Introduction to Affiliate Marketing

Internet marketing is an umbrella term that includes many technologies, tactics, channels, and revenue streams. There is no shortage of ways to utilize internet marketing to your advantage and it would be impossible to cover every effective strategy in the always-evolving online landscape. Today, we’re going to turn our focus to affiliate marketing – one of the most misunderstood forms of internet marketing.

Too much is made of the internet “moving at the speed of light.” Anyone researching internet marketing is bound to find one warning repeated over and over again: the internet moves so quickly that in order to be successful you must be one step ahead of the latest tools and best practices. It’s true that being an early adopter can help you become very successful in the short term, but it’s also highly risky. It’s much more rewarding in the long-term to provide a product that is consistent, stable and practical. In other words: slow and steady wins the race.

This is especially true when it comes to affiliate marketing. Affiliate marketing is one of the cornerstones of internet marketing and it is largely built on trust. The best affiliate marketers are seen as authorities within their niche.

As a whole, affiliate marketing is an enormous network which helps businesses reach their target audiences and points consumers to the products that best suit their needs. In this regard, affiliate marketing has a lot in common with, and is closely linked to, search engine optimization (SEO).

Simply put, affiliate marketing involves two parties: the business and the affiliate. The business is selling some kind of product and the affiliate is promoting that product. It’s a form of commission-based salesmanship, with the affiliate rewarded based on their performance. Every time the affiliate helps to generate a sale, the business pays them a share of the sale. This graphic explains the relationship between Brands, Affiliates, and Ad Platforms.

Affiliate Marketing - How Does It Work?

While ad platforms used to play a very large role in affiliate marketing, more and more affiliates are finding ways to earn commissions that bypass these platforms altogether.

One way for affiliates to promote products is by creating a customer-facing service, for example a blog that reviews books, a series of videos explaining how to build furniture, or a website documenting the latest fashion trends. In the first example, the affiliate can provide links to buy the books from Amazon, in the second, the affiliate can provide a list of all the tools used in the video and link to buy them from Home Depot, and in the third, the affiliate can direct people to Revolve. Each of these companies has a healthy affiliate program and there are many other programs and networks to choose from.

The key to success in affiliate marketing is to provide an organic and high-value context in which to drive traffic to your partner(s) – consumers aren’t going to follow a link unless you give them a good reason to. First, you need to attract people to your site, which is going to require good SEO in order to rank higher in Google. Then, you need high quality content to keep people reading and keep them coming back. The more value and usefulness your content offers to your readers, the more business you’ll generate.

Affiliate Marketing Facts

  1. Affiliate marketing is one of the cornerstones of digital marketing

Affiliate marketing is a broad network used by every major online retailer. It’s a widely accepted form of digital marketing and a huge part of any retailer’s consumer outreach strategy. Affiliates act as an arms-length sales and marketing force, organically directing consumers to the products they want and need, and helping businesses to grow their customer-base.

  1. Affiliates DO sell a product

Affiliates are more than just a part of a business’ sales funnel – they provide a very valuable product of their own: good content. Affiliates are thought leaders and tastemakers that answer the questions consumers are actually asking. Whether customers want to know more about a specific product, want to keep up with the latest trends, or are getting into a new hobby, affiliate marketers are often the people they turn to for more information. The most successful affiliates are the ones who offer the most valuable (and most well-written) information to consumers in their niche.

  1. You CAN make money

Many people portray affiliate marketing as passive income, but that’s a little misleading. Starting an affiliate marketing site takes a lot of work – don’t expect there to be anything “passive” about it during your first six months. Affiliate marketing, like SEO, is built on trust. It takes time for consumers to trust you as a resource and it takes time for Google to trust you. Generate good content and network with other sites in your niche for at least six months before you expect to see a significant return on investment. Be patient: by your second year you could be making $10,000/month.

  1. You DON’T have to focus on a specific niche

What holds many people back is a desire to do something totally unique, waiting to find that hyper-specific niche that will make them one-of-a-kind. But there are two problems with this: first, for a very specific niche, you have to truly be an expert to regularly produce good content; and second, if nobody’s done it before, there’s a good chance that’s because there’s no money in it. By choosing a broad niche (such as fashion or home renovation), you can target a wider audience and tap into a wealth of existing information and resources.

Anyone can be an affiliate. If you already have a blog or website (and lack the time or the ability to create a whole site dedicated to affiliate marketing) you can still work with businesses in your industry by linking to products that you use yourself or that you think your visitors would enjoy, or just by including a banner ad on your homepage.

Did you know that Payza has its own Referral Program? Test out your affiliate marketing skills by helping people sign up for their free Payza Account. Once they reach a certain amount of transactions, you’ll earn $5 USD for your first 10 referrals, and $10 USD for every referral after that!

Join the millions of businesses and individuals around the world that use affiliate marketing to supplement your income, and if you have any questions about getting started, ask us in the comments below.

Bitcoin Then and Now – Has Bitcoin Lived Up to Its Promise?

The early months of 2017 have been a very interesting time for Bitcoin. On January 2nd, Bitcoin maintained a value of $1,000 USD for the first time and only 5 months later it set its current record value of over $3,000. For a cryptocurrency that was worth only 25 cents per coin in 2010, this radical rate of growth has kept investors on the edge of their seats.

Soaring values can have their downsides though. Bitcoin is embroiled in a civil war caused by its scaling problem. Both sides know that a “fork” (an update to the code which runs the Bitcoin blockchain) is required for the currency to survive in the long-term, but the debate centers on whether a “hard” or “soft” fork is the optimal solution. A hard fork would split the code to effectively create a new blockchain with an increased block size, which would solve the scaling problem but make the “new” Bitcoin incompatible with the old. The alternative, a “soft fork”, known as Segregated Witness or SegWit, has been proposed as a way to increase the block capacity without splitting the code.

Opponents of SegWit have two concerns. The practical opposition is that the soft fork would not increase transaction speeds significantly enough to maintain Bitcoin’s lead in the cryptocurrency landscape. The philosophical opposition is that SegWit would undermine Bitcoin’s purpose: to be a decentralized alternative to fiat currencies, immune to political influence.

