Most small software vendors don’t want all the hassle of taking payments direct from customers, so they use a third party registration service. Registration services provide payment processing plus additional services, including handling of:
- licence key emails
- coupon codes
- affiliate payments
- taxes
- invoice sales
But these services don’t come cheap. According to this calculator some registration services charge as much as 15% commission on every £20/$40 sale. 15%! I find that quite staggering. 10% is more typical, but personally I don’t intend to give 10+% of my hard earned income to anyone, except my wife and the government. To add insult to injury some of these services also try to upsell questionable ‘offers’ to your customers. For example KAGI upsell a licence look-up service for which the software vendor gets a, frankly insulting, $1. I understand from reading the macsb forum that the upsell will be added automatically to the shopping carts of all software vendors selling downloads and will be checked by default. You then have to opt out if you don’t want it. Personally I think every software vendor should offer licence retrieval for free. And don’t even get me started on Digital River/SWREG and their Reservation Rewards ‘offer’.
PayPal and GoogleCheckout are much cheaper, with rates of approximately 3.4%[1] and 2.25%[2] respectively on a £20/$40 sale. But PayPal and GoogleCheckout are just payment processors and don’t provide all the additional services most software vendors need. They provide extensive APIs so you can ‘roll your own’ service, but this sounds like a lot of work reinventing the same old wheels.
Alternatively you can use a third party to provide additional services on top of PayPal and/or GoogleCheckout. I use ejunkie which provides most of the services you would expect from a fully-fledged registration service from just $5 per month[3]. The savings can be considerable, for example (all figures approximate):
| number of $40 licences sold per year |
yearly costs | ||
| 10% commission registration service | PayPal +e-junkie[4] | GoogleCheckout +e-junkie[5] | |
| 1,000 | $4,000 | $1,420 | $1,060 |
| 5,000 | $20,000 | $6,820 | $5,060 |
| 10,000 | $40,000 | $13,660 | $10,060 |
If you can offset your GoogleCheckout processing fees against your Google adwords spend your monthly costs could be as little as just the $5 ejunkie fee.
On the whole I have been very happy with the service I have received from e-junkie, once I got it all working. It has been very reliable and the support has been very responsive. ejunkie does seem to be more geared to selling downloads (e.g. e-books and MP3s) than licence keys and the documentation is thin in places. Consequently I had a few issues trying to bend it to my particular requirements. I will try to find time to cover these issues in another article.
You can find out more about ejunkie and try their 1 week free trial here.
Other possible third party integration solutions are PayLoadz and Linklok. For those of you who prefer a more traditional registration services, I have heard some good reports about Plimus and Avangate on various forums. Neither of these companies has been bought out by SWREG owner Digital River (yet). I haven’t used any of these services myself.
It remains to be seen whether pressure from PayPal and Google forces registration companies to reduce their fees, add more services or just puts them out of business.
Thanks to Patrick for first alerting me to ejunkie.
Full disclosure: The above ejunkie links are affiliates links. If you follow these links and sign up with ejunkie I will get a commission. It is not a lot, but I won’t need many people to sign up to cover my ejunkie fees completely.
[1] PayPal rates vary according to volume. Currency conversions cost an extra 2.5%.
[2] Google have sweetened the deal by offsetting processing fees against adwords fees until the end of 2007. This means the rate is effectively 0% if you have a moderate spend on Google adwords each month.
[3] The monthly fee depends on number of products. $5 per month covers 10 products and 50MB of storage.
[4] Based on 3.4% PayPal fee + $5 per month ejunkie fee.
[5] Based on 2.25% GoogleCheckout fee + $5 per month ejunkie fee.
Successful Software 
Actually, the deal is even sweeter for US-based Checkout merchants. We get free transaction processing through 2007, no ifs ands or buts, and then in 2008 we get offsetting with AdWords expenditures.
I’ll second the thanks to Patrick for highlighting e-junkie on his blog.
