Google Checkout - For Merchants

[Qui Gon Jinn]

Several questions here aimed at merchants but can be replied to by anybody.

1. Have any merchants calculated pre & post free period how much money they would save, if any?

2. How reliable is it / will it be to existing method?

3. What are the advantages a merchant sees with Google Checkout over others?

4. What are the disadvantages a merchant sees with Google Checkout over others?

5. Do any merchants have a fear that their natural listings will be lowered if they don't incorporate Google Checkout?

6. Will the Google Checkout logo attached to advert increase or decrease CTR (click thru rate) and will this increase CR (conversion rate) or just increase ad spend?

7. Are merchants inclined to change their checkout procedures for the sake it being Google. In other words .. If It Ain't Broken Why Fix It?

[Spreader]

Hi Paul,

I hope you are well mate.

Prezzybox have not, nor have any immediate plans to introduce Google Checkout. However, we'll monitor the situation and potentially will introduce it later on this year. To be honest, this will be primarly based on market forces (if the market dictates then we'll most likely have to do it).

So, bearing that in mind, I've answered your questions below...

1. Have any merchants calculated pre & post free period how much money they would save, if any?

No. I think this is a difficult one - especially when you consider that you get 10x Adwords spend free transactions. I think with Google Checkout you pay a % of the transaction. Currently with a lot of PSP's (Payment Service Providers) you pay Xp per transaction. This could increase/decrease the cost in relation to your current cost significantly dependent on your ABV.

2. How reliable is it / will it be to existing method?

At the minute there's apparently a few teething problems (with it not recognising some UK address's). I would assume long term it will be as reliable as the current method merchants employ.

3. What are the advantages a merchant sees with Google Checkout over others?

The major advantage is the obvious brand awareness, which will potentially help to drive sales and ease any security issues the consuer may have. Another advantage is that the consumer only has to register once - as opposed to having to register with multiple merchants - and therefore internet shopping may be simpler.

4. What are the disadvantages a merchant sees with Google Checkout over others?

Apparently the merchant does not have acccess to the customers details once they have purchased. Not only could this create problems when actually delivering the product/liasing with the customer, but also negates any future marketing potential with that particular customer.

5. Do any merchants have a fear that their natural listings will be lowered if they don't incorporate Google Checkout?

In a word Yes. This is probably my biggest concern and one of the primary considerations for actually introducing Google Checkout. A large percentage of our traffic comes from google. I'd suggest this is similar for a number of merchants. So, if we were to be 'penalised' for not incorporating Google Checkout with regards to our natural listings then this would be very detrimental to our business.

6. Will the Google Checkout logo attached to advert increase or decrease CTR (click thru rate) and will this increase CR (conversion rate) or just increase ad spend?

I would say potentially yes.

If a user is a complete beginner then they may attribute more credibility/security to a website who is using the Google Checkout as it is a household name, whereas Prezzybox (for example) is not as recognised.

If a user is a seasoned internet shopper then they may prefer to use websites who have incorporated Google Checkout as it will (potentially) be quicker for them to do their shopping as they only need to log in to the one checkout (albeit everytime they visit a different shop).

7. Are merchants inclined to change their checkout procedures for the sake it being Google. In other words .. If It Ain't Broken Why Fix It?

Not initially, but if market forces dictate then we may need to, yes.

Thats it mate. As I say, we don't currently work with Google Checkout so some of the information may be incorrect, but this is my understanding of it...


Zak.

[BFG 9000]

Originally Posted by Spreader I think with Google Checkout you pay a % of the transaction. Currently with a lot of PSP's (Payment Service Providers) you pay Xp per transaction.

What you need to consider is that google checkout completely replaces your current credit card merchant account - rather than passing data to them.

So, to give an example - I used to have a credit card merchant account provided by Natwest/Streamline - they would charge 1.935% of credit card transactions, 3.4% for commercial credit card transactions & £0.20 for each debit card transaction.
I was at the time using Secpay for online transaction processing (but similar fees apply with protx, worldpay etc.) they would charge me £0.20 per transaction plus £20.00 per month.

Using these figures the cost of accepting credit/debit cards ranges from 2.5% - 3.5% + 20p/transaction + £20/month.

With google checkout until 2008 it's completely 100% free.
From 2008 the charges are set at approx 1.5% with the possibility to reduce your fees by 10x your adwords spend.

It's easy to see that this is a much better deal than you'll get anywhere else.

One of the sites I currently manage has negotiated a rate for their credit card merchant account of 1.1% for credit cards, but this is still 3.4% for commercial cards & there is still the per transaction fee to pay to the PSP so (with the potential to reduce fees according to adwords spend) we're still better off with google checkout.


TTFN

BFG

[Qui Gon Jinn]

Ok sounding thick here for the moment, is GC undercutting not only Paypal & WorldPay & other Payment Service Providers, but also cheaper than the banks? Both Pre 2008 & into 2008?