SegWit developer Peter Wuille addressed Bitcoin’s scaling problem by devising a method to “segregate” the transaction signature from the input data: the signatures used to validate transactions can be stored separately from the blockchain, increasing the chain’s capacity to store more data and process transactions more rapidly. The trouble is that this requires the signatures to be overseen by the Bitcoin Foundation, which some see as effectively “centralizing” control of the currency. To many, this stands in diametric opposition to the ideals Bitcoin was founded on – but is that really true?

The Whitepaper

In 2008, a mysterious figure known as Satoshi Nakamoto released a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. In the 9-page whitepaper, the pseudonymous author (or authors) defines the technologies which make the blockchain possible, using an innovative proof-of-work scheme which solved the double spending problem by timestamping transactions into a public ledger on a peer-to-peer network. This allowed, for the first time, a fully automated and decentralized currency and laid the technological foundation for all cryptocurrencies today.

In the introduction to the whitepaper, Nakamoto writes:

“Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. (…) What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.”

That is about as political as the paper gets. Nakamoto describes Bitcoin as a technological innovation which simplifies e-commerce transactions and security, without contextualizing it within an anarchic political frame. While in 2008 a lack of faith in fiat currencies was definitely part of the conversation among the early adopters of Bitcoin, the developer(s) of the blockchain chose not to define it in those terms.

If Bitcoin was not intended to stand in explicit opposite to fiat currencies, but was simply envisioned as a more modern and robust payment technology, is SegWit incompatible with its original intention? Technically, SegWit would change the fundamental design of the blockchain by separating the transaction data from the proof-of-work, which means the possessors of the proof-of-work would take on the role of a “trusted third party” – which is exactly what Nakamoto set out to eliminate in the development of Bitcoin.

On the other hand, if SegWit could be implemented in such a way that the proof-of-work is also a fully automated chain, operating in parallel to the blockchain and communicating with it, this would theoretically achieve the same results as the whitepaper envision, but with an updated design.

A Hard Fork

The alternative, the “hard fork”, would retain the fundamental design as laid out in the 2008 paper, with the only difference being to increase the capacity of the individual blocks in the chain. Currently, these 10-minute blocks are limited to a maximum size of 1MB, but Bitcoin has become so popular that it can no longer process all the transactions made within any given 10-minute period, creating a backlog.

The existence of this problem suggests that Nakamoto never dreamed Bitcoin would become so popular, but many investors believe this is still only the beginning. So far this year, the price of 1 BTC has already tripled and some analysts have gone so far as to make value estimates as high as $55,000 USD per coin by 2022. On paper, Bitcoin’s technology is ingenious, but can a truly decentralized currency really handle this level of popularity?

The debate over the hard or soft fork has made Bitcoin highly volatile in recent months, with optimistic investors doubling down on their stock and the more wary exchanging their Bitcoin for other altcoins such as Ether. And it’s no secret that when the inevitable fork happens the coin’s value will drop significantly in the short term as the new chain is tested and the old is abandoned, which raises a different perspective on whether Bitcoin has lived up to its promise. Bitcoin’s popularity is often credited to its position as an alternative to fiat currencies, which have lost trust due to the high level of geopolitical turmoil during the last decade. But if Bitcoin after almost 10 years still shows no sign of stability comparable to fiat currencies, can it really be considered more secure?


Payza is closely following the development of Bitcoin and altcoins and is committed to providing practical and innovative cryptocurrency services. Using our platform, you can buy, store, and sell Bitcoin and sell over 50 different altcoins right inside your account. For the latest updates and industry insights about Bitcoin and cryptocurrencies, be sure to subscribe to our blog and follow us on Twitter and Facebook.

Payza Summer Reading Guide for 2017

Payza Summer Read

The summer is officially here (in the northern hemisphere) and we’re all looking forward to taking some time off in the hot sun and reading a few good books. To prepare, we asked our staff to share some recommendations for summer reading. It was originally meant to be shared just around the office, but we received so many good suggestions that we decided to share some of the most interesting ones with you, our members! So if you’re looking for something good to read this summer, here are 6 of our favorite book recommendations from the Payza staff:

Nikita P, Banking Reconciliation Team – The Immortals of Meluha by Amish Tripathi

Nikita is fascinated by Indian mythology and religion, and has introduced many of us at Payza to Amish Tripathi’s Shiva Trilogy of novels, which begins with The Immortals of Meluha. A deeply-researched fantasy novel heavily based on Hindu history and mythological stories, the first novel by this Mumbai born and based author was a huge success when first published in India in 2010.

“Beautifully narrated by Amish, which makes us flow with its story, The Immortals of Meluha is a completely mythological story written in a modern style. The novel creates anticipation in the reader’s mind and compels one to read with great curiosity till the end. I love reading this book and would especially suggest it to anybody interested in the ancient history of India.” – Nikita P.

Buy it here: The Immortals of Meluha

Rob E, Marketing Team – Zero Waste Home by Bea Johnson

Originally published in 2013, Zero Waste Home is an instructional book on cutting garbage (waste) out of our lives. In it, author Bea Johnson explains how she, her husband Scott, and their two sons have managed to limit their garbage to just one quart per year and this has resulted in healthier lives, more time spent together, and an annual household spending cut by a remarkable 40%.

“This book teaches you how to organize your life by cutting out the waste. Not only will it help you learn to appreciate what is really important in life, it will also teach you how to do your part to help the environment by throwing out less garbage. Zero Waste Home is full of tips for all situations, it has something for everyone.” – Rob E.

Buy it here: Zero Waste Home

Derek H, Marketing Team – The Handmaid’s Tale by Margaret Atwood

Now a major television series from the American streaming service Hulu, this 1985 novel from prolific Canadian author Margaret Atwood, already her most popular work, is newly relevant again. A dystopian novel set in the near future in New England, it paints a picture of an America now controlled by a totalitarian regime and tells the story of one woman’s struggle against oppression and subjugation.

