The agent this week has several prospective clients who use Shopify. She asks how to overcome the objection of cancellation fees for switching?
I think the Shopify model is one of the best in the industry. They’re one of the toughest competitors for agents. They’ve done a good job of walking the wire: they don’t lock the merchant in to a processor, but they do!
Do a Google search for “Shopify credit card processors.” Read their pricing; it’s right on the website. You’ll find that the larger the merchant account, the easier to justify.
The higher the subscription fee, the lower the penalty. It’s a basis point penalty with a cap of about 50 basis points.
If I’m a small online retailer doing $20,000 per month revenue, I’m probably on one of their lower subscription plans. I don’t want to pay $500 per month to Shopify in order to have a lower processing penalty to pay.
Thus, you want to go after the larger merchants. There is no pitch other than cost savings. The technology they’re using IS Shopify. You won’t give them a better widget. They’ll be using Shopify.
I pitch it very simply: “Look, I won’t guarantee anything except that I won’t waste your time. Send me a statement from Shopify; I’ll take a look at it. I know exactly how it all works; I know the fees; I know your subscription. I’ll take a look at your statement and let you know.”
Then when you’re actually making the proposal with our getisoamp.com (or whatever you’re using), add a line item for the monthly fee for Shopify and for that penalty fee. Decide what the figures would be if the merchant does what you’re advising. Add that to your proposal.
If you can still show savings, it’s a no-brainer. Savings is literally a utility. This is what I say to merchants, “If I’m saving you $10 per month, there’s absolutely no reason not to do this. This is a pure commodity; you’re using Shopify for everything you do. Just like electricity. I wouldn’t be doing anything other than providing a credit card processing service to move the money from Shopify to your bank account. Why wouldn’t you want to do that as inexpensively as possible?”
There’s no other variable involved. I simply need to do the integration which involves logging into the merchant’s back office and changing a couple of numbers.
To summarize, it’s very low barrier and easy to switch. The only question is whether you can save the merchant money with that penalty in mind.