I will never use Paypal again. After being a loyal customer for over 3 years, one day they decided to place a 6 month hold on my money for no reason. I couldn’t access over 20k in my account which I needed to pay my bills!

The above quote was just one of many emails I received in the past few months since my article went live. In the interest of full disclosure, I use Paypal Website Payments Pro to accept payments for my online store and I’ve never had any problems with them in 4+ years. But the fact that so many readers have such strong anti-Paypal sentiments made me a little paranoid about my business. After all if you can’t process credit cards, you can’t make any money.

Paypal Horror Stories From People I Know

Most of the horror stories I’ve read about Paypal through surfing the web have to do with Paypal randomly limiting accounts or freezing funds. Most of the complaints I’ve come across seem to indicate that Paypal will rarely hold your funds for longer than 6 months, but 6 months can be a long time if you need access to your money. And once they freeze your funds, it doesn’t make sense to continue accepting money through Paypal if you can’t access it. In other words, once your account is frozen, you are pretty much screwed.

All of the stories that I’ve read online are from people that I don’t know personally or from people that I’ve never heard of before so I’ve been taking them with a grain salt. However, I do have a few fellow blogging friends that have had their accounts frozen for no reason so I asked them for their side of the story.

In both cases with my blogging buddies, they had their accounts frozen after a big product launch. For one of them, Paypal limited their account by only allowing them to process $10,000 per day. The other blogger had over 40K in funds frozen for 180 days. It seems as though Paypal doesn’t like seeing huge spikes in money being received into your account.

In the case of my online store, the revenue we receive is pretty steady and consistent from month to month but occasionally we get spikes of revenue when we hold a sale. So, I decided to call my dedicated account manager at Paypal to get the story straight and here’s what I found out.

Why Paypal May Limit Or Freeze Your Account

After talking to my Paypal rep for over 30 minutes, they reassured me that it’s extremely rare that they ever place holds on user accounts. They also told me that there were no limits on my account whatsoever and that I could process as much money as I wanted to in any given day. When I brought up the stories about my blogging friends and how they had their accounts frozen, the representative assured me that the reasons for limiting an account vary greatly from user to user and largely depends on the situation.

Under the following circumstances, Paypal has certain triggers in place as a safeguard against fraud. Here are some reasons why some of these safeguards might be triggered

• You’ve received an abnormally large amount of money in your account that is way above your average
• Someone has filed a complaint to Paypal about your business
• A series of chargebacks have been placed against your account
• Your website has questionable content
• You are in violation of Paypal’s use policy. For example if you sell drugs or anything illegal, you may get banned
• Your account information is not up to date or your account is not fully verified
• Someone has logged into your Paypal account from a strange location.
• Your credit score is low or something with your background history makes you a higher risk customer
• They have detected fraudulent activity on your account.

Preventing Paypal From Ever Limiting Your Account

Towards the end of my conversation with Paypal, they assured me one last time that only a very small fraction of a percent of people get their accounts frozen and that accounts are rarely frozen for the full 180 days. They also recommended the following guidelines to greatly reduce the chances of this happening.

• If you are expecting to receive a large sum of money, then you should call Paypal ahead of time so they expect to see the extra funds. In other words, if you are planning a large product launch, make sure you let them know ahead of time
• When you first signup for Paypal Website Payments Pro, there’s a survey that you have to take. Make sure that you check off higher numbers in terms of how much money you anticipate making every month
• Contact Paypal to make sure that your account is not limited in any way in terms of how much money you can accept per day. Sometimes limits are placed depending on various factors relating to your credit history or background checks
• Make sure your name or the name of your business is on your Paypal account and that it exactly matches your bank account and credit cards.
• Use the exact same addresses and phone numbers that match your bank account and credit cards
• Always use trackable methods of shipping if you ship physical goods in case a dispute is filed against you
• Make sure that your FEIN or social security number exactly matches the name of your business on the account
• Link both a credit card and a bank account to Paypal

Does This Sound Like Too Much Trouble?

Here’s the bottom line how I see it. If you are in the business of selling informational or digital goods and your revenues are extremely lumpy, then I would go with a regular merchant account and gateway like Merchant Plus. If you have low credit scores or any history of fraud or criminal activity, then go with a regular merchant account and gateway like Merchant Plus. If you never want to deal with the possibility of getting your account frozen or limited, then go with a regular merchant account and gateway.

The main reason my wife and I use Paypal is because they offer an extremely convenient way to ship packages and accept Paypal payments with one easy to use interface. Paypal’s fees are higher than a traditional merchant account but the perks are worth it for our store. But if you do decide to go with Paypal, it’s probably a good idea to give them a call to make sure that there aren’t any artificial limits on your account.

Photo By BoxChain

As I mentioned in my article on best posts of 2011, the traffic to my blog has doubled in the past year.

And unfortunately during that time, the amount of spam comments has increased by an order of magnitude as well.

Just to give you an idea, there were several days in December where I was getting bombarded with over 20 spam comments every few seconds.

