing costs.
These are just some of the advantages for signing up with Square. Of course, no business is perfect, and neither is Square. Under some circumstances and for some types of businesses, Square is not the best option.
What Are The Disadvantages Of Square?
No business can be everything to everyone, so Square is not suitable for every type of business. One of the biggest complaints we see about Square is that Square sometimes withhold funds in a merchant’s account, with or without warning. Sometimes, you never get paid. If you fit into one of the categories below, you might want to think twice before signing up with Square:
Not Suitable For High-Risk Businesses: A “high risk” business is usually defined as a business that deals with guns and ammo, tobacco and vaporizers, pharmaceuticals, gambling and financial services, and similar — anything highly regulated or prone to chargebacks and disputes. If you deal in any of these, Square is likely not the right business partner for you. Specifically, in its Terms of Service, Square reserves the right to terminate service if you violate any export control regulations (for example, sell military-grade items to specific countries) and money laundering laws, sell weapons or devices designed to cause physical harm, or “use the Services except as otherwise allowed” under their agreements.
Not Suitable For Business With Many Chargebacks: If you have a business that causes a high rate of dispute or chargebacks (even if it’s not otherwise a high-risk business), then Square is probably not the right company for you. Going back to Square’s business model, it fronts you the money that you take from your customers so you can collect right away while it waits for the banks to settle the charges. So, if Square can’t eventually get the money from the banks, it might stop fronting you the money (put a hold on your account) or stop working with you altogether.
Not The Best Pricing For High-Volume businesses: Despite its transparent pricing, Square might not be the cheapest service provider for your particular business. If your business is mature, you have an established financial history and are doing a consistently high volume of card payments, and you know how your customers tend to pay for your goods or services, then you might want to shop around a little more to find the merchant account provider that can offer you interchange-plus pricing and volume discounts. (That said, Square does negotiate custom rates for high-volume businesses, but you should absolutely shop around all the same.)
We have an article that gives more details on why Square is not suitable for high risk and high chargeback businesses. If you have an established business and wish to shop around, here’s some information on where you might be able to get a better deal.
What Are Square’s Fees?
Business owners like having predictable operating expenditures every month. Because credit card fees usually have a percentage component and a flat fee component, the cost of allowing credit card sales tend to be less predictable. Compared to traditional credit card processors, however, Squareâs fees are easier to predict.
With Square, you usually only have to worry about just one fee, expressed in a percentage form. Right now, if you use Squareâs free credit card reader and free Point of Sale software, you pay 2.75% of the sale. Thatâs it. If your customers choose to pay online, your rate is 2.9% + $0.30 per transaction.Â Having only to keep two numbers in mind makes it easier for you to figure out your markups so you can make a profit for your entire business.
Note, though, that if you use Squareâs premium hardware or software, the charges can get a little complex. Here’s an article giving a more detailed breakdown of Square’s fees.
How Do You Use Square?
When it comes down to it, it’s fairly easy to start using Square’s services. You can do it in four steps:
Sign Up For A Free Account. This only takes a few minutes, and we even have an article walking you through the process. You wonât have to provide a lot of financial information, and they wonât do a credit check on you at this stage (they will later, after youâre all set up).
Get Your Free Square Reader. Youâll have quite a few hardware choices–some of which you will need to pay for–but thereâs always one thatâs free for either iOS or Android.
Download The Free Square App. The app is called Square Point of Sale, and you will need this app to process payments through a mobile device.
Log In To The Free Square Dashboard And Explore. This is a fairly robust piece of software that manages all your credit card charges. You can customize reporting in a centralized hub, and do much, much more (some of which cost extra). Here’s a Merchant Maverick article on the details of the dashboard.
As mentioned above, Square wants to help you run your business. There are a lot of value-added services they offer, so once you’re all set taking credit card sales, you might wish set aside a little time to explore these additional services to see how they can help you run your business.
What Kinds of Businesses Is Square Best For?
Square isnât right for every business, but if your business is small or new, Square is very likely the best bet for you. With Square, youâll get lots of free software, hardware, and add-ons to get you up and running very quickly. You can use Square on the web, at a brick-and-mortar store, and even at mobile locations such as food festivals.
