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B2B Sellers of eCommerce Seas: Keys to an Overflowing Treasure Chest

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In this second article in our series on B2B eCommerce, we help you avoid getting hornswaggled out of profits.

You already mastered the basics of launching an ecommerce B2B operation in “The Promise of the Shopping Cart”. So you’re ready to set sail with your eCommerce adventure. But what is the best vessel for your journey: The Black Pearl or the Flying Dutchman? A shopping cart or alternative payment options? A combination of the above?

Fees can hornswaggle you out of profits

Choose recklessly and fees could hornswaggle you out of your profits. The right decision could be the key to an overflowing chest.

I can already hear the calls of ”Argh! Just tell us the services to buy and spare us the details matey.”  As in all business endeavors, the devil is in the details (the ”devil,” by the way, was a long seam in old wooden sailing ships that was very difficult to seal. Ignore the devil in eCommerce and you’ll face the same consequences of sinking your project.)

There's no best shopping cart, matey

In the first of this series, we introduced some eCommerce concepts and requirements, but refused to name the ”best” shopping cart. The reason is simple: There is no one ”best” shopping cart. The details in your business requirements define what tools you will need to succeed. Use your end goal and the results you expect as your compass, guiding you to the right solution. Seek results-based on best-practice B2B marketing, not technology-driven marketing.

Today we’ll look at some of the fees associated with two ways of conducting eCommerce. We will go over still more fees in the third and final part of the series.

Fees, scurvy fees

Nothing is free in the eCommerce seas. Carefully assess bank fee structures associated with your online transactions before bringing your account onboard. Take a hard look at all gateway charges and merchant account processing. Following are some of the fees you can expect:

An Internet Merchant account can run around $10 a month, with a per-transaction fee of 25 cents, an additional charge of the credit card company of between 2% and 3.5% (known as a qualified discount rate), with additional non-qualified surcharges running from 0.5% to 1.5%. 

Avast, you should also be aware that cards can be ”charged back” if the card holder disputes the charges.  This typically incurs a $20 charge per-transaction fee.  This is on top of the funds you lose in a charge-back dispute.  To protect yourself from the curse of the chargeback, consider a fraud protection plan , particularly if you are selling products that can be resold on the “gray market.”

For Gateway fees you can expect to pay around $18 a month and some kind of per-transaction fee, typically around 10 cents a transaction.  This cost is stacked on top of the merchant account cost, which gives a running total of $28 a month and 35 cents per transaction, plus the discount rate of the credit card company.  It’s possible to negotiate lower rates if you shop around and keep your merchant account processor aware of your needs.

Alternative payment programs

PayPal, Google Checkout and a few other alternative payment services typically offer "free" payment services for buyers and a fee-based system for sellers or service providers.  Alternative payment methods represent a small portion of overall eCommerce sales, so it’s critical to understand the markets they can be leveraged in.  They are called “alternative” because the primary payment method is by credit card: Discover, Visa, MasterCard and American Express.

Google Checkout:

  • For sales of less than $3,000 a month: 2.9% plus 30 cents per-transaction
  • For sales above $100,000: 1.9% plus 30 cents per-transaction
  • An additional 1% for International payments

Google Checkout provides a secure method of purchasing products and services within the Google network. You would need a verified Google account with a verified bank account, and your client would need to have a Google Checkout account with a verified credit card for purchases. Google Checkout will deposit payments in your specified verified account.  Google Checkout does not provide any out-of-network services at this time.  It does provide fraud protection to the merchant, hence verification of accounts requirement. The association with the Google brand can be a positive and a negative.  Google’s big brother image and recent privacy issues can bias some of your customers, although the adaptation of Google Apps has not stopped all businesses.  Another challenge is that Google funds management is difficult to reconcile as its API is very limited.  On an ecommerce site with a large amount of daily orders, it is not practical.


  • For sales of less than $3,000 a month: 2.9% plus 30 cents per-transaction
  • For sales above $100,000: 1.9% plus 30 cents per-transaction
  • Generally an additional 1% for International payments

PayPal offers a secure payment network and out-of-network credit card payments (by non-PayPal account holders).  The one catch to the out-of-network payments is a lifetime limit on an unverified guest, which also carries over to PayPal.  You have to verify your account (that is, give PayPal your business account number and let them deposit a small sum of money into it which you then verify).  PayPal offers chargeback protection and fraud protection. PayPal payments must be transferred to a bank account to access the funds outside of the PayPal network.

The downside: PayPal carries the stigma of eBay. The upside: PayPal enjoys a big chunk of the alternative payment market (roughly 20% by industry standards of all payment methods). It also boasts a well-developed API and a large number of third-party integrations with shopping carts. While not widely accepted by consumers it does remain an attractive alternative payment method for B2B.  PayPal offers a service on the high end, a "virtual terminal" that allows a business to charge a credit card directly.

PayPal Virtual Terminal runs around $30 a month with a 2.4% to 3.1% credit card transaction cost plus a 30 cent per-transaction fee.

You can see how choosing the right crew can make or break your fortunes in the high-stakes world of B2B ecommerce. For those who brave the elements, the reward can be great.

This is the second article in a three part series on B2B eCommerce. The final installment will help you set a course for a smooth ecommerce launch. Please share your experiences setting up a B2B ecommerce site and ask your burning questions about how to protect your booty from the curse of too many fees in the comments section below.

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Topics: Lead Generation Design