Yes, you heard that right. Whenever I refreshed my dashboard, I would see 20 or more spam comments in my Akismet filter. In fact, the amount of spam made all of the websites on my server extremely slow or inaccessible for a long period of time during those days.

The Problem With WordPress

Now under normal operation, my blog does pretty well under heavy traffic because of a plugin called WP Super Cache. Essentially, this plugin creates a static version of every article in my blog so that it can be served very quickly to the end user. However, this plugin is helpless against a heavy influx of comments because comments require your server to call up WordPress each time in order to process the comments one by one.

And because WordPress is such a resource hog, a heavy influx of spam comments can easily take down any blog even if you’re on a dedicated server and you use a caching plugin. It doesn’t matter if you use the best comment spam filters in the world, all spam comments still have to get processed by WordPress which takes a good chunk of server resources.

The Characteristics Of Spam Bots

Now having a slow or inaccessible blog is one thing, but comment spam also affects other sites that are running on the same server which is unacceptable. After doing some research about spam bots, I discovered a few things.

• Spam bots typically do not accept cookies
• Spam bots can leave comment spam in a matter of seconds
• Spam bots typically don’t run javascript

So what does this mean? In a non technical terms, a spam bot does not behave like a regular user on a web browser. And the key to solving my problem involved detecting the spam bot immediately and directing it to an error page instead of launching WordPress.

Based on the characteristics described above, I could detect spam bots either by placing a cookie on the user’s machine, disabling comments for many seconds after a page loads or coming up with some javascript code to detect the spam bot.

Solving My Comment Spam Problem

After much deliberation, I came up with a fix to secretly insert a cookie on the user’s machine whenever an access is made to a page on my blog. I could then look for this cookie on the user’s machine before allowing a comment to go through. Because a spam bot typically doesn’t accept cookies, I could easily detect the bot and direct it to a static error page.

Originally, I was planning to post my source code on this blog entry which I wrote in javascript (I would be happy to send it to you if you are curious), but after talking to a few fellow bloggers, I discovered that the same author of WP Super Cache, Donncha, had already written a plugin called Cookies For Comments which essentially does the same thing that I just wrote. Because his plugin is written a lot more elegantly than my javascript plugin, I highly recommend you go and download it.

But if you plan on using Donncha’s Cookies For Comments plugin, make sure you make the following change to your .htaccess which differs from the plugin’s installation instructions.

What do these 2 lines do? Basically, these lines of code detect the presence of the secret cookie that was inserted on the users machine. If the cookie is not present, the user or spam bot is directed to WordPress’s 404 page or “page not found”. Now the problem with this default setup is that WordPress still gets called in order to process the 404 page which still requires a lot of server resources.

The difference here is that the spam bot is directed to a completely static error page which prevents WordPress from being loaded up altogether.

Problem Solved??? Not Quite

So the changes I described above fixed my comment spam problem, but after running smoothly for a few days, my server started crashing again! Looking at my server logs, I discovered the following.

mywifequitherjob.com GET /oxvumirserver33.rar
mywifequitherjob.com GET /oxvumirserver33.rar
mywifequitherjob.com GET /oxvumirserver33.rar

Basically, some rogue machine kept trying to access the same nonexistent file on my server over and over which was crashing the site. Now with normal websites, these rogue accesses would not affect the server at all. However, WordPress processes all accesses to nonexistent files and sends users to WordPress’s custom 404 or “page not found” webpage.

Did I mention WordPress is a resource hog? All it takes is a bunch of these bogus accesses and your server will still go down no matter what caching plugin you use. The secret to solving this problem is similar to my comment spam problem. Ideally, we want to take WordPress out of the equation entirely and send the rogue user to a completely static error page in order to save server resources.

What does all this code do? Basically, when a file is requested from my server which matches one of the types above, I want my server to bypass WordPress altogether. If the file does not exist, the user will be directed to a static error page called 404.html.

Once again, bypassing WordPress is the key to solving my crashing problems. Because the rogue process in my server logs is accessing a .rar file, I now redirect this malicious user to my error page which takes practically no resources at all.

Does This Solve All Of My Problems?

So I’ve been running with the above 2 changes for a few weeks now and my server has been running like a champ with no slowdowns. Unfortunately, the way WordPress is written makes it impossible to prevent all rogue accesses from crashing your server.

For example, whenever someone tries to access an article that is not found on my blog, WordPress still gets loaded. So in theory, if someone wanted to take down MyWifeQuitHerJob.com or any WordPress blog for that matter, all they would have to do would be to access nonexistent pages on the site over and over.

But in the meantime, everything seems to be stable on my end. Hopefully in the future, WordPress can be patched to address these server issues.

