Welcome to the first week of Merchant Maverickâs essential news briefing for small business owners.
An appointment-making robot and Amazon Prime Day records dominated the small business news cycle over the past seven days. Read on for this weekâs top five must-know stories for small business owners.
Google’s AI Assistant Has Begun Booking Appointments For Users
Google recently began rolling out the booking feature of its AI chat assistant Duplex, per a report by VentureBeat. Duplex’s booking abilities enables users to request appointments at a business using the Google Assistant, Search, or Maps apps on their phone. Duplex will then call the business and reserve an appointment on the user’s behalf using “natural language processing.” In all cases, Duplex informs the person on the other end of the call that it is an automated service.
Originally teased by Google in 2018, Duplex’s recent launch supports barbershop, hairstylist, and salon appointments, but the AI bot has also had a limited capability to make restaurant reservations over the phone since at least 2019.
Besides the rollout of Duplex’s booking feature, Google also shared a number of tidbits relevant to small businesses during its Search On conference this week. The company says Duplex has updated 3 million business listings across eight countries since the start of the pandemic. Google also announced that starting in the first half of 2021, everyone can migrate for free from Hangouts to its new communication service Chat — a potential Slack competitor.
Why this matters to you: Duplex’s booking feature could help increase the reach of small businesses that rely on phone calls to book services. Because not everyone likes talking over the phone, potential customers who might balk at calling to set up an appointment may feel more comfortable booking one through Duplex.
Further reading: One year later, restaurants are still confused by Google Duplex, The Verge
Amazon Prime Day Set A Record For Small & Medium Businesses
This year’s Amazon Prime Day, which ran October 13-14, saw third-party sellers rack up $3.5 billion in sales — a 60% increase over last year. While failing to disclose total Prime Day sales, Amazon claims that third-party sales grew more than Amazon’s own retail businesses. Amazon added that “most” of its third-party sellers are small-to-medium-sized businesses, with small businesses in Utah, California, and New Jersey nabbing the biggest sales per capita.
Despite smashing sales records, Amazon faces scrutiny. The company was recently named in a Congressional anti-competition report that looked into how Amazon’s rules may have put smaller sellers at a disadvantage. The site has also struggled to shake the notion that it frequently peddles counterfeit products, an issue that came to a head last year after a Wall Street Journal investigation.
Why this matters to you: As small businesses look for digital revenue streams in the world of COVID, selling on Amazon could be a great way to dip into the eCommerce space — and Prime Day’s record sales numbers provide an early indication that shoppers are keen to buy online this holiday season.
For more on how your small business can make money on Amazon, check out Merchant Maverick’s guide to starting an Amazon store.
PPP Lenders Allegedly Told To Favor Existing Customers
The government’s much-ridiculed Paycheck Protection Program (PPP) for small businesses has yet another blotch on its record: A Democratic-led House congressional oversight subcommittee found that the US Treasury Department privately encouraged lenders to prioritize existing customers when issuing PPP loans. The initial instructions for lenders to “go to their existing customer base” allegedly came from the Treasury on March 27, the same day the PPP legislation was penned into law.
The House report did note that the Treasury denied such claims. However, the report cited several high-up industry leaders, including the president of the American Bankers Association and a “senior banker” at JPMorgan Chase & Co., as saying that the Treasury wanted banks to work with existing clients. A spokeswoman for JPMorgan said that the bank “initially focused on existing customers” because of the “time-consuming regulatory requirements to onboard a new client.”
Why this matters to you: Because lenders may have favored existing customers, underserved small businesses (which include those owned by minorities and women) were potentially put at a disadvantage when applying for PPP funds. These latest insights reinforce earlier reports that banks favored larger companies — even though rules issued by the Trump administration said the PPP was to be “first-come, first served.”
Comcast RISE Launched To Help Diverse Small Business Beat COVID
In an effort to help small businesses survive the recession generated by COVID, media and telecommunications conglomerate Comcast launched Comcast RISE. This new support program will help out small businesses via $10,000 grants, marketing resources, and tech equipment.
Black-owned small businesses are eligible to apply for Comcast RISE’s initial wave right now. The program will open up applications to BIPOC (Black, Indigenous, and People of Color)-owned small businesses starting November 28. The grant part of Comcast RISE also hasn’t started yet, either — that will launch November 28, too.
Why this matters to you: COVID has ravaged much of the US economy, with small businesses taking the brunt of the damage. With financial support from the government looking slim, small businesses will need to turn to alternative methods to help push through a downturn in revenue. Through its various tools, Comcast RISE will hopefully be able to keep numerous small businesses up-and-running through 2021.
A New Service Can Help Track Competitors’ Google Maps Ratings
Ratings on Google Maps have long been a great way to gauge the public’s perception of a business. However, it’s difficult to monitor a business’ rating over time — and even more difficult to gauge multiple competitors’ ratings over time. Enter Local Monitor, a recently-launched service from Paris-based startup WizVille.
WizVille’s Local Monitor works simply: You enter your business’ name on the site and get a display of nearby places that provide similar products or services to you. You can then choose up five competitors to track and WizVille will email you a monthly report detailing your business and its competitor’s Google Maps ratings over time. Read more about Local Monitor on TechCrunch.
Why this matters to you: Being able to track Google Maps ratings can help you understand how customers view your business and its competitors. This extra bit of data could give you a leg up over other local businesses within your niche.
The Latest From Merchant Maverick
Our latest small business spotlight looks at a Texas-based startup called Everyware, a payment gateway that offers text message-based billing solutions for an array of industries. By building its product around text messages, Everyware aims to eliminate the clutter that persists throughout daily life. Take a peek to learn more about Everyware:
Everyware Uses Text-Based Billing To Help More Businesses Profit From Contactless Payment During COVID
It’s a bleak, bleak world out there, so let’s finish your briefing on a positive note.
In Tampa, Florida, two teenage boys raised $30,000 over the course of six months to help small businesses struggling because of COVID. Gifts of $10,000 will go out to three businesses local to Tampa.
“We could never have expected to raise this much money,” said Robbie Herzig, one of the enterprising teens that kick-started the operation. “We were just looking to help any way that we could and when it took off.”
Do you have a story idea, tip, or press release for the Merchant Maverick news team? Shoot us an email: [email protected]
The post Google’s AI Can Now Make Appointments & 4 More Small Business News Stories You Need To Know appeared first on Merchant Maverick.
You’d never want to use the word “luck” in the context of something like a pandemic, but the adaptations businesses have made to comply with lockdowns and social distancing have made a powerful case for entrepreneur Larry Talley’s vision.
Talley is the founder & CEO of Austin, Texas-based Everyware, a payment gateway that seeks to address some common pain points in the payment/billing cycle. Talley’s solution is built on an optimistic premise: that many bills, transactions, and customer service inquiries that go unaddressed or unfulfilled aren’t being purposefully avoided. They’re simply getting lost in the shuffle. In other words, have you carefully gone through that pile of mail on your kitchen table? Do you regularly check your spam folder to make sure nothing important is landing there?
If you’re anything like me, probably not.
It Starts With A “Thank You”
Everyware gets around this by sending a text message receipt with every transaction.
âIt can be as simple as a thank you, but what it does is provide a basic communication channel that’s open all the time, 24 hours a day, seven days a week,” explains Talley. “You can always text back your concern or your problem. Or even a positive review.â
Talley, who is a software developer, bootstrapped Everyware and maintains it with a small team of around 25. The company now has customers not only in the US, but in Canada and Mexico thanks to word of mouth and ISO referrals.
âLike most bootstrapped companies, you start with a great idea, but bringing that idea to market is a lot harder than you think,” says Talley, “The idea really goes back to 2015, but it took until about 2017 to really pull it together.â
Saying “YES” To Text-Based Billing
The kind of text channel Everware helps to create can be used for more than just thanks or communication; it can also be used to initiate payments. This can be done through a link in the text or, if the payer has a credit card on file, simply approving the transaction with an affirmative text message like “YES.”
As a freestanding payment gateway, Everywear can be added to most existing merchant account services.
If you’ve interacted with the medical system in the past few years, or have donated to a political campaign, you probably have an idea of how this works. Many healthcare providers will, for example, send you texts reminding you of upcoming appointments. Afterward, they’ll send you a message alerting you that your bill is now available, usually with a link to their patient portal. Similarly, many political campaigns this cycle have utilized “textbanking” to connect with supporters, alert them about events, and solicit donations. As you might imagine, these have been two of Talley’s biggest sources of customers.
Talley expands on how useful text-based billing can be in the medical industry, “When you go to the hospital, you might have five different doctors and different bills for each. All when you’re going through a tough time in life.â It’s not uncommon for patients to get a bill from one doctor or department, think they’ve completely settled their medical payments, and miss the other bills. The hospital misses out on payments, and the patient starts getting calls from collection agencies. Everyware seeks to eliminate this problem by providing better communication with an easily accessed paper trail.
Thanks To COVID, Everyware Is…Everwhere
Everyware’s niche may turn out to be a lot bigger than politics and medicine when all is said and done. COVID-19 has created an enormous demand for contactless payments. While eCommerce transactions can and have been filling the gaps, they aren’t the only way to replace what would otherwise be over-the-phone card payments. A text-based transaction can not only be used to make many of those payments, but it can do so more securely. Think of it as something like two-factor authentication. Not only are you getting the card’s security features, but you’re also getting it via a phone number and device that have a record of belonging to a specific individual for an extended period of time. This creates less room for fraud than most card-not-present transactions. It also leaves a record of the transaction in a place where it can be easily seen and recovered.
“We’ve signed up a few private airports, so now pilots don’t have to get out of the plane to pay for gas. They can just pay from their phones,” says Talley. Talley sees government and municipalities as big growth sectors, particularly where the court system is concerned. While getting a traffic citation by text may not be a thrilling prospect for most people, Talley anticipates savings from reduced paperwork and fewer unpaid tickets.
There are plenty of other businesses that may find a use for text transactions in our new paradigm.
âWith curbside pick-up, pharmaceuticals, online schooling, everything moving toward a model that’s compatible with our platform, it has really accelerated our growth,” explains Talley. “We’re today, a company that’s cashflow positive and high-growth. We’re more or less a platform now rather than just a standalone payment gateway.â
The post Everyware Uses Text-Based Billing To Help More Businesses Profit From Contactless Payment During COVID appeared first on Merchant Maverick.
Signing up to sell online through Square is fast, free, and easy. But is it a move you should consider making?
Square has been a game-changing player in the mobile payments arena since it was launched by Jim McKelvey and Jack Dorsey in 2009. Today, the Square application has been download more than 33 million times, making the company a POS (point of sale) giant. Since 2019, Square has been using software from online website builder Weebly to offer users an easy-to-use, all-in-one eCommerce solution called Square Online.
Whether you’re new to online sales or looking to jump from another eCommerce platform, we’ll show you how to get started with Square Online and how to make the most of your store.
What You’ll Need To Start Your Square Store Online
The one thing you won’t need when you set up a store is a credit card or any other payment method. That’s because it’s a free service, at least for starters. You can add on extras later, if you decide they’re worth paying for. To get started with Square Online, all you need is the following:
Your Business Name
Tax ID Number: You can enter this later, if you don’t have it ready
Estimated Annual Revenue: Choose from a range, if you know it, or skip this step.
How To Start An Online Store Through Square
The first thing to know about setting up an online store with Square is that it’s easy to do, even if you don’t know much about eCommerce or setting up websites. Read on to find our step-by-step instructions on how to start an online store through Square.
Sign up for Square eCommerce
When you’re ready to start, head to the Square Online signup page and press the blue button that reads Start a free online store.
You’ll be prompted to enter your name and email address, and to create a password. You’ll also be asked to check a box noting that you agree to Square’s terms, privacy policies, and e-sign consent. Be sure to click the links so you can read what you’re agreeing to. Once you enter that information, you’ll be asked to enter your business name, your tax ID number, and your estimated annual sales. All you really need to enter at this point is a business name, however; the other two items are either optional or can be entered later through your Square Dashboard.
Enter Business Information
The next page you arrive at will ask you to describe your business. The choices given are limited:
Clothing & Accessories
Specialty Shop: Retail
Specialty Shop: Food & Drink
Art, Photo, & Film
Outdoor Markets: Food & Drink
Jewelry & Watches
Hair or Beauty Salon, or Barbershop
If your business doesn’t fall into those categories, don’t worry. At the bottom of the page is a button that says I Don’t See My Business Type. When you hit that button, you will go to a new page that offers more choices, including narrow categories like Beauty and Personal Care as well as catch-alls like Retail. Select the category that most closely meets your business type, and then choose a subcategory to narrow it down further.
For example, under Home and Repair, you can choose from a wide variety of businesses, from automotive services to watch and jewelry repair.
Screenshot of Square webpage, captured 8/25/2020
Explore Products & Features
Before you can go further, Square will ask you to enter a physical address for your business, to verify your identity. Check the box if this is also your home address. After you do that, you’ll be taken to your Square Online Dashboard, where there’s a setup guide you can use to help you explore. If it doesn’t pop up automatically, look for the Tour your Dashboard option under the My Business tab at the top right. Take a look at the admin panel on the left side of your screen. This is where you’ll list products, take orders, and manage inventory and payments.
Take your time while exploring, but don’t worry if you can’t take everything in at once. You can always revisit areas where you need to spend more time.
Compared to other eCommerce platforms, the Square Online setup process definitely is more focused on payment, possibly because of Square’s origins in POS. If you want to skip the financial information for now and move on to setting up your store, you can always come back to it later.
On the other hand, if you’re ready to activate the Setup Guide, just click the green button at the top of the page to move through the steps needed to get your finances up and running. This guide covers three key areas:
Activate your account to take payments. You can verify your identity, link your bank account so you can transfer funds, and take your first payment with Square.
Set up your account.Â You’ll be able to customize the way receipts look and what they say, set up taxes for individual items or at checkout, add a business location or merge multiple locations, and explore Square’s software tools. One of those tools is the Dashboard app, which lets you manage our business through a mobile device.
Get started with Square Point of Sale.Â You can choose to order hardware and devices to take payments in person, or download an app for Android or iOS devices.
Set Up Your Store
Once you have the business end straight, it’s time for the fun part: setting up your store! From the Dashboard, click the Online button, and you’ll be able to choose from three general page types:
Single Ordering Page
Full Website Plus Ordering Page
Screenshot of Square webpage, captured 8/26/2020
If you’re not sure which page type you should choose, there’s a Help button that takes you through a list of questions about your business and makes a suggestion. Next, you’ll be asked how you plan to fulfill orders: by shipping, by customer pickup, or by delivery. You can choose more than one, or you can skip for now if you’re not sure.
Next, you can access several Setup Guides that will help you design your website, add products, and connect a domain. When you choose website design, you get your first look at the page Square Online suggests for you. You may or may not like what you see, but don’t worry — it’s meant to be customized. And although your choices are limited, compared to other eCommerce platforms, it’s very easy to change the look of your Square Online webpage using the Page Sections choices on the left side of your screen.
Screenshot of Square webpage, captured 8/26/2020
For example, if you click the Header edit button, you can change the layout, logo, navigation options, action button, cart and search icon, and the overall section style. You will still have the same general layout, but you should put your personal touch and your own business message on it. It’s easy to use, though not as flexible as the drag-and-drop editing available on other website builders. Take your time filling in all the available fields, as this will be your main point of contact with potential customers.