We’ve compared Square with PayPal and Clover Go and believe Square really does offer the best value for the price for a start-up business. As long as youâre not one of the âhigh riskâ businesses, you should have no problems getting payments from Square or with your account being abruptly suspended or terminated. Best of all, if you use Square and then after a while decide you donât like them, you can stop using them at any time.
Is Square right for you? This more in-depth article can help you decide.
The post What Is Square And How Does It Work? appeared first on Merchant Maverick.
If you’re reading this article, chances are that some of your customers have recently asked whether you accept Apple Pay or Google Pay. Your preliminary research has yielded the terms digital wallet and mobile wallet, but while you may have heard of these forms of payment before, you don’t yet know many of the details.
What do these terms mean? Is there a difference?
The short answer is that digital wallet is a broad term covering software that electronically stores credit card numbers, debit card numbers, loyalty card numbers, etc. on your laptop, tablet, phone, or the cloud. A mobile wallet is a type of digital wallet that lives only on your phone and allows you to “tap to pay” in stores, often using NFC technology.
Below is a more detailed explanation of what these wallets are, as well as how they might affect your small business.
What Is A Digital Wallet?
A digital wallet is an electronic method for storing payment information. It is a broad term covering many types of functionalities, and not every wallet offers every type of functionality. Below is a list of major functions typically found in digital wallets.
Store Credit & Debit Card Information: All digital wallets can store credit and debit card information. Some, like Apple Pay, Google Pay, and Samsung Pay, will allow payment directly from the card. Others, like PayPal, draw funds from a stored credit or debit card but pay out through the service itself.
Pay At A Store: Many digital wallets will allow a user to pay for purchases made at a brick-and-mortar location. Apple Pay and Google Pay both allow this type of payment when an NFC-capable point-of-sale terminal is available.
Peer-To-Peer (P2P) Payments: Most digital wallets allow users to transfer funds to one another. Typically, these payments are small amounts used to split a lunch bill, pay a babysitter, or even pay a share of the rent. The Cash app, Venmo, Zelle, Apple Pay, and Google Pay all allow users to transfer money this way.
Online Payments: Digital wallets can be used to pay for online purchases. At checkout, a merchant who takes digital wallet payments will display the appropriate button for the appropriate wallet. PayPal is the most well-known wallet having this type of pay with button, but Apple Pay and Google Pay have similar buttons.
Hold Funds: A digital wallet can store cash in the same way a gift card can hold cash. The funds are held in a cash account, and a user can link a bank account or a credit card to this cash account to cover shortages. Square’s Cash app and PayPal’s Venmo are examples of digital wallets that hold funds, and they even provide their users with physical prepaid cards (Visa for Square and Mastercard for Venmo) so the cash can be used at brick-and-mortar stores.
Hold Coupons & Loyalty Cards: Many digital wallets can hold coupons or loyalty cards so a user can be given the appropriate credit or discount for using a particular card or for shopping at a particular store. Apple Pay, Google Pay, and Samsung pay all hold coupons and loyalty cards.
Store ID: Some digital wallets will allow a user to store IDs. For instance, Apple Pay will allow a college student to store a student ID and use it to access various buildings or even pay from a student account.
Store Transit Tickets: A number of digital wallets allow users to store transit tickets. Users can tap the phone (or a wearable linked to the phone) on a reader to enter subway or bus stations in an increasing number of cities in the US and abroad.
Security: All digital wallets have security features that keep the stored information safe. The information is not only protected by password or biometrics (fingerprint scan, iris scan), but is also encrypted in many ways. Credit card information, for instance, isn’t even kept on the phone. Only a token that represents the information is kept on the phone.
Given that digital wallet is an overarching term that includes all the above features, is there a meaningful difference between a digital wallet and a mobile wallet?
How Is A Mobile Wallet Different From A Digital Wallet?
An easy way to distinguish mobile wallets from mere digital wallets is that mobile wallets let the user make a payment at a storeâs point-of-sale terminal. The payment is usually pulled directly from a credit or debit card rather than from a cash balance kept in the digital wallet.
With a mobile wallet, a user typically pays by tapping on a credit card terminal with a smartphone or a wearable device like a smartwatch or a fitness tracker. The device then transmits the payment information from the phone to the terminal via Near Field Communication (NFC) technology. Other mobile wallets (e.g. Dunkin’ Donuts, Walmart) send payment information through QR codes that a merchant can scan or the user can import through the phone’s camera. A third technology proprietary to Samsung (Magnetic Secure Transmission (MST)) mimics a magnetic swipe and transmits payment information that way.