Here are some of the highlights for 2011

• Year over year revenue grew 39%
• Year over year profit grew 44%
• Except for just 2 months out of the year, our store had higher revenues than the previous year’s highest month.
• Our SG&A went down as a percentage of revenue due to the fact that we had no major travel expenses.
• Our average order size remained relatively flat but the pure number of orders per day went way up
• Our margins increased significantly due to the introduction of higher end products
• Website traffic increased by about 31%

As you can see from the numbers above, we had another killer year with over 44% growth! If you look at all of the years that we’ve been in existence, that is now 3 straight years of at least double digit increases!

To put things in perspective, if my wife had stuck with her six figure day job, she probably wouldn’t be receiving double digit raises every year. In fact, I can’t even remember the last time I got a double digit raise at my current job! It really pays to have your own business on the side and the internet allows you to that with very little upfront risk.

Other Highlights

In addition to a pretty healthy uptake in business, we were also featured in a few major publications and our handkerchiefs were even used in a celebrity wedding though I don’t have permission to publish the name.

• Our personalized handkerchiefs were featured in the annual Martha Stewart Weddings DIY Issue
• Our tea napkins were featured in the Jan/Feb issue of Lonny Magazine
• Our cocktail napkins made the “Homes” section of the Wall Street Journal in the Dec 10th, 2011 issue!

Breaking Down The Numbers And What We Did Differently This Year

The bottom line is that more traffic equals more sales. The reason our revenues increased as much as they did was because our traffic increased by a proportional amount. And these increases were a direct result of our search engine optimization efforts, our increased advertising spend and word of mouth.

Last year, we already ranked in the top 4 spots for our targeted keywords phrases. So this year, instead of trying to get all of those keywords to the #1 spots, I started focusing on long tail keywords that were just shy of the front page. It turns out that our online store ranked for a whole bunch of keywords that were in the top 20 and required just a little push to make the front. These extra long tail keywords contributed to much of the traffic gains for the store.

In addition, the direct traffic to our store increased by 39% as word of mouth continued to spread. Seriously, we’ve been recommended by many of our existing customers as evidenced by some of the phone calls and emails we’ve received.

We Revisited Our Adwords Campaigns

The bad thing about running an Adwords account is that campaigns can quickly go stale. Since I had a lot going on in previous years, I’d been neglecting our Adwords account and many of our campaigns got out of whack. So in the first quarter of last year, I did a major overhaul of all of our advertising campaigns and got back on track.

For keywords that performed well, I maxed out our bids to the point where we were getting the most clicks possible while still making a profit. For keywords that weren’t converting well, I made the keyword phrases more specific to improve the conversion rate.

We Introduced More Product Lines

As I had mentioned in a previous post, the textile industry in China is in major flux. Fabric prices have been shooting through the roof due to increased labor costs and labor shortages so we’ve had to adjust by continually finding new backup vendors to add to the mix. Thankfully, last year things settled down a bit and my wife was able to introduce a few new products lines to our store.

We now carry products that span across the entire gamut of price points. In other words, we now carry lower end products, middle range goods and a new high end line of hankies that are imported from Germany. By increasing our high end product lines, we’ve managed to increase margins which have added to the amount of profit per conversion.

Lowlights For 2011 And What’s Ahead

Despite all of the great profit growth, unfortunately there were some lowlights for the store as well. For example, both the average number of pages per visit and the average time on site went down about 7% compared to the prior year.

Based on my last article about why my online store needs a mobile website and how to tell if you need one too, I attribute this reduction in time on site to the increased number of cell phone users that have shopped at our store and the lack of optimization for these customers on our part.

There’s no doubt about it. The number of mobile customers is going to explode this coming year and I’m currently in the process of taking appropriate action. In fact, I’ve been working on the mobile site for my online store for the past 2 weekends and it’s almost ready for prime time.

As I mentioned in a previous post, most of my competitors don’t have a mobile site up yet so I’m hoping that having one will allow me to steal some business away from them. If you are curious about creating a mobile site of your own, I’ve documented everything that I had to go through in creating mine and I’ll be sure to have a series of blog posts about it.

There are many different approaches to making a site mobile and I evaluated each option thoroughly before deciding to completely gut my site and custom code most of the pages from scratch. In any case, I’ll keep you all posted once the mobile site goes live so you can check it out. Here’s to a successful 2012!

The Best Blog Posts Of 2011

Let’s face it. We are all very busy with our lives so I know that most of you don’t have the time to read every single post on this blog. So, I thought that I’d take some time and highlight some of the best articles of 2011. Enjoy!

Fun Articles

• How To Improve Your Online Store Website By Negotiating With Your Toddler
• How To Increase Sales For Your Small Business By Potty Training Your Child

Entrepreneurship

• From 0 To Quit: Why You Should Start An Online Store Today And Why Niche Shops Are So Powerful
• Why Embracing The Turtle Will Help Your Online Business Succeed
• Why Etsy Stores Are At A Disadvantage Compared To Online Stores That Own Their Domain
• The Secrets To Being Successful With Any Business You Launch
• Niche Affiliate Site Or Online Store | Which Should I Launch If I Want To Quit My Job?
• Dropshipping Vs Affiliate Marketing: Which Online Business Will Make You More Money?

Ecommerce Related

• How We Use Google Analytics To Improve Our Online Store
• How To Install An Open Source Shopping Cart And Start Your Online Store In Under 5 Minutes
• Why Ranking High In Organic Search Doesn’t Cut It Anymore When It Comes To Online Stores
• How To Get More Facebook Fans With A Facebook Reveal Tab Or Fan Gate
• 3 Usability Issues With Our Online Store Website That Were Uncovered By A Clueless Customer
• Are These Ecommerce Mistakes Driving Newbie Shoppers Away From Your Online Store?
• Ecommerce Mistakes That Make You Look Like An Amateur

Thanks again and here’s to an even more successful 2012!
Take Care,
Steve

Photo By nffcnnr

Me: Let’s go pick up everyone’s gifts at “The Big Convenient SuperStore” (Not the real name).

Wife: I will never shop at that store again.

Me: Huh? Why not? It’s so convenient and cheap. We can get all of our shopping done at one place.

Wife: I ordered there a few years ago and had a bad experience. Can’t remember the full story but I didn’t get my order on time.

Me: Is that all? Was it their fault?

Wife: No, they shipped it out the same day, but it got lost in the mail.

Me: So what’s the big deal? That’s not the store’s fault. It’s the shipping carrier’s fault. Did you get a refund?

Wife: Yes, but I don’t care. Still never shopping there again.

Me:**Rolling my eyes** Okay whatever.

Wife: What do you mean whatever!?! If you must know, the customer rep I spoke to was rude and condescending.

Me: Ahhh ok…I get it. But it’s a large company and you probably just got someone in a bad mood.

Wife: Doesn’t matter. They should train their employees better. Oh and don’t say “Whatever” to me ever again!

Me: Yes ma’am.

I learned quite a few things from this brief conversation with my wife. Lesson 1, never say “whatever” to your wife. Lesson 2, shopping is often more about the experience than the product or the price. My wife was so furious with this company that she vowed never to shop there again.

But if you look at the situation from an outside perspective, the store didn’t really do anything wrong. One, we received the package late but it wasn’t the store’s fault and two, we got a full refund. No harm was done and no money was lost. Yet this store managed to lose a customer for life just because of a bad phone conversation. Perhaps the customer rep used the word “whatever”. Who knows?

The Anatomy Of A Bad Review

Later that day, I happened to be reading through some Yelp reviews of restaurants in my area when I noticed some interesting patterns of behavior. While most of the reviews were thoughtful, written in a neutral tone and provided an unbiased review of the food, every now and then I’d come across an absolutely scathing review that had nothing to do with the food whatsoever. Here’s an example.

The food came quickly. But the servers (they switched between 2) were rather curt. I mean this one guy slammed the plates on our table and didn’t care ask who ordered what. And what shocked us the most was when my brother hadn’t even finished his appetizer, the waiter took away the plate right from under his nose… and never apologized even when we called him out. This was by far the most awful experience we’ve ever had. We’re never going back again and wouldn’t recommend you do either. This place deserves a zero but 1′s the lowest you could give out here

Almost every 1 or 2 star Yelp review had similar characteristics. The customer was not upset at the food so much as the service which resulted in the restaurant getting slammed.

The Real Reason Customer Service Matters So Much

I’ve been doing customer service for quite some time now and the situations are almost always the same. When someone calls with a complaint about your business, the actual situation is often quite trivial. Blah Blah Blah…my order didn’t arrive on time. Blah Blah Blah…you accidentally sent me the wrong thing. Blah Blah Blah, the quality of your product is not good enough.

The strange thing is that as a customer, you rarely remember the financial hit that you took when placing the order. It’s all about the disrespect or the indignity that you faced when speaking with the customer service rep.

When a company representative angers you or treats you with a lack of respect, that tends to override everything else. For example, whoever spoke to my wife must have really said something bad for her to boycott an entire store because no harm was actually done. A simple “whatever” and a rolling of my eyes inadvertently disrespected her as well, a mistake that will probably come up again in a future altercation. **Sigh**

Key Takeaways

So what have we learned? When a customer takes the time to send you an email or call you on the phone, make sure that the customer never leaves angry. Do what you must do and make things right, especially if it is your fault.

If there’s one piece of wisdom that I’ve gained from dealing with customers, it’s that their emotions are worth way more than any dollar value. If you can deal with a negative situation in a positive fashion, you can almost always turn the customer around.

After all, whenever you are representing your small business, you have to take off your operations hat and don your marketing cap. Conversations with the customer absolutely matter and even though you might lose a few dollars in the process, it’s worth every penny in terms of mind share because the effects are exponential.

“The Big Convenient SuperStore” lost more than just my wife as a customer that day. I’m no longer allowed to shop there and most likely my kids and her friends will not either. Word travels fast.

