I have a confession: even though I love shopping on Etsy, my mom has never bought anything here. Don’t get me wrong – she loves original artwork, raku pottery, fine shawls, and all the other wonderful things Etsy sellers have to offer; she just couldn’t figure out how to use PayPal. She has money to spend and knows how to shop online when she can use a credit card. This is why I’m so excited that we now take credit cards on Etsy — for all those people like my mom who will finally be able to shop here.
We talked to sellers to get their observations and tips about accepting credit cards (a.k.a. direct checkout) in their shops. You’re probably wondering what happened in their shops as a result. Here are their observations and tips. And, before we get started – yes! This will be available outside the US. We are working hard on this very thing and are excited to be able to offer this to sellers across the globe.
Effect on Our Shops
More options, more business: A number of sellers who are accepting credit cards reported more sales and/or that a good chunk of their buyers have been paying with a credit card. Some shoppers are intimidated by PayPal, but are comfortable using credit cards. Offering both options opens you up to a larger pool of potential customers.
“Since turning on DC, roughly half of my orders have been DC versus PayPal. It could be that people didn’t realize they had the option to use PayPal instead, but given that the cost to me is the same, I like to offer my customers a choice to make certain I don’t lose the sale. I want to get them from the point of just favoriting my item to the actual buying point.” — CCNdesigns
“Half of my total sales have been paid through direct checkout. I’m positive direct checkout has secured sales from new customers, especially people who don’t regularly shop online and people who found my shop though social media like Pinterest, Twitter, and StumbleUpon.” — SeashoreLove
“I have not seen an increase or decrease that I can attribute directly to direct checkout but I have been told by customers that they preferred it to PayPal as it seemed like a simpler process to pay.” — SugarSidewalk
“A good number of my recent sales have been through direct checkout, and I like to think having the option attracts buyers who otherwise wouldn’t have bought from me if I’d only offered PayPal as an option. I imagine that it’s especially appealing to brand new buyers who sign up the same day they want to make a purchase, and who want the checkout process to be as streamlined as possible — not everyone has a PayPal account, after all, or knows you can use it without one, or wants to deal with the company.” — threestonebirds
New Buyers: A lot of sellers are reporting that new buyers prefer to use credit cards. Our own data shows this as well. With the holidays approaching, we’ll be seeing lots of new buyers on Etsy, and we want to make sure that you will be able to make new customers out of those who may be used to purchasing with credit cards on other sites.
“I was reluctant to enable DC until Tuesday, when a potential customer who was interested in buying 3 items messaged me to ask, ‘Do you accept anything other than PayPal? I’m having trouble with it.” DC to the rescue! I activated it right then and there, and the sale successfully went through. I can see the merits now of having more options for buyers”. — silverthaw
Tip for contacting new buyers:
“I send information to their personal e-mail. New Etsy customers don’t check their convos, but they do check their personal e-mail accounts.” — Rt9NJvintageFun
Developing a System
Here’s Rt9NJvintageFun‘s system for handling credit card orders:
Day 1: After getting the sale, I get the vintage item wrapped, write the thank you note, and pack the item.
Day 2: I take the packages to the post office, send shipping notifications to give the customer their tracking number and expected arrival date.
Day 3: I go to my Shop Payment Account and request a funds transfer.
Shipping tools for credit card payments are coming! In the meantime, here are what other sellers are doing for labels:
“I use ShipStation, so shipping is no problem for me since my orders go directly to ShipStation and the addresses are printed automatically.” — RazzleDazzleMe
Endicia: No one in the thread happened to mention this service, but a lot of sellers use and love it, so we’ll give it a shout-out here.
PayPal: Here’s a tip for using PayPal’s shipping with credit card sales from hopestarbound:
1. Go to PayPal’s shipping page.
2. Copy and paste the info from your DC receipt and pay with your PayPal account funds. Easy-peasy!
You still get the PayPal discount, the automatic delivery confirmation, and everything. You can even have these packages picked up by your local postman (or woman).
One challenge some sellers have found is budgeting for getting their money after they have shipped the item. Here is how sellers are managing this:
“The money I get in PayPal pays for the Etsy bill and shipping, so the DC account is my profit and what I use to buy supplies.” — RazzleDazzleMe
2. Have an operating budget
“I quickly learned I must have some liquid funds in my account to cover shipping, but that is the reality of running a business.” — Rt9NJvintageFun
A simple way to start an operating budget would be to start stocking away a little money from each sale. If you find it difficult to “catch up” so that you have a little pool of money for your business needs and to cover emergencies, you might consider looking at your pricing and/or material costs. Many sellers who make custom or made-to-order items have shared that having money set aside for purchasing supplies and shipping fees has been invaluable. Pricing for profit will make budgeting all the easier!
In other accounting news, sellers who use Outright will be happy to learn that direct checkout sales information is now integrated. If your Etsy account is already linked to Outright, all of your historical direct checkout sales data and ongoing sales will sync automatically. If you already use Outright, you don’t need to do anything to get your direct checkout sales added – they will start flowing into your account automatically starting August 7, 2012. For those not familiar, Outright is a free online service that lets you pull all your accounts — PayPal, bank accounts, and credit cards into one place so that you can manage your finances and prepare for taxes.
Tip: Earlier this week, we published an article to help sellers think about growing their businesses financially. If you missed it, check it out here: Four Financial Lessons From Sellers.
Have any more questions? If you decide to sign up for direct checkout, you can also join the Direct Checkout Team. There are over 2,000 sellers already talking about accepting credit cards and helping each other with questions. For even more information, watch our Online Lab where we answer burning questions about taking credit cards via Etsy live from the community: