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In my last post we discussed various ways of  working from home and touched on the subject of direct sales. This is where you offer a product for sale yourself rather than through an affiliate relationship where in fact you are marketing a 3rd party product sale.

In order to be able to sell directly you will nearly always need a means of accepting online card payments if you are going to operate effectively. The vast majority of people who purchase online like to make online payments, it is a part of the whole convenience package that they are being offered. If having offered a product online, you then advise your customer that they need to make an offline payment you might find in a lot of cases that they will not proceed with the purchase.

I have to qualify that statement however by saying this is the case for the vast majority of products, but not all, and at the end of the day you will need to rationalise what is the best method of payment i.e. an offline payment option, offline combined with online,  or a combination of online payment options. To maximise your chances of making a sale it is a good idea to have at least 2 ways people can make a payment.

That was a bit of a tongue twister but basically those are the options available to you overall. The online payments can be further broken down into types and there are 3 primary ones:

• 3rd party payment processor
• 3rd party vendor or reseller
• Using a merchant account

These have been listed in the order of ease for setting them up.

3rd party payment processor

The main 3rd party payment processors will be instantly recognisable to most people. PayPal is the best known, closely followed by Google Checkout; RBS WorldPay is another.

Typically how these services work is that you register an account with the provider and you use their software to add buttons to your site that allow your customers to add items to an online basket and ultimately proceed to check out.  At that point they leave your site and go to the 3rd party providers site where they make the financial transaction. You are advised of the purchase and you fulfill the order, either by downloading a digital product or physically packing and shipping their product to them. The 3rd party service provider then takes a commission from the sale and places the balance in your account.

This is normally very quick and easy to set up and for most people they can be up and running in minutes. If you visit the sites of the 3rd party payment processors you should find that the instructions for implementing the service are very clear and easy to follow. You will also find that many people on line are familiar with the way of utilising this type of service, trust the service being offered and are more inclined to go ahead and make a purchase.

3rd Party Vendor or Reseller

There are many similarities between  3rd party vendors/resellers and 3rd party payment processors, I guess the subtle difference is that they are selling your product for you. In many ways however the process looks the same and the benefits are logically very similar to 3rd party payment processors; the main one being that they take care of the financial transaction including fraud protection and security.

One of the best known 3rd party vendors is ClickBank. They deal exclusively with digital products and you can register with them both as an affiliate (selling other peoples products) or a seller. You can become an affiliate for free but if you want to become a seller you have to pay a fee.

Other 3rd party vendors are 2Checkout and Plimus, these provide options to sell more than digital products but the principal of operation is similar.

Merchant Accounts

This is the most flexible option for setting up online payments but also the most complicated of the three. It also carries the most responsibility for your business, because you have to take care of the security of the online transaction and provide measures to protect the financial data provided by your customers.

The way this works is that you need to set up an arrangement with the bank that allows you to receive payments via credit card into a special merchant  account via a ‘Payment Gateway’.

The financial transactions are made using a secure server known as an SSL server, recognisable by the opening ‘https’ as opposed to the ‘http’  URL prefix that you would normally encounter. There are online services such as PowerPay.biz that will help you set up a merchant account and select a suitable payment gateway to support your online business dealings; this is probably the easiest way to go about setting it up.

There are additional benefits to using a merchant account, for example you can accept telephone orders, you can process repeat orders more easily and the user interface can be more customised to suit your business. The other obvious benefit is that you retain all the information rather than a 3rd party.

So as long as you are happy to accept the added responsibility that comes with this choice, then you may find it’s your best option.

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