Getting Punished For Being Honest

Here’s just a sampling of what I had to go through in order to install one piece of software that we use everyday for our business. Without this software, we can not sell personalized items in our store. So get this. Even though I completely reinstalled the program using my original and authentic installation disk, the software would not run because I needed to reactivate it!

With programs like Microsoft Windows, reactivation can be done completely online. However, this company required me to contact them directly to get a new activation code. Not only was this a major hassle but I also had to wait until Monday morning before I could contact support which meant that the weekend’s orders could not be processed.

So finally Monday rolls around, I get a hold of support and they inform me that my software was registered using a different address, email address and phone number than before and that they couldn’t reactivate my software unless I used the original information. But the kicker was that they also couldn’t tell me what info I had used in the past.

After arguing with the sales rep for about 20 minutes, she finally relented and gave me a new activation code. But the damage was already done. This ordeal wasted several days of my valuable time and caused numerous delays with our order fulfillment. The worst part? I paid good money for this software, so why was I getting punished and hassled just because someone else decided to copy it illegally?

More Ridiculous Copy Protection Shenanigans

Getting a new computer also meant that I was forced to upgrade my operating system to Windows 7 from Windows XP. And it just so happens that one of my software CDs only has the XP version which won’t run on Windows 7. So I contact support and they provide me with a download link to the Windows 7 version of the program. Cool! Everything is all good until I try and run the software.

The program requires the CD to be in the actual CD drive in order to run!!! Since I didn’t have the Windows 7 version of the CD, I had to contact support and have them send me another one. Another week lost and once again I was getting punished for paying for my software!

More Chaos And A Lesson Learned

In the midst of all the chaos, we also had to deal with one very annoying customer issue. The other day we received a surprise return in our mailbox. But it was not just any ordinary return. This particular lady had the gall to ask for a refund for goods that she had already used. Actually, the word “used” is a mild way of putting it. To be specific, she purchased a set of napkins and returned them to us completely filthy and then demanded a refund.

When we told her that we didn’t accept returns that are not in resell-able condition (not to mention nasty used napkins), she claimed that the napkins were this dirty when she received them. Yeah right…

Your return policy says 100% Satisfaction Guaranteed. I’m not satisfied.

Since it wasn’t worth having her throw a fit and getting all upset over 35 bucks, we begrudgingly gave her a refund.

The funny thing though is that this one isolated incident made my wife and I completely reevaluate our return policy. Currently, we offer a 30 day money back guarantee but this lady pissed us off so much that we seriously considered making all sales final. No returns period.

But once we calmed down, we thought about our ordeal with the sewing software companies and realized that we were probably feeling exactly how they felt whenever someone copied their software. And here we were considering some drastic anti-return measures to prevent future customers from cheating us out of money.

After a while, we realized that canceling our return policy just because of this one crazy lady was ridiculous. But man was it tempting. As a business owner and a human being, it’s really easy to overreact especially when you feel completely ripped off and taken advantage of. But it’s important not to lose sight of the big picture and focus on your main customer base, the customers that you care about.

Is your business making important decisions based on a few vocal customers? Are you making your business worse for the majority of customers because of a few bad seeds that are abusing the system?

Now I don’t want to discount the importance of protecting your business profits, but I just hate it when a small group of people spoil things for the rest of us. Let’s try to not to let that happen with our small businesses shall we?

Which One Is Cheaper?

The first and foremost criteria that most people use to select a credit card processor is price. But when it comes to credit card processing, the different fees are not always straightforward to calculate.

For example, some credit card processors charge you a registration fee, a monthly gateway fee, a statement fee as well as a percentage of your sales. Some merchants allow you to apply your monthly gateway fee towards your discount rate fees. Some merchants provide a tiered discount rate depending on how much you sell. There are many different ways to get charged depending on your sales volume and all of the numbers can get confusing depending on the scenario.

The reason I like Merchant Plus is because it is cheap and the fees are very straightforward to understand. For example, there are no complicated rules on how you get charged.

• There’s a monthly fee of $19.95
• There’s a 25 cent transaction fee per charge
• The discount rate is 2.15% for Visa and Mastercard

After researching many different credit card merchant account and gateways, the rates for Merchant Plus are very reasonable, the service is very dependable and they provide good support as well. Now let’s take a look at Paypal Website Payments Pro.

The fees for Paypal Website Payments Pro are fairly straightforward as well but the rates are more expensive and tiered depending on your sales volume.

• There’s a $30 monthly fee
• For a monthly sales volume of $0.00 USD – $3,000.00 USD, you get charged 2.9% + $0.30 USD
• For a monthly sales volume of $3,000.01 USD – $10,000.00 USD, you get charged 2.5% + $0.30 USD
• For a monthly sales volume >$10,000.01 USD, you get charged 2.2% + $0.30 USD

Overall, Merchant Plus is always going to be cheaper than Paypal Website Payments Pro.

Which One Is More Convenient?

