A lot more digital content is on the way from Photics. With the return of Revisions (possibly a sequel too), a Stencyl book and maybe a book on Drupal 8, I started wondering about e-commerce. Am I managing my products in the best way possible? How should my books be sold? Currently, the Unofficial GameSalad Textbook is sold through FastSpring. Is that what’s best for me? What if I managed my own online store? PayPal has been around for years. Why not use that instead? Technology aside, which is cheaper? I decided to run the numbers.
Keep in mind, this is not a recommendation for what you should do. You might want to run the numbers yourself. I might have gotten something wrong. There might be more things to consider too. But basically, here’s my logic…
PayPal charges a 2.9% + 30¢ fee, while FastSpring charges an 8.9% fee. There are different scenarios possible, like volume discounts or other options, but that’s basically what I was considering. So, I was wondering the breaking point. FastSpring starts out as the cheaper option, but when does PayPal win out? I use Numbers in iWork to make a pretty chart…
According to my calculations, a $5 sale is the tipping point. If it’s under five bucks, FastSpring is cheaper on fees. If it’s over $5, then PayPal is cheaper.
This really wasn’t to change my strategy. Rather, it was just to make me feel better about my decision to stick with FastSpring. What I like about FastSpring is that it does the work for me. They assume the role of the seller. They handle sales tax, order fulfillment, fraud protection and other features. With PayPal, I’d be taking on a lot of extra work.
Still, I’m supposed to be a hotshot developer. I can setup my own shopping cart. I had this nagging feeling that I was leaving money on the table. And according to the chart, I am! Right now, a copy of the Unofficial GameSalad Textbook is available at FastSpring for $10. If I sold the book here at Photics.com (through PayPal) I would make 30¢ more per sale.
But then, I started looking at the low-end. I’m thinking about bringing back Revisions and writing a sequel. Those books would likely be sold at $1-$3 a copy. So if the book was sold at $2.50, I’d make 15¢ more per copy with FastSpring – while enjoying all of the extra features.
The reality is that I’m just one guy. While I could setup my own e-commerce site, that doesn’t mean I should. I like that there’s a company out there watching my back. They’re also looking out for my customers. I’d have to work hard to match the features of FastSpring. But in doing so, I’d be distracted on what matters — making great content!
It also shows me that perhaps I should think about making more inexpensive content. With $1-$5 games and books, FastSpring could work well. Most of the top games on the iTunes App Store are 99¢. Maybe $1-$5 is the new sweet spot for the site. I don’t know if the textbooks should go that low, but that’s a nice range for my fictional books and games.