educational

Selling Tangibles

Mitch Farber
Many webmasters make a lucrative living selling memberships, driving traffic to their own pay sites as well as affiliate sites. As the adult Internet has matured, paysite operators are continuously looking to increase their bottom line using upsells, cross sells, member retention and other methods.

Being involved closely in adult and mainstream processing for almost 10 years and processing for thousands of online merchants selling tangible goods and membership based sales, Netbilling has seen a large increase in products sales crossover to compliment membership sites, especially over the past few years. Whether selling DVDs containing the content they have viewed online, sex toys for penis enlargement or for their girlfriends and wives, along with herbal pills to make it grow another 12 inches, selling tangible goods is big, big business (pardon the pun).

Shane's World Studios relies on both tangible and non tangibles to generate income. Airek, vice president of Internet operations has this to say about the topic, "Since Shane's World started in tangible goods and then migrated into Internet at a later period in their landmark run in the adult industry, I can attest to the value and potential equity that tangible goods merit to a profitable business model. What I personally like about tangibles is that you experience a much lower return rate and credit back than you experience with online based subscriptions. Tangible goods are a breath of fresh air away from the "high risk" category that we are all grouped into.

"By selling tangible goods you also reduce your chargeback percentage by increasing the number of low risk transactions on your account," he added. "So from a business model mind-set it actually makes sense to venture into that market for this reason alone. I would encourage any adult venture with a stake in the future of adult to develop a tangible goods line of revenue. It's a market that not all paysites can pursue on their own, but having your own merchant and running your own empire is always the way to do it in my book."

Unlike overall membership sales, chargebacks for tangible goods are extremely low. There are several reasons for this. Ordering tangible goods of any kind is less of an impulse buy than joining a porn site. Because these products are shipped to a physical address, fraud is much less likely, especially if a signature is required upon delivery. When attempted disputed of transactions do occur, documentation of the purchase is easily produced through the payment gateway and/or shopping cart system as well as signature receipts from the delivery carrier.

Obtaining a merchant account to sell tangible goods is extremely easy. Companies like Netbilling work with several banks that welcome tangible goods merchants, both mainstream and adult. Merchant account approval for these types of accounts typically happen the same day as the application is submitted to the bank, at rates far less than membership site processing rates (typically less than three percent). Credit cards and online checks (ACH) are the most popular methods of payments for tangibles, as with membership sites. However, since you can hold the goods to be shipped until check payments actually clear, you are protected from people stealing your content as they do when signing up for a membership site and having access while you are waiting for the check to "clear."

The standard delivery method to present purchaseable products to customers on your web site is by using a "shopping cart". There are many free open source shopping cart systems on the market like OScommerce with processor plug-ins to easily utilize your preferred payment processor such as Netbilling, Verisign, Authorize.net and other popular payment gateways. Netbilling also provides a free shopping cart that is fully integrated and hosted by us, as a courtesy to our merchants.

As an alternative, other companies offer shopping cart systems with enhanced capabilities, affiliate tracking and content management such as Mansion Productions, MIVA, and XCart to name a few.

Mitch Farber is the president of Netbilling. He can be reach via email at: mitch@netbilling.com, by phone at (888) 357-8166 or on the web at Netbilling.com.

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