“Margaret Atwood is one Canada’s most popular and celebrated authors, and as a Canadian it gives me great pride to see a whole new audience introduced to her work because of the new TV series based on The Handmaid’s Tale. I hope the people who like the show don’t limit themselves to just this one book, because she has dozens of brilliant novels that everyone should read.” – Derek H.

Buy it here: The Handmaid’s Tale

Ruchita M, Account Verification (Trainer) – Mrityunjay by Shivaji Sawant

Mrityunjay, one of the most famous Marathi novels, was the first novel by author Shivaji Sawant. Mrityunjay, which translates into “Triumph Over Death”, is based on the Indian mythological Karna, one of the leading characters of the epic Mahabharat. Written in Marathi, it was later published in Hindi in 1974 and English in 1989.

“The novel comprises auspicious Marathi writing skills, simple artistic language dealing with the beauties of nature, as well as figures of speech natural to Marathi speakers. This novel is a milestone in the history of Marathi literature yet remains popular in this century and has been awarded many of the prizes and awards given by the Jnanpith (Murti Devi Award). I am looking forward to read more from the same author.” – Ruchita M.

Buy it here: Mrituyunjay

Emelie S, Marketing Team – Option B by Sheryl Sandberg and Adam Grant

Released just a couple of months ago, this non-fiction book from the COO of Facebook was named the Amazon Best Book of April 2017. Part memoir, part self-help book (the full title is Option B: Facing Adversity, Building Resilience, and Finding Joy), Sheryl set out to write this book after her husband and the father or her children passed away, and recruited friend and psychologist Adam Grant is co-author.

“It’s not fair to call Option B a self-help book; it doesn’t just give superficial advice about how to self-actualize, it actually tells the true story of Sheryl’s experience overcoming the loss of her husband and the trauma that has inflicted on her family. Sometimes uncomfortable but always rewarding, this book will be relatable to, and helpful for, anyone who has experienced any significant loss or adversity in their lives, which I think is all of us.” – Emelie S.

Buy it here: Option B: Facing Adversity, Building Resilience, and Finding Joy

Karleen J, Quality Assurance Team – Harry Potter and the Philosopher’s Stone by J.K. Rowling

Originally published on June 26th 1997, Harry Potter and the Philosopher’s Stone, J.K. Rowling’s first novel and the first installment in the Harry Potter series, just turned 20 years old. If you still haven’t read the Harry Potter books, now is the time to find out why it is the best-selling book series in history and has been translated into 73 languages and counting.

“It’s hard to believe that the first Harry Potter book came out 20 years ago. Me and so many others grew up on those books (and later, those movies) and I go back to them every few years. They never get old. Anybody who hasn’t read Harry Potter yet should start right away and see why The Philosopher’s Stone turned J.K. Rowling into a household name and spawned six more books in the main series.” – Karleen J.

Buy it here: Harry Potter and the Philosopher’s Stone

There you have it! We hope you enjoy some of these books this summer, but we know that many of you probably already have your summer reading list lined up. What are you planning to read during your time off this year? Tell us about your favorite books in the comments below!

A Challenger Appears: Ethereum Approaches Bitcoin Market Capitalization

Ether Challenging Bitcoin

At the start of 2017, the global cryptocurrency market cap, that is, the total value of all cryptocurrencies like Bitcoin and Litecoin, was just under $18 billion USD. This was already a very promising increase from just $7.1 billion the year before. Compared to what was about to come however, even that increase seems minuscule. As of mid-June 2017, cryptocurrencies have reached a global market cap of just over $115 billion. That’s a 533% increase in less than half a year!

Payza has been keeping a close eye on the exciting new cryptocurrency trends, and in 2014, became one of the first e-wallets to allow its members to load and withdraw from their accounts using Bitcoin.

Until a few months ago, Bitcoin’s dominance, or the percentage of Bitcoin’s total value compared to the total combined cryptocurrency value, held steadily between 80% and 90%. Since March, however, there has been a tremendous rise in both awareness and value of Bitcoin alternatives, dubbed Altcoins. As a result, Bitcoin’s dominance has dropped significantly, making up just under 40% of total cryptocurrency value as of mid-June.

Trailing closely at 31% of the total cryptocurrency market cap, a challenger seems eager to take Bitcoin’s throne: Ether.


Built on the Ethereum computing platform, Ether (ETH) was released in May 2015 and has since gathered strong support from developers and investors alike, despite a hard fork in 2016 that prompted the creation of the Ethereum Classic (ETC). Following the success of the network and a growing market capitalization, multiple ventures are aiming to use Ethereum for projects related to finance, energy sourcing and pricing, sports betting, the internet-of-things, etc.

With an adoption rate that rivals that of Bitcoin, both experts and enthusiasts are becoming reluctant to use the term ‘altcoin’ when referring to Ether. There’s even speculation within the community that Ether will soon overtake the current leader, an event humorously named “The Flippening.”

The Enterprise Ethereum Alliance

With partners from multiple Fortune 500 companies (Microsoft, J.P. Morgan, Intel, etc.), research groups and blockchain startups, the nonprofit organization Enterprise Ethereum Alliance was established in March 2017 with a vision: to augment the Ethereum blockchain by creating a private version (currently known as EnEth 1.0), based on a reference architecture focusing on confidentiality, privacy, scalability and security. It will facilitate collaboration, as everything created will be open-source, making the EEA evolve alongside the public Ethereum community in harmony.

A Surge of ICOs

Part of the extraordinary increase in cryptocurrency value during the second quarter of 2017 is attributed to growing cryptocurrency awareness, the creation of the Enterprise Ethereum Alliance, but also to a multiplication of successful Initial Coin Offerings (ICOs), crowdfunding campaigns dedicated to projects that build upon the Blockchain to provide solutions to existing problems or to future-proof the technology. Among the top ten crowdfunding projects, six are cryptocurrency-related, all based on the Ethereum blockchain: Bancor, the DAO, AEternity, MobileGo, Basic Attention Token and Aragon.

These projects, which have raised just over $477m, show tremendous support for the Ethereum blockchain, which was itself crowdfunded in September 2014 for $18m, a figure that pales in comparison of recent investments.

