If you’re in the business of coaching soon-to-be or growing e-commerce entrepreneurs, you’ve probably got your hands full. There is so much wisdom that you need to impart: business development and customer acquisition strategies, advertising, branding, web design, shopping cart integration—the list goes on.
Coaches have to help their clients manage an assortment of complex subjects, and it’s easy to miss something among the myriad of issues to cover. Especially important to remember is properly managing merchant account volume, particularly with low ticket sales becasue often times these lower risk merchant accounts feel like “set them and forget them” accounts.
As a leader in the credit card processing industry, E-Commerce 4 IM has a great deal of experience in helping ventures around the globe establish and maintain merchant accounts that allow their businesses to flourish. We know how to maneuver merchant accounts successfully — and how to avoid the various pitfalls along the way.
What are Low Average Ticket Sales?
While most coaches probably already know this, it’s still beneficial to review the terminology. “Low ticket sales” refers to the price per item or transaction that is put through a business’ merchant account. No specific dollar amount makes a transaction “low ticket;” the term is relative to the tickets that the bank, the merchant, and the industry as a whole process on a day-to-day basis.
High ticket sales are easy to define; items like weekend mastermind sessions, or even more traditional e-commerce items like flat-screen TVs, computers, or jewelry. Low ticket items generally fall into the “everything else” category.
The risks associated with high ticket sales are well known. High ticket sales often have an above-average rate of chargebacks. As a consequence, merchants that deal in these products are often considered “high risk” by banks. At the end of the day, getting a merchant account can be difficult without some professional assistance.
On the other hand, low ticket sales are considerably less risky. However, that is not to say that low ticket sales are risk-free! Even if you, as a coach, are not a high risk merchant, you can still run afoul of merchant bank rules and limitations, and if you coach e-commerce merchants, they certainly can run into problems with their merchant accounts.
Low Ticket Sales Risks – A Question of Volume
Let’s set aside your own coaching merchant account for now and talk about your client’s accounts. Say that your coaching strategies have been effective—very effective. Your clients’ e-commerce business is soaring and they undoubtedly get their money’s worth.
Their e-commerce sales are climbing through the roof, and all of your planning and brainstorming has paid off. Suddenly, your client’s merchant account is shut down, and their enterprise comes to an immediate and screeching halt. It’s a position no merchant wants to find themselves in.
Sales Volume Limits
Since low ticket sales aren’t necessarily high risk, many businesses, unfortunately, make the mistake of not paying attention to the volume limitations of their merchant account. If your client is wondering where they might find the sales volume limits, you should direct them toward the “volume” field on their merchant account application, or better yet their approval email. If they exceed their allowed sales volume, the bank’s fraud and risk detection tools may sound an alarm.
It’s important to remember that a merchant account is underwritten like a line of credit. In other words, it isn’t like a traditional checking account. Exceeding your anticipated volume is a bit like trying to go over your credit card limit. The bank isn’t going to let you do that. Repeatedly doing so makes you look unpredictable, and they’ll conclude that you are an unnecessary risk. If it is anything that merchant banks don’t like, it is an unpredictable merchant.
The Merchant Account Agreement
The next question is “how do we fix this?” Coaches should encourage their clients to carefully analyze the “meat and potatoes” of their merchant account agreement. If your coaching client is applying for a new merchant account, some serious thought should be given to the size of their market and what a realistic volume should look like.
Anticipating a volume that’s too high can jeopardize a merchant account application. On the other hand, predicting a volume that’s too low can result in exceeding the merchant account volume limits. This can shut a business down or even land them on the dreaded MATCH list.
How E-Commerce 4 IM can Help Low Ticket Coaches
For years, E-Commerce 4 IM has been in the business of facilitating e-commerce enterprises. We even help those ventures considered high risk acquire and keep the merchant accounts that lead to profitability.
For coaches, we can leverage our experience in order to help you do your job; consider us a force multiplier when it comes to issues surrounding SSL implementation, chargeback mitigation, credit card processing, website hosting, and funding. If you’re looking to evaluate merchant account options for your clients, reach out to E-Commerce 4 IM today at 1-800-570-1347 or on our website.