Money is important but it’s not everything. When you sign up for Merchant Plus, you are more or less signing up for a vanilla merchant account and gateway. In other words, you’ll be able to process credit cards but that’s about it. What’s nice about Paypal is that they offer additional features that are very convenient.

For example, your online store is probably going to accept regular Paypal in addition to credit cards. Paypal Website Payments Pro allows you to accept both Paypal standard payments and credit cards all through the same account. This is really nice simply because you’ll have one less account to deal with. In other words, that’s one less account where you’ll have to transfer money out of and into your business checking every single month.

The other really nice thing about Paypal is that they offer an extremely convenient and easy to use one click shipping platform. Whenever someone makes a purchase from your shop, the address information can be sent directly to Paypal. Then, using their multi-order shipping interface, you can quickly and easily ship all of your packages and print shipping labels from Paypal’s website. The best part is that all of the shipping fees are automatically deducted from your Paypal account.

If you run a small online store, that you means you don’t have to sign up for a 3rd party shipping platform like Stamps.com. You don’t have to deal with downloading and uploading customer addresses to a separate shipping service. You can do everything without leaving Paypal’s website!

The Intangibles

Sounds pretty good right? But the one caveat with Paypal is that Paypal is not a true bank. With Authorize.net and your own merchant account and gateway, any money that you receive is automatically yours once it reaches your bank account and no one can easily take it away from you.

With Paypal however, they get to call the shots with your money and can place holds on your account whenever they feel like it. For example, let’s say that Paypal detects some abnormal charging patterns with your account. Without any warning, they can freeze your assets and prevent you from accessing your funds. A full on fraud investigation can last for several months and during this period you will not be able to withdraw your money from your account.

While this has never happened to me (knock on wood), there are many websites out there such as www.paypalsucks.com that are filled with stories and complaints from Paypal users who have had their money frozen for long periods of time.

Which Should I Choose?

If you don’t care about the integrated shipping that Paypal offers and you don’t mind having yet another bank account, going with Merchant Plus is a no brainer. In addition, readers of MyWifeQuitHerJob.com can take another 20% off of the monthly fee by using coupon code: MYWIFEQUIT upon signup.

However, if you hate maintaining a bunch of different accounts and want a nice, integrated way of shipping your orders, you should consider signing up for Paypal Website Payments Pro. While it starts out more expensive, once you reach a monthly sales volume of greater than $10000, the difference in discount rate is not that big of a deal.

The other major thing you have to consider is whether you are comfortable with Paypal having full control over your funds. If you are even remotely worried about having your assets frozen, then avoid Paypal altogether. Once again, this has never happened to me before but just be aware that it’s a possibility. Good luck with your decision!

Oh Tortoise, Oh Wise One

But something interesting happened to me during my late twenties after I got married. I started having less and less time to myself and I was forced to set a schedule in order to find free time for my side projects. When my wife gave birth to our first child, I had even less time and on top of everything else, I was sleep deprived as well.

But strangely enough, the busiest periods of my life coincided with some of my biggest accomplishments. The reason? The tortoise like mindset. Since I had much smaller blocks of time to work on stuff, I had to tackle every project piece by piece on a set schedule. Instead of working 20 hours over a weekend and burning myself out, I simply picked a pace that I could sustain indefinitely and all of sudden things started to click.

Working on my side projects became part of my lifestyle and I rarely felt pressured or frustrated due to a lack of time. For example, Sunday nights became my blog posting night. Sunday mornings before the kids got up became my online store improvement time. On Thursday nights, I would work on my online store course.

Tortoise Like Results

Most people who adopt the “hare” like mindset often make significant progress in a short period of time but then burn out and stop working altogether. The beauty of the tortoise is that even though you might not be fast, you are always making constant progress towards your goals. And if you manage to integrate your business related tasks into a consistent weekly schedule, you’ll be surprised at how much you can accomplish in a short period of time.

When my wife and I first started our wedding handkerchief shop, we devoted every Sunday to the business. In fact, it was penciled into our calendar as part of a lifestyle change that we both agreed upon until the store was up and running. We purposely did not schedule anything on that day and we worked on our store consistently every week. As a result, it took a little longer for us to launch but our store made huge strides every week. Today, we still maintain a set schedule where we add new content to keep our website fresh.

MyWifeQuitHerJob.com is also a great example of the “tortoise” mindset at its best. For the past 3 years, I’ve written at least one blog post per week and to tell you the truth, I don’t even think about it anymore. It’s subconscious. Writing blog posts has become a part of my lifestyle. It is ingrained into my schedule and if I don’t write, I get this nagging feeling of regret.

Even though the blog started out “extremely” slow (Things didn’t pick up until after well over a year), today this website attracts over 38K visitors a month and my email newsletter grows by 20-40 people every single day. In the back of my mind, I always knew that my blog would make it to this point but I had no clue how long it would take and I didn’t really care. I simply picked a sustainable pace and made blogging a part of my life.

