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Yahoo Merchant Solutions

Thursday, August 09, 2007

Yahoo!® Merchant Solutions helps to provides businesses an easy way to start up their e-commerce website.  While at first glance, their prices might seem pretty inexpensive, but they are actually a bit more expensive than other electronic payment gateways.  That's right - they are an electronic payment gateway, just like LinkPoint, Payflow, Authorize.net/Cybersource.

Yahoo!® provides merchants three different plans which includes a monthly fee.  

A monthly fee that covers the web hosting services that support your store, including: hosting your store and products on our secure, reliable servers; using our powerful software platform; and conducting business on the Yahoo!® Merchant Solutions infrastructure.

This monthly fee can be compared to a hosting provider, such as TechEvolution and an electronic payment gateway.  And unlike the LinkPoint Gateway, Yahoo!® charges a transaction fee for using their gateway: .75% (Professional), 1.25% (Standard), or 1.5%(Starter).  This monthly fee is $39.95, $99.95, or $299.95 a month. 

The Pros of Using Yahoo!® Small Business

The benefits of using Yahoo!® Small Businesses can be considerable.  If you want a company to handle and maintain the hosting, want one company to call, Yahoo!® might be the best solution.  If you would like to have discounts on Yahoo!® paid searches, Yahoo!® might be the company to call.

The Cons of Using Yahoo!® Small Business

The costs would be the one thing to consider.  For an e-commerce store to start out, you need a Secure Sockets Layer (SSL) certificate, a hosting company, an electronic payment gateways, a merchant account, and of course your own domain name.  Purchasing these items through another company would be cheaper, both in set-up costs and monthly costs.

Yahoo!® Small Business Solution Costs

 Yahoo!® partners with Chase / Paymentech and uses the First Data Nashville Platform to help process the transactions.  The basic costs of this account is:

• Setup/application fee: none
• Monthly fee: $22.95
• Transaction fee: $0.20 cents per transaction, and 2.69% for Visa and MasterCard (2.58% for debit cards)

With LoudCommerce, your charges would be more along the lines of:

• No Set-up Fee
• Discount Rate: 2.19%
• Transaction Rate: $.25
• Address Verification Service: $.05
• Monthly Account Fee: $15.00
• Monthly Minimum: $0.00
• Batch Fee: $.25

So using a transaction of $100, the approximate costs of using Chase / Paymentech and Yahoo!®, the cost would be $4.39 with the Professional Package and $3.64 with the Starter Package.  Using LoudCommerce, your approximate costs would be $3.24 with the Professional Package and $3.99 using the Starter Package.  (Remember, that Yahoo!®  is still charging you a transaction cost.)

Using Another Service

You could use LoudCommerce's special and the approximate costs for the same transaction above would be $2.49.  This special uses the LinkPoint Gateway.

If you review the prices, you will see there is no termination fee, it is a month-to-month contract, and there is no monthly minimum.

Do your ROI when considering using Yahoo!® as your service provider.  Look at what your competition is charging as well and make sure that your business will make money.

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