Yes, E-junkie is great once you’ve figured your way around all the things I guess they assume you just ‘know’. I’d love them to re-brand the completion pages though. Thinking of my customers, I still cringe at ‘ejunkie’ URLs and the little demon logo.
>Thinking of my customers, I still cringe at ‘ejunkie’ URLs and the little demon logo.
The association with “junkie” is rather unfortunate, I agree. However all my customers see is the e-junkie url briefly flash up before they are redirected to PayPal. They don’t even see the URL for GoogleCheckout payments. I then send them to my own URL after completion, not the e-junkie one.
Personally I think e-junkie could do well with a rebranded and simplified version of their service aimed just at software vendors. Thats easy for me to say of course. ;0)
We use Plimus and were pretty happy with it for YEARS until it suddenly reported a number of false chargebacks :-(. Wish we could use Google Checkout, but we are a European-based company, and Google is for US-only merchants :-( sigh…
Alex,
GoogleCheckout is now also available for UK based companies. I don’t know if/when they are planning to roll out to other European countries.
I’m very irritated that Google Checkout/Paypal and the upcoming Amazon service don’t let me accept payments in South Africa, so we’re stuck with the aforementioned payment processors / registration services.
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> For example KAGI upsell a licence look-up service for
> which the software vendor gets a, frankly insulting, $1.
> I understand from reading the macsb forum that the upsell
> will be added automatically to the shopping carts of all
> software vendors selling downloads and will be checked by
> default. You then have to opt out if you don’t want it.
> Personally I think every software vendor should offer
> licence retrieval for free. And don’t even get me started
> on Digital River/SWREG and their Reservation
> Rewards ‘offer’.
Kagi never made anything like that!
You must confuse with SWReg. This story happened with them (except that you couldn’t opt out, you had to manually modify the HTML to remove this ‘feature’).
If Kagi would have done something like that, I suspect that some suppliers would have react (in the mailing list)!
And it would be in my store, now!
Cheers,
Frederic
Frederic,
Kagi do have such a service. Follow the link above for proof.
As to whether to is added by default – I am only going on what I read in the MacSB list – I don’t use Kagi myself.
My apologies!
I don’t know why, but it never appeared on my store :) (and Kagi didn’t make this sort of things before), so I missed this.
Richard: PayPal has accepted payments from South Africa for quite a while.
There are still a few places they do not take payments from, like Serbia (IIRC), but it has been vastly reduced during the last few years.
Does anybody has worked with ShareIt? what about them?
>Does anybody has worked with ShareIt? what about them?
Digital River company. Wouldn’t touch them with a barge pole:
e-Junkie sure has very good features. One thing which is not clear to me is how I can determine the price based on the product attributes. Our product price depends on various attributes and I want my customers to make those selections before I show them the “Add to cart” link.
I am sure the reference to e-junkie site is not noticeable to many users but the name itself is a little put off for some people. I will be giving them a try and will see how it goes/
Collagist,
Pricing is by number of products. I guess you would have treat each price+currency as a separate product.
I’ve used e-junkie for six months to sell both a digital download (eBook) and tangible goods (trophies). I’ve stayed with them because of ease of use, excellence in delivering downloadable products, and low price. There are some cons, though, especially around the area of thank you emails. Read my full e-junkie shopping cart software review
Another solution to sell both tangible and digital products is Juzaz EasyPay.
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Hi Guys,
Did not see how I can post a new message – so I hope somebody reads this. WinRAR is sold via shareit and all goes OK besides the processing of corporate/educational orders via PO/Invoice. Can anybody recommend a service that professionally handles such kind of orders and is at least as good (and less expensive) than shareit with “normal” credit card orders?
Thanks in advance!
Tom
tom@winrar-edu.com
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Well, if you are just looking to sell digital files Kiqlo is free with no limit of space or items.
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Thank you to comparison of means of payment. I personally use Paypal but well give all the documents have since the beginning finds herself with an account blocked, money and customers who stuck harassing us. I excused my English through a translator.