Finally, my most recent “tortoise” like accomplishment has been with my Create A Profitable Online Store course. When I launched on March 2nd, I had no video content whatsoever. The first 25 students that signed up did so based on good faith that I was going to pump out some great video tutorials…and I delivered on a consistent weekly basis.

Today, there are over 60+ videos in my course library representing well over 30 hours of material on how to run a successful online store. Because preparing the material and shooting the footage takes me about 10 minutes for every minute of video produced, this means I’ve spent over 300 hours on my course in the past 7 months. Could I have done this in one straight 13 day span? No way! I can barely find a nice 2 hour block of time with 2 kids!

The Moral Of The Story

So what am I trying to say here? When it comes to starting a business, it’s not a sprint. If you try and cram everything in a mad rush to launch, you will burnout…guaranteed. Instead of being in such a hurry, simply pick a pace that you can maintain indefinitely and focus on the long term for a period of at least a year or more.

Being the tortoise is not glamorous by any means. You won’t be able to brag how you made X dollars in just a 2 weeks. You won’t be able to say that you started a full blown business in under a month. But you will make steady progress long after those rabbits have quit and moved on to something else.

We Track Repeat Customers

Out of the box, Google Analytics bunches every customer that visits your site into several generic buckets. Sure, many of these buckets are useful, but sometimes you want to further segment your customers down depending on what type of customer they are.

For example, whenever someone makes a purchase on our store, we tag them as a “paying customer” using a custom variable in Google Analytics. By tagging them in this way, we can filter out and specifically look at analytics data just from our repeat customers. Here are a few ways we apply this data.

• We analyze which products our repeat customers are looking at and specifically target them with coupons or special promotions.
• We analyze where our repeat customers are coming from and focus our advertising spend and optimization efforts on that traffic source.
• We discover which products are more likely to be purchased repeatedly and adjust our inventory accordingly. For example, if customer X always buys napkins in the middle of November, we can account for that sale when buying our napkins ahead of time.
• We use repeat customer data to measure customer loyalty and experiment with ways to improve repeat business

As most business books will tell you, the easiest way to make more sales is to sell to your existing customers. Since we are in the wedding industry, a large subset of our clientele are not repeat visitors. However, the customers that do buy from us regularly tend to spend a lot of money because they are event planners, hotel managers or restaurant owners.

We Track Customers Who Have Created An Account

Most people who shop at our store do not register for an account during checkout. What this means is that when they make a purchase, they do not want their information kept in our system for future purchases and promotions. Those that do choose to register however, exhibit drastically different behavior than our unregistered customers.

For example, registered users are much more loyal and tend to become repeat visitors. Registered users are much more likely to browse our new products. Registered users are more likely read our newsletters and spread the word about our online store. That is why it’s important to track registered users in a separate category.

By default however, Google Analytics does not distinguish between registered users and guests and everything is lumped into one big category. But by implementing a custom variable in Google, you can filter out and track your registered users separately. Then, you can use this data to make changes to your store and offer promotions specifically tailored towards your best customers.

We Track Users Who Use Our On Site Search Engine

One of the biggest problems with many shop owners is that they neglect the search engine on their own site. In a previous article, I talked about ways to improve your online store search engine, but often times you can’t tell whether your search engine optimizations are making a difference unless you track your progress.

That is why it is important to be able to filter out and analyze those customers that actually perform searches using your online store search engine. By segmenting out search customers specifically, you can determine…

• Whether customers are leaving your store because your search engine is not returning good results
• Whether customers are finding what they are looking for and actually making a purchase
• How customers browse through your store after performing a search. Are you directing them to the right product and/or the right content?

In a nutshell, you can easily measure how good your onsite search engine is by simply looking at how well customers are converting after performing a search on your site. By filtering out searches for products that you actually carry, you can determine how well you are funneling customers in the right direction and what percentage of customers are actually finding what they are looking for.

We Track Visits And Conversions Based On Product Category

By default, Google Analytics allows you to track individual page views. Therefore, you can easily see how many people are looking at specific products in your online store. However, if you want to take a step back and take a birds eye view at which product categories are performing the best, you need to provide Google Analytics with more information.

Analyzing your data at the category level is important because you can make decisions at a higher level to determine where you should focus your efforts on. For example, if category A is performing especially well, you may want to invest more into category A. Conversely, if category B is hurting in sales, you may want to consider removing that category altogether or try to figure out why those products are not selling.

Some of you are probably thinking that all of this information is available offline in Quickbooks or in your shopping cart backend. However, I’ve found that analyzing all of my data online through Google is more productive because I can obtain all of the necessary data in one place. In addition, Google allows you cross reference other valuable pieces of data such as the traffic sources, marketing campaigns and demographic data about your customers.

Conclusion

Don’t get me wrong. The default tracking of Google Analytics is extremely powerful. But if you want to get down and dirty with specific aspects of your shop, you will need more power than what is provided out of the box with Google Analytics.

By default, Google Analytics spits out too much broad based information for you to interpret correctly. In order to effectively use analytics, you must learn how to filter out only the information you need and focus on what will make you the most money.

