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ANALYSIS of AVAILABLE SERVICES for SELLING DOWNLOADABLE FILES
3/14/2004
There are 4 criteria that must be satisfied.
- The system must include
a shopping cart program linked to a gateway service to process and confirm the
credit card transaction, or it must satisfy this requirement internally.
- The
credit card transaction must be complete before the file is made available to
the customer.
- There must be adequate means for the owner to obtain the profit from
the transactions.
- The system can include storage for the downloadable files, or the
files can be stored elsewhere.
- The cost must be in-line with the
product price. For this study the product price was approximately $6 per unit.
My research came up with 5 reasonable options that varied in cost and simplicity.
All appeared to be equally effective. I decided not to report here on
anything other then the first two options. So if for some reason they are not
satisfactory there are other options.
The 2 best services are:
- eSellerate
60 cents per transaction.
- PayPal and PayLoadz combination
38 cents per transaction.
eSellerate
This system is by far #1 in the cost/simplicity equation.
- Set up an account
and the shopping cart.
- Submit a signed agreement.
- Submit a signed credit application for automatic
deposits.
- Done
COST: There is only one fee charged which is based on annual percentage of
sales. They start you out at the lowest rate of 10%, for sales from $0.00 to
$15,000. In the worst case scenario the maximum rate is only %15 for sales in
the $15,000 to $50,000 range (with sales greater then $50,000 the rate is lower).
Therefore the total cost of sale on a $6.00 item would start out at 60
cents and never exceed 90 cents. Each month the funds from sales (less commission)
will automatically be electronically deposited in your bank account without any
action needed on your part. No other accounts are needed, and there are no other
storage fees or transfer fees.
eSellerate provides the shopping cart, the credit card verification process,
and the file storage.
For more info see:
http://www.esellerate.net/default.asp
PayPal
and PayLoadz combination
Until I discovered eSellerate this was by far the simplest and least expensive
option. This still is the least expensive, but I believe you may prefer the added
simplicity of eSellerate over this option.
This system uses PayPal for all funds transactions - collection from the customer
and disbursement to the owner.
The Owner will merely need to establish a PayPal Premiere account
(done online) for the funds from the sales to be deposited into. In this process
you identify a bank account which the PayPal funds can be transferred to. Then,
periodically you log on to your PayPal account and initiate the transfer of funds.
The Customer will likewise need to register a PayPal account
to make the payment for the product. Though this sounds like a negative, the
process of setting up a PayPal account involves no more effort then entering
your personal info in any online shopping cart. The benefit to the customer is
that this is a one-time effort. If they ever need to use PayPal again their information
will already be on file. If a prospective customer already has a PayPal account
(as many do) the transaction process is actually simpler then under a normal
shopping cart transaction scenario.
File Transfer is managed by PayLoadz, a third-party PayPal add-on system designed
specifically for selling downloadable files (intangible goods). PayLoadz releases
the necessary information to download the file to the customer after the completion
of the PayPal transaction.
FILE HOSTING: PayLoadz has options here.
The first option is a free account in which the files are stored on the owners
site. The free account is applicable up to $250/month in sales. If sales exceed
this amount you must move up to one of their Premium accounts which have a "sales
limit" and "monthly fee" as follows:
Premium I: $500/mo in sales requires a $15/mo fee (includes file hosting)
Premium II: $1,000/mo in sales requires a $29/mo fee (includes file hosting)
Premium III: $2,500/mo in sales requires a $70/mo fee (includes file hosting)
Note that the Premium accounts include file hosting plus many other features
that are largely unnecessary.
SHOPPING CART: Web pages on the owners site are used to display (or
list) the products for sale with associated "Add To Cart" buttons that
connect the user to PayPal for the balance of the shopping cart processes and
the completion of the transaction. Once the process is complete the customer
is sent an email message with the information needed to download the file.
COST: Beyond the fee for PayLoadz (which may be free), PayPal charges
2.2% to 2.9% + $0.30 per transaction. This is competitive with standard merchant
account transaction fees of which there will be none when using PayPal. As an
example, the cost on a $6.00 transaction will be less then 38 cents.
For more info see :
http://www.payloadz.com
https://www.paypal.com/
Follow-up 03-31-08 - Also see:
http://www.e-junkie.com/ej/pricing.php
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