Alternatives for Special Situations
I will wrap-up with a few thoughts for some specific types of online sales where you should consider alternative approaches. The first is where you are selling digital goods. By that I mean files – software, documents, music, audio – anything that can be delivered by file transfer or e-mail.
In the case where you are selling music or any type of audio, you should seriously consider using a service like TuneCore to make your material available on iTunes, Amazon MP3, and a range of other online music services. These services create many more opportunities for customers to find your goods, and you can have a very simple website that directs visitors to the online distribution channel of their choice. There are some tradeoffs in going this route. The biggest is the percentage that those services will charge runs from 10-30% Each distributor has a different (and confusing) pricing schemes, and for some – most notably iTunes – you will not get to set the price end customers pay. The good news is that services like TuneCore help you understand how much you will make per sale. The other thing to remember is that in addition to handling card payments, the major music distributors take care of delivery, customer service, and they provide a lot of visibility worldwide. TuneCore and its competitors also help you out with ISBN numbers and other details of international music distribution. If you’re selling music this is almost certainly your best option for digital sales. (If you’re planning to sell video content, see the part about CreateSpace below.)
If you plan to sell a mobile app, the obvious solution is to sell it via the relevant app stores. Most of them have a relatively easy path to signing up as a developer. For iPhone and iPad apps, this is the only way to distribute your app – and it is probably your best bet for Android, Blackberry, and the other major smartphones as well. As with music sites, the app stores take care of the transactions, delivery, and customer service – and most importantly they give you visibility. Like the music distributors they take a 20-30% cut. App stores are also becoming an option for desktop software as well. Apple has already launched their Mac app store with similar terms as the mobile version. Windows allegedly has a similar store in the works as well.
Beyond those special cases, for other digital goods you should consider a service that automates the delivery of your files immediately after customers make payment. They charge a bit for this service, but it’s well worth it – your customers will expect the instant delivery and your order fulfillment process will be completely automated. The service I have used a few times is E-junkie and as far as I can tell they still have the best feature set and pricing. A popular competitor of theirs that I’m familiar with is PayLoadz, and there are others. Search around to see which fits you best. Make sure that whichever you pick will work with the payment service you plan to use. For example, E-junkie works with both Google and PayPal but not Amazon. PayLoadz only supports PayPal.
If you are planning on selling a book or music and want to have “hardcopy” available (printed books, CDs), or if you’d like to sell a movie digitally or on DVD then Amazon has a great option in their CreateSpace service.
CreateSpace lets you make your material available “on demand” – both digitally and in physical forms. For digital, that’s the norm – but it is a great and relatively new option for physical books, CDs and DVDs. They actually create a copy for each order you receive. You don’t need to pre-pay for print runs or predict demand for hard copy versus digital sales. You can sell your material through a dedicated online store page they provide you, and you also have the option to list your merchandise on Amazon.com (for a higher percentage of revenue.) If you’re selling a book you can make it directly available for Kindle, which is the strongest of the digital book distribution services right now.
There are a few competitors in the self-publishing space, but I think CreateSpace is the best thanks to their low setup fees and the potential for Amazon/Kindle exposure. Where they are weak is in the appearance of the dedicated product pages they provide and the complete lack of any ability to track sales driven by your website or other online marketing efforts. Those issues aside, it’s a great deal and I am using it myself for a few projects.
Restricted Material:
Pretty much all the options I’ve presented so far have restrictions on the type of material you can sell. Most significantly, they all disallow “adult” material. They each have their own definition of what that means, but if you have an “adult” business idea it is probably safe to assume that none of the above are an option for you.
There are services that do not have the adult restrictions, and the best way to find them is to go to sites that sell material or services similar to what you have in mind. Begin the sign-up or checkout process and at some point they will show you the service they use to process subscriptions or orders. Some will have their own merchant accounts so this may take a few tries. (You don’t actually have to sign up, just browse to the point that you see who takes the payment – then check out that company’s website.) These payment services charge higher fees – partly because they can since you’re limited in your options, and partly because the fraud and chargeback rates are way higher for sites selling racy or otherwise restricted material or products.
Hosted Stores:
A final and important option for selling goods online is to pay for a hosted store service. Intuit made a big entry into this business a bit ago, and other big players include Yahoo! and most of the major web hosting companies like GoDaddy and 1&1. They provide an all-in-one solution: site-building and management software, the shopping tools, and checkout. Their card processing rates are usually similar to the three payment services in this article, but they typically charge a monthly fee that is quite a bit higher than a typical web hosting arrangement.
I don’t care for these because they are generally proprietary systems and limited in what they can do in terms of look and feel. So, if you start with one of them you are stuck with them unless you decide to completely rebuild your online store elsewhere – there is no easy way to “migrate” to another service. That said, if you have checked out the instructions for adding PayPal, Google, or Amazon buttons to a site and you are thoroughly confused, these may be the best way for you to get started – and they may meet your needs for a long time. If you’re successful and outgrow them, then your profits may be enough to hire a web developer to create a new site for you in the future.
As always, I hope this article was useful and I’d appreciate your comments. Best of luck!
