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Question of the Day: How do you normally pay for purchases in stores?
Online trade in sorry state
- Thread starter rpm
- Start date
armitage
Expert Member
I can attest to this sorry state of affairs.
Recently a coworker started his own cc. Selling pc's and components.
So he decided to get his own online retailing site.
He got a site with all the frills for about R50 a month.
Though when he started looking into getting the credit payment option running it turned out that his profit would be completely eaten up.
He faced a difficult situation on the one side he could continue to sell his goods for the small markup that makes him competitive or he could raise his prices to absorb the clearing houses fees.
In the end the price increases turned out to be a killer of his company.
Resulting that he took off his eretailing section on his site and now working much more profitably just through normal phone/eft purchases.
Truly ****ing pathetic.
Recently a coworker started his own cc. Selling pc's and components.
So he decided to get his own online retailing site.
He got a site with all the frills for about R50 a month.
Though when he started looking into getting the credit payment option running it turned out that his profit would be completely eaten up.
He faced a difficult situation on the one side he could continue to sell his goods for the small markup that makes him competitive or he could raise his prices to absorb the clearing houses fees.
In the end the price increases turned out to be a killer of his company.
Resulting that he took off his eretailing section on his site and now working much more profitably just through normal phone/eft purchases.
Truly ****ing pathetic.
You have to realise that not only do we have to suffer from one of the most expensive and pathetic broadband services in the world, but we also have exceedingly high charges on nearly every other service. Banking being a prime example. Why do you think we're suddenly getting an influx of foreign banks. They can charge exorbitant fees, provide poor service and have it sanctioned by gvt. In the UK normal banking charges are very low or non existant, but your penalties are very high. In SA they do it @rse about face, with e.g. nedbank charging the earth for normal banking but telling individuals or SME's that they won;t be penalised for exceeding limits, RD cheques etc.
bl@@dy marvelous.
Why not reward the person who is following the rules and managing his acc properly instead of rewarding the d!ck who scr3ws up all the time
bl@@dy marvelous.
Why not reward the person who is following the rules and managing his acc properly instead of rewarding the d!ck who scr3ws up all the time
MrGray
Honorary Master
I've setup a couple of ecommerce sites myself in this country and I can attest to the problems.
1. The payment processors are unhelpful sharks - to actually get a merchant account to take online payments is a bureaucratic nightmare and if you don't get a merchant account you have to work through a third party like setcom/paypal/etc which is a joke as they either demand a huge percentage of your sales or hassle you about releasing the money and happily reverse any and every transaction a customer queries, no questions asked. Most of the online payment gateways are also very technically unflexible - i.e. Setcom will only let you add one item at a time to the shopping basket - you either have to bounce your customer to their site with every "click to add to cart", or you have to combine everything into one item at the end of the process.
2. Fraud - one ecommerce site I was involved with at one point had a ratio of 5 fraudulent attempted credit card transactions for every valid one. The result is that the shopowners were terrified to despatch anything (high value electronics) because of the danger that the transaction could turn out to be with a stolen card or could be disputed and reversed in 2 months time.
3. Bandwidth - apart from the fact that bandwidth is already way overpriced, unless you have the expertise to co-locate your own server at somewhere like hetzner where you'll pay a good rate for fast bandwidth, you will probably end up being raped for hosting by anyone of the many unscrupulous providers out there.
4. Shipping - just costing this and pricing it into the sales order is a nightmare. Forget about international shipping! Expect endless meetings with local courier companies and still end up scratching your head about how to do this and be competitive. Unlike overseas where you can simply plug your ecommerce application into a web service run by your favorite courier company to get realtime pricing, etc for the item, almost all the local couriers have no clue what you're on about. Then work out how you can sell a R50 item online when the shipping will cost you R56. Since shipping is by generally weight forget sending anything like a computer box or large crt monitor.
5. Bureaucratic legal mumbo jumbo and regulations - thanks to the ECT act etc, if you want to cover your backside properly, you have to hire a lawyer to draft the right privacy policy, disclaimers and paia documents for your website as well as ensure that you have the right policies regarding cooling off periods and allowing customers to refund goods, otherwise you could potentially end up in hot water with the law. There is no real distinction whether you're a hobbyist selling a few things not for profit or a large corporate entity. Just out of interest - according to a new international tax treaty, if you sell to the EU you now have to charge the right VAT depending on which country in the EU the customer is and it's your responsiblity that the customer is where they say they are.
I'd say that the majority of eager online entrepreneurs drop out of the process when they start to find out about all of these things. Others (depending on the product) take it all offshore to server in Panama where they don't have to give a damn about regulations, taxes and bureaucracy and you can become a Panama citizen overnight simply by sending a cheque.