Add Items For Sale
Once you have tinkered with the look of your webpage and improved its functionality to meet your needs, it’s time to add products to sell. Near the top of the dashboard, you’ll see a blue button that says Add. Click on that to access a dropdown menu that includes Item, and you can start to build your store’s inventory.
Screenshot of Square webpage, captured 8/26/2020
You can add a physical item, prepared food or drink, donation, event, or membership. Just pick the right item type, then add an item title and its price. You should include a description of your item, including materials, origin, special details, size, and specifications. Add images and check the right box to indicate how you’ll fulfill orders, including shipping, in-store pickup, or local delivery. That’s all it takes! Repeat as necessary until your store is ready to take live.
Take Your Store Online
You should see a blue button near the top right of your screen that says Publish. When you push that, your site will be live and ready for shoppers to visit. It’s probably a good idea to Preview your site first, though. There’s a button for that just to the left of the Publish button.
Square will assign you an automatic domain name that probably will read Your-Store-Name.square.site. Fortunately, you’re given an option immediately to improve on that no-frills URL. You can link to a domain you already own or, if you want to upgrade to a paid plan, you can build your brand with a professional web address. It’s worth noting that all Square Online plans, including the free one, include a shopping cart, inventory management, tax calculator, coupon codes, and gift cards, and allow you to accept payments through Square. If you’re interested in adding a paid plan, you’ll add features to that list.
Tips For Selling With Square
That’s all it takes to build a basic website for eCommerce using a Square Online store. Of course, if you want to make the most of your site, you have a few more items on your to-do list.
Look Into Paid Plans
There’s absolutely nothing wrong â and many things right! â with using the free option for your Square Online store. However, once you’ve gotten to know the site and perhaps solidified your eCommerce goals, there’s nothing wrong, either, with taking a look at what paying for a plan can get you. Square Online paid plans run from $12 to $72 per month when billed annually.
Screenshot of Square page, captured 8/26/2020
What do you gain for that cash outlay? The first bump-up in service means you can publish to a custom domain, use custom fonts on your page, and ditch the Square branding and ads on your store. For $26, you add the ability to accept PayPal payments, integrate shipping apps, and email to recover abandoned shopping carts. The top-tier plan lowers your transaction fees, delivers shipping rate discounts, and gives you a tool to calculate shipping rates more accurately.
The free plan gives you more than what you need to set up a basic store. As your sales and your goals increase, you may want to upgrade.
Upgrade Your Product Photos
When customers shop online, they can’t actually see or touch the items you have for sale. All they have to rely on as they make buying decisions is an image on their screen. So it’s important to have high-quality images that show off your products in the best light. Square Online offers an interesting feature called Photo Studio. Find it through your admin, and you’ll have a chance to order professional product photos at a low price. At just $9.95 for three multi-angle, high-resolution photos optimized for eCommerce, or $29.95 for an interactive 360-degree image, it could be an investment that pays you back with increased sales.
Connect With Customers
Square Marketing helps you send out a one-time or automated marketing email campaign. You can send out a discount code to first-time buyers who left without placing an order, for example, or make a special offer to previous buyers who haven’t visited in a while. You can also ask for customers’ birthdays and then send them a special offer on their special day. If you’re active on Facebook, or if you’d like to build your presence there, you can send customers a link and ask them to leave feedback on your Facebook page. You can customize Square’s campaign templates with your branding elements or product photos to help you meet your marketing goals.
Play Around With Pop-Ups
From the Marketing tab on the admin, you can build a pop-up ad that grabs customers’ attention. There are templates you can customize for collecting email addresses, offering coupons, making announcements, or verifying shoppers’ age, if you’re selling age-restricted products. It’s an easy process, with help if you need it. Don’t overdo the popups, as customers often find them annoying. However, since they’re easy and free to add, it’s worth experimenting with them to see if you can use popups to increase sales or meet marketing goals.
Confirm Payment Options
Your Square Online store comes equipped to handle Square transactions. You don’t need to add a third-party payment gateway. You’re even set up to accept Square gift cards. If you look under the Checkout tab on your admin, you’ll see two other options: Accept Apple Pay and Accept Google Pay. You can decide whether or not you want to add either or both of those options. Don’t overlook the fact that you’ll be charged fees of 2.9% plus $0.30 per transaction. If you want to accept PayPal, you’ll need to upgrade to the Performance plan, at $26 per month. Again, it’s fine to stick with the free plan for now and revisit your options when sales start coming in.
Getting Your Square Online Store Up & Running
Square Online offers an all-in-one solution that allows small businesses to jump into eCommerce with no cash upfront and very little ongoing financial investment. Especially if you’re already using Square to process payments, a Square Online store will help you to quickly bring your products to the wide world of online selling. Great things await you there, so get started!
The post How To Create An Online Store Through Square appeared first on Merchant Maverick.
More than 2.5 million people are making money selling handmade items and designs, vintage items, and crafting tools and material on Etsy. Are you ready to join them and bring your products onto this thriving online marketplace?
While there are other online marketplaces catering to vendors of handmade goods, Etsy remains a top platform â and for good reason. It’s easy to sign up for Etsy, and Etsy provides a supportive community of artists and artisans that has drawn in more than 45 million active buyers since 2012. This article will share step-by-step instructions for setting up an Etsy shop and give you some tips you can use to start selling.
If you’re ready to jump into eCommerce via Etsy, read on!
How Much Does It Cost To Sell On Etsy?
While it’s free to join Etsy, everyone who sells there incurs some costs. Each product listing will cost you $0.20, and when you sell an item Etsy takes a 5% transaction fee on the item’s cost as well as on shipping costs. If you use Etsy Payments, you can expect to pay transaction fees of 3% plus $0.25 when items sell. (If you use a different payment gateway, you’ll owe transaction fees to them.)
If you want to upgrade from the free Standard Plan, you can move to the Plus Plan for $10 per month. You’ll gain some advanced features for that price, and some credits and discounts you may find appealing. Etsy fees sometimes change or increase, so you’ll want to stay on top of the latest information about Etsy pricing.
What You’ll Need To Start Your Etsy Shop
It’s easy to get your Etsy store up and running, even if you don’t have much experience with eCommerce or coding. Before you log on to the site, though, you’ll want to gather some information, including the following:
Your bank routing and account numbers
Credit card to leave on file for fees
You won’t need to enter all this information right away, so hold onto it while you get ready to launch. Follow the steps listed in the next section, below.
How To Start An Etsy Shop
Once you’ve decided to set up an online store through Etsy, you’ll find it’s an easy process. The first thing you need to do is sign in to your Etsy account. If you don’t have an Etsy account already, create one. Then follow these steps that show you how to set up your online store through Etsy.
Sign Up To Sell On Etsy
On the Etsy page, right next to the search bar, you’ll see the words “Sell on Etsy.” Click on that link, and you’ll have taken the first step toward becoming an Etsy vendor.
Screenshot of Etsy webpage, captured 8/21/2020
That link takes you to a new page with information about Etsy. Take some time to explore the links you’ll see, and you’ll learn about:
Once you’ve made your way around the page, click on the black button at the bottom, the one that says Open your Etsy shop.
Screenshot of Etsy webpage, captured 8/21/2020
When you click that link, you’ll be taken to a new screen, where you’ll be asked to enter some basic information, including your country of operation and whether selling is a full-time or part-time gig for you.
Screenshot of Etsy webpage, captured 8/24/2020
Create Your Etsy Shop
When you press Save and continue, you’ll be asked to enter a name for your Etsy shop. That name can include only unaccented Roman letters, with no spaces. Be aware that it’s highly likely that your first choice of name will be already taken by an existing Etsy user. Fortunately, Etsy has a handy name generator that will take your first choice and generate closely related suggestions for alternative names that are available. For example, I tried to claim the store name “KatesCorner.” That not-so-original name was taken, but I could see that KatesCornerUS was available, among other names suggested. If you see one you like, type it into the name box exactly as it appears, then hit Save and continue.
Screenshot of Etsy webpage, captured 8/24/2020
Add Products To Your Etsy Shop
The next step is to add products. When you add a new listing, you’ll be allowed to upload as many as 10 images. There are even helpful suggestions for how to take and choose the best photos. You can perform basic photo editing on the site, though you probably have better editing tools on your computer already.
Screengrab of Etsy webpage, captured 8/24/2020
You’ll be prompted to enter more information about each item, including a listing title that includes keywords buyers can search for. You’ll also be asked who made the item. Be aware that Etsy allows listings for handmade items only if they were made by you or by a production partner whom you will have to identify in your About section. The only exceptions include certain vintage items that are at least 20 years old and craft supplies. Etsy members can flag listings that appear to violate listing policies, and if your listing is flagged it may be removed. Your listing fees will not be returned.
Screenshot of Etsy webpage, captured 8/24/2020
As you enter your product information, take special note of the Renewal options. The default is Automatic, meaning the listing will renew after a four-month period, if it hasn’t already sold. Your account will be charged the $0.20 listing fee each time the item renews. You can change the option to Manual, and renew expired listing yourself if they don’t sell within the four-month listing window.
You’ll also be prompted to enter Tags, the words that will show up first when users search for items like yours. You can enter your own tags to describe your item’s shape, color, style, function, and so on, or you can ask the Etsy system to make suggestions. If you’re unfamiliar with tags and other SEO terms, spend a little time reading up on them to improve your listings.
Price Your Items
Before you’re done listing items, you’ll need to assign a price to each. Etsy offers some helpful suggestions that can help you assign a fair price, including shipping and the cost of materials and labor. Once you decide on a price, enter it, and then enter how many of that item you have available. Again, note that you will be charged a new listing fee of $0.20 for each unit as it relists after a sale.
Screenshot of Etsy webpage, captured 8/24/2020
Set Your Shipping Prices & Policies
Before you publish a listing, you’ll need to think about how you’ll deliver items to buyers. You can leave it to Etsy to calculate the shipping charges, or you can decide to set fixed price shipping fees for each item. If you choose the Etsy option, your buyers will see shipping costs based on their location and the information you enter for each item including product weight and dimensions when packed for shipping. You can set a custom shipping profile for each item you’re listing, once you decide:
Where and how you’ll ship
Will you offer free shipping
Will you charge handling fees
Screenshot of Etsy webpage, captured 8/24/2020
Note that you can choose to ship worldwide. Etsy will calculate international shipping fees for you and take care of the details of international shipping, including customs paperwork.
Take Care Of The Financial Details
The best part about selling on Etsy? Getting paid! But before you can do that, you’ll need to enter some financial information:
Your full name
Type of account
Routing and account number
Date of birth
Social Security number
You’ll be asked to enter credit card information, as well. Etsy costs, such as listing fees, will be charged to the card you enter. After you enter card information, you’ll be ready to open your shop.
How To Sell On Etsy Now That Your Shop Is Up
You’ve created product listings and entered your financial information.
You could sit back and wait for the sales to start rolling in. But there’s a better way. Take these steps to make sure your Etsy shop is primed for success.
Step 1: Build Your Customer Base
Step 2: Manage Your Listings
If you’ve done everything right, the items you’ve listed will fly off your shelves. If you haven’t done everything right, don’t worry! Any kind of marketing or sales involves trial and tweaking. If you’re not seeing the sales you like, revisit the language you used in the listings. Research competitors on Etsy and elsewhere. How do they describe their products, and how can you use what you see on their pages to improve your own? Look at other elements, too, like price and delivery time. If your numbers are noticeably higher, you may need to lower your price and speed up your production in order to become competitive.
Step 3: Build Your Profile
While Etsy walks you through the process of listing items and posting them for sale, one thing is left out of the process: introducing yourself and your store to customers. Fortunately, it’s easy to do that once you’re up and selling. From the admin panel, under the heading Sales Channels, click on the edit button to the right. From there you can add a title for your shop, put in your location, add a profile photo for yourself and/or your shop, and add a banner photo. You can upload one video and up to five photos, giving you a chance to introduce yourself to shoppers and show them how you create your unique items. You can also list a tagline or slogan. Don’t forget to link to your website and social media pages too.
Step 4: Analyze The Data
From the Etsy home page, you should be able to see a Shop Manager link at the top, to the right of the search bar. Click on that to go to your shop’s admin. This is where you can manage all aspects of your shop, from listings to customers, and more. In the admin panel, there’s a link for Stats, and if you click on that you’ll see a lot of very useful information about who is finding your page and how. You’ll be able to see overall sales performance as well as how individual listings are performing. You can use this information to target your marketing efforts and to tweak your listings to attract more views and more sales.
Step 5: Activate Other Channels
Etsy isn’t the only channel you can use to funnel shoppers into your store. Think about connecting all your social media pages, too. From the admin panel, click on Marketing, then choose Social Media. You’ll be guided through the steps of creating a post to boost one of your listings, and the Etsy system will generate a link to your listing that makes it easy for buyers to find you. It’s easy to link your Facebook, Pinterest, Twitter, and Instagram pages.
Step 6: Stay On Top Of Service Issues
Once the orders start rolling in, it’s finally time to celebrate and relax.
Or is it?
As customers place orders, you’ll need to stay on top of any service issues that arise. Use your admin panel to track orders, including any that are canceled or returned. Remember, while you will not be allowed to contact customers outside of the Etsy sales process, you can communicate with them and do your best to ensure a successful sale that leaves them satisfied â and likely to recommend you or return to shop again.
Step 7: Keep An Eye On The Competition
Whatever you’re listing on Etsy, it’s highly likely that you’re not the only one offering it for sale. So pay attention to what your Etsy competitors are doing. Etsy doesn’t allow direct copying of other vendors, but you can see what they’re doing to make their products stand out. Maybe they’re offering customization options that you could consider adding to your listings, or perhaps they are charging less (or more) than you are and enjoying greater sales. Put regular “window shopping” on your Etsy to-do list, and you just might find ways to make your shop and your sales better.
Go Forth & Launch Your Etsy Empire!
It’s hard to find perfection, and Etsy won’t be the right platform for every seller. However, it’s hard to argue with a strategy that made possible nearly $4.975 million in sales last year. If you’re making a killer product that you can’t wait to share with the world, do your research, and then don’t hesitate to jump in and start selling on Etsy.
The post How To Set Up An Etsy Shop & Start Selling appeared first on Merchant Maverick.
To say that WordPress looms large over the modern-day internet would be an understatement.
Statistics compiled by w3techs.com show that 37.7% of all websites are powered by WordPress. If this includes you and your business — or if you’re looking to build a small business website using WordPress — there are a number of shopping cart integration choices. However, one choice stands out as the most popular and, arguably, the best: WooCommerce.
WooCommerce’s open-source shopping cart has been downloaded over 84 million times since its initial release in 2011.
Let’s explore how this free eCommerce plugin works and examine just what makes it such a popular service among online merchants.
What Is WooCommerce?
WooCommerce is a free, open-source eCommerce plugin that works exclusively with WordPress sites. However, while the software is free to download, running a WooCommerce-powered online store is not free — you will still have to pay for hosting and for the add-ons and extensions needed to make your store functional.
After you download WooCommerce, you can connect it to your WordPress site like you would with any other WordPress plugin. Just click “Add New” on the plugins page, search for WooCommerce, then click “Install” and “Activate.”
With WooCommerce, you are given a set of basic tools for free. You can later add extensions to fill in any feature gaps. That’s what makes WooCommerce such a scalable platform — if you invest in plugins to get the more advanced features, you can go from selling a few products to selling thousands of products without having to switch eCommerce platforms in the process.
What Is WooCommerce Shipping?