As a side note, the popularity of NFC technology for payment processing has a lot to do with security. In the US, NFC is favored because it transmits the information only over very short distances. This way, there’s less likelihood that a snooping device can steal the payment information. In comparison, QR codes are less secure because a user can innocently scan a rogue code and be tricked into sending money to the wrong destination.
In this article, we try to draw a distinction between digital wallets and mobile wallets, but, in truth, the nature of these wallets is still in flux. When most people speak of mobile wallets, they tend to only be thinking of Apple Pay, Google Pay, or Samsung Pay. While digital wallets like PayPal and Cash can be loaded onto smartphones as apps, they cannot make NFC-based payments, so they are technically not mobile wallets. (PayPal can be linked to Google Pay and Samsung Pay, so it is still possible to pay at a store with PayPal, but the app itself is not capable of handling NFC payments.) However, Google Pay and Apple pay do let users make P2P payments and send cash, and these features tend to be major functions of pure digital wallets. Google Pay and Apple Pay, therefore, blur the line between digital wallets and mobile wallets.
If the line between digital wallets and mobile wallets is blurry, is there even a reason to draw a distinction between them? For a consumer, the answer is likely “no,” but for a merchant who wishes to take these payments, the difference can be significant.
What Mobile & Digital Wallets Mean For Merchants
For a merchant, there is a subtle but meaningful difference between a mobile wallet and a digital wallet. If you operate an online store or sell through a mobile app, then you can take digital wallet payments, but likely it will take a little work because you must add new code to your web store or your app. If you can’t handle coding yourself, you’ll need to hire a developer to implement these payment options. This is a bit different than some other online payment options that allow you to accept credit cards with minimal setup.
If, however, you operate a brick-and-mortar store where your customers pay through a point-of-sale terminal, then you can probably take mobile wallet payments without doing anything extra. If you have an NFC-enabled terminal, then you are all set to take Apple Pay, Google Pay, or Samsung Pay. If you are still using an older terminal that only takes a magnetic stripe card, then you can still take Samsung Pay because it has that the proprietary MST technology that mimics a magnetic strip card swipe.
Below are some of the additional advantages of taking digital and mobile wallet payments.
Digital and mobile wallets are secure. Digital wallets store payment information on a specialized, super-secure environment called the Secure Element (SE). Apple uses an SE chip embedded in the phone while Google and Samsung use one in the cloud.
When a customer makes a purchase, instead of the real credit card number, only a tokenized number is sent to the merchant. Hereâs a more detailed explanation of credit card tokenization, but for quick reference, a credit card token is just a random number with the same number of digits as a real credit card number. Only the credit card company has a way to match that random number to a customerâs real credit card number. So, if a token is stolen, the credit card company simply issues another token and disallows payment requests made with the stolen token. The real credit card number is kept safe and other purchases made with the real number (or other tokens) can continue.
From a merchantâs standpoint, the explanation above just means that tokenization takes you out of scope for PCI compliance (meaning less work for you) and you won’t be held responsible for fraudulent charges made with a stolen credit card. Thatâs a great reason for taking digital or mobile wallet payments.
Digital and mobile wallets make checking out faster. Whether you operate online only or have a brick-and-mortar store, faster checkout typically translates to more sales.
If you have a webstore or an app that takes in-app purchases, digital wallets often can populate all the payment fields with the push of a button. This means your customer wonât have to dig out a credit card, enter a long series of numbers, triple check to see the number is entered correctly, enter in their email twice, etc. etc. Being able to pay easily and quickly makes a better overall purchasing experience, and that means a better chance of a returning customer.
At a brick-and-mortar store, payment with an NFC enabled phone or wearable also makes checking out faster. Tapping a phone or a smartwatch over a point-of-sale terminal takes a mere second or two. Compare that to digging out a card from a wallet, dipping a card into the reader, waiting for the reader to approve payment, and making sure the customer does not forget to retrieve the card, you can see the time savings right away. Whatâs more, all the customers behind the one making the payment can see their time savings as well. The more happy customers you can move through your checkout, the more sales you can make.
