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I'm 50, retired military, and working for someone else. I have a business plan which will realize $25K to $50K annually. However, the retail product will cost each customer about $500 - $750. Should I accept credit cards (a rarety in this area). I think it is low risk and good for business, but don't know if the extra expense on my part would be worth it. Small businesses generally don't accept credit cards. Why not?
"A rarity in this area" is the part I am focusing on. I do have a question for ESFP. Are you selling from your home, going on sales calls, or have a store? Can you give more information on the type of product?
I know no one who would say I'm going to buy a $500 item, so I think I'll go to an ATM and withdraw cash so I can go to the merchant to buy it. They just go to the merchant and use their card. If the merchant does not take the card a very high likelyhood they will loose that sale.
Cards are a convenience and a protection for the consumer. I know many consumers that only use their card and merchants do loose their business if they don't take them (or as earlier poster said - consumer wants to use it because of the related reward).
While cards do cost the merchant, the merchant also needs to consider if he has any losses related to bad checks, accounts receivable aging and related bad debt, and cash loss/theft. Look at those historically for your business and consider if those transactions were cards you wouldn't have had those losses - so the card fee could offset some of those losses.
If taking a card picked up some extra business for the merchant (those consumers that would have left if not taken) then you can also consider the card fee almost an advertising fee. Taking that card with its related fee got you some business you wouldn't have had.
If you sell any type of item with any kind of impulse buying there are real statistics from retail trade groups that show card transactions are also a higher average sale than a cash or check transaction. That card fee won you that higher average sale.
Yes they cost and it can be expensive, but think about all the good and bad and build it into your Business Plan.
I have people go to the ATM a few times each year. I would like to know more about the product.
When I owned a small business we had a credit card machine. We found merchant services through one of our local banks. We shopped around for the best services. Being in a rural area, we thought it would be hard, but it was easy. We had to sign a 3 year lease on the machine and had a monthly service charge that was adjustable. If our credit card transactions increased, so did the fees.
Having the credit card terminal was great for business. The machine did a daily total printout, weekly total printout, and monthly total printout. It was very easy to track sales and find customer info in case there was a problem with a transaction. It also made it easy to keep track of the books.
Driller1, sure... I will be mainly selling pellet fuel pellets. Maybe expand in the industry, but for now there is a unbalanced supply and demand for these. Average customer will probably buy 3 tons @ $225 ea. Delivery is extra, of course. All of these replies are fantastic. This is one factor in the business that has been perplexing. It will be nice to be able to make an informed opinion, based on your experiences.
Driller1, sure... I will be mainly selling pellet fuel pellets. Maybe expand in the industry, but for now there is a unbalanced supply and demand for these. Average customer will probably buy 3 tons @ $225 ea. Delivery is extra, of course. All of these replies are fantastic. This is one factor in the business that has been perplexing. It will be nice to be able to make an informed opinion, based on your experiences.
This is not an impulse buy at all. People will plan to buy these days ahead. I wound not take on the cost of credit cards at this time. JMO.
This is not an impulse buy at all. People will plan to buy these days ahead. I wound not take on the cost of credit cards at this time. JMO.
This is a good point. Even though there are several places in this area to get these, all are competitively priced. I will read all of these ideas, and hope to get as many as possible. This is a toughy. It isn't really an impulse purchase item, is it?
It might not be an impulse buy, but I know the last business (a pizza joint) that charged me to use a credit card (for a purchase over $10) hasn't and won't see me again as a customer. My purchase was 8 months ago, and I typically purchase at least one pizza every week.
It might not be an impulse buy, but I know the last business (a pizza joint) that charged me to use a credit card (for a purchase over $10) hasn't and won't see me again as a customer. My purchase was 8 months ago, and I typically purchase at least one pizza every week.
My 2¢.
It is actually against MasterCard/Visa/Discover rules for a merchant to charge you for using your card. If they find out they will notify the merchant and if it continues he can loose his ability to accept the cards.
That is not to say a good merchant won't factor the cost of the cards into his overall cost of goods sold and cover his expense with his overall pricing strategy. A merchant can also offer a discount if you pay by cash. But they can't add a surcharge for the one using the card.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
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I generally won't do business with any business that will not accept credit cards. When I had a water pipe between my house and the meter burst, I called several plumbers that quoted me $1000 to $1200 to replace it. I took one company that came in at $1070 because the 2 below that said no credit cards. Well I do not have that kind of cash in my wallet and I would have had to take time off my job to go to the bank and get it out of savings (ATM limit is $300 a day). I had to get the thing fixed like NOW because it is hard to live with no water. Credit cards are essential to doing business in my view.
I generally won't do business with any business that will not accept credit cards. When I had a water pipe between my house and the meter burst, I called several plumbers that quoted me $1000 to $1200 to replace it. I took one company that came in at $1070 because the 2 below that said no credit cards. Well I do not have that kind of cash in my wallet and I would have had to take time off my job to go to the bank and get it out of savings (ATM limit is $300 a day). I had to get the thing fixed like NOW because it is hard to live with no water. Credit cards are essential to doing business in my view.
LOL. I would have showed you how your home owners would have paid it and I would have covered the deductible.
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