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TIGSource ForumsDeveloperBusinessidiots guide to ecommerce?
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« on: August 19, 2007, 06:22:25 PM »

Hi, I want to get into distributing some of my own games myself, I thought  a trail run will break me into the business of online distribution, Ill sell some developer products first before I move onto my games, so Ill sell model textures etc first so I can get a feel of what one does in ecommerce, from this I can learn about setting up online shops and learn about online distribution before I do it with a game product. My questions apply to selling developer content, but the same question is relevant if it is also a game, which I will do once I have learnt about online distribution.
 
Being new to ecommerce I'm new to the whole affair so I have some questions on what to do.

The first thing that came to my mind is a store that uses paypal, rates don't look too bad, though I think this may not be an automated service, I'm not sure if we have to manually send the products to the buyer, does paypal just give a list of buyers and what they bought, then you have to send the digital media out.

Ive heard of some other ecommerce services, that I think are automated as in in they handle the payments and send the digital media to the buyer, but the cost is much more, like way more than paypal. Giving out like 8% and more of the cost of the item to the service, hell that's high.

What are the options of online shops, what can we do here.

Also, I have sites that are interested in selling my art assets, now how does this model work, these sites have told me what percentage they take but Id like to know how sales are managed, is my product on their server and I have to go on trust of how many units was sold, that sounds like one way to get cheated to me, what are the safeguards, or do they send the traffic to me and take a cut that way. In this case its sales of art assets, but it could apply to a video game, whats the method of business in this, if someone sells your product.
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Matthew
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« Reply #1 on: August 24, 2007, 10:25:58 AM »

Check out http://forums.tigsource.com/index.php?topic=257.0

I'd recommend Plimus, but any on the list should work fine.

Also, seriously consider whether you want to save a few measly percent by using any order system that requires manual fulfillment.  PayPal fees come to %4.4 / $0.88 on a $19.95 game.  Plimus would be 10% / $1.95, but includes front-line support for license recovery (including phone support), a host of reporting tools, refund tools, and automatic email sending including license support.

How much do you value your time?  If you need to do some additional hands-on support for 10 orders--support which would have been covered by Plimus' systems--you've just worked your ass off to save $10.70.  That doesn't make any sense; automation and delegation are key.
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Matthew Wegner
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« Reply #2 on: September 03, 2007, 04:44:48 PM »

What exactly does paypal do, whats the process, it seems that it involves manually setting the order.

What exactly is involved, it seems these other services send the order out for you, what exactly does paypal do.

whats the process for the seller, I don't mean setting up an account, I mean selling.

Also even at 10% that's a lot, I cant see massive games companies giving out 10% for there online orders, these companies would be making 10% of all online business if that was so, they would be making billions, 10% of all the worlds ecommerce, even if spread over like 10 or 20 companies, that's a lot of money, cant this be done with a program on your server or something. Not that its likely, but say if a game did 100,000 sales, at 10 UK sterling a go, that's a million sterling, your gonna give away 100,000 to some company that just processes this.
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« Reply #3 on: September 03, 2007, 05:13:12 PM »

Also even at 10% that's a lot, I cant see massive games companies giving out 10% for there online orders, these companies would be making 10% of all online business if that was so, they would be making billions, 10% of all the worlds ecommerce, even if spread over like 10 or 20 companies, that's a lot of money, cant this be done with a program on your server or something. Not that its likely, but say if a game did 100,000 sales, at 10 UK sterling a go, that's a million sterling, your gonna give away 100,000 to some company that just processes this.

When you sell 100,000 games, you no longer qualify for the idiots guide to ecommerce. Wink  Large companies with good history can negotiate much cheaper credit card processing rates (which is lower than 10%).  For example, something like  http://merchantaccounts.networksolutions.com/  But as a brand new internet based company, you either won't qualify for the low rates, or you won't have enough sales to survive the fees associated with such account.
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Matthew
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« Reply #4 on: September 03, 2007, 08:31:10 PM »

Walk through it.  Let's say you do sell 100,000 units.

1) You opt for a homebrew system powered by a merchant account, PayPal account, or whatever.

2) Compared to Plimus, BMT Micro, or other turnkey systems, you lose front-line telephone support and numerous other time-saving features.

3) As a result, you spend an average of 10 seconds of your time per order dealing with support issues, reformats/reinstalls, and refunds.

That adds up to 277.7 hours (not counting any development time to create your own system).  Save any money yet?
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Matthew Wegner
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« Reply #5 on: September 04, 2007, 07:21:20 AM »

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That adds up to 277.7 hours (not counting any development time to create your own system).  Save any money yet?

pay someone 5 quid an hour, 277 x 5 = 1385 pounds sterling. Thats cheaper than the 100,000 of our 100,000 selling 10 pounds game.

But like the post says, this is the idiots guide.

lets walk through what happens, what exactly does paypal do, what does the seller do, like I said, this is the idiots guide, for someone that knows nothing about it, as in nothing.
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« Reply #6 on: September 04, 2007, 05:11:23 PM »

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That adds up to 277.7 hours (not counting any development time to create your own system).  Save any money yet?

pay someone 5 quid an hour, 277 x 5 = 1385 pounds sterling. Thats cheaper than the 100,000 of our 100,000 selling 10 pounds game.

But like the post says, this is the idiots guide.

lets walk through what happens, what exactly does paypal do, what does the seller do, like I said, this is the idiots guide, for someone that knows nothing about it, as in nothing.

Honestly, 10% really just ain't that much, in the grand scheme of things.  Especially not for what you're getting in return.  And we're not talking 300 hours saved, we're talking much more, when you factor in the cost of rolling your own system, managing whoever's doing your support (if it's not you), PLUS the time involved for you to do all those "trial runs" and comparisons you're talking about.  (And by the way, who the hell is going to do good support for you for 5 quid an hour?)

Instead of going through all that hassle, give BMT Micro or Plimus a buck for every game you sell.  You know what you're paying and you know what you're getting.  Use the time you saved to work on your games.  And Matthew's two-man company pulls six-figures a year.  He's done the research, he's done the analysis, he knows what he's talking about.  He's given you good advice that you're fighting, for some reason.

So what it sounds like to me is that you're not really interested in the options, you're interested in how PayPal's merchant system works.  In which case, I'd say go out and do a Google search, or look through PayPal's website, or start a merchant account there - figure some things out for yourself, and then come back and post your findings in a new thread about PayPal and we can discuss it again at that point.

I don't think it's a bad topic to discuss at all, but I'm extremely wary of people who ask a lot of questions but aren't interested in heeding advice or doing any research themselves.

In the meantime, I think I'm going to lock this thread, because it's redundant, everything that needs to be said has been said, and it's getting confusing what the issue at hand is.  Wheels are spinning but I don't see it going anywhere fast.

Also, I'm banning your first account. Huh?
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