Monday, August 1, 2011

Merchant Accounts for Biz Ops ( and ways to help reduce chargebacks)

Anyone who is not familiar with Internet Marketing may ask, what exactly is a biz op? Well as I am sure you can tell, Biz Op refers to “Business Opportunity” and basically a biz op is a program/course that is created by someone to help other make income (usually from the comfort of their own) online. A lot of the biz ops are people who have made a lot of money with affiliate marketing teaching others how do to that exact same thing (and of course charging a fee for it). Some have free trial offers to sign up, then charge a membership fee to continue having access to the backend and the tools there. I have seen some very impressive and sophisticated backend’s with tools that I believe can really help someone.

However, like a lot of other things, a few bad apples ruined the bunch and biz ops have gotten a bad name amongst banks for credit card processing. Why is that? Well excessive chargebacks for one and shady people who are really only out there to make a quick buck.

I have been working with a lot of biz op marketers lately and the guys I work with know what they are doing. They have a sophisticated product, clear terms and good policies and procedures in place to reduce chargebacks.

Some of the strategies that I believe a biz op can put into place that will help them reduce chargebacks are:

1. Have good support channels. Your company should be accessible, communication and an active support forum can be helpful.

2. Methods for success should be clear.

3. Clear Fees. Costs are justified because people understand they can’t expect to earn money without an investment. Costs and Fees will actually legitimize the business because nobody would actually expect to earn money on something that
is free. Membership fees can also be justified if some kind of benefit to
insure your success is made available. It costs money to run a business and in
many cases it takes money to make money. An example would be if the company
hosts websites and/or other promotional aids to help you succeed (a detailed
back office for instance).

4. No Outrageous claims – “Work only two hours a week – No selling – No dealing with customers – Make millions” – No way…

Like I mentioned earlier, sometimes credit card processing/merchant accounts for biz ops are hard to obtain. I work with quite a few banks both domestic and offshore who do work with legitimate biz ops. I have heard horror stories from a lot of clients who were shut down by their previous processor for a variety of reasons and the biggest one I believe is that they just didn’t understand the business. Like any recurring billing, there is a higher risk of chargebacks so not only do you need strategies like the above to help reduce chargebacks but partners who understand the nature of the business to help you ensure that your processing will not go down.
This could include using a chargeback management system, as long as the ROI make sense. Spreading volume between multiple banks, including offshore and domestic. Or just going offshore and having more of a margin to operate in.

What I do is evaluate my client’s current situation (if they aren’t a start-up) and make recommendation and propose solutions. If they are a start-up I look at their marketing plan, where they are getting their traffic from, etc etc and propose a solution that will keep them up and running. A lot of processors won’t take biz op without processing statements, I can help with that.

Of course, like everything, pricing is factor. But any experienced marketer will know that paying a bit more to ensure your merchant account stays up and running ( as opposed to working with a company that offers cheap rates then shuts you down as soon as there is a problem) is worth it.

If you have any questions please do not hesitate to contact me.

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