WooCommere Shipping is a shipping tool that you can download for free from WooCommerce’s website. Once installed, it integrates directly into your WooCommerce dashboard. The shipping tool allows you to set up and print shipping labels, manage packages, review your label reports, and more.
With WooCommerce Shipping, you can display live shipping rates from FedEx, UPS, USPS, and other carriers in your store.
What Can You Sell On WooCommerce?
What can you sell with a WooCommerce online store? Just about everything! Let’s go through the types of products WooCommerce allows you to sell:
Physical Products: Sell clothing, trinkets, artwork, gadgets — whatever you like. You can sell physical products in multiple variants. For example, a shirt can be sold in multiple colors and sizes, and you can set different weights and prices for each product variant.
Digital Products: WooCommerce lets you sell digital downloads of all kinds. From MP3s to event tickets, if the product is digital, you can sell it through WooCommerce.
Subscriptions: With the WooCommerce Subscriptions add-on, you can accept recurring payments for subscription products, whether they be digital or physical. You can charge renewal payments on a weekly, monthly, or annual basis.
Of course, just as with any other eCommerce platform, there are restrictions on what you can sell with WooCommerce. WooCommerce’s terms and conditions forbid you from using the service “in furtherance of illegal activities” such as copyright infringement. Likewise, WooCommerce Payments has a list of services and product types you cannot sell, such as drug paraphernalia, firearms, and adult content. While you can always use a payment gateway other than WooCommerce Payments, other gateways are likely to have similar policies.
How Does WooCommerce Work?
We’ve established that WooCommerce is a WordPress plugin. This means that in order to install WooCommerce, you’ll need to buy WordPress hosting and install WordPress first. Once you’ve done this, you can install the free WooCommerce plugin. Once you’ve done this, you’ll have the tools necessary to build a basic eCommerce site — all for free.
The following is a partial list of what you’ll get for free:
Mobile-Friendly Design: Because WooCommerce-powered online stores are designed to work well on mobile devices — on your end and on the customer’s end — your customers can shop on the go, just as you can manage their orders on the go.
Geo-Location Support:Â Geo-location detects your customersâ addresses to streamline shipping and tax calculations.
Organize Your Products: WooCommerce lets you group your products by category, add variations to each product, and sell affiliate products.
Inventory Management: WooCommerce’s free package includes built-in inventory management. Track your stock level, hold the stock when an order gets canceled, and hide out-of-stock items from your storefront.
Shipping Options: You can offer a shipping calculator on the shopping cart page, insuring there are no surprises at checkout. Let customers choose between pickup, local delivery, and shipping.
Search Engine Optimization:Â Benefit from WordPressâs built-in SEO best practices.
Checkout Options:Â Allow your customers to create an account on your site or check out as guests. It’s always a good idea to give your customers both options.
However, to get the functionality you’ll need to run a profitable online store, you’ll likely need to explore the many feature extensions available for WooCommerce. Many of these require a paid subscription, though you can find some decent free ones as well. You may also want to explore the many custom themes available, both free and paid.
The Benefits Of WooCommerce
WooCommerce is a supremely adaptable and scalable eCommerce platform. This is the core of WooCommerce’s appeal and goes a long way to explain the platform’s widespread popularity. You can start out with a basic free online store, and once your store finds its sea legs and/or you need a wider range of features to expand your business, the WooCommerce extension ecosystem stands ready to take your store to the next level.
Another point in WooCommerce’s favor is the fact that it is open-source. If you and/or your team has web development experience, you can edit the code to customize your store with a great degree of precision.
Finally, WooCommerce’s popularity is, in itself, an asset, as it means the WooCommerce community stands ready to help you with solutions to technical issues. Likewise, the community is continuously developing new features and add-ons to extend the functionality reach of the product.
Free to download and use
Lots of extensions and themes available, both in-house and third-party
Software is open-source, making it endlessly customizable
Scalable to accommodate your online store’s growth
Huge WooCommerce community stands ready to help you
The Drawbacks Of WooCommerce
While WooCommerce is designed to be usable even if you’re not a tech whiz, it’s not as easy to use as some competitors and can be challenging to learn. Expect to face some degree of difficulty as you tackle the learning curve. Thankfully, WordPress has a collection of tutorial videos available to walk you through setting up your store.
Another thing to keep in mind is that WooCommerce’s active customer support is quite limited. You can submit a web ticket to WooCommerce, though it may take a full day to get an answer, and you may need to disable your third-party extensions before the company can help you. Thankfully, you can always turn to the extensive WooCommerce community for assistance.
Lastly, though the core product is free, you may end up spending more than you anticipated on feature extensions, particularly if you purchase many of them as monthly subscriptions (some are priced as one-time purchases).
Steep learning curve
Limited customer support
Paid add-ons are often necessary
Who Should Use WooCommerce?
With WooCommerce being as scalable as it is, the product can easily meet the eCommerce needs of startups and mature businesses alike. Just make sure that you use a web host that can keep up with your bandwidth usage as you grow.
As for the type of business most suited for WooCommerce, the wide variety of extensions, themes, and payment processors available mean that just about any type of merchant can build a great WooCommerce-powered online store. Of course, being a WordPress add-on, it helps if you and/or your team has experience with WordPress. You’ll also be able to more easily extend your store’s functionality if your team has some web development expertise.
If you find WordPress intimidating, or if you just want a simpler eCommerce solution with an easier learning curve, an all-in-one eCommerce solution like Shopify may be more to your tastes. Shopify’s powerful SaaS platform does most of the heavy lifting for you, so those looking for a more straightforward selling platform may prefer it to WooCommerce. Of course, the flip side is WooCommerce’s open-source software gives you more flexibility and control than you’ll ever have with Shopify. So, which platform is best for your business? It all depends on your business priorities and needs.
Check out our WooCommerce VS Shopify article for a deeper look at this comparison.
How To Get Started With WooCommerce
By now, you know that you’ll need WordPress in order to use WooCommerce. WordPress comes in both a self-hosted version available from WordPress.org and a hosted freemium version available from WordPress.com (our WordPress review examines the latter version).
If you’re going to use the self-hosted version of WordPress, keep in mind that when choosing a web host for your online store, you’ll want to choose a host that specializes in WordPress hosting. This way, you’ll have hosting that is optimized for the needs of WordPress along with better technical support. Once you have a WordPress-friendly web host and you’ve bought a domain name, download and install WordPress (it’s free!).
If you’re going to use the hosted WordPress.com service, you won’t need to find a separate host, as hosting is included. You can then buy a domain from WordPress.com or connect any existing domain you already have.
Once you have WordPress, get yourself a WooCommerce-optimized WordPress theme (both free and premium themes are available) and activate WooCommerce. See WooCommerce’s installation guide for detailed instructions as to how to do this.
Once you have WooCommerce activated, you’ll have the option of adding functionality beyond what comes with the free WooCommerce package. From payment gateways to shipping to subscriptions to booking to marketing, you’ll have a seemingly endless array of options to make your online store exactly what you want it to be. Just keep in mind that while some of these feature extensions are free, many require a paid subscription, while some third-party add-ons are available for a one-time payment. Check out our article on the top WooCommerce add-ons to see some of the best extension options available.
The Bottom Line
If you want an online store that is truly yours — one that is entirely under your control and which you can customize to the nth degree — a WooCommerce-powered website is hard to beat. If your business is prepared to take on the challenge, WooCommerce’s offerings will empower you to create the eCommerce empire of your dreams.
To learn more about WooCommerce, head on over to our complete WooCommerce review. If, on the other hand, you don’t see WooCommerce working out for you, have a look at the leading alternatives to WooCommerce.
The post What Is WooCommerce & How Does It Work? appeared first on Merchant Maverick.
Are you passionate about education? Do you love working with students? Do you have a specialized skill that you want to pass on? If so, you might be a good candidate for establishing your own tutoring business.
Becoming a tutor allows you incredible job flexibility, while also giving you an opportunity to do meaningful work in your community. When you tutor, you make an impact on students’ lives and help guide them toward educational success. And at the same time, tutoring allows you to manage your own schedule and set your own rates. What’s more, when you set up an online tutor business, you can even work from home!
Have you been considering starting a tutoring business, but you aren’t sure where to start? In this article, we’ll walk you through a step-by-step process for planning your tutoring business. And, we’ll also give you some ideas for where you can turn for the funding you might need to get set up.
Ready? Let’s go!
Why Start An Online Tutoring Business?
Tutors start their own businesses for a number of reasons, but one of the primary reasons is the ability to be your own boss. When you operate an online tutoring business, you are able to set your own hours, determine your own hourly rates, and take on as many or as few clients as fit your schedule. The flexibility that comes with tutoring is one of its biggest advantages.
What’s more, becoming a tutor is an excellent way to support students and parents. When you step in as a tutor, you help students learn the skills they need to succeed in the classroom, and you relieve some stress on parents. For many students, a tutor can change the outcome of their educational career. So if you have a heart for students, and a desire to see them grow and succeed, tutoring could be your passion.
In addition, over the past few years, online tutoring has been increasing in popularity. According to IBIS world, the market size of online tutoring services in the US (as measured by revenue) is expected to increase by 4.1% in 2020. There is always a need for educators, especially during the school year and around standardized testing time, and when you become a tutor you help fill that need. If you want to join a growing market, now is a great time to open our own online tutoring business!
When To Sign Up With A Tutoring Service Instead Of Starting Your Own Business
There are a couple of routes you can take to begin tutoring online. You can choose to sign up with an existing online tutoring network (such as Care.com), or you can start your own independent online tutoring business. Your choice between these two options depends on your available resources, your timeline, and your intentions for your business.
In general, you should sign up with an existing tutoring network if the following applies to you:
You Have A Limited Social Network: If you don’t already have a number of potential students in mind, it might be best to join a tutoring website. These sites help connect tutors with students, which can reduce some of the demand that comes with building an entire client base from scratch.
You Need To Start Working Immediately: Finding clients and establishing a presence in the tutoring market can take significant time, energy, and money. If you want to skip over this process, signing up with a tutoring site is a great option. You’ll be able to find clients and get teaching much sooner.
You Don’t Mind Paying A Fee: Most tutoring sites charge tutors a percentage of their earnings. You should have room in the budget for this expense in order for a tutoring site to be an advantage.
You Don’t Want To Set Up The Technical Tools On Your Own: In order to successfully tutor across the internet, you need access to a variety of tools. At minimum, you need a video conferencing tool, a way to share your computer screen, and a virtual whiteboard. Many tutoring sites that specialize in online tutoring (such as Varsity Tutors) offer these tools built into their platforms.
Here are a few tutoring sites you might consider: Chegg Tutors, Care.com, VIPKid, and Varsity Tutors.
Alternatively, you should consider building your own business if:
You Already Have Potential Students: If you have a wide social network full of school-age children and college students, you may not need any help building a client base.
You Want To Keep All Your Earnings: This is a huge factor. If you resent the amount that tutoring sites charge for their services, you should build your own business. You’ll have to cover other expenses, but you get to decide how much those other expenses cost.
You Have The Time To Get Set Up: As I mentioned above, building your own business takes time. Make sure you have the time (and available income) to build your business before you begin.
Before You Start Your Tutoring Business: Essential Prereqs
As you might imagine, education is a major requirement for starting your own tutoring business. In general, most tutors need to have earned at least a high school diploma or a GED. This is especially true if you are signing up with an online tutoring site.
The level of education you have earned plays an important role in determining what content areas you can teach. Here are the grade levels and subjects you can tutor with each level of education:
High School Diploma Or GED: At this education level, you are able to tutor elementary and middle school students. You are also able to tutor high school students, although you may need to demonstrate your knowledge in other ways (using transcripts or standardized test scores to demonstrate content area knowledge).
Undergraduate Degree: With a Bachelor’s degree, you are able to tutor elementary, middle school, and high school students. You are also able to tutor college students in your area of specialization. This is especially true if you have work experience post-college that relates to your specialization.
Post-Graduate Education: You can tutor elementary, middle school, high school, and college students. Depending on your area of specialization (if you have a degree in education or in teaching English for Speakers of Other Languages), you might also consider teaching adults who are finishing their GED or who are looking for a way to develop their English fluency.
As you look into tutoring, you should also consider working towards a Tutoring Certification. These certifications require you to go through a few hours of training, pass a background check, and submit a couple of letters of recommendation. Earning a Tutoring Certification enhances your credibility, and it also demonstrates to parents that you are safe around their students. Many tutors also benefit from the training included in earning a Tutoring Certification. These certifications are available from the National Tutoring Association and the American Tutoring Association. Depending on the certification, you may have to pay for training, membership fees, a background check, and application fees. These expenses total around $200-$250 for certification, but I think this expense is worth it for the amount of credibility you gain.
Finally, in order to begin tutoring, you need to identify your area of specialization. Think about where you can add value, and consider the experience that you have under your belt. Is there a particular grade level or content area that you are skilled in?Â As you look for your specialization, consider the subject areas in which tutors are in high demand: English, Math, Science, Test Prep, and Study Skills. And remember, each of these subjects can be broken down into sub-categories like Algebra, Chemistry, reading comprehension, SAT and ACT preparation, etc. Once you have identified one or two specializations, you’re ready for the next step.
8 Steps To Starting Your Own Tutoring Business Online
Step 1: Make A Business Plan
Strong businesses start with a strong plan. A business plan is a written description of your planned business and business strategy. It’s your vision of how your business will be organized, how it will operate, and how it will be profitable. You can find lots of information online about writing a business plan. Your local chamber of commerce and government economic development agencies likely also have resources you can use.
A typical business plan includes:
Sales & Marketing Strategy
Organizations & Management Team
Once you have a basic idea of how your business will operate, it’s time to calculate your starting costs. Do you need to purchase materials or teaching aids? Will you be paying for website building software or a web host? Do you need to purchase any hardware or software, or perhaps buy business insurance?
Since your business is just getting started (and since you will probably be the only employee for a while), your business plan does not have to be incredibly in-depth. Mostly, you should use this plan as an opportunity to set goals, create your marketing strategy, and predict your business expenses.
Step 2: Perfect Your Computer Setup
Your next step is to set up your classroom. Find a place in your home to conduct your online tutoring. You should look for a location that’s away from the noise of the house and has plenty of light. Then, position yourself so that there is a clean, neutral background behind you in video calls.
You should also make sure that you have all of the technology you need to begin online tutoring. You, of course, need a computer and a strong internet connection. You should also have a webcam and a functional microphone (even if it’s just the microphone built into your laptop). In addition, we recommend purchasing a tablet or digital drawing pad and stylus that you can use with a virtual whiteboard software. These tools make it easier for you to illustrate and share concepts with your students from a distance.
Step 3: Find The Right Tutoring Software
Once you have your hardware figured out, you should select your software. You should consider purchasing the following types of software:
Video Calling Software: Find a video calling software like Zoom or Google Hangouts that allows you to schedule meetings in advance and then send meeting links to your attendees via email. You should also look for the ability to share your screen as you will likely want to use this tool to make demonstrations in your tutoring.
Virtual Whiteboard Software: Virtual whiteboard software allows you to draw, write, and diagram on a digital whiteboard. All you need to use the software is a mouse, but using a tablet or a digital drawing pad and stylus (like Wacom Intuos) gives you even better control. A few virtual whiteboards you should check out include Ziteboard, Â IDroo, and Scribblar.