Altcoins and Payza

Payza has kept a watchful eye over all cryptocurrency developments, not just developments related to Bitcoin. As such, we’ve already started exploring and developing new ways to incorporate Ether and other Altcoins into our global online payment platform.

As cryptocurrency and blockchain technology advances, it is becoming increasingly clear that these currencies will make up a meaningful part of the global e-commerce ecosystem. The only questions that remain are which coins will emerge as the market leaders, and how much of global e-commerce volume will cryptocurrency payments make up?

Distributed Teams: Payouts for International Workers

In today’s digital economy, distributed teams are common. Many organizations, including the majority of companies doing business online, have anywhere from a few to a few hundred employees who rarely, if ever, come into the office. This brings countless advantages for the employer as well as the employee, but one of the new challenges it introduces to businesses is how to manage payroll. We have some experience in this area, and we’d like to pass on our expertise!

Working remotely is not a new concept, but the idea of working remotely was often thought of as a carrot to be dangled in front of workers – a “perk” that few could hope to gain and that, frankly, didn’t make much sense for the employer. Or so it was believed until remote labor pioneers such as Dell and IBM experimented with distributed workforces and discovered that not only did expenses go down, but productively actually went up! Organizations saved the overhead costs of office space, computers, building maintenance, phone and travel allowances, while employees became happier, more flexible, and, surprisingly, more productive.

Naturally, as remote labor became more common, businesses realized that they no longer had to hire the most qualified person within commuting distance of their office, they could now hire the most qualified person, period. Today, some companies don’t have an office at all, operating instead as a fully distributed team. These companies use a slew of specialized apps and cloud technologies to collaborate from all corners of the world.

How do you manage payroll for a distributed team?

Though managing remote employees in other countries is entirely doable, it does require a different set of tools and practices. Communication and access to the cloud is not limited by location, but the ability to pay employees, contractors and affiliates may be.

Businesses now need to consider several new issues including:

  • International legal and compliance issues
  • Security and reliability of regular payouts
  • Risk of currency fluctuation (and whether the company or the employee absorbs that risk)
  • Payroll account management and reporting

For startups and small organizations, these concerns can add a great deal of expense and man hours to a business that already operates on small margins and with small teams.

Because of these factors, most companies with a distributed workforce opt to outsource their international payroll. There are two main ways to do this: using payroll cards, or consolidating payouts using a global payouts platform.

Payroll Cards

An alternative to direct deposit or paper checks, a payroll card is a reloadable prepaid card onto which an employer loads a worker’s earnings at the end of each pay cycle. Typically issued by major credit card providers or payment processors, workers can use them anywhere credit cards are accepted, including ATMs and cash-back transactions.

The advantage of payroll cards is that employers can deposit money directly onto the card without having to pay the high bank fees for international money transfers, and workers aren’t required to have a bank account. The downside is that payroll cards do still come with fees, similar to those charged on traditional debit cards, which vary depending on the issuer. It’s import to inform workers of these fees before they agree to this payroll method.

Global Platforms

The most convenient option for businesses with distributed workforces is to consolidate all of their payroll needs into one place. This is made possible using a global payment platform. International payroll services allow businesses to eliminate the labor required to execute and manage multi-currency payouts. These platforms also remove the need for businesses to have full banking services in every country where they are employing workers.

Payment platforms consolidate payroll into one place. This allows a business to keep their total salary expenses organized and ensures secure and reliable delivery of payments to employees, contactors, and affiliates, regardless of location. Payroll specialists utilizing cutting-edge payment technologies can provide these services more efficiently and affordably than traditional banks and can reduce or eliminate the costs of accounting, legal, HR, and compliance associated with international payouts.

Consolidating payments with a global platform also benefits workers. International payroll providers can deliver payments in a more timely manner and can pay workers in local currencies, saving them the currency conversion fees. This also allows the company to pay a fixed salary in the local currency, which safeguards workers against currency fluctuations.

By using Payza’s global payment platform to consolidate payouts to your employees, contractors, and affiliates around the world, you can rest easy knowing you’re in the hands of the most secure, reliable and affordable payout provider you can find. Payza’s highly secure payment processor is easy to integrate into your website and supports a wide range of payment options, such as credit card, Bitcoin, and e-money transfers. Payza’s Mass Pay feature lets you easily send payouts to all your recipients in one action, saving you time and trouble.

A Payza Business account makes it easy to complete your payouts with just one click. Send money to employees, freelancers, contractors, affiliates and suppliers and keep track of your payments with Payza’s detailed Transaction History. Just upload your payroll spreadsheet and send money to anywhere from a few people to a few hundred, instantly!

5 Dropshipping Tips to Help You Outsource Your Warehouse


Shipping and fulfillment are arguably the most labor-intensive parts of running an e-commerce business. The man-hours required to pack boxes, buy insurance, contact couriers, and track shipments are incredibly time consuming, even for a small business. And as time goes on, the challenge of scaling your logistics can become a critical barrier to growth. This is where dropshipping comes in.

Although dropshipping has been around for years, it’s only now beginning to break into the mainstream. Large retailers like Home Depot and Macy’s are starting to integrate with dropshipping to expand their online offering. Shoe Carnival and Pier 1 Imports have announced plans to start doing the same. E-commerce giants are taking note of this new strategy because it has now been refined and proven effective by countless online start-ups.

Dropshipping works by partnering with your manufacturer or supplier. Instead of buying your merchandise in bulk and warehousing it, once an order has been placed you instruct the wholesaler to ship the goods directly from their warehouse to your customer. In addition to outsourcing all your shipping and fulfillment needs in one fell swoop, dropshipping can benefit your business and your customers.

Advantages of dropshipping

Here are just a few of the benefits that dropshipping has to offer:

  • Less labor, lower overhead costs: With dropshipping there’s no need to keep a stock of inventory, process shipping information, or pack boxes. That saves significant man-hours and overhead costs.
  • Mitigated risk: Because you don’t need to maintain an inventory, you don’t face the risk of buying in bulk and getting stuck with products that don’t sell or are replaced by newer models.
  • Wide selection: Now that you’re no longer limited to the amount of stock you can fit in your warehouse, you can offer an infinite shelf of products for your customers.

