I speak to a lot of budding Web entrepreneurs who have products they want to sell on the Internet. Many of these folks are long on enthusiasm, but short on funds. There's no way to avoid the fact that it is expensive to set up a high-quality Web storefront. However, there are a few things you can do to get your products out there on a small budget.
One of the biggest recurring expenses for a Web storefront is payment processing. To do it right, you need to set up a credit card merchant account and an Internet payment gateway service and pay monthly maintenance fees. The startup fees can easily exceed $500, and the minimum monthly fees run around $40. That's frequently just too much for the mom who wants to sell her embroidered oven mitts on the Internet.
Fortunately, there is an alternative, albeit one that has limitations: PayPal. PayPal is an Internet payment service that lets you exchange funds with any other PayPal user. PayPal has no startup cost and no monthly fees. You pay a reasonable per-transaction charge for the credit card payments you receive. As of this writing, their standard charge is 2.9 percent plus 30 cents, so a $100 payment costs you $3.20 to process.
Your PayPal account is basically a virtual bank account. When someone pays you, the money is placed into your account. You can then withdraw the money by asking for a check or by requesting an electronic funds transfer. You can also use your PayPal funds to make electronic payments to other PayPal users.
How you use PayPal with your Web site depends upon how many products you sell. If you have just one product, you can use a Buy Now button that takes your customers straight to check out. If you have multiple products, you can use the PayPal shopping cart so customers can purchase multiple items before checking out. Both methods use simple links on your Web site, and PayPal has tools to help you set them up. The links take your customer over to PayPal for shopping cart review and payment acceptance.
As I mentioned at the beginning of this discussion, PayPal has its limitations. For one thing, you can only exchange funds with other PayPal users. That means anyone who wants to buy from you must become a PayPal user. Because the service is free, this doesn't sound like much of a big deal, but it can turn customers off. I've also found that customers become confused or lost when they have to complete the sign-up process (which includes an e-mail message exchange with PayPal) before they can finalize their payment to you. I recommend that you tell your customers to sign up with PayPal BEFORE they attempt to purchase anything from you.
The other problem with PayPal is that you can't reliably integrate it with third-party Web storefront software. For example, say you have storefront software that displays your products and manages the customer's shopping cart, but you want to use PayPal to accept the credit card payment. As soon as you pass control to PayPal, you have no way of knowing whether or not the customer successfully submits payment. Granted, PayPal gives you a way to specify a return URL for successful payments, but it is easy for a hacker to fake that return path without actually paying. The way around this problem is to always review your PayPal transaction history to verify payment before you ship anything.
Although it isn't perfect, PayPal is a good low-budget way to add a storefront to your Web site. With about 9 million current users and more signing up every day, there must be something right about it.
For more information on PayPal, visit http://www.paypal.com. |