Document Sharing Software: Consider using the free tools that Google provides to your advantage. Google Docs is an excellent tool for sharing documents, editing simultaneously, and making comments on specific pieces of a document. Google Classroom further expands these tools. Using Google Classroom, you can create a central hub of information for your students. Here, you can add resources, assignments, and rubrics. You can use quiz features to help students assess their learning. Google Classroom stores students’ work indefinitely, making it a great way to keep track of student progress over time.
Step 4: Set Your Rates
As your own boss, you get to decide on the rate you charge for your services. Rates vary dramatically from tutor to tutor, and they typically depend upon your education level, the subject area that you teach, and your students’ specific learning needs.
Typically, tutoring rates fall somewhere between $20–$80 an hour.
Tutors who charge the highest rates are those who teach in-demand subjects that require significant experience and familiarity, like SAT prep, and high school and college-level math and science. Tutors who have training and experience working with students with special education needs also typically charge higher rates.
Unfortunately, hourly rates tend to drop when you tutor online instead of in-person. This is primarily because tutors are not limited by location, which makes the online tutoring market much larger with more available tutors. On the other hand, when you tutor online, you eliminate any expenses related to travel and you don’t have to rent out a space for tutoring.
I’ve seen information that suggests that the average rate for online tutoring is $20–$30 an hour, although you can certainly charge more based on your education level and experience.
As you think through your pricing rates, you should look into the rates that other tutors in your content area charge. Then, you should take into account your anticipated business expenses (pricing for any required software, self-employment taxes, and the time you spend preparing for each tutoring session). Using this information, you can set your own pricing range.
Step 5: Register Your Business
In many cases, registering your business is technically optional.
Tutors who decide to operate as a sole proprietorship or partnership do not need to do anything to register their business. Essentially, the business is an extension of its owner. Sole proprietorships are easy to set up, and typically in a sole proprietorship, taxes are simpler than they are with other forms of incorporation. In a sole proprietorship, when you go to file taxes, you file your business taxes and personal taxes together. You will have to pay self-employment taxes on your earnings. In addition, sole proprietorships do not come with the liability protection that is part of many other types of business structures. You are personally liable for any debts your business takes on.
Other forms of incorporation require more time to set up and come with their own advantages and disadvantages.Â Here are the most popular ways to incorporate:
Limited Liability Corporations (LLCs): Aside from setting up a sole proprietorship, many tutors find that establishing an LLC is their next best option. LLCs offer limited liability protection for their owners, and they are not as complex as a corporation. Each state has its own rules for what it takes to start an LLC, and you don’t necessarily have to register your LLC in the state where you’re doing business (although you generally should). Like with a sole proprietorship, LLC owners report their business earnings and losses on their personal taxes.
C-Corp:Â In a C-corp, shareholders are considered the owners of the company, and they receive limited liability protection. However, at the same time, business decisions are made by corporate officers who may or may not be shareholders. In a C-corp, taxed are filed separately from personal taxes, and shareholders pay income tax on dividends. In order to form a C-corp, you have to file articles of incorporation with your state.
S-Corp:Â S-corps are very similar to C-corps, but with a few additional restrictions: You have to have fewer than 100 shareholders, and they have to all be U.S. citizens or residents. Profits and losses are reported on personal taxes. Finally, in addition to filing your articles of incorporation, you also have to file IRS Form 2553.
Even if you decide to operate your tutoring business as a sole proprietorship, we suggest setting up a plan for separating your business finances from your personal finances. The easiest way to keep your finances separate is to create separate business checking and savings accounts. These additional accounts make it easier to track your profits and losses, and they can save you a ton of headaches when it’s time to pay your taxes.
You should also consider filing a DBA (Doing Business As), Trademark, or Entity Name for your business. Filing a business name allows you to operate your business under its own name, instead of your legal name (Math Works as opposed to Sandy Davis, for example).
Step 6: Establish A Web Presence
As an online tutor, it’s crucial that you have a strong online presence. There are a few ways you can go about building your web presence:
Create A Website: It never hurts to have a sleek, attractive website. Developing your own website adds credibility to your business and can help build hype for your services.Â Luckily there are user-friendly and cost-effective website builder tools that you can use to set up a site in a matter of days. Some of these tools (such as Wix) even provide appointment scheduling tools that you can use to allow your clients to book–and pay for–their tutoring sessions online.
Set Up Social Media: Set up business accounts on the social media sites that your clients use most frequently (Facebook and Instagram are good places to start). Make sure you include important information like your subject areas and a link to your website. You should also encourage reviews on your Facebook page, so parents and students can leave testimonials, improving your credibility.
Create A Yelp Page: If your business doesn’t already have a Yelp page, now is a good time to set one up. Adding a page on Yelp encourages more clients to leave reviews, and it can help direct new potential clients to your services.
Check out these top website builders:
Hosted or Licensed
Templates & Themes
Compatible Credit Card Processors
$14 – $179/month
Go to Site
Free – $29.90/month
Go to Site
Free – $25/month
Go to Site
Go to Site
Step 7: Choose A Payment Processing Solution
In order to accept payments online, you’ll have to integrate with a payment processing solution.
Payment solutions fall into two categories: Payments Service Providers (PSPs) and merchant accounts. PSPs are typically easier and faster to set up, but they are also known for having account stability issues. Many PSPs accept merchants almost immediately, and then upon review decide that certain merchants are too high-risk to use their platform and freeze their accounts. Merchant accounts, on the other hand, take longer to set up because there is an initial review process. This makes merchant accounts more stable (you are less likely to have your service revoked). Merchant accounts also allow you to negotiate the rates that you pay for payment processing. In order to process online payments with a merchant account, you need to find a payment gateway, which is an integration that allows you to connect your website and your merchant account.
Here are a few payment processing solutions that might work for you:
Payment Service Providers: PayPal is one of the most widely accepted PSPs out there, and it is a familiar payment option for your clients. Another good PSP is Square. In fact, Square includes appointment scheduling features, so your clients can schedule sessions and pay for services at the same time.
Built-In Payment Processors: Some website builders come with their own in-house payment solutions. One of these options is Wix Payments for Wix users. Built-in payment solutions are great options for quickly setting up a payment method.
Merchant Accounts: Although merchant accounts often take longer to set up, for some merchants the initial investment is well worth it. We particularly like Fattmerchant and Payment Depot.
Step 8: Market Your Business
Once you have your website and payment method set up, it’s time to start marketing your tutoring business! Your marketing strategy should take into account your current network and your intended audience. Here are a few methods you can try:
Email Marketing: If you already have a large personal network, make sure to notify them of your new business. Use email marketing software like Constant Contact or Mailchimp to reach out to family and friends with information about your tutoring services.
Social Media Marketing: Use your personal and business social media accounts to announce your business. One great way of gaining new clients with social media is to put out free content that anyone can view or download. Upload or link your favorite learning resources, and create a few videos to show how you prepare for a tutoring session. Sharing these resources and videos demonstrates your personality and teaching style. It can help build your reputation and make you appear more approachable.
Post In-Person Flyers: Place fliers with tear-off tags on bulletin boards in libraries, churches, schools, gyms, and daycare centers. Think about where parents of school-age children might be, and get your fliers out there! Be sure to always check with management before posting your fliers, of course.
Offer Free Consultations: Consider giving new potential clients an opportunity to meet with you for a free initial consultation. It’s a good idea to include parents in this initial conversation.
Share Customer Testimonials: Ask happy clients for a positive customer review, and then use that testimonial to your advantage. Word-of-mouth goes a long way. Make use of it in any way you can.
How To Fund Your New Online Tutoring Business
New businesses often find themselves in need of capital. If you’re facing startup costs and wondering how to address them, here are a few options:
If you have some liquid assets saved up, now might be a good time to use them. By using the money you’ve already saved, you eliminate the risk associated with debt and you ensure you won’t be losing additional money on interest. That said, you take a risk by using your personal money to finance your business. If your business fails, you lose that money.
One of the easier–and riskier–ways to fund your startup expenses is with personal or business credit cards. Credit cards allow you to access credit quickly and apply it to many different types of purchases.
You should keep in mind, however, that credit cards charge high-interest rates on any balances you carry from month to month. This makes credit cards a good option for purchases you can pay off quickly, and a potential problem for ones that you can’t.
Note: Avoid taking out cash advances on your cards unless absolutely necessary. They come at a very high cost.
Although traditional business loans are not an option for some new businesses, you can often use a personal loan to cover some of your startup expenses. These loans can be easier to get when you’re first starting out.
The downside of a personal loan is that you don’t get the liability protection you’d have if you applied as a business. You may also be more limited in terms of the amount of money you can take out. Still, if you need a little money to get started, it’s not a bad option.
Grants might be the closest thing to “free money” we have in the real world. Grants are often highly competitive, and they require businesses to complete a fairly involved application process. As you consider your options, you should factor in the amount of time you spend applying for a grant. And, you should take into account the likelihood that you will not be selected for that grant.
If you need some advice on where to look for grants, check out our feature on the topic.
ROBS stands for Rollovers as Business Startups, and they areÂ extremely niche products for entrepreneurs with retirement accounts like 401(k)s.
For a fee, a ROBS provider allows you to use money from your retirement account to pay for startup costs without incurring any tax penalties for accessing retirement funds early. Like with personal savings, with ROBS, you are risking your own money. ROBS is probably overkill for most new tutoring businesses, but it is a good option to keep in mind.
Go Out & Start Your Online Tutoring Business
Does tutoring from the comfort of your own home sound like your dream job? Tutoring can be one of the most rewarding and profitable small businesses to start. And with minimal start-up costs and very few steps to getting started, you can get begin tutoring in very little time!
That said, as with all new business ventures, you should approach your online tutoring business with a strategic mindset. Take your time, decide on a niche, gather all the tools you need, and work towards building a positive reputation in your social network. Now is a great time to enter the tutoring market. So get out there, and get teaching!
Your complete guide to business structures
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Check out this guide for starting a consulting business
Learn how to start an Amazon business
Check out this guide to starting a pet sitting business
The post How To Start An Online Tutoring Business: Prerequisites & 8 Steps To Success appeared first on Merchant Maverick.
If you’ve been searching for a payment gateway, you’ve probably come across these two names: Stripe and Authorize.Net. Or heck, maybe you were just searching for a way to take credit card payments online, and these appeared near the top of your search results.
Both companies offer a powerful suite of payment services along with robust support for developers who want to integrate their services into their websites. Both companies provide excellent support for foreign eCommerce transactions.
While Stripe and Authorize.Net aren’t exactly the same type of company — Authorize.Net is not a “full-stack” payment service — it is possible to get most of the same services through either company.
Stripe VS Authorize.Net: Quick Comparison
Evaluating Stripe vs. Authorize.Net comes down to the sheer volume of features vs. flexibility.
Both Stripe and Authorize.Net provide payment gateway access, but Stripe does so as merely one part of a gigantic payment services package. Authorize.Net gives you the option of pairing its gateway service with any merchant account, potentially making it a better choice for businesses with established, stable merchant accounts. On the other hand, Stripe — which has no monthly fee — will probably be the more efficient option for newer businesses.
I struggled with this one for a bit despite, at a glance, it being pretty obvious that Stripe is just a far more massive service than Authorize.Net. That begs the question of whether it’s a fair comparison. Stripe is designed to be a one-stop-shop for your payment processing needs. Authorize.Net focuses on a much smaller part of the payment processing environment. If it offered everything that Stripe does, it wouldn’t be Authorize.Net anymore. In fact, Stripe can be overkill for a lot of businesses, and if all you’re looking for is a payment gateway, it just doesn’t make sense to choose Stripe over Authorize.Net.
Authorize.Net has some niches where it excels, particularly where security is concerned, but let’s give credit where credit is due: Stripe can just plain do a lot more than Authorize.Net. From its more comprehensive support for global eCommerce to its more flexible development environment to its plethora of add-on features, it lives up to its “full-stack” claims.
Stripe is a powerful brand for international eCommerce. Stripe is available to businesses in 34 countries. The company’s reach, however, is significantly greater; you can accept payments from all over the world thanks to Stripe’s support of over 135 currencies and numerous regional payment methods.
Stripe Supported Payment Methods
Stripe breaks its support for payment methods into two categories: universal, for payment types accepted throughout the world, and local, for payment methods that are only supported in specific regions, with particular attention given to the US, European, and Chinese markets.
Stripe accepts the following universal payment types:
Amex Express Checkout
Masterpass by Mastercard
Stripe supports these payment methods in their markets:
SEPA Direct Debit
Stripe Core Features
Listing all of Stripe’s features would make this article unreadable. It’s an enormous ecosystem, with numerous optional features. Here’s a quick rundown of the main features:
Payments:Â Stripe Checkout is a prebuilt form that you can just drop into your site. But if you need something more customizable, Stripe Elements will let you design a form that suits your needs. You can build payments into your website or your mobile app.
Connect: Stripe’s Marketplace tools are some of the most robust out there, allowing you to build and manage your platform, including automated payouts to your merchants. Connect also facilitates connecting Stripe to other services (such as building native payments into eCommerce software).
Billing:Â “Billing” now encompasses all of Stripe’s subscription, invoice, and recurring billing tools. Stripe’s subscription tools have always been powerful, but with the addition of invoice capabilities and the option for metered billing, it’s safe to say that you really can’t beat what Stripe has to offer.
Additional Stripe Features
Sigma: Stripe offers an assortment of standard reporting tools in its dashboard. However, if you want advanced reports, then you’ll need Sigma. For an additional monthly fee (based on volume, see the Pricing section below for more details), you can generate custom reports based on SQL queries.
Radar:Â Stripe’s fraud monitoring tools include machine learning to identify and flag suspicious transactions. Merchants can review and override transactions they know to be legitimate or set up custom rules for fraud transactions, all with far less fuss than you’ll see with Braintree. If you’re very comfortable with fraud management, this is definitely an advantage.
Multi-Currency Displays & Conversions:Â Stripe has spent a LOT of time billing itself as the platform of choice for global businesses. It should come as no surprise then that Stripe allows merchants to display pricing in local currencies and automatically handles the currency conversion. You can connect multiple bank accounts to save money on conversion costs, too.
Account Auto-Updater:Â Keep recurring transactions from failing when customers get new cards. Stripe will automatically update card data in your vault to ensure continuity of subscriptions.
Atlas:Â Atlas allows international businesses to incorporate in the US, set up a US bank account, and get tax and legal guidance. Stripe says it has had more than a thousand startups apply in more than 120 countries, and it has added more than 100 partners to the network since the launch.
Payouts:Â ThisÂ is an automation toolset designed to help you send mass payouts to sellers, freelancers, or service providers. It’s also designed to help simplify compliance requirements with third parties and global markets.
Relay:Â Relay’s features allow merchants to link their eCommerce catalogs with your app or directly upload product information. Relay creates in-app buy buttons and forwards all the sales information to the merchants to fulfill the order.
Integrations: Stripe has more than 300 integrations with all kinds of other software and services that a business might need. The sheer number of supported integrations could be a significant advantage for some merchants. You can browse the integrations by category on Stripe’s “Works With” page.
Stripe Developer Tools
Stripe’s built a reputation on being extremely developer-friendly, and, to be fair, it’s largely earned it. Stripe’s SDK is easy to work with for novices and extremely customizable for experts. Stripe’s documentation is also second-to-none, with detailed tutorials, clone-able boilerplates, and support for mobile platforms.
Stripe supports the following server-side languages:
Authorize.Net’s business support isn’t quite as widespread as Stripe’s; it’s only available to merchants in the United States, Canada, United Kingdom, Europe, and Australia. Its currency support is also more limited. Authorize.Net supports different currencies, depending on the region in which your business is located.