In line with faster checkout, taking digital and mobile wallet payments offer additional conveniences to your customers. These days, most people pay for their purchases with a credit or debit card, and mobile wallets are increasingly being used to store these cards, especially by the young and/or tech-savvy. Millennials and Gen Z’ers transfer cash between friends using mobile wallets without a second thought and never seem to carry actual cash on them.
For these customers, it would be convenient to consolidate spending into one wallet, so they can easily keep track of their cash, credit, and debit spending. Most digital and mobile wallets also allow users to pay faster by approving a purchase using stored information. PayPal has a one-touch feature that allows a customer to instantly approve a payment with stored data. Google Pay allows a user to approve a purchase by just unlocking the phone and hovering the phone over the payment terminal without ever opening the Google Pay app.
Of course, digital and mobile wallet users won’t stop patronizing your store just because they can’t pay with their mobile or digital wallet. But, if you do allow it, they might come back to you more often because you take payments in the way they prefer to pay.
Do You Need To Accept Mobile & Digital Wallet Payments?
You probably do not absolutely need to take digital and mobile wallet payments, but allowing them might bring you more sales. If you have an online store, then you might have to invest some time or money to connect up to the wallet services. However, if you own a brick-and-mortar store, you likely already can take them. In fact, if your customers tend to be tech-savvy and/or young–or you want to attract more such customers–the ability to pay with digital or mobile wallets will offer them the convenience they want and induce them to do more business with you.
Whatever you do, if you decide to take digital and mobile wallet payments, be sure to advertise it properly. You can request signs and stickers from the wallet providers and of course download logos and the appropriate buttons for your webstore. Once this is done, you are on your way to taking digital and mobile wallet payments.
If you already take digital and mobile payments, what has been your experience so far? Have you increased your sales? Have you gotten positive comments from (hopefully pleasantly surprised) customers that you have improved your technology to allow for this new way to pay? Leave us a message in the comments!
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When you own a small business, at some point in your growth you may want to protect your personal assets from your business finances. Without proper coverage and a solid business structure, your own assets, in addition to your business assets, might be in danger.
An LLC (limited liability company) is a business structure that protects a business owner from personal liability in the event of a lawsuit, accident, property damage, or a costly mistake.Â While the LLC business structure works to protect the business owner’s personal assets, obtaining business insurance is the next step in any business’s risk management plan.
In this post, we’ll cover which insurance policies LLCs need, where to find them, and how much they cost.
What Is LLC Insurance?
LLC Business insurance is a collection of business insurance policies designed specifically to protect your LLC from the costly effects of a lawsuit, property damage, or worker mistakes. There is not a specific LLC insurance policy a business can purchase but rather, several policies bundled together. Most LLC insurance bundles will have a foundation of general liability insurance or a business owners plan (BOP) that contains both general liability and commercial property insurance.
There is no one-perfect fit for each company; different risks equal different policies, and only you and an expert will be able to identify the best choices for your business — but this post should give you a good head start.
Why LLCs Need Insurance
According to the government, up to 53% of small businesses experience a lawsuit — and, out of the businesses that face a lawsuit, over athird of them close their business due to the unforeseen cost. Those are sad statistics, but they don’t have to translate to sad endings for businesses. Insurance exists to protect your business, so you don’t have to lose sleep at night thinking about the worst-case-scenarios for your LLC.
Accidents are bound to happen in life and in business — while there are things you can do to mitigate business risks, some things are beyond your control. Instead of worrying about the various hazards that could befall you, cover your business with insurance policies specific to your business needs. With the proper coverage, if your business is the subject of a lawsuit, these policies will work to protect your personal income and assets from being involved in a business-related accident or mistake.
How LLC Insurance Policies Work
Once you’ve decided to purchase insurance for your LLC, you should sit down with an insurance professional and itemize your business risks. Identifying the risks for your business and its industry can help ensure you get the proper coverage your business needs.
Most policies will start with a general liability policy or a business owners policy (BOP) — that bundles general liability, commercial property, and (sometimes) business interruption insurance. In addition to the foundational policies, there are business insurance policies for your specific risks as well. With an insurance expert, you’ll build upon a general liability policy to create the perfect insurance plan for your LLC.
Types of LLC Liability Insurance
Once you’ve acquired basic general liability insurance as your foundation, here are some of the most common other liability insurance policies that will help provide you with additional coverage.