On top of these advantages, you also enjoy flexible product testing, fewer shipping challenges, greater scalability, lower initial investment, and more.

Dropshipping drawbacks

Even with all these advantages, there are still some downsides to dropshipping. The cost of the service itself is typically expensive, especially for small businesses with slim margins to begin with. As your sales grow and profit margins increase, this becomes less of an issue, but the expense can be a barrier to new businesses.

There are also risks and challenges associated with outsourcing your shipping and fulfillment, since you have no direct control over shipping and handling, and have no opportunity for face-to-face customer service.

5 dropshipping tips to help you succeed

To ensure a successful dropshipping strategy in today’s market, here are five tips you need to consider:

Find your niche

Because Dropshipping allows you to offer something for everyone, the temptation of an infinite shelf is hard to resist, but be careful about falling into this trap. While this may seem like a good idea, it’s not necessarily what customers want. One-stop-shops, while convenient, are also impersonal. Offer your customers what they’re really looking for: something custom tailored for them.

Don’t just sell headphones and stereos, sell headphones and stereos for young professionals who habitate post-industrial urban neighborhoods and consume vegan straight edge punk rock, for example.

The bottom line is: Specialize!

Have multiple fulfillment options

When you’re first building your business, it might seem easiest to just partner with one wholesaler, but that opens you up to exactly the type of risk you’re trying to avoid. It should be part of your plan to store at least some stock in-house (such as your best-selling items) and consider working with multiple suppliers. This way you can still offer an inventory that is unique to your store while avoiding potential troubles associated with relying on a single supplier. You can also save some of the dropshipping costs by fulfilling a portion of your orders in-house.

Be transparent

Myth-busting time: Most people will tell you to hide the fact that you’re outsourcing your warehouse and delivery. Don’t.

You should be upfront with your customers about your fulfillment partner. Today’s consumers have become so comfortable with major marketplaces that dropshipping is not seen as a negative; the most important thing for most online shoppers is that their retailers are open and honest.

Use low-cost marketing and be easy to reach

Profit margins are slim enough for new retailers and dropshipping can make them even slimmer. Dropshipping can also limit your visibility and direct interaction with customers post-sale since you don’t have as much room for packaging customization.

Focus your marketing efforts on effective, low-cost strategies such as SEO and social media engagement.

Make customer service a top priority, as well as having open channels of communication. Often in e-commerce, the merchant who responds the quickest to customer inquiries is the one who makes the sale.

Have a complete e-commerce plan

Dropshipping is effective but it’s not a magic solution to every e-commerce need. Too many failed dropshippers have taken an “if you build it, they will come” approach to this business model, assuming that they can passively earn a living income by simply building an online store and waiting for sales to roll in.

Dropshipping can help you launch or expand your business, but it’s just one tool among many, and the most important tool is your own hard work and commitment. Don’t expect a living wage in your first year of business and don’t expect dropshipping to fix all your problems. But if you work hard, curate your inventory well and diversify your revenue streams, it can be one of the cornerstones of a profitable and sustainable enterprise.

Bonus tip: Offer your customers multiple payment options

Once you have set up your online store, you’ll need to provide simple and secure payment options. You’ll want a highly secure payment processor that is easy to integrate onto your website and supports a wide range of payment options, such as credit card, Bitcoin, and e-money transfers.

A Payza account makes it easy to accept online payments and there are lots of added bonuses, like free recurring billing, built-in fraud protection, and no hidden fees. With Payza’s Guest Checkout options, such as credit card and Bitcoin payments, you’ll make it easy for your customers to pay you instantly.

European E-Commerce Laws and Regulations: What You Need to Know

Ecommerce Laws Europe

In any discussion of e-commerce in Europe today, the subject inevitably turns to Brexit. Everybody is waiting to see what impact Brexit will have on e-commerce both within Britain and on the EU as a whole, but for the moment Great Britain is still part of the European Union and still subject to their laws.

Let’s set aside the “what-if’s” for now and take a look at the e-commerce laws and regulations that any merchant selling in Europe needs to be aware of.

European E-Commerce Overview

Europe is a major destination for e-commerce. Germany, France and the UK are all among the largest e-commerce markets in the world and the region as a whole is easily one of most mature and developed. With market maturity comes strong infrastructure, high consumer adoption of cross-border e-commerce, and well-defined rules and regulations.

Key to all of this is SEPA – the Single Euro Payments Area. Coordinated by the European Payment Council, SEPA introduced a single payment format for all transactions in the Euro currency in order to harmonize the fragmented European nation states into a single domestic market. With SEPA in effect, all countries dealing in Euros share not only a currency but also a payments network, meaning that money can be transferred freely across borders.

As a result, selling in Europe is simpler than ever. European-based e-commerce operations can sell throughout the region and merchants outside of Europe need only one set of payment tools to begin doing business throughout the Eurozone. But that doesn’t mean there aren’t a few laws and regulations cross-border merchants need to be aware of. Here, we’ve compiled a quick overview of key e-commerce laws within the EU.

Regulations for European Merchants

Online sellers within Europe will need to familiarize themselves with the VAT system. Merchants selling across borders are required to pay the VAT on products sold based on the location of the customer. For example, if a business based in Germany sells products in France, the taxes on those products must be charged at France’s VAT rate, even though it is higher than Germany’s, and paid to the French government rather than their own.

Currently, European e-commerce merchants can choose which EU countries to sell to, meaning that they can opt out of certain countries due to higher VAT rates (or for any other reason). However there is strong support among EU regulators to ban geo-blocking, which allows retailers to decline transactions made with a foreign bank card. The geo-blocking ban, if it is made into law, will make it so that all online merchants in Europe will have no choice but to accept orders originating from any country in the EU. This in turn could have a major impact on how European retailers approach e-commerce.