US & Canada: USD, CAD
The UK & Europe: CHF, DKK, EUR, GBP, NOK, PLN, SEK, USD
Australia: AUD, NZD, USD
Authorize.Net Supported Payment Methods
Authorize.Net supports the following payments methods:
Authorize.Net Core Features
Authorize.Net’s feature set is considerably smaller than Stripe’s, but at their core, they do many of the same things.
Payment Gateway:Â If you’re working with Authorize.Net, you’re there for the payment gateway. Or even more likely, the payment services company you signed up for is using Authorize.Net as its gateway. It is, however, possible (though not necessarily advisable) to work from the other end and sign up directly with Authorize.Net, in which case the company can help set you up with a merchant account through one of its partners. Just be aware that, unlike Stripe, the merchant account isn’t in-house.
Virtual Point Of Sale, Mobile Point Of Sale & Simple Checkout: Authorize.Net offers ways to accept cards both on the web and through mobile devices. The virtual terminal also allows you to key in card information manually. Authorize.Net is integrated into a dizzying number of third-party shopping carts through Simple Checkout, which allows you to generate HTML snippets for “Buy Now” and “Donate” buttons to add to your website easily.
Billing:Â Authorize.Net allows you to process recurring subscription payments and permits you to not only customize pricing but also offer free trials and installment packages.
Authorize.Net Additional Features
Advanced Fraud Detection Suite (AFDS):Â Included for free with your account, AFDS consists of a set of thirteen filters that you can customize to your own needs to help flag and block potentially fraudulent transactions. This feature helps to prevent inventory loss due to fraud and lowers your liability for chargebacks. While Stripe’s security features are nothing to sneeze at, Authorize.Net’s have a reputation for being some of the best in the business.
eCheck.Net:Â This is an optional feature. You can addÂ echeck processingÂ to your existing merchant account or sign up for the eCheck Only Pricing Plan. Pricing is 0.75% per echeck, a much lower rate than you’ll pay for credit or debit card transactions.
Customer Information ManagerÂ (CIM):Â The CIM, one of Authorize.Net’s most powerful standard features, allows you to securely store customer information, such as billing address, shipping address, and payment method information. Because this includes your customers’ sensitive credit card information, the data is securely encrypted. As we’ve noted, however, this security comes at the expense of data portability (see Negative Reviews & Complaints).
Sync For QuickBooks: While a QuickBooks integration is fairly standard these days, it’s still nice to have and will keep your accountant happy, especially if that accountant is you.
Authorize.Net Developer Tools
Authorize.Net also has a healthy developer subculture with excellent online resources and the option to create a sandbox account in which to test out your code. It doesn’t support quite as many languages as Stripe, but where the two overlap, you’ll probably see variable preferences from developer to developer.
Authorize.Net supports the following languages:
Both Stripe and Authorize.Net offer similarly priced services, although making a direct comparison isn’t easy. For purposes of this comparison, I’m only looking at the costs of features the two companies have in common. If you want a complete look at Stripe’s pricing, check out our guide.
If you take Authorize.Net up on its merchant account partnership offer, you’re looking at identical flat-rate transaction costs for both Stripe and Authorize.Net. Beyond that, you have to dive into the secondary fees. If you process a lot of subscriptions, you may incur a processing fee with Stripe. On the other hand, Stripe’s chargeback fees are $10 less. International transactions are more expensive with Authorize.Net unless you need to do a currency conversion, in which case Stripe is more expensive.
And then there’s the gorilla in the room: You can buy Authorize.Net as a humble gateway service without any of the other bells and whistles. With Stripe, if you want to use the gateway, you’re also getting the payment processing bundled up with it.
What ultimately breaks the tie in Stripe’s favor is its lack of a monthly fee. Stripe’s fees are almost entirely usage-based, making it easier to get a sense of where you’re getting value and where you’re not. By comparison, if you’re interested in Authorize.Net, it’s often cheaper to get it bundled with another service than directly from the company.
Authorize.Net Fees & Transaction Costs
Authorize.Net breaks its services into three plans:
All-In-One (includes a merchant account with one of Authorize.Net’s partners)
Monthly Gateway Fee: $25
Per Transaction: 2.9% + $0.30
Payment Gateway Only
Monthly Gateway Fee: $25
Per Transaction: $0.10, daily batch fee $0.10
Enterprise Solutions (for companies processing over $500K/year)
Contact Authorize.Net for pricing info
International transactions cost an additional 1.5%. Chargebacks cost $25 per occurrence. Note that, should you choose the All-In-One package, you may be subject to additional fees associated with the merchant account provider you are paired with.
Stripe Payments Fees & Transaction Costs
Since Stripe has a lot of add-on features that Authorize.Net does not, we’re going to ignore those for purposes of this comparison and just compare pricing for those features that they both offer.
Card Transactions:Â 2.9% + $0.30
Subscription Fee:Â 0.4% after the first $1 million
Stripe charges $15 per chargeback incident. International transactions cost an additional 1%, with another 1% added on if currency conversion is required.
Ease Of Use
Both companies are reliant on a mix of do-it-yourself developer culture and third-party services that integrate Stripe or Authorize.Net into their product.
Starting with the first case, as we touched on above, both companies offer extensive documentation for developers who want to add payment functionality into their websites and apps through the services’ APIs. Stripe’s documentation, support, and interfaces feel just a little more extensive and modern than Authorize.Net’s, but your mileage may vary.
Some users report that Authorize.Net is a little bit faster on average when it comes to payment processing time (one to seven business days vs. two to seven business days).
On the third-party side, your ease of use will depend entirely on the method of integration you’re using, for example, a shopping cart such as WooCommerce. With most of these services, activating your payment gateway is pretty simple, just tweaking some toggles and entering security keys; the challenge with most of these is mastering the eCommerce environment more than the payment integration.
Customer Service & Support
Both Authorize.Net and Stripe offer numerous ways to resolve problems should they arise.
Phone Support: This avenue of support is available 24/7, minus major holidays.
Support Center: The online resources include a knowledgebase, articles, white papers, and video tutorials.
Ticketing System:Â You can open a support case online through the integrated ticketing system.
Social Media: You can reach out to Authorize.Net on Facebook, LinkedIn, and Twitter. You can also check out video tutorials and customer testimonials on YouTube.
Phone Support: This avenue of support is available 24/7.
Live Chat: This is also available 24/7 to customers.
Knowledgebase & Documentation: Stripe’s documentation is the gold standard. Developers will have no trouble here, whether they’re searching for a term or clicking through the sidebar. The knowledgebase is a little more sparse but serviceable.
Email: Stripe offers 24/7 email support but doesn’t give an exact time frame on how quickly someone will get back to you.
Freenode IRC Chat: Stripe’s developers seem to spend their time in the #stripe channel if you need technical assistance. Unsurprisingly, most developers seem to like this aspect of support.
While Stripe offers more methods of contact, Authorize.Net seems to have a better reputation for quick, responsive, and useful customer service. Stripe’s made efforts to improve — including offering phone support — but it still has some ground to make up.
User Reviews, Complaints & Criticisms
Both Stripe and Authorize.Net have avoided any scandals grave enough to drop their BBB ratings below an A+, though both do register a fairly typical spread of complaints. They tend to garner similar scores on various review aggregators, with a few outliers here and there rating one substantially higher than the other.
Stripe High Points
Pricing:Â While it’s not the cheapest possible option, it does offer a lot of functionality for the price.
Global Utility:Â Stripe is a truly international platform, giving businesses the ability to conduct eCommerce all over the world and in different currencies.
Freedom & Control:Â Stripe’s API allows for great flexibility for developers and makes it a good fit for various integrations.
Stripe Low Points
Account Holds & Terminations:Â Like all third-party processors, Stripe ends up doing a lot of its due diligence after the fact, which means it’s easy to run afoul of its opaque quality control processes. Most user complaints about Stripe fall into this category.
Lack Of Fraud Protection: While Stripe’s security features are strong, most of the advanced ones cost extra, leaving some users more exposed to chargebacks than they’d like.
Unresponsive Customer Service:Â While Stripe’s customer service is much improved, many customers were frustrated by Stripe’s inability to resolve or contextualize sudden account holds and terminations.
Authorize.Net High Points
Recurring Billing Support: Many users were pleased with how easy this feature was to activate and use.
Flexibility:Â Between Authorize.Net’s robust API and the ability to pair the service with any merchant account, users were generally happy with the amount of freedom it offered them.
Customer Service:Â Many positive user reviews involve good experiences with Authorize.Net’s customer service.
Authorize.Net Low Points
Billing Issues:Â Most of the complaints you’ll see about Authorize.Net revolve around that pesky monthly fee. The timing of the monthly payments seems to cause confusion for a number of customers, resulting in disputes over what interval of time they were paying for.
Non-Refundable Fees: Related to the previous issue, customers found it difficult to recover fees for which they believed they were wrongly charged. Be aware that if you sign up for an account online, you will be charged the gateway fee.
Data Portability:Â Authorize.Net has a reputation for being a difficult platform to migrate from, although some of this appears to be due to issues that have been at least partially addressed.
If you’re running your credit card through any eCommerce site, there’s a very good chance it’s passing through a Stripe or Authorize.Net gateway. The number of integrations for both services is staggering, and both can be easily plugged into most eCommerce environments with just a few lines of code. In general, you should have very little trouble getting either to play nice with the program of your choice.
Since we are splitting hairs, however, it’s worth mentioning that Stripe is just a bigger fish in the pond, possessing a higher market share and more widespread adoption. That translates to more integrations, should you need to work with something more niche and obscure. But again, both are extremely well-supported.
Which Is Best For My Payment Gateway Needs?
We’ve arrived at the moment of truth. If you’ve been following along until now, you probably already have a sense of the recommendations I’m about to make. If you’re impatient and skipped to the end, and who can blame you, here are my recommendations.
Choose Stripe Payments If…
You Need Payment Services In Addition To A Gateway:Â Stripe works best as a comprehensive, all-in-one platform offering both a payment gateway and third-party payment processing. It delivers the gateway functionality at the same per-transaction cost as Authorize.Net and without the monthly fee.
You’re Doing Business Globally:Â Authorize.Net’s support for foreign transactions is good, but it’s not anywhere near as extensive as Stripe’s. Stripe supports local payment methods in addition to the popular international brands and can handle over 135 currencies.
Choose Authorize.Net If…
You Already Have A Merchant Account You Like:Â If you’ve been taking card payments for a while and are pleased with your merchant account provider, you won’t be able to take it with you if you migrate to Stripe. On the other hand, you can simply add Authorize.Net onto your existing services.
You’re In A “High-Risk” Industry:Â Because it’s a third-party processor, Stripe isn’t keen on taking chances with industries that are flagged as high-risk. As a payment gateway, Authorize.Net has far fewer restrictions regarding the types of businesses it’s willing to partner with (just make sure your merchant account provider is also cool with your industry).
Neither Option A Good Fit For You? Try These Alternatives To Stripe & Authorize.Net
Stripe and Authorize.Net are both excellent gateway options, but they’re not the only ones. If Stripe has too much bloat and Authorize.Net feels too much like a clumsy add-on, consider one of the following options.
If you’re looking for a Stripe alternative with brand name recognition, PayPal’s a no-brainer. PayPal covers most of the same bases as Stripe. It’s a third-party processor/gateway combo that plays nice (even better, arguably) with international markets. Like Stripe, it’s a sprawling platform with tons of optional buy-ins. Just be aware that it doesn’t support recurring billing.
Square is another popular “full-stack” payment services provider. Compared to Stripe and PayPal, Square is a bit more focused on brick-and-mortar transactions, offering a wide variety of productivity-related functionality as well as POS hardware. Square supports eCommerce, but don’t expect the international support that Stripe offers.
It may not be a household name, but Payline Data is one of our favorite merchant account providers here at Merchant Maverick. It offers stable merchant accounts with interchange-plus pricing, not to mention its own proprietary payment gateway free of additional charge.
Comparing Authorize.Net & Stripe Payments: The Final Verdict
The battle between Stripe and Authorize.Net comes down to a big hearty buffet vs. a tasty side dish that can be served with almost any meal. Newer businesses that don’t want to add unnecessary complexity will probably prefer Stripe’s comprehensive payment services. Veteran businesses with stable merchant accounts that want to add gateway functionality may appreciate the flexibility Authorize.Net offers them.
If you’re scratching your head over a lot of the terms used throughout this post, don’t feel bad; payment processing is a very confusing industry. If you want to learn more about it, start with our complete guide to getting a merchant account. You may also want to read more about what a gateway is and how it fits into accepting payments online.
The post Stripe VS Authorize.Net: Which Is Better? appeared first on Merchant Maverick.
As we all gear up to face the grim reality of the global coronavirus pandemic, businesses around the world are confronting the enormity of the challenges ahead of them. The need to minimize the risk faced by vulnerable public-facing employees is particularly important.
Thankfully, there are steps many businesses can take to reduce in-person contact. In this article, we’ll discuss ways your business can minimize such exposure by accepting remote payments — both online and over the phone.
Is Cash Still Safe To Handle?
Cash is an efficient means of germ transmission even in the best of times. A Swiss study from 2008 found that, in some circumstances, flu viruses can survive up to 17 days on the surface of cash. Considering the heightened dangers we currently face, preparing your business to accept cashless and card-not-present transactions has never been more crucial.
We understand that the nature of certain types of businesses will preclude the possibility of everyone doing this at scale, but there are ways to accept payments from your customers that don’t involve the exchange of cash or even a credit/debit card.
You Can Still Accept Payments From Customers Who Aren’t Present At Your Place Of Business
If you’re considering shutting down your office and switching your business to delivery-only, know that you can get paid without having to send out invoices. Thankfully, you can accept payments both online and, via a virtual terminal, over the phone. If you haven’t gone this route in the past, we’ll explain how it works.
Of course, accepting these kinds of payments presents security challenges along with logistical challenges.
Security Concerns For Card-Not-Present Transactions
When accepting payments remotely, you’re responsible for ensuring the security of your customers’ payment information. The key to achieving this is to make sure that your payment system is PCI-compliant.
Merchant Maverick does have a complete guide to PCI compliance — what it means and how to bring your business into compliance — but we’ll summarize the main points here.
PCI compliance refers to a set of standards established in 2006 to ensure the security of all customer payment information that is sent and received online
Some of the practices that will help ensure your business remains PCI compliant include:
Use only PCI-validated payment gateway software
Don’t store any sensitive cardholder data
Use a firewall on your network and computers
Never use default passwords
Check that your wireless router is password-protected and uses encryption
Check your terminals, PIN pads, and computers to ensure that no one has installed rogue software or “skimming” devices
Educate your employees about security and protecting cardholder data
If you don’t take the steps necessary to protect your customers’ credit card information properly, you could easily suffer a data breach that puts your customers’ finances at risk — a development which would not reflect well on your business and lead to a general loss of trust in your enterprise.
Again, please refer to our PCI compliance guide for more detailed information on how to maintain best practices and keep your customers’ payment data safe from hackers and other bad actors.
Accepting Over-The-Phone Payments
Businesses in certain industries are more likely than others to be familiar with the ins and outs of taking payments over the phone. For instance, restaurants often use POS systems that include a feature for taking orders remotely and processing remote payments. If you operate a restaurant, there’s a good chance that your POS provider offers capabilities that you may not have had reason to explore in the past. Contact your POS provider and ask about the availability of these features if you’re not sure.
