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There are literally so many fees when it comes to running a business that it makes me want to vomit…. Processing fees, advertising fees, shipping fees, state taxes, income taxes, so on and so forth.
But, the stone cold truth is that they are just part of the deal. You can’t run a business without them. I mean you can, but it’s likely illegal. Fees in business are like Tom and Jerry, Spongebob and Patrick, Ross and Rachel – they just go together. Rather than letting them stop you from expanding your business, the key is figuring out how to make it work for you so that you are running a profitable business.
Translation: charging enough for your work.
So, if you sell custom t-shirts and the materials cost you $7.00 to make them. Selling the t-shirts for $7.00 is not going to keep you in business.
But, with all of that being said, the fees aren’t really what I want to talk about. I want to discuss the concept of whether or not those additional costs are “worth it”.
Take Amazon for example, they take a pretty hefty fee of 15%. And, let me tell you, it stings when I see those financial statements. That’s a lot of money being forked over out of every sale. This is when the concept, “you gotta spend money to make money” comes into play. That 15% commission is the key that unlocks the door to the millions of customers on the Amazon platform. Customers do not naturally land on a free-standing website. That takes a lot of work. The traffic to a free standing website builds over time.
Yes, I would much rather customers place their orders on my .com where the processing fee is 3% or 5% depending on the payment option they select, but I typically have to interact with them on a larger platform to earn their trust first. And, I’m totally okay with that. I put a lot of effort into my branding so that customers know how to find me for their next purchase.
But, I want you to think about this for a moment. If you have never seen a brand before and you are interested in their product are you a) more likely to purchase from a standalone website or b) more likely to purchase the same product through a platform that you trust? Personally, I am more likely to go through a platform like Amazon or Etsy first because I want to make sure I am protected by the platform policies just in case something goes wrong. This may not be fair, but I have been burned a couple of times by standalone websites and am hesitant to purchase that way the first time. As sellers, it’s important to keep this in mind when we are struggling to get shoppers to our websites.
So, let’s circle back. Handmade sellers frequently say fees are the reason for not selling on various platforms. After all, it’s hard to spend all that time making a product only to have someone else take a piece of the profit. Don’t let fees be the roadblock that keeps you from selling on large platforms with built-in customers. Platforms like Amazon and Etsy come with traffic and that requires a lot less effort than a standalone website. Paying those dreaded fees is an easy obstacle to overcome. An increase in fees doesn’t have to mean a decrease in profits. That’s not how large companies do it. So, you don’t need to do it that way either. The large corporations raise their prices while also looking for ways to decrease their cost of goods. This is exactly what will work for you, too. And, when you dig down deeper, that fear of fees is often really a fear that customers won’t pay more for your products. If you offer a quality product with top-notch customer service, your customers will pay that increased price. So, I invite you to think about whether or not a fear of fees is keeping you from moving forward in your business and, if so, how you can adjust your pricing model to accommodate them? I urge you to not let fear keep you from growing your business.