Now, there are a lot of finance tips out there for small businesses; even retention rates have a massive impact, and the same can be said about how you market your business too! For those who are mompreneurs, while yes, they’re helpful, sometimes, they’re not just tips you need, but you just need to know what’s happening.
As in, whether you can do or fix a financial situation or not in your business, it’s best to be aware that it’s even happening. The best example would be fees; like it or not, every business and consumer has fees. They just need to deal with this.
Actually, what makes this worse is the fact that these are eating into your business profits. So, with that all said, here’s what you need to know so you’re not overlooking these (and who knows, maybe you can find other companies that charge lower fees).
Using Platforms
Well, just about every platform that small agencies and freelancers use, but this still deserves some recognition. So, platforms like Fiverr, Upwork, and Etsy are fantastic for reaching a wider audience and growing your business, but they come with a cost. These platforms typically charge a commission or service fee on every sale. For instance, Fiverr takes a 20% cut of each transaction, while Etsy charges a 5% transaction fee plus a payment processing fee. Upwork’s fees start at 20% for initial billings with a client.
Generally speaking, these fees can add up quickly, especially if your business relies heavily on these platforms for sales. Many business owners get caught up in the excitement of making sales without realising how much these fees impact their profit margins. So, maybe it’s best to try to focus more on having a website so you don’t need to deal with these.
The Payment Processor Fee
So, this is one that basically can’t be avoided, but it’s best to at least recognize how this can eat into profits. These fees are essential for processing credit and debit card payments but can be complex and costly. Beyond the standard transaction fees, many processors add monthly fees, statement fees, and charges for PCI compliance or handling chargebacks. Have you ever noticed that some businesses refuse to accept credit cards? Well, this is the exact reason for it!
They don’t want fees eating into their profits, and some businesses will only accept one payment (such as cash) to outright avoid these fees. Now, some businesses, especially in-person businesses like shops and cafes, can do this, but chances are high that your online business should probably accept multiple types of payments. But is that all? Well businesses in high-risk or controversial industries often face higher fees.
For example, industries like adult entertainment or high-risk financial services are frequently subject to increased transaction fees and additional charges due to the perceived risk. Fortunately, there are some ways to mitigate this, for example, adult business credit card processing by Humboldt could be a great option for lower fees (again this is merely an example). But overall, look into how much fees are, and maybe see if there is a processor that charges less fees, again, these can really eat into profits!
Hidden Costs in Subscription Services
Subscription services can be incredibly convenient for businesses, providing everything from software to office supplies on a regular basis. But did you know that there are usually extra fees for these? It’s easy to sign up for a service and forget about it, especially if the monthly fee seems small.
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