Alternatively, many businesses may find that a virtual terminal is their best option for accepting payments over the phone. For those who don’t know, a virtual terminal is a means of accepting credit card payments without the credit card being physically present. They are typically web-based and involve you entering your customers’ credit card information into a secure web page for processing.
Many POS systems and virtual terminals have a vault feature that keeps your customers’ information stored on file for later use. This allows your customers to simply direct you to charge their card on file when making a purchase. Note that this is acceptable from a security standpoint because the information is not stored on your site or your devices. Instead, it is all encrypted and stored with the processor.
Here’s a good primer on card-not-present transactions.
Accepting Online Payments
Paying for goods and services online has become commonplace over the last few decades — although your business may not have experience with how it all works. In this section, we’re going to run through some common scenarios and let you know how to accept online payments in each instance.
Online Restaurant Orders
Most modern restaurant POS software will include online ordering and delivery functionality (along with payment processing, of course). If you have such a system and you haven’t taken advantage of these features yet, contact your POS provider and ask about how you can implement these features. And if you’re trying to sign up for a restaurant POS system, so you can accept payments online, ask the providers in question about payout times. A waiting period of around two days is fairly standard in the industry, though some processors offer faster payouts.
If you’re running a brick-and-mortar establishment and you’re setting up eCommerce for the first time, your existing credit card processor should be able to help you set up your online eCommerce system.
If you find that your current payment processor doesn’t allow you to do what you’d like with respect to online sales, you could always switch to a third-party processor, such as Square or PayPal. Establishing an account with the likes of Square and PayPal is incredibly easy and painless, so while this obviously isn’t an ideal time to go comparison shopping for a new payments provider, the option is there should you want to take advantage of it, and it shouldn’t take up too much of your time.
Invoices & Online Payment Forms
If you’re trying to further reduce the need for in-person exchanges of payment, you can use invoices and payment forms to send custom links to your customers that allow them to enter their credit card information remotely. This has the benefit of being both safer and faster/more efficient than the use of old-fashioned paper invoices and checks.
Here is an informational article that details the invoicing process.
Is Now Really The Time To Switch My Payment Setup?
Clearly, a global pandemic is not an ideal time for any business to be trying to switch up their payment processing system in order to save a few bucks. However, as the established ways of doing business are being upended at a dizzying pace, businesses everywhere will have to adapt in order to both remain viable and protect the health and safety of employees and customers alike. To that end, Merchant Maverick is here to help you adapt your business practices to our new shared reality.
Here is a link to our COVID-19 resource hubÂ — we are adding to our pandemic-related informational resources continuously. Additionally, you may want to read our piece on business interruption insurance.
Furthermore, you can read our Small Business Outbreak & Pandemic Guide: Coronavirus Edition for more on how your business can handle the COVID-19 pandemic.
The post Coronavirus Payments Guide: Everything You Need To Know About Switching To Online & Phone Payments appeared first on Merchant Maverick.
Here at Merchant Maverick, weâre constantly advising you to read your contract before you sign up with a merchant account provider. Why? Because this is the most important step in the process of negotiating an agreement with a provider. No matter how much time youâve spent obtaining quotes from multiple providers, researching each company, and negotiating with an agent for the company youâve chosen, none of it will matter if the legally binding documents that define every aspect of your relationship with your merchant account provider donât match up with what you were promised by the companyâs sales agent. Failing to read contract documents and understand what youâre really agreeing to can be an extremely frustrating and expensive mistake. In fact, a poor understanding of the terms of a processing agreement is the most common cause of issues that arise between merchants and their providers.
Reading your contract safeguards you in three major ways:
It protects you from unscrupulous sales agents who fail to disclose important contract terms, or even lie about the costs or obligations contained in a contract.
It gives you a clear understanding of almost every possible cost that you will or could be responsible for as long as you maintain your account.
Most importantly, it gives you your last and best chance tocall the whole thing off and back out of the deal before youâve signed up if you find that the actual terms of your contract are simply unacceptable to you.
In this article, weâll explain what merchant agreements are, how theyâre structured, and how to identify and interpret the most important clauses youâll find in them. Weâll show you examples of common verbiage that describe the length of your contract, how to cancel your agreement, and any penalties that might apply for doing so. Weâll identify common red flags that indicate that your sales agent isnât being honest with you, and give you some strategies for dealing with this all-too-common problem. Finally, weâll show you how to get out of a bad deal if youâve already signed up for an account, and things just arenât working out between you and your provider.
What Is A Merchant Agreement?
A merchant agreement is simply a document (or, more likely, a collection of documents) that establishes a contract between you, the merchant, and your merchant services provider. A contract, in turn, is an agreement between two parties that establishes the expectations and rules of behavior governing the relationship between them. Thatâs actually the simple definition â contracts have been around for hundreds of years and there is an entire branch of the law devoted to them. Despite what you may have heard, verbal contracts can be legally valid, although theyâre extremely difficult to enforce if a dispute arises between the parties. Today, most contracts are written, and they govern practically every aspect of modern life. From obvious examples such as automobile loans to those End User License Agreements (EULAs) that pop up whenever you install a new app on your phone, contracts are everywhere.
Unfortunately, weâve become so inundated with contracts that we rarely take the time to sit down and read them. Now, you might be able to get away with this when installing the latest trendy social media app (assuming you donât mind letting the company sell your personal data to advertisers, of course), but itâs a really, really bad idea when it comes to merchant services. Why? Because the sales agents that are tasked with selling merchant accounts have learned over the years that itâs much easier to convince you to sign up for an account if they conveniently forget to mention or explain certain terms — terms you might not be comfortable with if they were brought to your attention. These terms include (among other things) early termination fees that penalize you for closing your account, liquidated damages clauses that make it even more expensive to get out of your contract, automatic renewal clauses that keep you obligated to your provider indefinitely, and the fact that your equipment lease (if you have one) is completely and utterly noncancelable. Plus, thereâs a host of âhiddenâ fees that your sales agent might have neglected to tell you about but that are spelled out â often in very, very fine print â somewhere in your contract.
Before we dive into the nuts and bolts of understanding your contract, letâs begin by explaining that every merchant services provider will have a contract that governs your relationship with them. This includes popular payment service providers (PSPs) such as Square (see our review). So, if you see a provider claiming that they have âno contractsâ on their website, be aware that what they really mean is that you wonât have a long-term contract that commits you to keeping your account open for years at a time.
Depending on which provider you sign up with, your âcontractâ may actually include agreements with more than one party. Obviously, there will be an agreement between you and your provider. However, you might also have an agreement that applies to the relationship between you and the backend processor that will be processing your transactions. If you make the mistake of signing up for an equipment lease, there will usually be a separate (and even more draconian) agreement that only covers your leased processing equipment. The leasing of credit card machines has earned such a poor reputation in the business community that most large processors have spun off subsidiaries (wholly owned by the main company, of course) to handle these leases. Lastly, your contract might also include separate agreements with third-party service providers, such as payment gateway providers, etc.
Can You Negotiate A Merchant Services Agreement?
If youâve read this far and are starting to wonder whether itâs really worth it to open a merchant account at all, we have some good news. Unlike many other vendors or service providers you deal with in your everyday life, most merchant services providers will allow you some leeway to negotiate the exact terms of your contract. In other words, you wonât necessarily have to accept the first offer you receive from a prospective provider. In fact, many providers assume that you will try to negotiate a better deal, and set their prices higher than what theyâre really willing to accept. In this case, failing to negotiate for lower rates and more favorable terms can be an expensive mistake.
Hereâs what Jeff Marcous, the Chief Evolutionary Officer of Dharma Merchant Services (see our review) had to say about merchant services agreements:
The merchant agreement issue is definitely complex and is pretty much dictated by the acquiring banks of the MSP/ISO. For our part, we have to go along with the boilerplate terms set down by either Wells Fargo or Synovus Bank, but we do have authority to delete certain clauses â like termination fees, etc. It’s kind of like clicking on the terms of agreement for an iPhone update â if you or I actually read (and understood it), we would probably gasp at what is being agreed upon, but of course, you could not continue to use their services even if you pushed back on something.
That said, probably the most important thing is for an agreement to explicitly offer the ability for the merchant to cancel at any time without penalty. Even then, the processor has the right to keep an account “open” for a period of time in order to process any chargebacks or malicious activity on the account.
Now, before you start salivating at the prospect of customizing your entire contract to your liking, you need to be aware that your ability to change the terms of your contract is quite limited. In fact, roughly 90% of the terms of your contract consist of standard boilerplate terminology that will be the same for every merchant, regardless of which provider youâre using. For example, you canât change the rules set forth by the credit card associations (e.g., Visa or Mastercard) that are restated in your contract. Likewise, youâre extremely unlikely to get a waiver on arbitration clauses or clauses that specify a choice of jurisdiction for disputes. However, many of the most critical aspects of your contract are, in fact, negotiable. These include the following items:
Early Termination Fee (ETF) Or Liquidated Damages Clauses:Â These clauses are the most common terms in a merchant services contract to be waived through negotiation. No one wants to be hit with a penalty for closing their account, and providers are often eager enough to get your business that theyâll waive the ETF as an inducement for you to sign up with them. A word of warning is in order, though. Never rely on a verbal waiver promised to you by your sales agent. Always get a written waiver, and keep a copy of it for your records. Weâve heard far too many complaints from merchants who were promised a waiver, but then had the ETF automatically taken out of their bank accounts later on because the sales agent never passed the waiver information along to anyone else at the company.
Contract Length:Â Although theyâre falling out of favor, the standard merchant account agreement today still usually requires an initial commitment of three years. However, you can often have this term waived if you ask for a month-to-month arrangement instead. Be aware that having a waiver to the early termination fee does not mean that your three-year term is automatically waived also. These two terms are often contained in separate clauses to your contract, and youâll want written waivers to both of them to protect against being automatically charged recurring fees after youâve closed your account early.
Processing Rate Plan:Â Although we consider tiered pricing to be the worst possible processing rate plan for merchants, itâs still the most commonly used type of pricing in the industry. Why? Because most merchants donât know the difference between tiered pricing and interchange-plus pricing, which is both more transparent and more affordable. Many merchant services providers will try to set you up with tiered pricing, even though they also offer interchange-plus plans. Donât fall for it! Always ask for an interchange-plus pricing quote, and be prepared to find a different provider if it isnât offered to you. Note that if your provider of choice offers flat-rate or subscription-based pricing, or uses a standardized interchange-plus rate based on your monthly processing volume, you might not be able to negotiate a custom pricing quote unless your processing volume is extremely high.
Some Fees:Â Donât get too excited here. Merchant account providers charge a host of recurring and incidental fees, all of which should be disclosed somewhere in your contract. While some of these fees can be reduced or eliminated through negotiation, many others cannot. For example, you can always count on having to pay chargeback fees, monthly account fees (although you can sometimes lower the amount), and any fees that your provider has to pass on to issuing banks or credit card associations (e.g., Visa FANF fees). Fees that can be waived or reduced include application fees, account setup fees, statement fees, and your monthly minimum.
Your ability to change the terms of your merchant services agreement will depend primarily on both the size of your business and your negotiating skills. Providers make more money and are exposed to less risk by working with larger businesses that have established processing histories, and so theyâre more likely to adjust their offer to get one to sign up. Small or newly-established businesses, on the other hand, donât have these advantages and often have to take what they can get. However, you can still improve your negotiating skills and use them to your advantage, regardless of the size of your business. Check out our article on negotiating your credit card processing deal for some helpful tips.
What About Square & Other Payment Service Providers (PSPs)? Do They Have A Contract?
Square (see our review) and other PSPs are very popular with small business owners because they allow you to set up an account through their website without having to submit a small mountain of information about your business and wait for an underwriting department to go through it all before approving (or denying) your account. Approval is quick and, in most cases, nearly automatic.
But do they have a contract? As weâve emphasized above, thereâs always a contract. In this case, Square has conveniently posted their standard Terms of Service right on their website. Unlike most merchant services agreements, itâs relatively short and written in plain English. We highly encourage you to read it before you decide to sign up with Square. The only downside to this approach is that you canât negotiate the terms of a one-size-fits-all contract like this. However, since Square already offers month-to-month billing, no monthly fees, and fully disclosed flat-rate pricing, there really isnât much to negotiate anyway.
The Most Important Parts Of A Merchant Agreement (For A Merchant)
As weâve mentioned above, most of the content in a merchant agreement will be nearly the same from one provider to the next. However, this wonât make the job of deciphering your contract any easier. No two merchant agreements are identical. Every provider has their own way of organizing their contract documents, and some providers even have multiple versions of their contracts, depending on which backend processor is underwriting your account.
Merchant agreements can run anywhere from as few as four pages to over 60 pages, depending on how theyâre organized and how many additional agreements are included with them. At a minimum, you can expect your agreement to include two distinct parts: a Merchant Application and a set of Terms and Conditions. You might also have one or more Third-Party Agreements as well, either incorporated into the main document or published separately. Hereâs a breakdown of what to look for in each part of your agreement:
Before you can open a credit card processing account, youâll need to fill out a Merchant Application. This document, often only one or two pages in length, collects information about you and your business. Besides obvious facts such as what industry youâre in and whether you operate out of a retail location or sell online, youâll also have to provide reasonable estimates for what percentage of your sales are in cash, by credit or debit card, or via another payment method. You might also need to provide enough financial information for the provider to run a check on your personal credit.
One word of caution is in order here: providers often ask for information about your business bank account, including account and routing numbers. While they legitimately need this information to deposit funds from your credit card sales into your account, they can also take money out as well. Unscrupulous providers can sign you up for a merchant account without your knowledge and begin extracting any number of fees immediately, even if you donât process any credit card sales. We recommend that you wait to provide this information until youâve read your contract thoroughly and are certain that you want to open an account with your chosen provider.
Merchant applications also provide a space to lay out all the information that will be unique to your account in one location. This will include all applicable processing rates and recurring fees that vary from one merchant to the next. Incidental fees, which are typically the same for everyone, will usually be found somewhere in the Terms and Conditions portion of your contract. Hereâs a sample Merchant Application from CardConnect to give you an idea of what to expect.
Merchant applications arenât as chock full of legalese as the Terms and Conditions section of your contract, but itâs still critical to review them very carefully. One particularly important thing to look for is the presence of mid-qualified and non-qualified processing rates. This is a sure sign that your sales agent has signed you up for an expensive tiered pricing rate plan. Sales agents have a bad habit of only verbally disclosing the qualified rate for your plan, without mentioning the mid-qualified or non-qualified rates. These rates are much higher, and today most of your credit card transactions will fall into one of these two types of rates instead of the lower qualified rates.
Terms & Conditions
Just as the Merchant Application contains all the information that applies specifically to your account, the Terms and Conditions section of your contract includes all the stuff that applies equally to every merchant account maintained by the provider. And itâs a lot of stuff. Terms and Conditions sections invariably run for many pages and include a tremendous number of rules and policies that govern how you use your account, all spelled out in exacting legalese that can be painfully difficult to read. Some providers have started to call this section a Program Guide, perhaps in an effort to make it sound a little less daunting. Most of the information contained here is industry-standard, with very little real variation from one provider to another. However, there are also some really important policies buried in here that can have a serious impact on your relationship with your provider. The most important things to look for in the Terms and Conditions are going to be clauses that define the length of your contract term, the automatic renewal clause (which will usually be included), early termination policies, and instructions for properly closing your account. You should also familiarize yourself with clauses that require you to submit to mandatory arbitration or specify a choice of jurisdiction in the event that you find yourself in a legal dispute with your provider.