For more information, you should read up on custom variables, advanced segmentation and filters. Fortunately, Google offers some great tutorial videos on how to implement everything that I’ve mentioned in this article. You just have to apply it to your specific needs. Enjoy!

Make Sure You Set Up Ecommerce Tracking

Google Analytics has many ecommerce specific features which are not setup by default with the standard javascript snippet. While many shopping cart packages support Google Analytics ecommerce tracking out of the box, you sometimes have to enable this feature in the admin panel of your shopping cart because it involves sending Google all of your conversion rate information. And by all your information, I really mean ALL which is why some people get a little apprehensive about giving all of this data to the big G.

For example, once you have the full blown ecommerce tracking set up, Google will know exactly which products you sell, how much you are making as well as how much you charge for shipping. However, while you are sending Google a lot of private information, they will never access your records without your permission and the tracking that comes along with it is invaluable. Trust me.

In any case, once you have ecommerce tracking set up is when the fun begins. Here are a few things that Google Analytics will help you track.

• The total amount of revenue broken down by products sold and correlated with every traffic source that you receive
• Your conversion rate depending on the traffic source. Do certain mediums convert better than others?
• The demographic data of your customers. Is someone in New York more likely to spend more than someone from Wyoming? Is someone from Georgia more likely to buy a certain item from your shop?

As you can see, ecommerce tracking in Google Analytics essentially allows you to gather and cross reference many key pieces of data for your online store. Very valuable stuff.

Refining Our Google Adwords Ads And Our Product Mix

So what are some of the primary ways we use Google Analytics? Probably one of the most important uses of Google Analytics is to refine our Google Adwords ads. By tracking all of the search queries that customers type in when searching and clicking on our Adwords ads, we know exactly what the customer is looking for and we can adjust both our ad keywords and our landing pages accordingly.

For example, if a customer arrives at our website looking for something that we do not carry, we can add negative keywords to our Adwords campaigns. Negative keywords prevent Adwords ads from showing up when a customer types in a query that contains a specific keyword. As a result, we save money with our ad spend because we will never pay for ads for customers that don’t stand a chance of buying from us.

Another way we use Google Analytics is to decide on what new products to add to our online store. For example, if we look at our reports and find that a disproportionate number of people are searching for “European Handkerchiefs”, we may decide to carry them in our store. In fact, we added European imported lace handkerchiefs to our product mix earlier this year for precisely this reason.

Focusing Our SEO Efforts

Once you have ecommerce tracking setup, you can immediately start correlating your revenues based on which keywords customers are using to arrive on your online store through organic search. For example, when we found that our conversion rate for the term “ladies handkerchiefs” was on the order of 15-20%, we immediately started focusing our SEO efforts around this particular keyword.

Today, our online store fluctuates between the top 2 spots for this search term and it brings in a good amount of revenue every single month for free. Without keyword analytics, it’s hard to tell which search terms will bring you the most revenues. After all, you only have a finite amount of resources and the only way to succeed is to focus your time and effort on activities which will maximize your profits.

Tracking Marketing Campaigns

The problems that most brick and mortar stores face when launching an ad campaign in a newspaper or magazine for example is that it’s difficult to determine how much in sales and foot traffic were generated as a direct result of the advertisement.

With an online store however, it’s very easy to track all of your online marketing campaigns via click tracking in Google Analytics. For example, whenever we send out a broadcast email to our store email list, we insert a link to our online store within the email that is specifically tagged with our promotion. As a result, whenever someone clicks on that link to shop at our store, we know exactly which marketing campaign resulted in that new customer. Analytics will also tell us exactly how much money we made as a direct result of the email promotion.

Using similar principles, we also know which sources of traffic generate the most revenues for our store and can make the necessary adjustments. This past year, conversions from both Bing and Yahoo have started increasing significantly which indicates that we may want to focus more efforts on these 2 search engines. In addition, traffic from Facebook has eeked into the top 10 this past year as well.

Tracking Visitor Information

One other trend that we’ve been noticing lately via analytics is that more and more people are now shopping on their mobile devices. This month, over 5% of our revenues have resulted from orders placed from a mobile phone. At around the same point last year, this number hovered around 1% or less. Depending on the percentage of mobile traffic to our store, we may want to consider creating a separate design specifically optimized for mobile phones.

Another way we use Analytics is to track where our visitors are coming from. This comes in especially handy when deciding how to allocate our advertising dollars. For example, certain wedding websites charge based on how many regions you wish to display advertisements for your store. Because it’s way too expensive to advertise nationally, we use Google Analytics to tell us which states bring us the most revenues and purchase our ads based on this information. After all, there’s no point in paying for ads if there’s not a lucrative market.

Conclusion

These are just a few ways that we use Google Analytics to improve our store. Just because you run a small shop does not mean that you can’t track customer behavior. Google Analytics is very powerful and completely free so there’s no reason not to use it. What are some ways you use analytics for your business?