Secret To Maximizing Revenue For Music Downloads Using Paypal Micropayments

You can likely make simple change to your PayPal account, that may easily boost your profits by 35% or maybe more!

The artist as record label

There is no question that the traditional'record company'model of music sales is being obsoleted by a new digital download model. In this new model, bands can interact directly using their fanbase. Direct band-to-fan sales of digital album and song downloads net the artist repeatedly the quantity of money per sale as did the old'recording contract'model. Indeed, under the new model, the artist performs the role of record label, receiving all the cash that previously could have been retained by this middleman.

Once your decision is made by the artist to promote direct to fans via online sales, the artist must pick a way of handling the financial area of the transaction. For the overwhelming majority of artists, the logical choice in this region is to partner with PayPal for the merchant services.

PayPal is easy, trusted, and ubiquitous

PayPal is the leading provider of internet transaction processing services. Functioning for over a decade, it is a widely-trusted, secure brand, easing customer fears about coping with potentially sketchy transactions. It allows consumers to pay for in the shape they prefer -- be it through charge cards, debit transactions, or from their PayPal account balances. With over 150 Million accounts, and transacting in a large number of currencies, it is a globally-recognized brand.

Using PayPal as a 소액결제 현금화 processor, money is paid from the account of the consumers choice to your PayPal account fully for each digital music download. For every single such transaction, PayPal receives a small amount as their compensation because of their service. This really is deducted from the seller's receipts.



Maximizing profits

As seen above, utilising the 소액결제 현금화 Fee structure can lead to dramatic increase in profitability. Let's assume a single download of a $0.99 single is a typical transaction for your act. Under this model, you'd net $0.89 per transaction employing Micropayments Fee schedule, as opposed to $0.66 under the Standard Fee schedule. Or stated another way, this increases your profits by 35%!

Two payment rates

What is not widely-known, however, is that PayPal maintains two separate fee schedules (or Merchant Processing Rates) for sellers. The fee schedule specifies exactly how much of each sale will be paid by owner to PayPal for the service of processing the transaction. Dependant on the dollar size of your average transaction, it may be advantageous to be under one or another schedule.

The Standard Fee costs owner an appartment rate of $0.30 (in US Dollars) plus 2.9% of the sum total transaction. Under this cost structure, if the artist sells a single song at $0.99, PayPal charges $0.33 to owner for the transaction fee -- a third of the whole selling cost.

There is, however, the Micropayments Fee structure. Under this structure, the Micropayments Fee costs owner an appartment rate of $0.05 plus 5%. Using our previous exemplory case of selling a single song at $0.99, PayPal would charge only $0.10 whilst the transaction fee -- significantly less than one-third the price of the Standard Fee!


Can it be right for me?

One can readily note that the Micropayments Fee is a much better deal for small transactions. With a lesser flat rate, it creates small transactions competitive. However, with an increased percentage, it becomes less of an offer as the typical transaction cost increases.

So where's the crossover point? About $12.00. If you anticipate your typical transaction to be lower than $12.00, it will be better to employ the Micropayment Fee. This would be exemplary on most singles and albums sold as digital downloads. If you anticipate your average transaction to be more than $12.00, it will be better to employ the Standard Fee -- but you may not expect your average customer to buy all of your albums at once?

Signing up

The Micropayments Fee option is a little known feature of the PayPal system. PayPal would go to no great lengths to market its availability. Accordingly, very few know of its existence. You can find considerations to changing your PayPal account to the Micropayments Fee schedule.

First, PayPal only allows a single fee schedule for a given account. You can't use the same account with the Standard Fee schedule for a few transactions and the Micropayments Fee schedule for others. However, this is easily dealt with by employing two accounts -- one for each fee schedule.

Second, PayPal allows only Business accounts to employ the Micropayments Fee schedule. Neither Personal accounts nor Premier accounts qualify. However, it is a simple matter to open a Business account with PayPal