Contract Length Clauses
How long is your contract? Your sales agent should answer this question for you in detail before you sign up, but itâs not unusual for them to conveniently âforgetâ to do so. The typical, industry-standard merchant agreement has an initial term of three years, or 36 months to align with your accountâs monthly billing cycle. While a three-year initial term is the most common, weâve seen contracts where this term is as short as one year, and occasionally as long as four (or even five) years. Automatic renewal clauses extend the term of your contract, typically for an additional twelve months at a time. Again, thereâs some variation among providers, with subsequent terms ranging from six months to two years at a time. Note that Canadian law limits contract extensions to no more than six months at a time.
Long-term contracts have always been unpopular with merchants, as they make it very difficult to get out of your contract if you want to switch providers. The trend within the industry now favors month-to-month billing, which is much more flexible. Be aware, however, that you are still under a commitment even with month-to-month contracts. Look for verbiage in your Terms and Conditions that specifies an initial term of 30 days, with automatic renewal periods of an additional 30 days at a time thereafter. With no early termination fee imposed, month-to-month contracts allow you the freedom to close your account at practically any time without penalty. At most, you might have to pay recurring fees for one additional billing cycle.
Early Termination Policies
One of the worst aspects of merchant agreements is when providers impose an expensive penalty for closing your account before the end of the current term. The most common practice is to charge a fixed early termination fee (usually between $295 and $495), regardless of how much time is remaining on your current contract term. Some providers will offer proration based on the number of years left on your contract, which lowers (but doesnât eliminate) the penalty if you stay with them for over a year or two. In some cases, providers will use a liquidated damages clause instead of a fixed fee. Liquidated damages are based on a combination of your average monthly processing volume and the length of time remaining on your contract. A liquidated damages clause can potentially be very expensive, particularly if you have a high monthly processing volume and close your account within the first few months of opening it.
When you read the early termination provisions of your contract, one aspect that will probably upset you the most is the dramatically unequal way in which early termination applies between you and your provider. While you, the merchant, are contractually obligated to keep your account open for years at a time and pay a host of recurring fees, whether you use the account or not, your provider can close your account unilaterally at any time for practically any reason. While theyâre highly unlikely to do so as long as theyâre making money off of your business, a sudden closure could leave you without the ability to accept credit or debit cards until you can line up a new provider.
Account Closure Instructions
While lengthy contract terms and automatic renewal clauses are designed to keep you on the hook indefinitely, it is possible to close your account without penalty. Every merchant agreement contains specific instructions for closing your account. Providers donât make it easy, but if you follow the directions in your contract very carefully, you can terminate your contract at the end of the current term without being charged an early termination fee or liquidated damages. Almost all providers require written notice of your intent not to renew your contract, provided within a specified number of days before the end of your current term. Unfortunately, providers often make it difficult to find out the exact date of your contract renewal, so youâll want to pin this down and send in your notice well in advance of the minimum required period. Providers typically require 30 daysâ notice, although weâve seen some contracts where the required notice period was as long as 90 days prior to termination. You should also beware of providers that require that the notice be submitted on a special written form, which they jealously guard and will only provide to you upon request.
Hereâs an extract from an old Sage Payment Solutions (now Paya) contract that includes examples of all the clauses and terms weâve discussed above:
Â Clauses Affecting Legal Disputes
Although they donât happen nearly as often as you might expect, legal disputes between merchants and their providers are always a possibility, and providers will attempt to protect themselves by including language in their contracts that makes it more difficult for you to pursue this kind of remedy. Usually located near the very end of your Terms and Conditions, youâll almost always find a few provisions that cover any type of legal action you might wish to pursue.
Mandatory arbitration clauses are the most common kind of limitation youâll find, and theyâre a standard feature of almost all merchant services agreements today. These clauses simply require you to submit to mandatory arbitration in lieu of filing a lawsuit. In most cases, courts will send you to arbitration prior to hearing your case anyway, so these clauses donât have much impact on your ability to pursue a legal remedy.
Choice of jurisdiction clauses are also included in every merchant services contract today. In almost all cases, the provider will limit jurisdiction to courts in the state where their headquarters is located. While this doesnât prevent you from pursuing legal action against them, it can throw up a significant roadblock if you donât live in the same state. Youâll be responsible for any costs you incur traveling to court appearances, depositions, etc. While we donât recommend that you choose a provider based solely on geographic proximity to your place of business, you should be aware of the impact this kind of contractual limitation can have if you end up trying to sue your provider.
If your merchant account includes a product or service provided by a third party, youâll have a separate agreement with that party included as part of your contract documents. Payment gateways and equipment leases (which you should avoid) are the most common examples of these additional agreements.
Third-party agreements may be separate documents, or they may be included within the body of your Terms and Conditions. For example, if you need a payment gateway and your provider uses Authorize.Net (see our review) exclusively, youâll have an agreement that applies between you and Authorize.Net.
With equipment leases, many providers will use a separate company to provide the equipment and administer the lease. In most cases, this âcompanyâ is actually a wholly-owned subsidiary of the provider, often located at the same physical address. Be aware that the length of your equipment lease is separate from the initial term of your merchant account agreement. In fact, itâs often longer â keeping you on the hook for monthly lease payments even if you close your merchant account at the end of the initial term.
Standard Credit Card Processing Fees: What To Look For & Where To Find Them In Your Contract
As weâve discussed above, your merchant agreement will define the type of processing rate plan you have and identify the rates that apply to your account. Rate plans can be flat-rate, tiered, interchange-plus, or subscription-based. Unfortunately, most providers donât spell out exactly which type of rate plan youâre on in their contracts (particularly if youâre on an expensive tiered plan). You will almost always find this information in the Merchant Application section of your agreement. Make sure that your agent fills this section of the agreement out completely before you sign anything. Processing rate information can get complex very quickly, with separate rates for credit cards, debit cards, ACH payments, American Express cards, etc. Youâll want to know which rates apply to your account and the circumstances under which each rate will apply to a given transaction. For help in identifying your processing rate plan type, see our article on identifying your pricing model on your processing statement.
Be aware that interchange fees will not be disclosed on your merchant agreement, even if youâre on an interchange-plus pricing plan. These fees are set by Visa, Mastercard, and other card brands, and are usually updated twice a year. See our article on interchange fees for more information.
Your Merchant Services Agreement Could Contain Hidden Fees
In addition to processing rates, your merchant account will be subject to a bewildering number of recurring and incidental fees. Rest assured that these fees are all spelled out somewhere in your contract. Finding them, however, can be a challenge. Most fee information will be filled out in the Merchant Application section of your contract documents. The Terms and Conditions section, on the other hand, rarely discloses fee information unless that amount charged is identical for all merchants using that provider. Chargeback fees, for example, are often disclosed and discussed here. Be aware that some providers will include clauses in their agreements that allow them to change or modify other fees not disclosed in the contract, at their discretion. For an in-depth discussion on merchant account fees, see our post on credit card processing rates and fees.
Seven Red Flags That A Sales Rep Is Pressuring You Into A Merchant Agreement Scam
Nowhere is the credit card processing industry sleazier and more dishonest than in the sales practices it employs to sign merchants up for accounts. Many providers lower their costs by relying on independent sales agents, who often work on a commission-only basis, and need to sell accounts to put food on the table. While there certainly are honest, experienced people working as independent sales agents, the truth is that youâre more likely to encounter an agent whoâs more than willing to take some ethical shortcuts in order to close the deal and sign you up for an account. Hereâs a rundown of the most important âred flagsâ that can help you to identify and steer clear of a dishonest agent whoâs basically scamming you:
The agent fails to disclose that the contract contains an early termination fee. This is the most common complaint from merchants whoâve had a bad sales experience. Agents know that you donât want to have to pay an ETF if you later decide to close your account, so they simply âforgetâ to mention it unless you directly ask them about it. In extreme cases, agents will outright lie, claiming that the contract doesnât include an ETF, when itâs clearly spelled out in the Terms and Conditions.
The agent offers a verbal waiver of the early termination fee, but doesnât provide it in writing. Never rely on the verbal assurances of a sales agent! Agents are quick to promise you a waiver just to get you to sign up, but unless you have written proof to back it up, you could still be liable for paying the ETF down the road. In fact, some providers explicitly state that verbal agreements are not part of your contract. While this provision is meant to protect them from false claims by merchants, it also gives sales agents complete freedom to lie to you.
The agent fails to disclose the terms of the leasing contract. Few, if any, merchants would ever agree to a lease if they understood the noncancelable nature of the leasing contract and the true cost of the lease relative to the value of the equipment provided. Our best advice is never to lease your equipment. If you find yourself short on cash and tempted by the apparently low monthly lease payments, read your leasing contract before signing up. That should be sufficient to change your mind about entering into a lease.
The agent pressures you to sign the agreement before youâve had an opportunity to review it. This is a very common tactic in the processing industry. Agents know that you might back out of the deal or attempt to renegotiate the terms if you actually read the fine print, so they apply tremendous pressure to get you to sign up right away. The latest trick weâve heard about is agents physically coming into retail locations with iPads and other tablets to collect digital signatures from merchants without giving them an opportunity to review the documents. Donât fall for it!
The agent pressures you to sign the Merchant Application without telling you that doing so can actually bind you to a contract. Because the Merchant Application is used to collect information about your business, itâs easy to fool merchants into thinking that itâs just an application. Itâs not. The Terms and Conditions section of the contract does not require a signature, so an agent can submit your signed Application to underwriting without you ever seeing the Terms and Conditions. If itâs approved (and it usually will be), youâre now stuck in a long-term contract.
The agent fails to provide a physical or digital copy of contract documents. This is becoming more of a problem as providers migrate toward using web-based signup processes and digital signatures. Often, an agent will promise to send a merchant a physical copy after the account is approved, but then fail to do so. Do not let this happen to you! As a minimum, you should keep digital copies of all your contract documents. If the agent has written anything onto a paper copy of the contract (such as crossing out the early termination clause), keep a physical copy as well.
The agent forges your signature onto your contract documents and submits them to underwriting without your knowledge or consent. Yes, this actually happens â even though itâs a violation of criminal law and the agent could end up with a felony conviction and a prison sentence if he or she gets caught. Unfortunately, these incidents are rarely reported to the proper authorities for investigation. What usually happens is that the agent gets fired, and the provider quickly releases the merchant from their contract.
What To Do When Your Credit Card Processing Agreement Has Failed
Being stuck in a long-term contract might not seem so bad when your business is humming along, but things can go south very quickly for a number of reasons. Maybe your processor has raised your rates, or youâve had a bad experience with customer service. Maybe youâve found a better provider with lower rates and no long-term contracts. Maybe you just need to close your account because youâre retiring, shutting down your business, or selling it. Whatever the reason, early termination fees and automatic renewal clauses can make it difficult to exit your agreement without paying a substantial penalty. Unfortunately, providers donât like losing customers and are rarely sympathetic to whatever legitimate reasons you might have for leaving.
Unless itâs an emergency situation where you need to get out of your contract immediately, we recommend that you wait until the end of your current contract term and close your account by following the specific instructions contained in your contract. The aim here is to give your provider sufficient notice that you wonât be renewing your contract, so it doesnât auto-renew, and you wonât be assessed an early termination fee. Providers are notorious for making this process as difficult as possible, but as long as you get the ball rolling ahead of time, you should be able to submit the proper documentation and provide the required notice to terminate your contract.
If youâre only a few months into a long-term contract and itâs obvious that things just arenât working out, closing your account without penalty will be more difficult. Providers are usually more willing to work with you in situations where the business is closing or changing hands, but if youâre just trying to switch to a competitor, theyâre not going to help you out. However, the processing industry is so competitive that some providers will offer to pay your early termination fee for you if you switch to them. Just be aware that if you do this, youâre almost certainly going to be trading one long-term contract for another. If youâre going to switch providers, we recommend that you switch to a company that will offer you true month-to-month billing with no long-term commitment at all.
Finally, if youâve had a really bad experience with your provider and they wonât let you out of your contract, you should consider filing a complaint against them with the BBB. Despite all the shady practices commonly found in the processing industry, merchant services providers are just as sensitive about their reputations with the public as any other business. Weâve seen plenty of situations where an aggrieved merchant went public with a BBB complaint, and the provider quickly released them from their contract and refunded their early termination fee.
Your Merchant Agreement Is A Contract, Not A Death Sentence
If youâve read this far, you might be starting to wonder if accepting credit cards and having a merchant account is even worth the effort. For most businesses, the answer is clearly yes. With customers increasingly relying on credit and debit cards for nearly all of their purchases, the additional sales that come with having a merchant account will usually more than make up for the hassle and expense of setting one up. The real trick, of course, is to identify and sign up with the provider that can offer you the best combination of low fees, reasonable contract terms, and high-quality customer service.
Unfortunately, the processing industry is simply not the sort of place where you can expect everyone to be honest and treat you fairly. People in this business can and will take advantage of you â if you let them. Reading your contract before you sign up is your last line of defense against being stuck in a bad deal. With that in mind, here are some practical tips for actually reading your contract without missing anything important:
Pick a time when youâre rested and alert. You should plan to devote at least an hour to this chore, although it might take as many as 3-4 hours if youâve never done it before.
A cup of coffee or tea can help you to maintain your focus while wading through all the legalese. Save any celebratory adult beverages for after youâre finished.
Highlight key sections of your contract and take notes. This advice especially applies to the termination clauses of your contract. If needed, contact your sales agent for clarification of any provisions that you donât understand.
Obtain a digital version of your contract (usually in PDF format), if at all possible. You can magnify the fine print to a size thatâs actually readable and use the search function to find important terms quickly.
Keep a physical copy of your contract if one is provided, especially if it includes changes made by your agent (such a waiver of the early termination fee). This action can protect you in case a dispute arises later regarding the terms of your contract.
First-time business owners should read every word of their contract and make sure they understand it fully. More experienced merchants can carefully skim through the boilerplate provisions and focus on the important clauses that weâve discussed above.
We highly recommend that you read your contract thoroughly regardless of which merchant services provider youâre about to sign up with. Even with the most reputable providers, youâll want to have a clear understanding of the obligations youâre undertaking when you sign your contract. At the same time, itâs important to understand that most of the problems weâve discussed above will not be an issue if you sign up with a top-notch provider. The best providers in the industry fully disclose their pricing and contract terms on their websites, rather than burying this information in the fine print of a contract. They also employ in-house sales teams who arenât under pressure to earn a commission.
Finally, our favorite providers all offer true month-to-month billing with no long-term contracts and no early termination fees. Check out our Merchant Account Comparison Chart for a side-by-side comparison of the best providers in the industry!
The post How To Read, Understand, & Successfully Negotiate A Merchant Agreement For Your Small Business appeared first on Merchant Maverick.
So you want to start a subscription box company. I bet you’ve come here with questions, and if so, you’re in the right spot! We’ve got answers, inspiration, and plenty of resources ready for you to check out. Keep reading to discover how you to find niche subscription box ideas that will turn heads, how to keep your company running like a well-oiled machine, and how to reach more customers and expand your business once you launch. Let’s get going!
