E-Commerce (electronic commerce) is commercial transactions using credit cards over the internet and is an important aspect of managing the finance of your art business. With the US representing half of the world’s fraudulent credit card transactions, it’s important to get familiar with how to best protect yourself. Days of mailing and cashing checks are gone. Scammers are especially big on sending checks and tend to focus both on artists who still accept this method of payment and emerging artists who are excited about the potential sale.
The initial dive into E-commerce can seem daunting, especially if you haven’t set up an online storefront or accepted credit cards before but this blog introduces very easy ways to begin accepting credit transactions. This post will lay out both the benefits and challenges associated with a few E-commerce options as well as the cost associated with each option.
Some E-commerce and retail software can cost per month, can cost percentage per transaction or a combination of both. If you are just getting warmed up to the idea of accepting credit card transactions and if you open up your studio a couple of times a year, then a percent per transaction would be a good option for you. Otherwise, you could be paying between $15-$30 dollars per month for some E-commerce services that you use very minimally.
- Benefits – An easy E-commerce shop that is frequented by many artists, crafters, and creatives, 54 million registered members to be exact. Etsy is browsed by many to find that special one-of-a-kind gift. It has a wide range of amateur sellers to booming small businesses. It’s an online shop interface that can be linked to your artist website and bank account for easy transfers of funds.
- Advanced User Benefits: For advanced users, you can also get the HTML code to embed a small shop-like interface into your website. You also have the ability to develop downloadable merchandise (like How To’s and other digital format files). You can also accept Etsy gift cards and ship them internationally.
- Challenges – Shipping is a part of this E-commerce process. You need to be able to calculate the shipping and handling costs of your product. It’s also a good idea to create shop policies, for example, deciding you handle a situation where your product arrives damaged and the customer is unhappy. Taking nice photos of your product can be challenging if you are not a product photographer. Use good lighting and take multiple shots of your item. If this is not your forte, consider paying a photographer to take good images of your items because good photos are what sell your product online.
- Cost: 0.20 Cents per listing, 3.5% per transaction not including the shipping cost. Renewal of listed items needs to happen every 4 months and can happen automatically if you choose this option. Your bill can also be auto paid so you always have a full inventory in your Etsy shop.
- Benefits – A safe and secure online way to accept and pay money personally and for businesses with over 188 Million users. A wider audience base will be familiar with Paypal and it can apply to more monetary transactions. No shipping details like Etsy and can take many forms of online payment. You have the ability to send money and to request payment (invoicing). You can also connect it to your bank account for easy transfers.
- Advanced User Benefits: There is a Paypal card reader available for businesses (2.7% fee per swipe) and has manual credit card entry options with a slightly higher fee. Business loans are available too. You can add Paypal as a checkout option or link for your customers who prefer to pay this way.
- Challenges: Less about an online store and more about secure payment methods.
- Cost: Paypal has a 2.9% fee plus an additional $0.30 when selling. International transactions have a higher percentage fee. All rates can be found online, with no monthly fees or contracts.
- Benefits – Square provides a variety of POS devices ranging from a free Magstripe square reader that plugs into your headphone jack to a full register stand. Square takes all types of cards: Visa, Mastercard, Discover, Apple Pay, American Express and can be used on iPhones, iPads, and Androids. Make an account, download the app, add your sell-able merchandise to your register’s inventory and you are ready to take credit cards. Super mobile and easy to use. The app software allows for invoices and a register dashboard as well. Again, can connect to your bank account for ease of transferring funds.
- Advanced User Benefits: New chip reader is needed to take advantage of the security change in debit and credit transactions. Known as EMV (Europay, Mastercard, and Visa), it is the global standard secure way that uses chips for authentication. There are additional register options including register stands, no-swipe card registers (NFC), and more. You can include the percentage of sale tax on sales taxable items to automatically be calculated during the transaction. You can also create discounts and gift cards, and comp and void transactions.
- Challenges: The magstripe option doesn’t always go through so you can feel uncomfortable standing in front of your customer swiping your card 4 or 5 times to get the card to read. You can usually learn about any questions you encounter with Square online, they have good resources, videos, and help. As you see in the Advanced User Benefits, you can do a lot with this software so don’t feel overwhelmed, take on what you feel comfortable and learn once you feel you have mastered the basics.
- Cost: Basic Magstripe reader is free and so is the app. There is a 2.75% fee for credit cards charged, no monthly fees or contracts. Money transfers into your bank account within a day or two of the transaction.
- Benefits – Square Space is a combination of the website with a full working shop. Has a variety of options: website hosting, online shop, domains, and website. It’s a full package deal, artist website, and online shop in one! The interface allows for customization by color and design meaning you can include your logo in your shop. You can add incentives like free shipping and discounts. It accepts Paypal as a payment option as well as Apple Pay.
- Advanced User Benefits: You can send emails to users who placed items in their shopping carts but had abandoned them before checking out in an attempt to recoup sales. There is shipping integration with the software allowing you to print shipping labels for your sold merchandise (Etsy has something similar to this as well). Integrations between your networks allow you to connect your Facebook, Twitter, and other pages to the website.
- Challenges -You must have a Square Space website in order to take advantage of their E-commerce options. Therefore if you already have a website and you are looking to widen your merchandise base and sellability, creating a new website through Square Space probably isn’t an option without a complete re-design.
- Cost: Personal pages 3% transaction fees and a $16 per month fee, business pages 2% transaction fees and a $26 per month fee. Read the fine print because it looks like the monthly fees are $12 and $18 but that’s if you pay the entire annual fee at once. The personal page versus the business page has varying bells and whistles that come along with the package but both have a fully functioning E-commerce shop.