How You Get Paid Each and Every DayMost shoppers who shop online are going to order and pay for the product with their credit card. And if the customer pays for the product by phone then you can enter the customers billing and shipping information into your shopping cart as if you were placing the order online for them. After completing the order, your shopping cart software will encrypt and deliver the customers’ credit card information via a secured payment gateway processor.
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How You Get Paid Each and Every Day
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The payment gateway processor will then send that payment information to your merchant account bank.
After a complex yet speedy transaction, those credit card funds are then processed by your merchant account bank and deposited directly into your business or personal bank account within 48 hours or less. If the customer paid with their credit card through PayPal then those credit card funds are processed and deposited into your PayPal account instantly. |
Then you can manually transfer those funds into your bank account or use those funds to pay for products or business expenses. (Transfers from your PayPal account to your bank account normally take place within 2 to 3 business days.)
After the customer pays you, then you can order the product from the distributor. The distributor will then ship the product directly to your customer.
Whatever money is left over in your bank account from the sale is your profit. For example:
The customer buys a Laptop from your business for $797.95 with free shipping.
The customers’ credit card is charged for the total price of $797.95
The merchant account bank or PayPal will deduct a 2.5% (credit card processing fee) from the total sales price of $797.95 which comes out to $19.95. (Discount rates may vary).
After the customer pays you, then you can order the product from the distributor. The distributor will then ship the product directly to your customer.
Whatever money is left over in your bank account from the sale is your profit. For example:
The customer buys a Laptop from your business for $797.95 with free shipping.
The customers’ credit card is charged for the total price of $797.95
The merchant account bank or PayPal will deduct a 2.5% (credit card processing fee) from the total sales price of $797.95 which comes out to $19.95. (Discount rates may vary).
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Once the merchant account bank has deducted their processing fees you are now left with a total of $778.00.
$778 will be the total amount deposited into your bank account within 48 hours or less.
If the customer paid for the product through PayPal then that $778 will be available in your PayPal account instantly. For example:
$797.95
- $19.95 (2.5% merchant fees)
=$778.00 (total to be deposited into your bank account or PayPal account)
Wholesale price of the product = $698.00 + $11.00 for UPS ground shipping (which was free for the customer but paid for by you, the reseller).
In other words, you paid the wholesale distributor $698.00 for the laptop plus $11 for UPS ground shipping and sold it to the customer for $797.95 with free shipping.
$778 will be the total amount deposited into your bank account within 48 hours or less.
If the customer paid for the product through PayPal then that $778 will be available in your PayPal account instantly. For example:
$797.95
- $19.95 (2.5% merchant fees)
=$778.00 (total to be deposited into your bank account or PayPal account)
Wholesale price of the product = $698.00 + $11.00 for UPS ground shipping (which was free for the customer but paid for by you, the reseller).
In other words, you paid the wholesale distributor $698.00 for the laptop plus $11 for UPS ground shipping and sold it to the customer for $797.95 with free shipping.
Your total cost for the product was $709.00 with (UPS ground shipping included).
$698.00 your cost for the laptop
+$11.00 your cost for shipping
=$709.00 your total cost paid to the wholesale distributor for the product plus shipping
Sale price to customer =$797.95
$698.00 your cost for the laptop
+$11.00 your cost for shipping
=$709.00 your total cost paid to the wholesale distributor for the product plus shipping
Sale price to customer =$797.95
Determining your profit
To determine your profit for this sale simply subtract 2.5% (credit card processing fees) from the total price of the actual sale, $797.95 and then subtract your total cost for the product with shipping included from the sales price after the merchant fees have been deducted. For example:
$797.95 total sales price
- $19.95 (2.5% merchant account fees)
=$778.00
-$709.00 your total cost for the product with shipping included
=$69 profit
$69 becomes your total profit for that sale.
$797.95 total sales price
- $19.95 (2.5% merchant account fees)
=$778.00
-$709.00 your total cost for the product with shipping included
=$69 profit
$69 becomes your total profit for that sale.
Determining your profit after a sale has been paid by check
Sometimes, a customer may pay for the order with a cashiers or company check, and this is often the case with small to mid sized businesses and educational establishments as well.
The benefit of receiving payment by check is that no merchant account provider or payment processor is required to process the checks and as a result no merchant account or credit card processing fees are deducted.
The entire amount of the sales price goes into your bank account without any processing fees applied.
$797.95 total sales price
$797.95 total amount deposited into your bank account
After paying the distributor $709.00 (with shipping included) your profit will be $88.95
$797.95 total sales price deposited into your bank account
-$709.00 your total cost of the product with shipping included
$88.95 profit
$88.95 would be your profit for that sale if the customer were to pay you by check.
The benefit of receiving payment by check is that no merchant account provider or payment processor is required to process the checks and as a result no merchant account or credit card processing fees are deducted.
The entire amount of the sales price goes into your bank account without any processing fees applied.
$797.95 total sales price
$797.95 total amount deposited into your bank account
After paying the distributor $709.00 (with shipping included) your profit will be $88.95
$797.95 total sales price deposited into your bank account
-$709.00 your total cost of the product with shipping included
$88.95 profit
$88.95 would be your profit for that sale if the customer were to pay you by check.
Getting paid
At the end of the month you can write yourself a check for the total amount of the profits or for the amount of the salary which you wish to pay yourself with.
If you choose to do so then you can deposit those profit checks into your own personal bank account in order to separate your personal earnings from the earnings of the business.
You can also pay yourself a salary and leave the rest in your business bank account for capital and business expenses.
If you choose to do so then you can deposit those profit checks into your own personal bank account in order to separate your personal earnings from the earnings of the business.
You can also pay yourself a salary and leave the rest in your business bank account for capital and business expenses.
Payment formula
Total income from sales
Minus the cost paid to the distributor for the product(s)
= your gross income
Your gross income
Minus all business expenses for the month (including credit card processing fees)
=your net profit
Your net profit is whatever money is left over in your bank account after distributors and all business expenses have been deducted and paid. Then you can transfer your net profits into a separate account or bank account if you wish to do so.
You can pay yourself weekly, bi-weekly or in whichever manner works best for you. And you can also withdraw money from your profits daily as well.
After the customer pays for the product then you can order the product from the distributor. The distributor will then ship the product directly to your customer. Money from sales of the products will be deposited into your bank account daily and therefore allowing you to withdraw funds from your account daily as well, if necessary.
Whatever money is left over in your bank account after products, distributors and expenses have been paid, is your net profit. And that’s how you get paid each and every day.
Minus the cost paid to the distributor for the product(s)
= your gross income
Your gross income
Minus all business expenses for the month (including credit card processing fees)
=your net profit
Your net profit is whatever money is left over in your bank account after distributors and all business expenses have been deducted and paid. Then you can transfer your net profits into a separate account or bank account if you wish to do so.
You can pay yourself weekly, bi-weekly or in whichever manner works best for you. And you can also withdraw money from your profits daily as well.
After the customer pays for the product then you can order the product from the distributor. The distributor will then ship the product directly to your customer. Money from sales of the products will be deposited into your bank account daily and therefore allowing you to withdraw funds from your account daily as well, if necessary.
Whatever money is left over in your bank account after products, distributors and expenses have been paid, is your net profit. And that’s how you get paid each and every day.