Assuming a merchant with 10000 sales at £50 = £500k. What could a merchant save?

[woutermols]

Hi,

Some disadvantages I see with regards to the Google Cart are:

1. It does not offer the option of detailed (product level) sales tracking. I.e. 3 Blue Widgets at £4, Total £12, 4 Green Widgets at £4.50 Total £18 etc.
2. As far as I can see it does not support facilities like local cookies which is ideal in situations where a merchant is available through various networks. This can result in duplicate orders in multiple networks if and when the customer has visited the merchant's site through two affiliate links from different networks.
3. Google will now be able to track what keywords in AdWords result in sales and what the value of these sales are. This is great info for them to see what keywords they can increase minimum bid prices for if they would like to do so.
4. It would financially be in Google's interest to put Google Cart merchants higher in the SERPS and in the Adwords adverts as they stand to earn more from these merchants. At the same time forcing merchants to use Google Cart if they want to stand a chance in their own industry.
5. Google can glean from their stats what industries are worth investing in, becoming your biggest competitor in doing so. Do you really think Google will not take away your business if it can profit more from it by becoming your direct competitor?

[drivetowin]

Originally Posted by Qui Gon Jinn Ok sounding thick here for the moment, is GC undercutting not only Paypal & WorldPay & other Payment Service Providers, but also cheaper than the banks? Both Pre 2008 & into 2008? Assuming a merchant with 10000 sales at £50 = £500k. What could a merchant save?

If we assume an average card processing fee of 2% + 0.20p per transaction from other providers (which would seem a fair average from Paypal, Protx and Worldpay) (allowing for bank merchant charges too for Protx and Worldpay)

then Pre 2008 the merchant would save:

10000 x 0.20 = £2,000
10000 x 50 x 0.02 = 500000 x 0.02 = £10,000

Total saving pre 2008 £12,000

Post 2008

Merchant costs without Google = £12,000
Merchant costs with Google = £9,000

10000 x 0.15 = £1,500
10000 x 50 x 0.015 = 500000 * 0.015 = £7,500

Total saving post 2008 £3,000
But - if merchant spent £900 on Adwords then they would get £9,000 processing costs free - so any savvy merchant is going to do that

So then - total saving post 2008 £11,100.

Now I hear what people are saying about Google this, Google that, but to many merchants doing £500,000 per year turnover, the chance to boost their bottom line by an extra £12,000 a year is going to be hard to resist.

[BFG 9000]

Originally Posted by Qui Gon Jinn Ok sounding thick here for the moment, is GC undercutting not only Paypal & WorldPay & other Payment Service Providers, but also cheaper than the banks? Both Pre 2008 & into 2008? Assuming a merchant with 10000 sales at £50 = £500k. What could a merchant save?

They are definately undercutting paypal & worldpay.
Given that level of sales, I'd say they are probably (depending on the negotiation skills of your finance team) undercutting the banks as well.

TTFN

BFG

[BFG 9000]

Originally Posted by woutermols Hi,1. It does not offer the option of detailed (product level) sales tracking. I.e. 3 Blue Widgets at £4, Total £12, 4 Green Widgets at £4.50 Total £18 etc.

Agreed

Originally Posted by woutermols 2. As far as I can see it does not support facilities like local cookies which is ideal in situations where a merchant is available through various networks. This can result in duplicate orders in multiple networks if and when the customer has visited the merchant's site through two affiliate links from different networks.

Nope - this is no more of a problem than when using current systems - when the merchant sends the xml request to google, they send whatever tracking code they see fit - it's down to them to decide which merchants tracking code to send.

Originally Posted by woutermols 3. Google will now be able to track what keywords in AdWords result in sales and what the value of these sales are. This is great info for them to see what keywords they can increase minimum bid prices for if they would like to do so.

Agreed - can you see them actually doing it though?

Originally Posted by woutermols 4. It would financially be in Google's interest to put Google Cart merchants higher in the SERPS and in the Adwords adverts as they stand to earn more from these merchants. At the same time forcing merchants to use Google Cart if they want to stand a chance in their own industry.

Nope (not financially anyway) - especially not this year. It costs money to process card transactions - they're going to be losing money here![/quote]

[woutermols]

Nope (not financially anyway) - especially not this year. It costs money to process card transactions - they're going to be losing money here!

I'm not looking at this from a 'this year' perspective, I am looking at this in the long run. Google does nothing that does not somehow, somewhere have a positive financial impact.

I don't believe for a minute that after year 1 they don't make money on each 'paid for' transaction. And with regards to the non paid for transactions because of adware spend... it just depends on the profit margins they have on those ads and what the real costs are for each transaction.

And once things start ticking over, the merchants are using their cart, how long do you think the free transactions will last?

Call me sceptical, but I don't believe Google is the good Samaritan giving things away. They will always gain something from it. But like any big company they can afford to do certain things to push their competition out of the market. Short term loss for the long term gain, that's how it works with these companies.