Third Party Processors

The Easiest Way to Get Started Making Money On Line

The third party processors have a place. They are great for someone just getting started. However, they can cost more that you need to be paying out.

Third Party Payers

First lets look at the third party payers, their fees, benefits, and the cost of doing business with them.

They usually have a set up fee, many charging around $50. That is not so bad considering what they provide. But there is more.

For every transaction you will pay an additional fee. Usually it is around $1. The problem with this is if you have a product that you want to sell for say $1 you would actually be selling it at a loss. This is because of another fee they charge.

They charge anywhere from 3% to 7.5% of the transaction as a process fee.

There is some good news coming. There is light at the end of the tunnel although it has been turned off to conserve energy.

One last problem with third party providers is the Reserve Fee. This is a 10 to 25% hold back of the sale price to cover returns. It is like their insurance policy.

There is a lack of control once it is in the hands of the third party provider too. So when a return comes, it is often refunded and that can cost an additional fee. You may have no control over the return.

What if the reason was (a common oversight) it would not load on a Mac computer. That is something you could fix and make the product available to everyone.

The Benefit of Third Party Providers

The benefit is in the specialized service they provide and the scale that you can start with.

Suppose you have an e-book you want to sell. Imagine you sell it off your website and you sell it at $100. Your site is new and your still in the learning curve. So you only have 50 unique visitors a day. You only sell about 10 books a month.

Wow, you made $1000 last month. How would you like to make 10,000. What if I told you it would cost you $50 per book to make that much. Your thinking, why would I give 10,000 to make 10,000?

The why answer is simple. Because you cannot make the 10,000 where you are right now. You have a choice, make 1000 per month or 10,000. To make money you will have to give up money.

Here is how it works

You go to one of the third party providers like Click Bank. You set up an account. Then you set up an affiliate account. You want to get people who are serious about selling your book. So you give them $50% to do this.

Now because of the service Click Bank provides you could end up with 100 affiliates who each sell 2 per month or 50 who sell 4 copies. Maybe one really great site can move 100 all on his own. He may have 20,000 people visiting a month.

You would not have this if it were not for the service Click Bank provides.

There is another third party processor benefit. If I sign up as your affiliate, how do I know how many people you sell to. Click Bank keeps things honest. That is good for both of us.

This is just the basics on third party processors. More to come in time.

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What are the other Merchant Fees? 4 of 4

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