Regulations for Non-European Merchants

Merchants from outside of Europe will need to familiarize themselves with local legislation. In the place of the VAT system, products imported from outside of the EU are subject to duties depending on the destination country. Additionally, the European WEEE regulation states that for all physical products it is mandatory to register the number of items being put to market as well as the items taken back from the market (as in the case of returns). Merchants who fail to do so risk thousands of Euros in fines.

The EU also has relatively strict rules regarding both the checkout process as well as returns and cancellations:

Checkout Process Regulations

To be compliant with EU regulations, your checkout process must include the following:

  • Clear information: “Add to Cart” or “Buy Now” buttons which clearly state the obligation to pay. In other words, buttons must contain text that makes it explicit to customers that, if they continue with the transaction, they are required to pay for it.
  • Price transparency: List the total cost of a customer’s purchase, including taxes, fees, shipping & handling, etc. No hidden costs.
  • No pre-checked boxes: Boxes in checkout forms cannot be pre-checked and there can be no default settings to add goods or services.
  • Timely fulfillment: Products must arrive within 30 calendar days of purchase.

Cancellations and Returns Regulations

As with the checkout process, there are several regulations that govern cancellations and returns as well:

  • 14-day cancellation period: Customers in the EU must be given a minimum of 14 days to cancel a purchase penalty-free. Furthermore, if you do not explicitly communicate the cancellation period to your customers prior to making a payment, the cancellation period is automatically extended to one year!
  • Prompt refunds: Once an order has been cancelled, you must refund your customer’s payment within 14 days.
  • Cost of returns: In the case of returns, it must be explicitly stated at the time of sale whether you or the customer will be responsible for paying the cost of returning the items.

The bulk of European e-commerce laws and regulations comes from the EU E-Commerce Directive. Anybody conducting an online business in Europe should take the time to familiarize themselves with this directive, as failing to comply can result in fines, sanctions, or the ceasing of operations within the EU.

It is also important to be aware of national e-commerce laws within Europe, such as Germany’s “Abmahnungsgefahr”, which states that online retailers must pay a fine if a consumer or organization reports incorrect information found on their e-commerce site. It’s a good idea to conduct focused research on any countries where you’re planning to do business.

Follow Payza on Facebook and Twitter and subscribe to the Payza Blog for more information about building and maintaining a strong cross-border e-commerce operation and how to keep it compatible with new and existing legislation at home and abroad.

Beyond Bitcoin Part 2 – Steem, Ripple and Litecoin

Altcoin Payza

After the global financial crisis hit in 2008, people around the world saw their faith in the financial system shaken. Bitcoin emerged in January 2009 seemingly as a direct in response to this crisis, although the history of cryptocurrencies runs far deeper. In any case, trust in the stability of established currencies was lost and Bitcoin offered an alternative: a universal currency that was not tied to any government and not correlated with the stock market.

Bitcoin became so ubiquitous that its trade name is now often used as the colloquial term for any cryptocurrency, but in reality there are many “altcoins” (a portmanteau of “alternative” and “bitcoin”). In what has been called the end of Bitcoin, in March of this year Bitcoin hit an all-time high trading value of $1,325, then plummeted by almost $500 as US authorities rejected proposal for a Bitcoin-backed exchange-traded fund (ETF) and Chinese regulators cracked down on Bitcoin exchanges. But the promise of Bitcoin lives on and the price began to climb once again.

While the future of cryptocurrency is still unclear, the fact that there is a future for this technology no longer seems to be in doubt. Banks, technology companies, venture capitalists, and even some countries have invested heavily in blockchain and cryptocurrency technology, in a wide variety of ways.

In 2014, an anonymous developer in Iceland announced the introduction of Auroracoin, an Iceland-specific altcoin created as an alternative to the Icelandic Krona, which has been under severe regulation since 2008. Auroracoin’s creators announced the currency as an alternative to a “flawed financial system … at the expense of the people”, stating that “the power must be taken away from the politicians and given back to the people.”

After debuting in March 2014 by distributing half of the total auroracoins equally amongst all 330,000 people in Iceland (31.8/person), Auroracoin rapidly plummeted in value and never recovered. But for all the failed cryptocurrencies, there are many successful ones that are catching the eye of public and private investors around the world.

We looked at some of the top altcoins in March and now we will feature a few more to watch in 2017.

Litecoin (founded 2011)

Litecoin is currently the fifth largest cryptocurrency after Bitcoin, Ether, Dash and Ripple. Almost technologically identical to Bitcoin, Litecoin operates on a blockchain, a type of software pioneered by Bitcoin which timestamps transactions into a public ledger on a peer-to-peer network.

As one of the earliest altcoins, Litecoin is one of the most stable cryptocurrencies on the market. A steady, gradual growth in 2016 saw the value closing at more than $2 above its January value. Litecoin’s price spiked mid-year in response to the Brexit vote, further proving that people turn to cryptocurrencies in response to government instabilities. It spiked again recently when it appeared that Litecoin would successfully enact a Segregated Witnesses (SegWit) upgrade to its network.

Ripple (founded 2012)

Ripple is the third most valuable cryptocurrency after Bitcoin and Ether. Unlike most altcoins, Ripple is not technically decentralized. Unlike open blockchains hosted on peer-to-peer networks, such as Bitcoin and Litecoin, Ripple operates on a permissioned ledger overseen by a private company.

Built on a distributed open source Internet protocol, Ripple’s native currency of XRP tokens (aka “ripples”) are not accepted by any retailers. Instead, Ripple serves as an intermediary for instantaneously converting one currency to another, enabling secure, instant and nearly free cross-border financial transactions of any size. For this reason, the Ripple protocol is being increasing adopted by companies and banks as an infrastructure for their internal payment networks.

Ripple has attracted some very high-profile investors including Andreessen Horowitz, Lightspeed Venture Partners, and GV (formerly Google Ventures). Major banks, including Standard Chartered, Westpac, National Australia Bank (NAB), BMO Financial Group, and Shanghai Huarui Bank, have also committed to joining the Ripple network.

