Transitioning Your Business to the Internet

A lot of business owners suffer from the pain of loss of clients or customers (whichever you choose) to the internet. There’s really no need to continue pulling your hair out because someone stole business from you; it’s time to improvise, adapt and overcome! What’s your complaint, really? Losing business to the internet or not wanting to invest the time to transition your business when everyone else was. That’s right, at this point, everyone that is making it on the internet, formerly as a traditional business, started three to five years ago on their strategy for success in this market. All hope is not lost, all you need is a plan.

So you have a successful business that brings in enough money, but are losing business you should be getting to the internet. Maybe that’s the case, but maybe you, like a lot of smart merchants have a good location, product and support, but are doing the legwork for your virtual competitors. We’re all guilty of it, we stroke the sales staff at the local store, then buy online to save money. I talk with local vendors that cannot keep up, especially in specialty businesses like sporting goods and automotive. The pain isn’t so apparent right now, but in a couple years, their lack of action will drive them under. I guess, to end this article now, I’d just tell you to get a website and start uploading your inventory and services, but it’s a bit more involved. Start updating your infrastructure; not being able to keep up with orders when they come in unexpectedly will get you in more trouble than just shutting the doors and turning the phones off, and you know that. Contact your suppliers and work out a new deal, at least negotiate a new volume pricing schedule; while you may be blowing smoke, this happens everyday with manufacturers and distributors. Same thing with shipping; there’s nothing that irritates me more than when I buy a product online and they only offer one carrier. We all know there are differences and you need to be able to offer options, so get it set up. Forget about extra staff and office space, unless that’s absolutely necessary. Those things will drive up costs so high that you won’t be able to compete on price. If you need staff, get a temp or subcontract; you success may be short-lived, so don’t commit yet. Most importantly, if and when the orders come in, make sure you can accept payment. This means that your merchant account must be up to the task. Contact your bank or processor or merchant service provider to ensure that your limits and type of processing are in line with this possible transition. A lot of times they aren’t. Most banks look upon E-commerce business as high risk, paired with high volume, which in many cases is the only way to turn a good profit online, may be too much risk for a bank to bear and they may turn you off. First things first; read your merchant contract to see how your rates will change based on volume and type of transaction. Check your business plan and make sure it’s the one you submitted to the bank when you applied for your merchant account. Next, contact your bank, processor or merchant service provider to see what you need to do to ensure that you can accept funds, both high volume and high frequency. Do not take this aspect of your banking plan lightly. Unusually higher transaction amounts, high batch submissions and quick growth will throw up red flags with the banks and they will most likely flag your account and withhold the release of funds until an investigation is completed. The time this takes depends on the amount of work they have to do. Don’t get yourself into this situation at all costs; simple steps taken can avoid this; as well, investigations and variances in your account will drive up rates and/or ultimately have it suspended or terminated.

If the necessary parties are on board, you should be ok. If they’re not, or you don’t like what you are hearing from them, then contact a merchant service provider. Merchant service providers can shop your business around to banks that specialize in certain types of business. Some of them are domestic and some are international. International banks processing cards within the US is very mainstream and poses no threats to merchants. If you’re thinking of expanding your business online, keep in mind, move sowly and be prepared for an increase of business.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and ecommerce payment processing provider specializing in international and Internet merchant account solutions. Stradafee also offers check processing, high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing and check processing please visit www.stradafee.com.