Always a key event on the online seller’s calendar, Amazon Prime Day is fast approaching. So, now is the best time to get prepared.
Online marketplaces are taking over from the high street as shoppers increasingly favour the convenience of buying from home. If customers feel it will save them time, they’ll always be ready to embrace the newest payment option.
With so many options available, marketplace sellers may consider these the companies developing new payment methods to be a threat – and here’s why.
Debit card transactions aren’t restricted, but PayPal, Apple Pay and Amazon Payments could narrow the market as a consumer either needs to sign up to the service or purchase a specific smartphone.
A recent survey by ChannelAdvisor found that 67% of online payments were made through PayPal, the second highest behind credit/debit card transactions. Both Amazon's and Apple's version were not far behind. So which system should e-tailers use on their sites?
Paying by card is still the most popular option, so you should always offer that option. When it comes to the other methods, you should consider how many people use it and if that number is likely to grow in future.
PayPal has been offering online payments since 1998, but it was only last year that Apple got in on the act with Apple Pay. PayPal has 169 million users worldwide – newer services may have a lot less than that, but that’s going to change. You’ll need to consider the implications of that when choosing which option is right for you.
E-tailers also need to think about the restrictions to the payment options. While PayPal lets anyone sign up to its service, Apple Pay is available only to customers with iPhone 6, iPhone 6 Plus and Apple Watch devices and Amazon Payments is linked to a customer’s Amazon details – meaning these firms may find that their reach never goes beyond their existing customer base, and holds them back from becoming truly universal payment systems.
One-click payments, along with next-day delivery, are also becoming more popular with both websites and consumers. As a marketplace seller, this could put a strain on your logistical process, giving you less time to process and ship out orders. Investing in logistics – the nuts and bolts of an online business – is one way to overcome this issue, and accurate forecasting should allow you to see when to order extra stock and to get more staff in.
Exchange rates could be affected
PayPal can impose its own exchange rate on eBay transactions. PayPal is just one example of a transaction processor who takes control from online sellers in this way, and this kind of practice is something you’ll need to account for. Avoiding unfair exchange rates can significantly improve your profit margins, so it literally pays to investigate other means of collecting your profits.
In any case, the profit margins of any company trading internationally are vulnerable to changes in the foreign exchange market. However, by working with a currency expert to put the right foreign exchange management solution in place for your business, you can keep more of your profits – without changing the prices that attract your customers. At Currencies Direct, we’re helping thousands of e-tailers to do exactly that. Compared to relying on an online marketplace, our clients can save up to 3% of the total sales value on exchange rates.
Our friendly experts are ready to help you to do the same. Find out more about our e-tailer Collection Accounts and how they could boost your profits.