If you are buying or selling anything on the Internet you are undoubtedly aware of the many advantages Paypal and companies like it offer. A reasonably priced and simple alternative to merchant accounts, Paypal has become nearly irreplaceable to online charities and businesses alike. In fact, payment processors like Paypal are often the only choice for new businesses since merchant accounts require extensive security information and prohibitively high initial fees.
If your online store has become an online warehouse and you’re wondering where to put your piling up inventory or if you would like to try to increase your profits by expanding your line of products but are reluctant to commit money to something you’re unsure of then dropshipping could be for you.
Merchant accounts are special bank accounts set up to receive customer payments usually by credit card. It is often difficult for new online businesses to open a merchant account with a traditional bank. Banks, fearing fraud and other difficulties, are historically reluctant to trust small Internet merchants. In the face of complicated applications, expensive security deposits, and out right refusal many on line stores turn to payment processors like Paypal. Payment processors can be a vital in the beginning for a small business but when a business has grown a little and established some reputation it might be time to reconsider a merchant account. (Editor’s Note: Growing online retail businesses would be well advised to take a look at the many wholesalers offering great deals at Top Ten Wholesale.)
For quite awhile now small online and catalogue mail order businesses have been relying on drop shipping to fill their customer orders. For those still unfamiliar with the process it works like this; let’s say an online store sells digital cameras and uses a drop shipper to fill these orders. When a shopper purchase a camera the merchant passes the order along to his or her drop shipper. The shipper fills the order and ships the camera to the customer. The key element here is that the merchant sold a camera they never actually possessed or spent any money on until it was already sold.
For several years now people buying or selling larger ticket items on line have been turning to escrow services to protect both sides of a transaction. In brief the buyer deposits payment with the escrow service that then lets the seller know the money has been received. The seller then ships the item and the buyer lets the escrow service know the item has been received and the service releases the money to the seller. The escrow service charges a fee of around 3% of total sale including shipping charges. The auction site eBay recommends the use of escrow accounts for any purchase of $500 or more. As the word escrow implies these services are very similar to the escrow accounts used in real estate purchases and are often provided by the same companies. (Editor’s Note: PowerSellers interested in escrow services might also be interested in great buys on wholesale customer returns at Top Ten Wholesale.)
Just about any product you can imagine is available somewhere on the Internet. Millions of online retailers are trying to reach million and millions of potential customers everyday. So many in fact, that the world of online shopping is something of a trackless wilderness. It can sometimes take days of searching to find that perfect product at the right price. Often times those without a fair amount of web experience or the impatient simply give up and head for the mall.
The expense and reliability of shipping is one of the great headaches of owning a small Internet business. Especially in these days of rising gasoline prices merchants are always looking for ways to reduce the expense of getting merchandise to customers. It has historically been the case that either the United States Postal Service or United Parcel Service has met most small businesses’ shipping needs. These two both provide good service and reasonable rates for shipping limited quantities of lightweight products but aren’t nearly as satisfactory for larger quantities and won’t except items that weigh more than seventy pounds.
Ebay is engaged in talks with the Luxembourg based Skype with an eye towards buying the Internet phone company according to the Wall Street Journal. The Journal reported that the auction site is offering between $2 and $3 billion from their seemingly bottomless supply of cash.
As most auction site resellers already know eBay has recently raised its fees again. The auction giant has increased its fees by 60% with no corresponding improvement in services beyond a promise to improve its much maligned telephone customer support. The monthly basic store fee went from $9.95 to $15.95. The 10-day standard listing fee doubled from $.20 to $.40. While refusing to comment on what the rate increase meant for the company’s revenue eBay has said that the hike will be good for everybody. They didn’t say how exactly. I suppose resellers will stop losing sleep over how eBay executives will pay for their vacations.
On Wednesday, August 31st, Paypal announced that it is extending its micro-payment system to include inexpensive digital content as well as the music downloads it has been doing for some time. This is a big step forward in the struggle to bring convenience and appeal to the world of low cost online purchases.
It looks as if Internet colossus Google is getting into the payment provider business. The Wall Street Journal reported that the new payment systems would be launched this year in an attempt to compete with eBay’s Paypal. Google also hopes to become less dependent on advertising revenue, which at present makes up nearly all of the company’s earnings. The Journal also mentioned sources close to the company as confirming the report. Google itself has remained quiet on the matter with only a vague promise on its website to improved online payment options for some services.