Commercial Property Insurance
This insurance covers damage to your property because of fire, tornados, hurricanes, vandalism and the like. Strong winds push a tree into your building? Commercial property is the insurance for those claims. Was something stolen from your property or your vehicle? A commercial property policy is what you’d use for those claims, too.
Business Owner’s Policy
This is a policy that combines both general liability and commercial property insurance into a bundle. Sometimes this policy also includes business interruption service. Bundling multiple policies is a cost-effective way to get more coverage for less.
Errors & Omissions Liability Insurance
Many LLCs are formed by professionals in the medical field, and they should add errors and omissions (also known as malpractice insurance or professional liability) to their list of needed policies.
Directors & Officers Liability Insurance
If the directors and officers, or the main shareholders in the company, suffer a financial loss because of a lawsuit brought against them personally, this protects them and helps pay for a legal defense. (Intentional illegal acts are not covered by insurance.)
Professional Indemnity Insurance
Do you give any sort of advice as part of your business? Protect yourself from lawsuits directly related to bad advice that caused financial or personal damages to a client.
Product Liability Insurance
General liability insurance will cover some, but not all, lawsuits related to product liability. However, if your product is risky, extra product liability insurance is a must.
Cyber Risk Insurance
A data breach is a risk every business with an online presence (especially an online store) might face. If data is comprised, there are lengthy consumer rules to follow and cyber risk insurance will help pay for legal fees and facilitate the complicated process for you.
In most states, you need worker’s compensation to cover employee injuries. Texas is the lone hold-out with zero worker’s compensation guidelines, but all other 49 states have rules where you must provide worker’s compensation if you have employees.
Business Interruption Insurance
If your business has to close because of a disaster or accident, business interruption insurance will cover your lost income or the costs of temporary relocation. This policy could even protect you if a property leader suffers damage or foot traffic is limited to your establishment.
Other Insurance Policies LLCs Need
In addition to the liability policies above, you might need to add other coverage depending on the scope of your business. Here are some additional insurance policies that you may want to purchase in addition to liability insurance.
Commercial Auto Insurance
If your business has a company vehicle or uses business vehicles to transport goods and services, you might need to expand your auto insurance to include commercial activity. With commercial auto, you are covering your employees to drive an employee vehicle and also covering their car during business hours.
Home-Based Business Insurance
If you operate your business out of your home, consider specialized insurance plans to make sure your business is protected should something happen to your residence. Home owner’s or renter’s insurance may not be enough to cover business losses in the event of a fire, natural disaster, or theft.
How Much Does LLC Insurance Cost?
It’s hard for many business decisions not to come down toÂ cost.
For general liability insurance, the cost is affordable and within range for even small businesses with current low income. According to Insureon, over 53% of small businesses pay between $400-$600 a year for general liability insurance andÂ 21% paid less than $400 a year.
Some of the things that may affect that yearly premium are:
Your specific industry risks
How much liability insurance you need
What type of business you run
The size of your business
How many employees you have
The location of your business
For a small business that needs one million dollars of coverage, the price can be as low as $30 a month — a small price to pay for protection and peace of mind. Cheap liability insurance is possible and should be a convincing argument to start with a basic plan at minimum.
Once you’ve acquired the foundational insurance, everything after that is an addition. For a business owners policy (BOP), according to Coverhound, a one million dollar policy could cost you between $500-$3,500 a year. Worker’s compensation could add another couple thousand to your yearly costs depending on how many workers you employ.
The process for finding a great policy is all about research! Knowing the averages for your industry and comparing competing rates will help you make the best decision for your LLC. Start with an idea of the risks your LLC might face. Are you just online? You will have a lower premium than someone with a storefront. Will you need malpractice insurance? Do you need to insure commercial vehicles? By asking and answering these questions, you can come equipped to your first meeting with an insurance company with the knowledge of what you need.
When you meet with your insurance expert, discuss the cost-effectiveness of bundling your policies. Many sites like Coverwallet, Coverhound, and Insureon will comparison shop for you and walk you through the steps required to make an insurance purchase.
Your business needs protection. Don’t make the mistake of under-insuring your business out of optimism or denial and become one of the 33% of businesses that can’t recover from financial ruin after a costly mistake or accident. Protect yourself, your business, and your employees today.
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