I have been working with a customer who wants to set up an e-commerce site and I've done a lot of research on shopping carts. I am still amazed at the fees. Looks like the standard fee for most is about $30-35.00 for an e-commerce/hosting the site, then .30 - .35 per transaction plus a small percentage. Then there is the monthly statement fee by the gateway companies which appear to be around 24.00/month.

My customer may eventually sell many items retail on-line but right now they can only offer a few items on-line due to fears that some of their traditional retailers will be upset that they are selling behind their backs. Right now, the most expensive item they plan to offer is a pattern for $20.00. The least expensive item is a book for $5.99.
They've got a line of about 6-7 items. All this makes me think that it isn't worth it for them to go with a regular e-commerce site because of the cost.

Question 1. What is the least amount for an item someone should sell on an e-commerce site. I think $5.99 is about as low as they should go. Believe it or not they were thinking about selling poscards for .35 each which would have been insane. I talked them into bundling them and selling them as packets.

Question 2. I checked into Pay Pal as an option. It appears they now accept credits cards for transactions other than web auctions. They charge a Standard Rate of 2.9% + .30 per transaction. They have a Merchant Rate of 2.2% + .30 but you are only eligible for this rate after 90 days and keeping a $1,000/month volume. I am positive this client will not make that much starting out. The Pay Pal option certainly seems like our best best. Is there anything I am not understanding about them? Are there hidden costs? I've been using them on another site of mine but not the credit card option and am thinking I need to go back and start offering this myself.

I am always skeptical of things that sound too good to be true. Would appreciate feedback.

Hi....

i'm pretty sure this isn't true.
I dont think there is any minimum sales level.

Well i've had my site for ages...never kept more than $100 in it at a time......Paypal hasn't said anything to me yet.

The $1,000.00 a month min. is the amount of sales you have to have in order to receive the lower Merchant rate.

T

I love PayPal. I have been using it to accept payments at my site for over a year and the only charges I ever incur are the Standard charges at the time payments are made.

I have heard of PayPal discontinuing accounts of MLM types of sites that incur a lot of charge backs. It says in their terms of service that MLM sites are not allowed, but yours does not seem to fit this category.

Some criticize sites that use PayPal saying they should get a "real" merchant account, but your post explains quite clearly why this is not an option for most new online businesses.

It is a good idea to also include a snail mail option for customers who cannot or do not wish to use PayPal. They could send checks or money orders instead. It would delay their receipt of products, but at least they have another option besides PayPal. Including a street address for payments and contact will inspire more confidence, too.


Have a Profitable Day,

Cathy Wagner
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The drawback to PayPal is that customers have to register. This leads to monster cart abandonment.

Some options to look into:
PayQuake offers no monthly-fee, no set-up fee merchant accounts with free Authorize.net. Discount rates are higher than normal but this works out favorably for low-volume businesses.

You can get hosting for around $10 and use a free package like osCommerce. If osCommerce is overkill for you(it probably is) you can try Mal's E-Commerce which is similar to the PayPal cart but doesn't require an account. If you use their free option; you can log in securely to fetch credit card and payment details and put them through your gateway's virtual terminal. They also have a pay option that integrates with quite a few gateways.

.35 transactions are ludicrous. I can't imagine a way you could not lose money on that. Fort more substantial products, I think the lowest point you can reasonably sell at is at or above teh cost of shipping it; customers won't like paying more for shipping than they do for the actual merchandise.

Hope that helps.

Not everyone is a PP member nor will everyone go through the effort to become a PP member just to buy 1 item from your site. You're going to loose much sales from customers who just want to order simply with thier Visa or MC and don't want the hassle of signing up for some other service. Also, not everyone is e-commerce savy enough to understand what PP is. A great many people won't like the idea of signing up with PP just to shop with you.

Definately offer PP as an option but I just don't think you can have a successful high-volume e-commerce site using PP only. It's the cost of doing business.

I've been using KAGI for a long time and recently added PAYPAL. It seems to help, however sales are divided almost 50-50 between both. For people that do have a PAYPAL account, offering PP is a great way for them to make it easy to buy. I suggest offering at least two choices of payment.

Ditto. PayPal is great because it has lower fees and you get the money right away(if you have the debit card.) It's just not a viable only choice.

Hi...
just wanted to know if Kagi has a feature like PayPal's IPN...you know where they post purchase/order information to a script on your website?
Cheers

Paul

No they dont. They do it all for you from their server.

OT>

Does Paypal still require new users who have to register when they want to checkout at your site to enter that validation code from their CC bill? Moving into this field myself but the documentation on Paypals site is a bit sketchy.

Cheers

Dan

Yes...people that don't have a paypal account get one created for them the first time they pay.

They then become "unverified" members. They are allowed to send money without going though the whole credit card bill pin numbers thing....but only upto a certain limit (quite high i think a few hundred $ )

But if they want to send more money than the limit they have to wait for their creidt card bill and enter the pin number thats on it.

Cheers.

Is this different for Internation memeber. Im in the UK and a friend of mine has a Paypal account but his limit is $0.00 until he completes signup with the number thing.

Cheers

Dan

I'm pretty sure even international members can pay about $250 from their credit card without doing that number thingy (getting verified)

Cheers

Thats what I thought too but it puts a block on it. Maybe Ill get him to sign up again and maybe try and delete that account. Or send a trouble ticket in maybe.

Anyway thanks, I had better stop hijakking this thread now.

Just a quick tip to those new PAYPAL users. Although they offer a great service, you have to make sure not to leave too much money on your PAYPAL's account. They tend to block and restrict the accounts for any sort of small discrepancies and it can take a while for them to fix these things. I don't wish any of you having to speak to their customer service either, it's like talking to a robot!

I agree with Anode, we use Payquake, and their gateway provider is authorize.net. We have had no trouble with them at all. They are perfect for companies that do not mainly transact via credit card, however would still like to offer it to a customer as an option. The Pay to Play option (I think thats what it is called) is the best for low volume sites.

We are using Ibill and Paypal as payment options. We currently are receiving 200% more subscribers via paypal. (that might be because of the free trial we offer if you signup with Paypal. lol)

Here's our for so you can get an idea of how we offer it (http://www.jokaroo.com/joinroo.htm)