Everyone wants to be pretty and to look beautiful and have resorted into trying skin products, hair care line, diet pill and muscle developing gadget to achieve flawless skin, shiny hair and toned body. Nowadays, these personal care products are made available online by merchants who have put up online beauty business to join the high-growth of beauty care industry. Everybody seems to be present in the World Wide Web.
Several payment options must be made available to the customers such as cash, check and also debit and credit cards.
Apparently, online beauty business are considered as high risk business. What is risky with online beauty business? The business model for this niche include sales and marketing strategies offering trial offers and also subscription services that have recurring billing. Aside from that, there is also a reputation for the products being sold by these businesses that these products are not one hundred percent able to give the promised outcome. And when the customers who have registered for a subscription service feel that the results of the product are not good enough and failed to provide the promised outcome, they will request for chargeback. The more reason online beauty businesses are labeled as high risk. Moreover, some merchandise products of these businesses are subject to government regulation that requires FDA approval. That is why banks, credit card brands and many payment processors treat these type of businesses as high-risk.
Other factors that me a business a high risk are
- How long is the merchant’s business since it started up
- The business model the company is using
- The products and services being offered by the company
- Financial stability of the company
- Processing history of the company
A merchant account is a must to have to build an online beauty business to be able to process credit card transaction payments of customers since the customer base of this type of business spans much of the globe.
How to choose a Merchant Account Provider?
It is still possible to obtain a merchant account that is tailored for a high risk online beauty business which can help expand the business either locally or internationally.
- Ability to accept multi-currency payments to allow the business to explore the international market. Multi-currency options can also help the business enhance its market reach with little cost.
- Provision of a secure online portal or gateway to help prevent fraudulent transactions. The processor to be chosen must offer a Level 1 PCI-DDS compliant payment gateway.
- Helps protect the business operation through risk management. The chosen payment processor must be able to offer business protection by giving a robust risk management ad also chargeback management capabilities and also help determine the causes and solutions when issues arise.
- Be able to help the merchant accept payments via web, phone and event in the brick and mortar retail store.
- There should be no set cap on transaction volume.
- Can provide excellent customer support system.
How to Open a Merchant Account?
To simplify, below is the application process to obtain a High Risk Merchant accounts.
- Fill out an online application form by answering the few basic details or call the provider’s number to request for the form to be sent directly to the merchant’s mail.
- Once the application is complete, other supporting requirements must also be submitted to complete the documentation for the processor to start the underwriting process.
- The application will be forwarded to the acquiring bank that will cater the business needs. The bank will also evaluate the merchant and once approve will open a merchant account in 2 to 3 business days.
- The merchant can then start to accept payments through credit and debit cards.
Getting the right payment processor is one of the key success factor for an online beauty business. It can help in boosting leads and increase revenue and also help reduce payment processing costs. It can also help in strengthening the merchant’s relationship with the customer. That I why it is very important to find the right merchant that will be of right fit for the business needs.
The following are necessary steps a merchant must take when starting up a beauty supply online store.
- The online business must be able to register legally.
- The company must get an insurance. Several types of insurance are: health insurance, general insurance, workers’ compensation, liability insurance, payment protection insurance, business owner’s policy group insurance and overhead expense disability insurance.
- File for the intellectual trademark of the business logo as well as the product and formulas. Patents must also be registered.
- Hire a marketing professional that can help use marketing techniques that can help the business grow.