Hey everyone, I have posted in here once in a while on a feature we have been trying to tackle over the past couple of years. It was not high on our priority list until now, and is one of the last big features we would like to add as we are now large enough that it would generate a lot of revenue for us.
Basically our site lets people create free and easy to maintain and customize websites. We are creating a storefront / shopping cart system as well as allowing credit card payments on our current custom online form system. This is where the Shopify / Yahoo Stores model comes in, which we are looking to emulate.
If anyone has experience on setting this up, or just insight into some of our questions, I'd greatly appreciate it. We have a few ways to approach this. One is to set it up so that all the payments go to us and then we issue bi-weekly checks to all our customers. Would this be considered factoring or more of an affiliate system? Customers could in theory sell anything they want through the stores. If it is factoring, how do Yahoo and Shopify get around it? The main downside with this that it will probably take a good amount of time to issue checks each time and update each customer's account bi-weekly. We currently have approximately 5,000 websites, and I assume we would have 100-500 sites with active stores and payment forms. We would probably add a charge of 1% of each transaction, and with the volume we anticipate, we would be getting decent rates through our gateway and merchant account service, so sellers would be charge a small rate overall.
Another way to approach it is to let users use their own Google, PayPal or Amazon Checkout service, but require them to have a credit card on file with us, and we would charge a 1% processing fee for each item that people purchase through their storefront. The downside to this is that sellers would have to sign up for an extra service if they don't have one, and then we would have to create a system for users to enter and edit their credit card info (would probably just use Authorize.net's customer information manager.) As well, we would probably charge them bi-weekly or monthly to cut down on the processing fees, but that's 2-4 weeks where we have money that is technically ours sitting in limbo until we charge them, and there is more potential to abuse the system to avoid paying us.
So if anyone has any experience, or suggestions, I'd love to hear them. Keep in mind that we are a free service, and we cater mostly to sports teams, so most users would not be interested or able to create their own merchant accounts, and instead are looking for inexpensive turn-key solutions.