Step 1: You Need An Interesting Subscription Box Idea To Succeed
How will you find that amazing idea to dazzle your would-be subscribers? In part, the foundation of a successful subscription box company is that extra something that sets you apart. Interestingly, one of the most successful boxes in the last few years started with a regular old hygiene product we all probably purchase. I’m thinking about what the Dollar Shave Club did with a simple self-care item: the razor. Their campaign used visual textures, packaging, and smart, fun messaging to connect with potential subscribers. While they initially marketed to men, their brand has grown to target both men and women. The idea is that people sign up to save on a razor (something everyone needs anyway) and soon enough they’re adding non-essentials to their box as well. While you might have more of a whimsical idea than just a plain razor, this company shows that anything is possible with the right planning and execution.
There are a lot of exciting possibilities out there, so get a notepad out, grab a refreshing beverage, and let’s explore how to create a very successful subscription box business.
14 Subscription Box Business Ideas To Get You Started
The sky is the limit when it comes to curating a subscription box. It’s true that subscription boxes are becoming a competitive market, but that doesn’t mean you can’t reach a particular group with a new angle. As we saw with the Dollar Shave Club, sometimes it’s the simplest ideas that take off when coupled with a good message and imagery.
First, you’ll want to figure out your target audience and demographic and do the needed research on these folks. Will your box provide convenience, discovery, whimsy, and/or special interest? Here are some general ideas to help you narrow down the focus and come up with something unique for your subscribers:
Gourmet foods, exotic snacks, coffee, tea, candy, etc.
Pregnancy and baby
Arts and crafts
Gaming and “geek” interests
Fitness and health
Curated clothing and accessories
Self-care and pampering
Inspirational / encouraging
Beauty and grooming
Pet care and toy
Home (plants, cleaning, candles, art)
If you are feeling inspired, keeping brainstorming those ideas and write them down — you’ll need them for the research and discovery steps coming up. Keep reading to find out what you need to know to expand your business or start a brand-new business based on the subscription box model.
Step 2: Before You Start Planning In Earnest, Make A Business Plan
A business plan acts as a blueprint for success. It keeps you on track, aligns your goals, and helps you cover the basics. You’ll also need a business plan should you seek out funding or investors for your subscription box endeavor. The most important person this business plan serves is you, however.
Of course, you’ll need to do some more preliminary research and get your ducks in a row before creating your plan, but it certainly does not have to be complicated. We suggest starting with a lean business plan, which is a one-page document that follows this basic structure:
If you need a little more direction, check out our post, The How-To For One Page Business Plans
Research The Competition & Check Out Other Subscription Box Companies
As a part of your business plan, you’ll want to research the competition. The best way to start that is via a Google search. Go through the first few pages and click through the businesses there. The most important thing you can learn here is the average price point. You also can find product ideas there, but it’s more useful to identify what’s not in those boxes so that you can provide a unique angle.
Step 3: Consider How To Fund Your Subscription Box Business
There are several ways to go about funding expenses. You’ll need to consider a few things to help you assess what exactly you’ll need here.
Will you be paying the full price for some or all items?
Can you source wholesale to save costs?
Can you approach local artists or specialty shops for unique and specially priced inclusions?
Can you reach out to pitch suppliers for special pricing or free samples (more on this later)?
You can certainly do a combination of the above list. But whatever you decide, you’ll need to cover initial costs in marketing, setup, shipping, and inventory. Once you have an idea of what’s going in the box and your costs to fill it, then you can consider how you’ll go about funding the business.
Here are some options to consider:
Borrow money with a startup loan.
Use funds from advanced orders from subscribers.
Utilize a business credit card.
Another approach is to start small and limit quantities initially so you can cover your own costs. By doing this you can reduce your financial risk, not to mention create some urgency in the sale thanks to limited inventory.
Should You Crowdfund Your Subscription Box?
You could think about crowdfunding your fledgling business idea. Crowdfunding certainly has its advantages, along with some unique challenges. For one, you’ll need to devote marketing dollars to outreach and exposure for your campaign. And with that, you’ll need to lead with a great story to stand out and get attention. The best part of all this strategy, however, is that if you get your backers to support your start-up costs, you can reduce your debt and gain supporters while you’re at it. This strategy would likely be best for unique, cause-related, and highly niche ideas, as you’ll have the most potential for excitement from your backers.
There are several types of crowdfunding and (even more platforms to choose from), but rewards-based crowdfunding is likely the most appropriate choice for your subscription box business. Interested in exploring this option for your business? For more ideas and information on crowdfunding, check out Crowdfunding for Startups: 8 Tips For Launching.
Step 4: Seek Out A Supplier For Your Subscription Box Service
You’ve got a few options on how you’ll actually fill your box. You could choose to purchase directly from a wholesale company, pay full-price, or use a combination of both. For some or all of your products, initiating a long-term relationship with a supplier becomes the smartest option.
You can start finding some amazing things for your subscription box by networking and establishing good relationships with vendors, suppliers, or artists. Those of you who focus on unique or one-of-a-kind items will particularly need to get relationships going with specialty shops, sellers at trade shows, local artists, and crafters. Etsy can be a wonderful source for contacting niche and specialty item sellers in all kinds of categories — not just handmade items. Many sellers would be more than happy to supply samples or a discount, and some may even be open to sharing in exchange for exposure.
If you end up creating a full website for yourself (more on that coming up), make it easy for vendors to get in touch with you through a dedicated page and instructions for how to submit a request. While you may not be fielding a lot of inquiries when you launch, get it set up so you’re ready to respond to those requests when they start pouring in.
Why You Need To Perfect Your Pitch Before You Talk To Suppliers
We recommend creating your one-page business plan (discussed in Step 2) before approaching suppliers. If you already have an email list or social following, lead with these resources; suppliers will be more than happy to work with you if additional exposure to their product is in the mix. Whether you’re asking for sample sizes or a discount, remember that transparency, a good plan, and confidence in your approach will go a long way in your pitch.
Step 5: Build Your Web Presence & Customer Service Channels
You can approach selling your subscription boxes online a few different ways:
Hire a firm or freelancer to build a fully custom site.
Integrate a shopping cart with an existing site.
Choose an eCommerce platform including a site builder with website templates and a payment gateway all in one (e.g. Shopify, Read our review).
Sell via social channels only with a Facebook Store or Instagram Shoppable posts.
If the website part makes you a bit nervous, I have some good news for you. It really has never been easier to sell online — with little to no experience or technical expertise — by going with a website builder. Some platforms even offer all-in-one solutions with payments (including recurring billing), website templates, and a plethora of integrations for easier shipping and tracking built right in, too!
Where To Find eCommerce-Friendly Website Builders
Because they are both feature-rich, easy to use, and provide a lot of room to scale, we recommend Shopify and Square to business owners who are starting from the ground up with little to no tech expertise. And for those that do have coding expertise, you’ll have customization tools at your disposal, too! What makes me most excited about Shopify is that it enables multi-channel selling across platforms, including Facebook stores, Facebook Messenger, Instagram, and Amazon. With these options, you can take advantage of more opportunities for growth while meeting potential customers where they’re hanging out anyway. And what I love is that everything including your inventory and reporting is all synced no matter where you sell!
Whether you’re looking for just a shopping cart integration or a full all-in-one platform, I recommend checking out The Best eCommerce Platforms For Your Small Business as you can compare options side-by-side and get a lot more information regarding what to look for to match what you need.
I will leave one final thought in regards to eCommerce website builders â take advantage of any trial periods or demos to give yourself time to play around and explore your possibilities.
Why Your Choice Of Payment Processor Matters
Your payment processor is how you’ll actually accept payments, so this is an important business consideration. If you’re a fledgling entrepreneur, you’ll likely find yourself below the monthly volume of what many traditional payment processors serve.
Third-party processors like Square, PayPal, and Stripe (the backend processor of Shopify) make it possible for smaller businesses to start taking payments, and they provide an exhaustive set of (oftentimes free) tools to help you manage your business. ThisÂ convenience comes at a cost however: an increased risk of account freezes if you have an uptick in chargebacks or your account is considered higher risk.
Regardless of what type of merchant account you go with, however, you will have this risk, unfortunately. That’s why we recommend arming yourself with knowledge. Check out How To Keep Your Payment Processor From Holding Funds Or Terminating Your Account.
So what should you look for in a merchant account? Here is what you can keep in mind as you research companies:
Product Features: What comes with the account? Are there any beneficial add-on services like email marketing? Reporting tools?
Recurrent Billing: Allowing your customers to save and automatically be charged is a must!
ACH: Automatic bank transfers can lower your processing costs, and it’s another payment method to offer your customers.
Forms of Payment: Some payment flows like Shopify Payments let you easily add PayPal and digital wallets to your checkout.
Card Automatic Updating: This feature can prevent billing issues and ensures you don’t have to chase someone down for updating billing information if their card expires or gets replaced.
Check The Contract: Always read your contract! We recommend merchants avoid long-term contracts as they are often also laced with lots of fees.
Customer Service: It’s important to get the help you need when you need it. Companies that have several active customer service channels and generous customer service hours are a must for the eCommerce subscription box business.
Check out some of our top picks in payment gateways for online payment processing in our post The Best Payment Gateways For Online Payment Processing.
Solving The Customer Service Question
The customer service issue can also happily be solved with the right eCommerce platform, too. For instance, many web builders, like Wix, for instance, now include chatbots that allow you to communicate in real-time to field any incoming questions. Some companies direct their customers to send any order issues or inquiries via Facebook Messenger.Â If you’ve linked a Facebook business account with Shopify, for example, you can take advantage of order tracking as well. Of course, there are always reliable phone and email options. Whatever you decide, make it clear how your customers can contact you, along with the expected response time.
Regardless of customer service channels you ultimately choose, we suggest making it easy for your subscribers to alter their box or skip a month. Enabling them to easily skip a month may feel like losing a sale, but you’ll likely retain them for longer (and keep them less frustrated).
Step 6: Build A Marketing Plan To Draw In Customers
Getting a marketing plan down on paper is an absolute must, but it doesn’t have to be as overwhelming as it sounds. The subscription box biz is a bit competitive at the moment, and that’s where being savvy and making the most of the opportunities you already have can go a long way.
Social Media Marketing For Your Subscription Box
Social media can work wonders to establish your brand and get people excited. Follow the strategies below:
Start Posting Regularly: If you already have followers on social, you’re at an advantage, but if you don’t, consider building your following by posting regular content, tagging larger accounts, and networking.
Test A Paid Social Ad: If you’re up to it, I recommend testing a sponsored post or two to get people excited during your pre-launch focus and beyond. Facebook advertising is a very cheap way ($20-30 bucks) to get in front of potentially thousands of people, and your ad will go to Instagram automatically, too. It’s also easy to target your campaign (even down to niche interests).
Excite With a Giveaway: A giveaway is a tried-and-true method of increasing your footprint with every post! Ask your followers to tag friends, share, and direct them to your site to sign up with an email. You increase your reach exponentially while building an email list of people who are interested in you. It’s a win-win.
Tap Into Influencer Marketing: Whether you have a lot of followers or not, an inexpensive way to boost your brand is through influencer marketing. By offering your box to an established YouTube personality in exchange for a shout-out or review on their page, you can reach potentially thousands with your brand name. Influencers will likely be happy about to devote some screen-time to your sub box, as it’s not always easy coming up with fresh content.
Email Marketing For Your Subscription Box
If you already have an established business or a robust email list, email marketing is a great way to promote your subscription box service. Email is still one of the cheapest and easiest ways to advertise new products and services. I love that Square offers this as an add-on service for only $15/month and includes analytics, templates, and targeting.
Don’t have a list? Consider reaching out to another local business and paying a small fee for a shout-out in their next newsletter. Make sure you create an email form on your site to make it easy for people to show their interest in your box. You could even use a credit card number to reserve a spot for a limited quantity of boxes before you’ve even launched! Fanning the flames of FOMO (fear of missing out) is never a bad idea in marketing.
To get the most bang for your buck when it comes to emails, check out How To Create A Successful Email Marketing Strategy (all skill levels).
Step 7: Create A Strategy For Headache-Free Shipping & Fulfillment
There are two major pathways to take with shipping and fulfillment: doing it yourself or outsourcing fulfillment. Of course, the size of your operation and your budget are factors, as well as logistical and space considerations.
Creating a strategy that gets your boxes out on time is key, but you are probably looking for the lowest possible overhead and tools that can help you save time. There are a plethora of integrations that work with Shopify and other eCommerce platforms to make it easy to print labels and ship from your home.
When it comes to costs, your shipping fees can vary widely depending on what’s in your box, size, and materials you need. In your planning stages, do research on which carriers are most economical and if it’s best to use multiple carriers. Most importantly, when it comes to packing up your goodies and shipping out your subscription box, keeping everything protected and beautiful (not to mention eco-friendly) goes a long way in customer retention. The truth is that when you’re starting out, you’re building your reputation one box at a time.
Thankfully, we have a library of comprehensive and easy-to-digest resources to help you find the right solutions and make the best choices for your business. For answers to questions about shipping and fulfillment, check out our posts, 8 Hacks For Saving On Shipping CostsÂ and Learn To Delegate: What It Means To Outsource Your eCommerce Fulfillment.
5 Tips To Keep Your Subscription Box Business Growing
Create Referral Campaigns:Â Make the time-tested and powerful technique of word-of-mouth advertising work for you through a referral campaign. All you need to do is incentivize current subscribers to refer your box to their friends and family. Whether that’s through a bonus box or a few extra treats in their next shipment, those who successfully recruit friends and family to your brand deserve some celebration!
Stellar Customer Service:Â Nothing creates a solid reputation better than stellar customer service. To be the best, it’s not just about answering inquiries or solving problems, it’s about being proactive and listening to your current customers. Send them an email and ask them how they like their box, make amends right away for any issues (even if they weren’t your fault), and generally bring a “service with a smile” approach. Turning a customer into a brand ambassador is the ultimate sign of customer loyalty, and providing excellent care is how you’ll accomplish it.
Check Your Reports & Recognize Trends: Whatever eCommerce platform you go with, take advantage of any and all reporting and insights. Is there a certain geographical area that stands out? A peak time of year for sales growth? What is your “deadzone” in terms of new signups? Knowing the answers to these questions can help you target marketing and encourage growth through marketing when you need it most.
Identify Opportunities & Always Be Closing:Â Knowing what your customers love most about your boxes and looking at your sales reports gives you key insights into what items to purchase for upcoming boxes and new opportunities for growth. Once you have established customers, consider offering related or additional products that you know they’ll get excited about (because you’ve done your research). Remember Dollar Shave Club’s expansion from just the humble razor to a full line of personal care products? You want that potential growth for your business, too! Whether that’s through expanding into a new niche, identifying a new under-served market, or just boosting your sales with your current subscribers, always be closing!
Understand Cash Flow & Plan Ahead:Â Absolutely essential for any small business, including your subscription box company, is knowing your cash flow. You’ll need to figure out your cash flow so that you can make better decisions about your finances. To do this, you must understand how to create a cash flow statement, which breaks down your operating cash flow, cash flow of investments, financial activities, and net cash flow. We make this easier to understand and show you what tools can help in our post, How To Calculate & Analyze Business Cash Flow.Â
Are You Ready To Launch Your Subscription Box Company?
Launching a successful subscription box service requires some smart legwork, including researching your potential customers, curating irresistible products, buzz-building advertising, and structuring a plan of action. With the right eCommerce tools and a well-thought-out business plan, you can whittle down what feels like a giant, overwhelming project into something that’s more manageable.
For more startup resources, check out Small Business Startup Loans: Your 8 Best Options and The Beginner’s Guide To Starting An Online Store.
The post How To Start A Subscription Box: 7 Steps To Launch A Thriving Business appeared first on Merchant Maverick.