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A month ago, we switched our payments on CloudContacts from Paypal and Google Checkout to the new payments service from Stripe. I’ve been meaning to post about why we switched and since Greg Taylor posted today about his switch to Stripe, I figured this was a good time to start my string of posts about my online commerce payments research I’ve completed over the past few months. There is a good discussion of Greg’s post on Hacker News. Greg mainly discusses moving from Paypal to either WePay and Stripe and ultimately selecting the latter.
When I launched CloudContacts two years ago, I made the decision to use Paypal and Google Checkout as the payment services we would offer because after speaking with friends and colleagues, it seemed like people trust these services and as a new service, customers might be more likely to pay with one of these services. Initially we used a shopping cart with E-Junkie.
Shortly thereafter we created a custom checkout which had the following flow:
- CC Order Form > off site > PP/GC > back to site >CC Thank You
It seemed like everything was going well — every once in a while we would get an inquiry from a potential customer that they wanted to pay with a credit card and we explained that you could use a credit card on both Paypal and Google Checkout.
And then I started to do some analysis and realized the biggest mistake I’ve made with CloudContacts to-date. What I found was that a number of customers filled in our order form, went off to Paypal or Google Checkout, but never completed the order. Many of our business customers aren’t web savvy and the fact that they had to input their info twice if they needed to create a pp/gc account was just a headache. I know we all think that everyone has a Paypal and Google account but this really isn’t the truth and even if someone has a Google account, it doesn’t mean they have set it up with Payments (now Wallet) access and information.
I emailed a few of them and asked if they would explain why they didn’t complete the purchase and the overwhelming response was that it was just too much work and that they didn’t have Paypal nor Google accounts.
During his talk at Startup School earlier this month, Groupon CEO Andrew Mason noted that the company is working towards launching Groupon 2.0 after they master Groupon 1.0. Mason also mentioned that there is a six-month backlog of merchants that want to be featured on Groupon. Could a self-service option be the Groupon 2.0 Mason referred to?
A variety of startups have launched offering ways for companies to offer group buying deals on their own without the need to go to Groupon, Living Social and the other current group buying services. Groupon currently has over 1,600 salespeople in their 2,500 member workforce. Perhaps Groupon sees self-service as an opportunity to expand their business and build revenue further without the need for as heavy a sales presence in every city. This self-service opportunity becomes greater as Groupon’s brand presence continues to grow.
Oddly the idea of Groupon offering a self-service option differs from Mason’s presentation in which he talked about the need for a strong sales team to make sure all of the deals are of top quality. I assume there will be a strong quality control mechanism for self-promoted deals. Maybe they will add Digg-like voting to push deals to the frontpage of a city.
Yesterday Brian Mayer at MV Technology Partners noticed something new on the Groupon Chicago (their homebase) market. In the graphic below, you can see that Groupon mentions a new service named, “Groupon Stores” which appears to be a self-service option for merchants to participate within the Groupon platform.
I couldn’t find a mention of Groupon Stores within the merchants section of the site so I am not sure what the fees and/or charges are for merchants who use this new offering.
Brian notes, “The potential of this new program is obvious: the new merchant program will allow stores to create their own Groupon deals, which would presumably be purchased through the Groupon system, growing the network and enabling more targeted, localized deals.”
So far, the current Groupon Stores deal I’ve displayed below only has 6 sales. I wonder if the next city they will launch Groupon Stores will be in Mobile, their newest city.
I’ve been a rebate guy for as long as I can remember. Back in the old days before the Internet we know today, rebates were a hot mess. You purchased an item that offered a rebate, printed out all of the forms, copied the UPC codes, made your copies and send the envelope off to some PO Box. Then you waited – usually about 10, 11, 12 weeks – and after no check arrived, you called the company and were told that either the rebate was invalid or the check was sent, just wait a bit longer. Many times I had to resubmit the rebate and wait another 3-4 months for the check. The whole process was just a pain – but everyone knew that the way companies offered such great deals was to use “float” on the cash from the rebate (and that not everyone will submit the rebate offer) – so another 12 weeks delayed payment meant the company earned more on the money I was due.
In my opinion, Staples was the first large retailer to make the rebate process easier. They allow you to submit almost all of their rebate offers online which removes the delay in mailing along with the postage cost and there is no worry that Staples didn’t receive the rebate. You can track the rebate online and so far I haven’t had any issues with rebate payment.
What’s interesting is that I am more likely to purchase an item with a rebate at Staples because I know the process will be smooth — perhaps this counter balances the “float” I noted above because more purchases are completed.
Today Staples is now offering rebate payment via PayPal. This new form of rebate payment should actually make receiving the money quicker and easier as there is no wait time for the check to arrive. This new option should help ease concerns from many rebate shoppers who note that the rebate postcards often get lost in the mail.
Staples has a short FAQ about the Paypal rebate payment option.
At the Tech Cocktail event last week, the Ordoro team presented their web service. The founders describe Ordoro as, “a web-based order management software targeting small-to-medium ecommerce businesses”. They are focused on the long-tail of ecommerce businesses from individuals selling items on eBay to businesses with a retail store that also sell online.
The idea is that Ordoro doesn’t replace the ecommerce software a merchant uses. Instead what they do is help you manage the order from the time of purchase forward. This includes the customer management (emails, support, etc.), inventory management and purchase order management.
They connect to your website and keep track of the entire order fulfillment process. You can easily print shipping labels and send tracking numbers to each customer.
This month I moved to a new city and decided rather than hiring a mover which was amazingly expensive, I would give away/sell/donate most of my larger items and buy new when I arrived at the destination. One of the items I gave away was my bed (i.e. mattress/boxspring/frame).
I started to go mattress shopping and found it to be a pain as I remembered it was 10 years ago which was the last time I purchased a mattress. I think there is a mattress cartel in the U.S. as you can’t easily compare prices as every bed has a different name per shop even though it’s the exact same as the previous store. It’s amazing that bedding manufacturers have been able to get away with this for decades. Imagine if the iPad was sold under a different name from store to store.
I started to look online and only one merchant seemed to come up in search results. And after a few searches the company followed me via targeted online ads all across the Web. In fact, even browsing CN displayed ads for this online mattress showroom.
I decided to purchase the mattress from this online merchant and paid for overnight delivery (which was very reasonable at $49). I figured the worst thing that happens is that I have to exchange the mattress for one at a different comfort level. Reviews for the merchant were overall positive although there were many negative reviews but most of those were regarding shipping and what seemed like poor customer expectations for delivery dates.