I’m a Mompreneur… Now What? – Ways to Take Payment

The method that you use to take payments will greatly depend on where you are selling your items. Obviously if you are selling at a craft show you are going to need to take payment differently than you would if you were selling through ETSY, Storenvy or another online platform. There are also a few other criteria you need to pay attention to when you decide how you will accept payments such as the fees associated and the time it takes for payments to process. First lets talk about the most popular method for taking payment among those of us in the handmade community – Paypal. Paypal can be used for people with online shops and now by those of you who sell person-to-person. I have been using paypal for over 5 years and it is quick, convenient, and easy! Though you may be surprised to learn how much they are charging in fees. FEES: If you sell online (i.e. ETSY, Storenvy) or send an invoice Paypal will take 2.9% of the money you receive plus $0.30 (for sales made to people within the United States). They will take 3.9% plus a fixed rate (depending on currency) for any international sales that you make. In the past few weeks Paypal has started advertising their card reader and smart phone app which charges 2.7% when you swipe a card and 3.5% plus $0.15 if you type in a card number manually.(Please note that if your sales are exceeding $3,000 per month you can qualify for a merchant account with lower fees.) PROCESSING TIME: Payments are typically available immedietly on Paypal. The only time you have to wait is if the buyer purchased using an e-check in which case it typically takes 3-5 business days to process into your PayPal account. Please do yourself a favor and DO NOT SHIP any items until payments have processed. HOW YOU GET PAID: With money that you receive to your paypal account you can keep it in the account and use the monies to purchase from other places online that accept it, you can transfer right into your bank account (takes 1-3 business days and I have always had to wait the full 3 days), or you can apply for the PayPal debit card and use it as soon as you receive payments. My suggestion? Get the debit card! I can be shopping in Target, make a sale and use the funds 5 minutes later to purchase my dollar section finds! The square reader is good if you sell person-to-person. It is a little reader that plugs into your smart phone and along with the square app you are able to take credit/debit card payments on the spot. On the square reader website you can order your reader for free. If you need the reader yesterday then you can purchase it at places such as Target, Staples, etc. FEES: The square reader charges 2.75% per swipe. If you manually enter a card number you are charged 3.5% plus $0.15. PROCESSING TIME: With the square reader the monies you take during regular business hours are deposited to your checking account the following day. HOW YOU GET PAID: As stated above the money you receive with your square reader is deposited to your checking account. For those of you who sell on ETSY I’m sure you have seen lots of things from them about their new direct checkout option where buyers can pay directly through ETSY with their own credit or debit cards cutting out the need for Paypal. By accepting direct checkout in your ETSY shop you will also be able to accept ETSY gift cards and print shipping labels through ETSY which has been very convenient for me. The only thing I don’t like is that your money is not available right away. FEES: If you make a sale through direct checkout the fees are 3% plus $0.25. Etsy takes these fees before depositing the money to your checking account therefore you will not see them in your monthly statement. PROCESSING TIME: ETSY will release the funds for deposit to your checking account three days after you make a sale IF the item has been marked shipped. If you don’t mark the item as shipped until five days after the sale then ETSY will not send the money until that time. Even if your funds have been released that does not mean they were sent to be deposited. ETSY does deposits every Monday and once money is sent for deposit it can take 1-3 business days to show in your checking account. However, you can request a deposit sooner than Monday and you may be able to get the deposit pushed up. HOW YOU GET PAID: You get paid directly to your checking/savings account. CASH: Who doesn’t love cash? Hard, cold, green money in your hand is always great! Not much to explain here besides for – make sure you get your money honey! If you are selling person-to-person be as clear as possible about payment from the start. Make sure the price is clearly defined and that you advertise payment is due upon delivery (or however you want to receive payment). If you make custom ideas it may be a good idea to charge a deposit before starting the item to cover your own butt. CHECK: Just say no. There are too many risks involved in taking a check. I took a check ONCE for an ETSY order because the lady really wanted an item and said she was having trouble with her PayPal account. I decided to do it, but I told her that the items wouldn’t ship until the check cleared. It worked out, but it could have easily been a scam. OTHER: Other payment options are popping up around the web and I don’t have the knowledge to compare them for you but I would love to hear your feedback if you have tried anything different! Now that I have given you the information you need I have created a chart for easy comparison! Incase you missed the other installments of the Mompreneur Series you can find them here:

The future Momprener series schedule is below so mark your calenders OR sign up to receive the exclusive ‘I’m A Mompreneur… Now What?’ email every Sunday.

November 4th – Bookkeeping
November 11th – Product Photography
November 18th – Using Social Media for your Business
November 25th – Creating Community

Happy Selling!