12. Selling

When it comes to selling, most will want to go for the cheapest, but there are tradeoffs with that that can bring a lot of later headaches.

Offering a product for sale means having a way of collecting money. A one-off item for sale can be handled by cash. Too many and that gets unwieldy, requiring a store and staff and insurance and and and! This is where online sales with eCommerce software comes in, and that enables a huge amount of scaling up. However, while selling locally may not be too problematic, as soon as there is a requirement to charge different rates of sales taxes, it gets a lot more complex.

Payment gateways like PayPal can help because they have facilities to set up tax rates by location. However, go international and it becomes a lot more complex as the sales taxes have to be remitted separately to each country, though the EU does allow submitting all the returns for different countries through just one. It is the trying to keep track of all the different rates and the different thresholds in each country that makes the whole deal just not worth the hassle to keep the gateway's charges low.

The problem is that when selling through PayPal, they are only handling the money, but the transaction is still between the seller and the customer. The next step up is to go with a payment gateway that acts as the seller of choice. That just means that they become the retailer, handle and remit all the different taxes, and just pay the difference to me in the end. They take away all the headaches, which is especially important for a one-person operation.

It comes down to how much they charge, and given Apple store charges 30%, I thought that charges would be in the same range. Pleasantly surprised that FastSpring only charges a flat rate of 5.9% plus US90c per transaction. While some PayPal transactions can even be free, even that isn't cheap enough to warrant the taxes headaches compared to having all that taken care of.

Selling software digitally has another requirement that FastSpring fortunately offers, and that is for them to get a license number from me when they sell the product. That took some setup and programming, but was not too onerous. I did not want sales handled from my site, as it couldn't anyway, being Smallsite Design, but I didn't want them tracking every one of my site's visitors which they could do by being embedded in a page. So I have just a link to a page on their site and they call my license server to get a license and it is all done.

I needed a payment solution that was very low key, decoupled from my site, and that allowed me to keep the least amount of customer information on the license server. As it is, only the license number and eventually the domain are kept. The license number does include the invoice number and date, so there is traceability if required. This way I have no need for any financial compliance like PCI at all, as I don't handle credit card numbers and not even personal customer information.

FastSpring pays into a special PayPal account from which I can transfer as required to my own private account. They have the option of getting a constant amount per sale, regardless of where sold and the taxes charged, whereas normally they are deducted from fixed selling prices. I prefer the constant amount as then the amount I receive should be directly calculable from the number of licenses sold. It does mean that the selling prices are different in different parts of the world, but that is down to what government taxes are levied on them in each country. It keeps it simple from my end.

One of the problems I found with all the merchant of choice payment gateways is that actually getting the fee schedules are painstakingly difficult. I only found out on FastSpring once I started looking at the technical documentation. Searching these companies' sites usually turns up nothing. Their ads are like those late night ads that incessantly proclaim how affordable they are but never actually tell their products' prices. Some more transparency could help here, as being cagey gives the impression that they are expensive and don't want anyone to find out until it's too late.

One thing I am not happy about with FastSpring is that if for some reason they cannot get a license number, like a transmission error occurs, they still charge their customer. Fortunately, the transaction is pending and, as is usual practice at banks, dropped when no confirmation is received, but a few business days later. I would rather they cancel the sale immediately instead, as then the customer would know immediately where they stood and could safely try again later, rather than waiting for their money for days, and reticent about trying again unless they get billed for nothing again.