Cooling Off

by Bob Osgoodby

Those with a "brick and mortar" business, quickly learn that there are two types of people they will meet in their store. Those who can afford to pay for the goods and services, and those who can't. Now that seems simple enough.

Someone who leaves the store without buying, because they couldn't pay now, will seldom be seen again. Sure, some go to an ATM, withdraw the cash and return, but they are the exception rather than the rule. Others will write a check, but there are people who can't afford, at this moment, to write a check either. If you can't close a sale when they are ready to buy, they have time to cool off, and you will most likely lose the opportunity.

The same holds true on the web. If you can't close when someone has made up their mind to buy, you will probably lose the sale. Now there are several methods of accepting payment on the web. One is to have them send you a check or money order. They have to write out the check or get a money order, and time passes - in other words you have lost the immediacy of the moment.

Many people buy on impulse, and if you provide a convenient way for them to pay for the purchase, you have a better chance of making the sale. This can take several forms on the web, and let's talk about some.

Option 1

Many online business barely make expenses when starting out. As you get known, it will increase, but after a while will level out. You are losing the impulse purchases. Once you install online checks, your business should immediately increase.

Obviously the online check submission has an effect. But, you can then expect your business to level off again, even though it will be at a higher level than before. Realize that people will not submit a check online if they are tight on funds.

Some people will write a check or submit one online, knowing they don't have sufficient funds to cover it. Yes, this is illegal, but there are those who will do it hoping to get the merchandise.

Those that do are fairly comfortable in the fact that it is usually not worth the merchant's time and effort to prosecute, and they will simply write it off as a bad debt. While the number of bad checks you get will be low, you should take the next step.

Option 2

It is now time for you to acquire merchant status and be able to accept credit cards. People can now make the purchase knowing they have 30 days to make payment. If they were financially tight at that point, they could make a minimum payment, but still have the advantage of making their purchase now. At that point, your business should take a huge jump.

If you are doing business on the web, and selling either a product or a service, and feel you just can't afford to get a merchant account, it is costing you lost sales. Sure, there are upfront costs to become fully operational with online checks and a merchant account, but you will recover that very quickly.

Option 3

But I have to have a "secure site" to accept these you might think, and you are right. You can do this in one of two ways that make sense. You can contract with a company that provides web space and get a "secure site" from them, but this requires a knowledge of HTML coding. You also have to manually enter the credit card information, and you have little defense against a disputed claim, and may have "charge backs".

Option 4

A second way is to set up a shopping cart. This is probably the best way to do business online. You don't need a secure site of your own as the company providing the shopping cart does. An added benefit is that the customers enter the information themselves and their "IP" address is automatically captured. If the credit card is declined, they can immediately enter another.

You are only notified when there is a successful transaction. The customer is automatically sent a receipt, so the chances of a charge back are significantly reduced.

Option 5

If you don't have merchant status, you should at least consider "Paypal" which is probably the easiest and cheapest way for small businesses and websites to accept payments online. There is also a shopping cart available, but does require basic knowledge of HTML. "Paypal" is a viable solution for a small business. The only drawback is that your potential customer has to sign-up with "Paypal", and "jump through a few hoops". This does risk "cooling off".

If you find a way to close the sale when the customer is ready to buy that works for you, your online business should prosper.

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