You need to spend money to make money. Though there are a few of the costly aspects of running a store that are taken out of the equation for E-commerce, there is still a base cost to doing business. Your biggest concern should be how to spend the least amount of money while gaining the most profit possible.
Payment fees incurred from credit card vendors and other payment vendors come with the territory of selling online. Here are a few tips from Red Stag Fulfillment on how to lower those fees as much as possible without cutting payment options for your customers:
Cost Optimization: “I’m losing money in credit card fees!”
An online store refusing to accept credit cards is an E-commerce with numbered days. Customers expect the option of using a credit card, though it can cost between 2.3% and 2.5% for E-commerce stores.
You don’t just have to take it, there are definitely ways to lower or compensate for credit card transaction fees. When you’re looking for a vendor for your site, make sure you understand what fees you’ll have and what you’re being charged for. You need to read the fine print when it comes to your service agreement and make absolutely sure that you understand what you’re getting into. Certain companies will vary their charges depending on what your customers are using to pay with. Don’t be afraid to negotiate with your vendors and to shop around for the best price!
At the same time, don’t just choose based on price alone. If there is a slack in service, the low price won’t be worth it if your customers can feel the slowdown.
Promote Paypal and other payment options to reduce the number of credit card purchases you have. Paypal has its own fees when it comes to E-commerce stores, but by varying the available payment methods, you not only offer more to your customer, you can save money on charges.
While it’s important to cut costs where you can when it comes to payment options, half the battle is getting the customer there. You won’t be able to cut payment options because doing so will lead to cart abandonment. It’s not about cutting service, it’s about choosing the right service.
Image credit : Prakhar Neel Sharma