Why do you need to have a merchant account for your online business?

A question that haunts anyone who is planning to sell his/her products or services on internet is the mode of receiving payments from buyers sitting in another city, state or country. The best and the quickest option is to accept payment through credit or debit cards. There are other alternatives but none as quick and as convenient as this one. Online shopping is all about convenience and speediness, if the buyer has to wait for days before the payment arrives into seller’s account so that he might be able to dispatch the products. Such a lengthy turnaround time destroys the whole advantage of online shopping. In view of that, when you are setting up an online business, you must arrange for a merchant account to be able to accept payments through credit/debit cards. Asking your customers to send checks or money orders just doesn’t fits in.

Merchant Account is a type of bank account that makes it possible for account holder to accept credit card payments from his/her clients. In other words merchant account provider is a service that allows business owners to accept payment via credit/debit card. Though in most cases, you’ll not be dealing directly with merchant account providers, especially if you are a small or medium-sized business. However, the idea is to be able to accept credit card payments, be it through Merchant account providers, Independent Sales Organizations, Payment Processing Companies or Payment Gateways. Let’s take a look at how payment gateways or third party merchant accounts can help you in this regard.

Payment Gateway:

If you are an online business, you must sign up with a payment gateway service. Payment gateway allows you to offer an easy solution to your customers to make on the spot payments. The process starts from customers clicking on the “pay now” button and the whole transaction takes not more than 4 – 5 seconds (even though there’s a lot of data transfer taking place at the backend that includes various parties validating the process).

Third Party Merchant Account:

Third party merchant account is the most convenient and also the most commonly used medium by small businesses. Third party merchant account services serves the same as the traditional merchant account, however the prices differ. Third party merchant account typically cost less than the original merchant account when it comes to setting up an account; however the transaction fee is significantly higher. Some examples of third party payment processors are PayPal or 2co.

Source:
UK Wholesale

Types and characteristics of consumer loans

Banks normally thrive on the loans and services they provide to businesses. For example, offering funds for new businesses or expansion of some existing business, managing inter-city or international transactions involving large sums, or offering financial advice, etc. However, no bank can completely ignore the individual consumers, as they constitute a large part of the market and are considered an important source of funds for the banks.

With the passage of time, more and more individuals have shown interests in lending from banks, they'll seek loan for a small home-based business, go for a loan for house construction, or even knock at the door of bank when they need a brand new car. Consumer loans differ in sizes and characteristics, ranging from long term huge mortgage loans to small loans taken out for shopping through credit cards.

Consumer loan is different from business loan in many ways. Even though the business loans are borrowed by individuals as well, but people tend to think differently when borrowing for the business as compared to the borrowing for personal use. Consumer loans are thought to be the more risky ones than business loans because individuals defaults (fails to payback) more often than the businesses, that's why consumer loans normally have higher interest rates than the business loan. Also, consumer loan mostly has fixed interest rate.

Different types of loans:
Consumer loans can be divided into different categories. Some commonly known types are …

Credit Cards:
One of the most widely used forms of consumer loan; Credit cards have got such a huge user base because of the convenience factor. People use it for shopping at large retail stores, dining out in restaurants or at petrol pumps. Best thing about these loans is that consumers can avoid the interest altogether by paying back shortly after the transaction, otherwise a small percentage is added into the basic amount on monthly basis as interest.

House Finance or Auto Loans:
Another very important type of loan, house finance or mortgage has helped many to be in possession of their own house. Auto finance is a loan that succeeds in the time of economic growth. However, both of these loans are subject to manipulation by dishonest parties.

Installment vs. Non Installment Loans:
Installment loans are relatively smaller loans which the borrower is required to return in monthly installments, whereas non installment loans are needed to be paid off in a lump sum after a fixed period of time. Most of the time consumer loans fall in “installment based loans” category.

Source:
Whoelsale Suppliers
Wholesale Manufacturers

Different types of discounts you can offer to your customers

What are the two most attractive words, you can use in your advertisement to lure customers? Answer is Discount and Free, and although “Free” can pull much larger crowds as compared to “Discount”, you can’t really offer your products for free. Therefore, discount is a more practical, sensible and smart option to use. Different types of discounts and sales are very effective to curb the competition. It can also provide a good boost to your sales in the time of recession, when people are looking to save on every deal. However, offering discount on your products will obviously reduce the inflow of cash, therefore you need to chew over your discount strategy over and over, keeping in mind all costs and expenditures. In addition to this, there are some laws in developed countries that impose some restrictions on discounts; you need to confirm to these regulations as well.

Here are some of the discounts you can offer to your customers.

Quantity Based Discount:
You must have noticed a huge difference between wholesale and retail price. Whenever you buy something in large quantities you expect some discount from the seller. People are more than happy to offer low prices to a buyer who will purchase in large quantities because it allows the seller to save in many ways. But normally these quantities are too large for a normal consumer and only businesses can afford to purchase a product in these quantities, however you can offer some sort of off-price if the customer buy more than one units, for example 5% off if someone purchases 10 units or more.

Payment Based Discount:
If majority of your customers make purchase on credit then you can offer payment based discounts to these customers, tempting them to pay as soon as possible by offering a small discount on paying cash without delay. Prompt payments will save you all those collection costs and help you with daily expenditures of the business, as well.

Trade Discounts:
These are the discounts you have to offer to the middleman, be it the wholesaler, retailer or distributor, so that they can cover all costs of marketing that may be needed before the product reaches to the ultimate consumer. Trade discounts are in fact, the biggest of all.

Special Discount:
In some cases you can offer discounts to some specific group of customers to capture that special segment of the market. This niche group can be of students, house wives, doctors, your previous customers, small business owners or any other strategically targeted group.

Source:
Wholesale

Starting your own export business, The process explained

Whenever you decide to start something big, a little time spent on planning in the beginning will save you from lots of thinking sessions (filled with frustration, panic and disappointments) later on. You can make giant looking tasks a lot easier by dividing them in small, practical step-by-step procedures. Starting an export business is not a walk in the park, and when you decide to get into this business, you have to make quite a number of arrangements such as deciding your product, choosing shipment mode, arranging finance and much more.

Initial Stage:

Select your product

Determine potential buyers

Market research

Exporting method

Comprehensive business plan

First you have to select the product; in case you are not already involved in producing or exporting some product locally (even then you may need to improve its quality and features for international export). After choosing the product, you can now assess the targeted customers. Do some research on the market and analyze it carefully. Next step is to decide upon the exporting method. Remember, all of these decisions and selections should be based on some facts and figures, and not mere assumptions. As stated earlier, time spent in planning & research will save you from possible loss and failures in the future. You need to be watchful, alert and patient in the start, so that you don’t fall in hands of frauds and scams. 

Middle Stage:

Determine Price

Payment terms & conditions

Terms and conditions for delivery and shipment issues

Shipping mode

After you are done with initial research and planning work, you now have a plan in your hands. You know your potential customers by now. Next step is to determine prices, while doing this, keep all costs and expenses in mind, don’t try to take too much risk by offering extra ordinary low prices. Payment terms and the mode of payment is also an important decision, so is the selection of shipment mode you are going to use.

Final Stage:

Financing

Production/Manufacturing

Packaging

Shipment

Collection of payment through your bank or some payment processor

After all the planning and marketing, you will start receiving orders from interested customers. At this point, you need to have sufficient funds in hands to manufacture or arrange the products you are looking to export. Once you have got the funds, and you are done with the production work, you need to go through packaging and documentation work before making a shipment to the customers.

This is the basic framework for starting an export business, which will help you in starting smoothly and gradually growing.