Steem (founded 2016)

The founders of the social media website Steemit had a truly innovative idea: build a content-sharing platform on top of a blockchain and reward users for creating or curating (upvoting) content by paying them in Steem tokens, the currency built on the Steem blockchain.

Instead of arbitrarily rewarding people for having the processing power to mine the most blocks in the chain, Steemit provides a monetary incentive for producing high quality content modelled on Reddit’s upvoting system. This is a novel solution to the problem of cryptocurrency mining introduced by Bitcoin.

One of the newest altcoins, Steem’s value peaked in July and stabilized in October 2016. It is too early to tell how sustainable the system is, but in a market which rewards innovation, it is sure to be a major cryptocurrency to watch in 2017.

More people and companies are investing in cryptocurrencies and retailers large and small have begun to accept bitcoins and altcoins as legitimate forms of payment, both online and in-store. The power of digital currencies in today’s economy cannot be understated, and now is the time to start trading.

The history, complexity and power of cryprocurrencies is a subject we will be following closely in 2017. Visit the Payza Blog regularly for more in-depth articles about this and other industry disruptors, and follow us on Twitter and Facebook for e-commerce news from around the web.

Beyond Bitcoin – Cryptocurrencies and Altcoins to Watch in 2017

Cryptocurrency Payza

It’s telling that one of the most popular colloquial terms for a cryptocurrency is “altcoin”, a portmanteau of “alternative” and “bitcoin”. Bitcoin, the original cryptocurrency, has become so ubiquitous that it is the definition of its own category. But the future of Bitcoin is currently in question and, because of this uncertainty, many traders are switching to other cryptocurrencies.

On March 10, Bitcoin hit an all-time high trading value of $1,325 as investors banked on a US proposal for a bitcoin-backed exchange-traded fund (ETF). However, the proposal was rejected by US authorities, which happened to coincide with a crackdown on bitcoin exchanges by Chinese regulators. Together, these two events caused Bitcoin’s value to drop by over $300.

The root of the problem putting the future of Bitcoin in question is scaling: Bitcoin is becoming too popular for its own infrastructure. The number of Bitcoin transactions that can take place at any given time is limited, which is causing a backlog of transactions in queue for processing, slowing down the whole system. This is because of the limited computing power of the blockchain, a distributed database that records all transactions and serves as a public ledger. In some cases, the backlog becomes so great that some Bitcoin transactions are not confirmed for hours or even days, and in some cases, the bitcoins being sent never reach their intended destination.

The Rise of Cryptocurrencies

Blockchains, invented in 2009 by the anonymous developer of Bitcoin, would prove to be a core technology of all cryptocurrencies. Blockchains are the key software that allows digital currencies to break the double spending problem by timestamping transactions into a public ledger on a peer-to-peer network. Without this solution, double spending represented a flaw in which the same digital token can be spent twice, rendering it useless as a currency. This technology allowed bitcoin and other digital currencies to be decentralized.

Cryptocurrencies are a subset of digital currencies, distinct in that they are decentralized: they are not tied to any real-world assets, not backed by any government or central bank, and no one is required to accept them as valid forms of payment or exchange them for any real-world currencies. Nonetheless, Bitcoin became so successful that it is now accepted by major companies such as Microsoft and Dell. You can even use Bitcoin at some brick-and-mortar stores and coffee shops around the world. In fact, there’s a coffee shop in Prague that only accepts payment by Bitcoin!

Naturally, Bitcoin’s success inspired imitation. Many copycat coins failed, but those that refined and built upon Bitcoin’s model attracted investors looking to capitalize on the technological innovation promised by these new altcoins. While some digital currencies like Litecoin and Dogecoin may have already hit their high water mark, there are still lots of intriguing cryptocurrencies that have something new to offer.

Here are the up-and-coming Bitcoin alternatives to keep an eye on in 2017.

Today’s Top Altcoins

Ether (founded 2015)

Shortly after Bitcoin’s crash in mid-March, Ether, the cryptocurrency that powers the Ethereum network, reached an all-time high trading value, surpassing $55 on March 16. Ethereum is an interesting case, as 2016 saw its value rise and fall erratically due to the same scaling problem Bitcoin is currently facing. To solve it, Ethereum split their blockchain into two parallel streams, a solution bitcoin has sought to avoid.

Known as Ethereum and Etherium Classic, these two cryptocurrencies both trade in Ethers, but they can have two different values depending on which stream they belong to, which can rise and fall independently of each other. Microsoft, the Royal Bank of Scotland, and J.P. Morgan Chase are all investing in proprietary software built on top of the Ethereum blockchain, lending credence to Ether’s reputation as a preferred network for digital software applications.

Zcash (founded 2016)

Zcash is one of the highest-valued cryprocurrencies today, currently trading around the $65 mark. The success of Zcash in what is now a very competitive landscape is due to its revolutionary, totally anonymous blockchain. The public ledger reveals no information about the parties involved or the amounts transacted; no other cryptocurrency provides complete privacy and anonymity.

Dash (founded 2014)

The third most valuable cryptocurrency by market capitalization behind Bitcoin and Ethereum, Dash hit an all-time high of $108.32 on March 20. This is a huge leap in value from its 2016 peak of $14.42.

After two different name changes, it appears Dash has finally taken off, driven by its proprietary InstantSend technology that allows transactions to be verified without the longer confirmation times of Bitcoin and other altcoins.

Monero (founded 2014)

From the beginning, Monero set itself apart from other cryptocurrencies in a way that is proving very important: scalability. Unlike Bitcoin and most altcoins, Monero has no hard-coded limit on its block size, meaning that it will never face the slowdowns that provoked Ether to split its blockchain and that are causing Bitcoin’s current existential crisis.

This scalability is key because the popularity of cryptocurrencies has now reached epic proportions. Bitcoin’s inability to handle its own popularity has led one of its key developers, Mike Hearn, to state that bitcoin is a failure as more altcoins rush in to take its place.

