Selling software online

Discussion in 'Laughingbird's Blog' started by laughingbird, Jun 1, 2007.

  1. laughingbird

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    Back in 1999, when I began creating The Logo Creator, there were very few ways of collecting payment from online customers.

    I went directly to Visa, Mastercard and American Express and set up accounts with each one.
    All three gave me different methods of entering credit card information. I had to place each purchase ... manually ... into a software application ( that I think I remember purchasing for $400). Each night, we had to submit the credit card information ... over a dial up connection! 56k I think it was... then each morning, I'd get an eMail with the cards that went through.

    Then I'd send the software to the customer.

    This online commerce stuff was new back then, so collecting credit cards without an official signature was very tricky.
    It was very easy for the end customer to reverse the charges, or provide stolen Credit Cards.

    They (the credit card companies) collected 3 to 4% of each transaction. So not only did I loose the sale if the customer reversed the charges, I'd loose the transaction fees, the bank fees and, of course, the actual sale.

    :image12:

    It was nutts I tells ya!




    DigitalRiver saves the day


    So I went out online to look for a better way. I used Yahoo I remember. Google wasn't invented yet!
    I found a company called DigitalRiver. I looked up their number and gave them a call.
    ...I've been 110% happy with them ever since.

    They made it easy to collect any form of currency, in any language.

    Sure, they take 20% of sales, but this is WELL worth not having the hassles I mention above!

    My initial set up fee with them was $2,000.
    (this was 7 years ago. This fee might have changed I have no idea. So don't hold this against them if you decide to take up their services). $2,000 back then was a lump of money. But I took a chance and paid them. And it paid off.

    They've not only provided me with eCommerce, but I've got many connections to the software world through them. They handle over 30,000 other vendors including Adobe and Microsoft. I've been honored to meet people at of some companies I really admire. Symantec, Macromedia, Adobe, and online shops like PhotoOjbects.net and Clipart.com.

    Each year (twice a year), DigitalRiver holds a Summit where we all get together and talk about software, sales and how to market everything. I find this invaluable. The connections at these summits are more than worth the trips.

    I'll stop sounding like a commercial for them now.
    ... But if you're selling anything online, anything that can be purchased and downloaded through the web, give them a shout.
  2. Wicked

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    I am a bit confused.. I understand that back in that time (which I remember even at my young age) that Digital River saved the day.. However you mention that 20% percent thing.. I am not clear of everything they provide you with for 20 percent of sales. I am going to guess secure hosting of digital products, management of you're own affiliate program along with license keys for the software even maybe with an admin control panel to disable illegal copies. I guess if I am close to being right there I can see how it adds up being worth the 20 percent on each sale. Now that I keep laying out this scenario in my head I guess its not as confusing as I thought and as well worth it.

    I was just thinking at first that paypal only takes 3% plus 30 cents on every purchase.. Then I see now that digital river offers a lot of services that really help an online digital goods provider.. Am I close to being right with all the services you have after signing up?
  3. laughingbird

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    Paypal provides a collections function. You collect the money and the user downloads your software (or ebook).

    DigitalRiver provides the collections function (in multiple currency, checks, money orders, phone orders and PayPal).

    AND, they provide an eMail service ( BlueHornet.com ), an online admin section for refunding purchases or looking up customer accounts, a partnership with other software vendors (we all do cross mailings for each other), access to retail stores like the CompUSA download section, and best of all... an "Accounts Development Manager".

    Since DigitalRiver works on the 'shared profits' system, if I make money, they make money. So my ADM will go out of his way (or her way) to help with sales. They provide free PayPer click programs (search for The Logo Creator on Google. You'll see my natural listing ... and two Ad Listings. Both ads come from DigitalRiver at no charge to me. If the software sells from the listing - they get their 20%).

    It's really a win-win for everybody.

    There are also discount links you can create, "up sell" offers (if a customer wants "The Logo Creator" a special pop up page will appear asking the customer if they'd also like "The Corporate Identity Creator" for just $19.95).

    Paypal can't do any of this. :D
  4. Wicked

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    Well I am in the process of doing virtually the same thing you do.. Selling Software online. I want to make everything legit and wanted to know what all steps are needed for an online business.. Such as registering an EIN# or any of that? Keep in mind I am in the same state as you so the process should be similar if you have went through it.
  5. laughingbird

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    This is a huge topic actually Wicked! :D

    I'll be posting more in this blog about how I did everything.

    Off the cuff, I can offer my opinion of the four major steps you need to accomplish first:

    • Create - or have created for you - a nice looking website. This is important. I've heard it say somewhere that "We eat with our eyes". If the page looks chunky and cheap, you'll turn visitors away.

    • Create or obtain quality products to sell.
    • Have an easy way to collect payment, and offer the software to your customers
    • Market your site.

    The first thing to do is create your website. "If you build it, they will come." ... this is true. Sort of.
    Finding a website is like looking for a needle in a needle stack (a needle in a haystack would be much easier to find!)

    The next best thing you can do after the above has been accomplished is SEO (Search Engine Marketing).
    Check out a book I highly recommend: Aaron Wall's SEO Book.com

    More on Search Engine Marketing soon.
  6. davis123

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