On July 24, 2011 at 05:45, mariomp said...
I still don't understand how you guys can eat 3% from your profits just for the transaction handling.
I do my best to account for it during the "walk-through". I'll generally try to bring the conversation around to how they're paying.
If I worked 8 hours at $75/Hr, than I bill $600. Loosing $18 bucks just for transaction fee that can be revoked just seems like a bunch of money I could use to buy myself a lunch or two.
Put it another way, it's $600 on a $20K job.
You're charging $11. per hr. under the national average. Maybe it's time to raise your rates?
And lets not forget that you get charged on the whole transaction, including sales tax, so it's really higher than it appears, right?
Say I sold an item that cost me $800 for a $1,000. That's $200 profit. Tax a modest 7% on $1,000 is 70 bucks. 3% transaction fee on $1070 is $32.10. So now my $200 profit is $168. I just lost 16% off of my profit margin because I accepted credit card.
I know some will say, raise your price to cover. I'm already losing jobs because client's say they can't afford this or that; yes, we know better.
Losing clients because you're too expensive is generally a false statement. We all lose prospective clients. They will tell us that we are too expensive, but that's generally not the reason. (They may not have the money, so anything is too expensive) People buy on emotion and justify it with logic. I mean no offense by this statement whatsoever. I would buy a book on sales. I can recommend a few excellent easy reads. PM me. Bottom line, if you hear..."You're too expensive" alot. It's something else, not the price.
Others will say give them discount for cash transaction since most states (including mine) don’t allow to charge more for CC transactions. "OK, Mr. client, that will be $51.50, but we'll give you 3% off if you pay cash, or $50." All he remembers is that I was in the fifties, and my competitor at $49.99 was in the forties.
My Doctor doesn't give
me a discount, why should I give him one?
Maybe it's the instant payment that saves the headaches of tracking clients down weeks or months later about outstanding balance, and getting the "check it in the mail" stories that attracts CC transactions. Is that it for you guys?
In 25 years, I've only had to chase 1 guy down for payment. I actually posted about it on here because I had no idea what to do. We accept a deposit before work starts, and we collect on completion. The only time we'd let someone mail us a check is if they're a previous V.I.P client. But you have to set the expectations up front before work starts.
Isn't there a service that will charge a small fee per transaction? Like stock market with their $7 per transaction fee, no matter if you trade 1 share or a million?
There may be, I don't know.
