E-commerce is big business. It's estimated that consumers in the U.S. spent $385 billion online in 2016, and that number is expected be nearly double that by 2020.
There are thousands of businesses selling online to millions of customers, but what's the best way to sell? Is it better to outsource to a full-service e-commerce platform, such as FastSpring, or just use a basic payment service, such as PayPal, Stripe, or Google Wallet? Read on for a point-by-point breakdown of full-stack platforms vs. basic payment services.
Growing and Scaling the Business
If a business is going to grow, it needs time, money, and energy to do so. When those key resources are being diverted to building and maintaining an e-commerce platform, the opportunity for growth will never arrive. Or, if you do decide to take the chance and scale up, the growth will be unsustainable without the scaffolding of a solid e-commerce platform.
While a payment service will offer the basics required to accept payment on your website, it won't provide the support that a full-stack platform can. This support will give a business the stability it needs to make the dream you've envisioned for the future a reality. To get a better sense for the features offered in a full-stack e-commerce platform, review the FastSpring's extensive list of available features.
Back Office Assistance
One of the big benefits of a full-stack platform is the back office assistance feature. This is a wide-ranging service, offering help with a number of tasks that are inconvenient at best, but can often become burdensome to the point of thwarting growth potential. Basic payment services won't offer that kind of service.
Credit card chargebacks are the bane of many businesses. An e-commerce platform will not only eliminate chargeback fees (typically $15-$40 per occurrence), but remove the annoying chore of chargeback management.
Customer service is another sector in which a full-stack e-commerce platform outperforms basic payment platforms. Enjoy the benefits of having a Dedicated Account Manager handling the initial setup and assisting with any issues that arise on an ongoing basis with fast response. Typical response time from a Dedicated Account Manager is 12 hours or less, even on most weekends.
Additionally, businesses receive access to a support staff trained for software product and software delivery issues instead of inexperienced customer service representatives who aren't trained specifically for handling software vendor issues.
Tired of handling complex tax compliance issues by state or country? A full service solution like FastSpring will handle tax collection, compliance, and payment on your behalf as part of their back office assistance, including management of the European Union’s Value-Added Tax (VAT), California and New York state sales taxes.
While this is where one might assume that platforms focusing on payments only would perform best, don't discount the full-stack platform. Fraud is an increasingly prevelant issue in e-commerce; last year, fraud cost consumers over $16 billion. Reducing fraud rate is the best way to increase a business's revenue.
Save time and avoid hassle by using a full-stack platform to minimize the volume of fraudulent sales. Ensure your customers’ transactions occur on secure servers on a PCI compliant system that avoids storing customer credit card numbers, avoiding serious liability issues. For instance, FastSpring aggregates order data and does real-time anti-fraud analysis of each new order prior to each transaction occurring, eliminating fraud to a far larger degree than a merchant can do on its own.
Increase international sales by displaying your order page text in each customer’s native language, displaying prices in localized currencies, and settling your transactions in the appropriate currency for each customer. FastSpring supports 18 popular languages and currencies supported include Euros, Pounds, USD, AUD, CAD, and Yen. While payment-specific platforms such as Stripe or PayPal might support more currencies, they don't have the additional features that set full-stack platforms apart.
Utilize multiple merchant accounts for payment processing. No need to obtain your own merchant account, which typically costs 3.5-4%+ of every transaction. Card processors routinely advertise rates of about 2%, but check the statements. It’s far more thanks to surcharges applied to international transactions, 1%, higher rates charged on reward card transactions, corporate purchasing and debit card transactions, higher priced American Express processing costs, fees for items such as chargebacks, etc.
Many full service e-commerce firms utilize multiple merchant accounts for backup security and the merchant account cost is included in the price of the service. Payment services and e-commerce platforms both assist businesses to avoid working to obtain different accounts for different payment methods supported, avoid paying monthly fees to merchant providers, turning over personal financial records, being personally liable for certain bank account funds, and more.
Basic payment services and full-stack platforms allow customers to pay through as many methods as possible to maximize sales, including Visa, MasterCard®, Discover®, American Express®, PayPal™, check, and money order. Corporate, educational, and other types of customers who purchase large quantities often require payment to be accepted via purchase order. Increase revenue by accepting these large-sized orders.
If your business is lagging in customer acquisition, a basic payment platform won't be of any assistance. A full-stack platform offers:
- Access to a marketing distribution network and online marketing guidance offered by software marketing gurus.
- Cross-sells and upsells on order pages which typically increases your average revenue per order by 15-45%.
- Order pages branded with your site’s look to reduce cart abandonment, including shopping cart option.
- Sub-product listings (i.e. drop down menus for add-ons) and data collection throughout fully customizable order pages.
- 3rd party marketing tools like Google Analytics for site traffic analysis, Google Adwords online ad campaign tracking, and affiliate programs such as ShareASale, Commission Junction, etc. for growing affiliate marketing revenues.
- SEO Expert Assessment and Consultation.
- Online Marketing Expert Audit, Strategy, and Campaign Management.
- Seamless integration with 3rd party email marketing campaign management providers.
- Extended Download Protection or the option to receive your product in physical format for an additional customer charge via an on-demand CD/DVD physical fulfillment network.
- AdWords campaign optimization with Google AdWords Expert Audit and Campaign Management.