Nothing is certain in this crowded, complex market, and cryptocurrencies should still be seen as experimental and high risk in terms of an investment, but their potential power within the digital economy cannot be understated. More and more people are investing their real-world money in Bitcoin and altcoins, while businesses of all sizes have begun to accept cryptocurrencies in exchange for goods and services both online and in-store. If you’re curious about digital currency, now might be the time to start trading, and it’s still possible to find coins that have not reached their full potential yet and still have room to rise in value.

We’ve only skimmed the surface of the history, complexity, and capability of cryprocurrencies, but this is a subject we at Payza will be following closely in 2017. Subscribe to the Payza Blog to get email notifications about more in-depth articles about this and other FinTech disruptors, and follow us on Twitter and Facebook for even more e-commerce news from around the web.

Country Spotlight: Understanding Consumers and Cross-Border E-Commerce in Turkey

Turkey has always been a beacon of commerce. Today, Turkey’s B2C e-commerce market is the second largest in Eastern Europe, the internet penetration rate is the 7th highest in the world and total e-commerce revenues, already over $5 billion USD in 2016, are growing at a rate of 13.7% per year.

One of Turkey’s success stories is that Demet Mutlu, the founder of Trendyol, an online fashion retailer which since its inception in 2010 has become one of the country’s leading e-commerce operations, accounting for 2% of Turkey’s total e-commerce revenues in 2015. And this potential has not been lost on foreign investors either – China has taken a shine to Turkey, signing a deal on e-commerce bi-lateral trade at the G20 summit in Turkey last November, at a time when many cross-border players have been keeping their distance amidst domestic turmoil.

Turkey holds a lot of promise for international retailers. With Europe’s youngest median age and an increasingly technologically literate population, the e-commerce sector is expected to grow by 107 percent and smartphone penetration by 124.4 percent in 2017. For those of you thinking about taking part in this growth, we’re going to take a closer look at e-commerce in Turkey and how you can benefit from it.

Unless otherwise noted, figures in this article are sourced from:

Turkish Consumers

  • Internet users: 37 million
  • Online shoppers: 10 million
  • E-commerce sales: TRY 35 billion (EUR 12.5 billion)
  • Mobile shoppers: 4 million
  • M-commerce sales: TRY 2.1 billion (EUR 750 million)
  • E-commerce annual growth rate: 13.7%

Turkey has one of the fastest growing e-commerce sectors in the world, thanks to four driving factors: high credit card penetration, the popularity of social networks (Turkey has the fourth-largest Facebook population in the world), the maturity of the country’s physical infrastructure and, most importantly, the high level of mobile payment penetration. In Turkey’s payment landscape, mobile is seen as a major channel for online retail and customer interaction and Turkey is the leading European country in terms of mobile banking adoption, with 49% of internet users banking on their phones.

Turkey’s e-commerce market is still dominated by items whose quality and content are easy to assess, such as books and media products, indicating a relatively low level of consumer confidence. On the other hand, nearly one in every four Turkish people above the age of 14 have participated in e-commerce, almost half of them purchasing clothes and sporting goods. Other leading product categories include consumer electronics and home furnishings.

Along with local fashion giant Trendyol, another of the country’s leading e-commerce operations is Markafoni, which represents the Turkish trend towards private shopping. Investors, both local and foreign, have taken a strong interest in this new local shopping habit, where consumers purchase a membership for an e-commerce site which gives them exclusive access to that store.

One attractive feature of Turkey for cross-border retailers is the high popularity and penetration of credit cards. Accounting for 90% of all e-commerce transactions, credit cards are overwhelmingly the most popular method of online payment, with the small remainder shared by cash-on-delivery, e-wallets and bank transfers.

Drivers and Barriers

Driver: Mature Delivery Infrastructure

Another attractive quality of Turkey’s e-commerce market is the country’s highly mature fulfillment infrastructure. Nearly the entire population has access to door-to-door delivery, which makes it easy for international merchants to make sure their products are received in a timely manner.

Barrier: Domestic Instability

Political unrest in Turkey has caused consumer confidence to plummet, though it has been rising since hitting a six and a half year low last September. Sudden changes to the socio-political climate in Turkey and neighboring states could have unexpected effects on the e-commerce landscape.

Driver: Demand for Niche Products

Many large and small firms closed down in 2015, unable to secure cash-flow, leaving Turkey’s e-commerce market de-saturated. As consumer confidence recovers, so does the demand for niche, long tail products. Early stage start-ups meeting local demands such as online furniture seller Vivense and real-estate marketplace Tapu have seen success by focusing on specific needs.

Barrier: Large Incumbents

The flip side of this de-saturation is that the large private marketplaces such as Markafoni and Hepsiburada have cornered more of the market, leaving little room for more large-scale retailers. The fat head (large incumbents) and the long tail (artisanal shops) will thrive, but there’s little room for anything in between.

Turkish E-Commerce Facts

  • The second-fastest growing e-commerce market in Eastern Europe (13.7% CAGR).
  • The world’s 7th-largest internet penetration rate with Europe’s youngest median age.
  • A very mature physical delivery infrastructure and a low returns rate for cross-border purchases.
  • Credit cards are the preferred method of online payment, account for 90% of the total.
  • The most popular product categories by volume are clothes, sporting goods, electronics, household items and travel arrangements, but there is also a high demand for long tail artisanal products.
  • A special license is required to import mobile phones into Turkey; certain cosmetic products, including perfumes, powders, and toiletries, are on the Turkish no-import list.

Turkey is a powerful commercial hub with one foot in Europe and the other in Asia. Particularly compared to its nearest neighbors in South-Eastern Europe and the Middle East, Turkey has a very attractive foundation for cross-border e-commerce retailers, high internet and mobile penetration, widespread acceptance of credit cards and a mature physical infrastructure. Both for the sheer size and growth potential of the market and for the strategic advantage of establishing operations there, Turkey has earned its reputation as a wise investment and one of the most promising emerging e-commerce markets in the world.

Expanding into a new international market is a risky venture but a very rewarding one if done right. For the latest information about how you can build and maintain a strong e-commerce enterprise and keep it compatible with legislation and buying habits at home and abroad, subscribe to the Payza Blog and follow us on Facebook and Twitter for the latest industry news.