1. The payment processors are unhelpful sharks - to actually get a merchant account to take online payments is a bureaucratic nightmare and if you don't get a merchant account you have to work through a third party like setcom/paypal/etc which is a joke as they either demand a huge percentage of your sales or hassle you about releasing the money and happily reverse any and every transaction a customer queries, no questions asked. Most of the online payment gateways are also very technically unflexible - i.e. Setcom will only let you add one item at a time to the shopping basket - you either have to bounce your customer to their site with every "click to add to cart", or you have to combine everything into one item at the end of the process.
2. Fraud - one ecommerce site I was involved with at one point had a ratio of 5 fraudulent attempted credit card transactions for every valid one. The result is that the shopowners were terrified to despatch anything (high value electronics) because of the danger that the transaction could turn out to be with a stolen card or could be disputed and reversed in 2 months time.
3. Bandwidth - apart from the fact that bandwidth is already way overpriced, unless you have the expertise to co-locate your own server at somewhere like hetzner where you'll pay a good rate for fast bandwidth, you will probably end up being raped for hosting by anyone of the many unscrupulous providers out there.
4. Shipping - just costing this and pricing it into the sales order is a nightmare. Forget about international shipping! Expect endless meetings with local courier companies and still end up scratching your head about how to do this and be competitive. Unlike overseas where you can simply plug your ecommerce application into a web service run by your favorite courier company to get realtime pricing, etc for the item, almost all the local couriers have no clue what you're on about. Then work out how you can sell a R50 item online when the shipping will cost you R56. Since shipping is by generally weight forget sending anything like a computer box or large crt monitor.
5. Bureaucratic legal mumbo jumbo and regulations - thanks to the ECT act etc, if you want to cover your backside properly, you have to hire a lawyer to draft the right privacy policy, disclaimers and paia documents for your website as well as ensure that you have the right policies regarding cooling off periods and allowing customers to refund goods, otherwise you could potentially end up in hot water with the law. There is no real distinction whether you're a hobbyist selling a few things not for profit or a large corporate entity. Just out of interest - according to a new international tax treaty, if you sell to the EU you now have to charge the right VAT depending on which country in the EU the customer is and it's your responsiblity that the customer is where they say they are.
I'd say that the majority of eager online entrepreneurs drop out of the process when they start to find out about all of these things. Others (depending on the product) take it all offshore to server in Panama where they don't have to give a damn about regulations, taxes and bureaucracy and you can become a Panama citizen overnight simply by sending a cheque.
A) Credit card fees (credit card processing providers) are ridiculous over here. One of the main reasons for buying online is convenience of shoppinh with a credit card. Here you pay 5%-8% on CC fees the likes of Escrow, etc etc. What's the deal here?
B) Won't consider buying major electronics online unless they're insured (which shouldn't be necessary!!! Because it costs so much more!!!!). Courier services are very lax, at least from what I've experienced. They just chuck your stuff in the van and go. Had to return a computer system after the CPU cooling fan tore off the motherboard from mishandling.
B) Won't consider buying major electronics online unless they're insured (which shouldn't be necessary!!! Because it costs so much more!!!!). Courier services are very lax, at least from what I've experienced. They just chuck your stuff in the van and go. Had to return a computer system after the CPU cooling fan tore off the motherboard from mishandling.
AndyHiggins
BidorBuy CEO
- Joined
- Sep 15, 2005
- Messages
- 145
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- 8
bidorbuy is an option
I agree mostly with the article however I must say in my experience our postal system is not as bad as every one makes it out to be. There are a lot of sellers on bidorbuy for example that make use of local shipping options such as Speed Courier Services, where the costs are reasonable and the service is not bad (e.g. all items can be tracked online through their web site).
For those people that want to start an ecommerce operation one of the easiest and lowest risk ways to get going in South Africa surely has to be www.bidorbuy.co.za. The fees charged are between 3.5% and 5% on successful sales only (no upfront or setup fees).
Andy
(Managing Director - bidorbuy.co.za).
I agree mostly with the article however I must say in my experience our postal system is not as bad as every one makes it out to be. There are a lot of sellers on bidorbuy for example that make use of local shipping options such as Speed Courier Services, where the costs are reasonable and the service is not bad (e.g. all items can be tracked online through their web site).
For those people that want to start an ecommerce operation one of the easiest and lowest risk ways to get going in South Africa surely has to be www.bidorbuy.co.za. The fees charged are between 3.5% and 5% on successful sales only (no upfront or setup fees).
Andy
(Managing Director - bidorbuy.co.za).