Sen Ze’s Business In Your Pajamas! Blog

Further to my previous post on software hosted on a 3rd party’s server (not yours) – let’s check out Clickbank for an example.

Note: “Clickbank” is NOT a bank, but a Merchant selling digital products on the Internet with a fancy name.

If you’re a Merchant selling digital products but have difficulties getting a credit card merchant account and setting up an online payment gateway on your server so that your customers can use their credit cards to buy your digital product through the Internet, on your web site – Clickbank wants to be your partner.

It wants you to supply your digital product to it (at a price lower than your selling price) for it to sell directly to its customers (at the selling price) using its online payment gateway that processes credit card payments and deposits the money in its credit card merchant account.

The difference between the prices is Clickbank’s profit, which is usually 7.5% + $1 of the selling price.

Thus if you’re planning to sell your product for $100, you’ll be supplying (selling) it to Clickbank for $91.50. Clickbank sells it to its customers at $100, pocketing $8.50 for that sale.

Clickbank then pays you what it owes you every 2 weeks.

This is a great arrangement for small business owners who either find it a hassle applying for a credit card merchant account and then setting up an online payment gateway linked to that account, or are unable to be approved by their banks for a credit card merchant account that can be connected to an online payment gateway.

And there are MILLIONS of small business owners all over the world in that situation.

Note that the selling of the product is done at YOUR web site, with the order link hyperlinked directly to Clickbank’s Order Form. When somebody reading your Killer Sales Letter at your web site selling your product decides to buy it, and clicks on that order link, he is taken immediately to Clickbank’s Order Form for the payment to be made TO Clickbank (not you).

At this exact point in time, you will be “supplying” Clickbank with your digital product, and Clickbank immediately “sells” it to its Customers.

However there is no real “movement” of goods from you to Clickbank since the “delivery” to Clickbank’s customers is via a Download Web Page at YOUR web site (Clickbank immediately routes its Customer back to this page to take “delivery”) – but you can be deemed to be acting as Clickbank’s “Agent” for the delivery (in addition to being its Supplier), so everything is still in order even if Clickbank doesn’t itself doesn’t have a Download Web Page for your product at its web site.

The above arrangement of being a “Supplier” to Clickbank and tapping into its payment facility is necessary without Clickbank being accused of “farming out” its credit card merchant account facility to you to use, which is prohibited by Clickbank’s bank that gave Clickbank the facility since the facility is given by Clickbank’s bank to Clickbank only, not anybody in the world.

For its money, not only does Clickbank help sell your product to the entire world, it also has an Affiliate Program software running its Affiliate Program.

Thus anybody in the world can become a Clickbank Affiliate and sell the thousands of digital products within Clickbank’s catalog, with the suppliers (like you) for those products coming from all over the world.

Thus Clickbank leverages on an Affiliate Program with thousands of Affiliates it has recruited all promoting the products that it carries at YOUR web site (since the sales letter must reside on your own server) – and you leverage on Clickbank for its setup to move your products for you.

Clickbank’s Affiliates also get paid every 2 weeks for any sales made that earn them commissions, via checks sent through snail mail. You don’t have to bother with this at all, since they’re not your Affiliates.

See what a wonderful arrangement this can be for you as a Merchant if you have a digital product to sell but don’t have the setup to sell it online?

You can go directly to Clickbank and apply for an account as its Supplier. Then you simply go to work creating your Killer Sales Letter and Download Page, and entering some details in the Clickbank Merchant Area (which you will access via a login name and password) and doing some test purchases.

When you’re ready, let them know, pay them a one-time Activation Fee of $49.95, and you can be live and ready for business after that with everything in place!

For most businesses with digital products to sell, this is a GREAT arrangement.

However, as good as this arrangement can be for you, Clickbank comes with its own important set of “issues” that you need to know about, that may affect you and whether you would want to use them for your business.

More on those issues in my next post. Watch out for it.

Sen Ze

P.S. You can link to this post with the following URL:

http://SenZe.com/business-blog/internet-business/clickbank.htm

Technorati Tags: Clickbank, digital products, credit card merchant account, online payment gateway, Internet payment gateway, Affiliate Program