Interesting conversation with a retailer who formerly accepted Bitcoin

[paraipan]

Of course, in reality, the chance of an increase in value pretty much balances out the risk of a decrease in value. If you want essentially zero risk, Tony provides that service, and it's still cheaper than credit cards.

Yes, but HOW... I would either need to shift my whole cart to a new platform, or do everything by hand (and still pay the exchange fees). Both increase costs. taking bit-pay as an example I only save .59% over pay-pal (16 cents on the average transaction.)

Lets say that I could change carts (or hire a developer) for $5,000. Our average sale is around that 27 dollars I used in the example.  It would take 31,250 bit coin sales to JUST BREAK EVEN! That would take years, even if every transaction that we took shifted to bitcoins. If I processed ten bitcoin transactions a day, it would take 8.6 years to break even. And when I was taking bitcoins last year, I had about 2 a week which would take 300 years!

Even if it just cost me $1,000 to implement bit-pays automated solution it would not be worth it.

Lets look at the math doing it by hand with gift cards... Again, on the average transaction using bit-pay I save .16 cents. So someone I pay $10 an hour would have to be able to get the email notifying us of a bitcoin sale, go into our shopping cart software create the gift card (then sell the gift card from our online store into our POS system so that when we ring up the sale of the goods there is a way to pay for it in POS) and then write an email to the person with their gift card number in there... all in under 1 min... and thats just to "break even".

Bit-pay is a more expensive way to do it, I would not use them unless it was automated, if im going to be doing things by hand anyway, i might as well use a cheaper solution... but as the person pointed out before, there is no real good solution... as mtgox is cheap, but can take two weeks to send the money! I will contact bit-pay and see if they have any interest in developing a 3dcart plug-in-play solution.

EDIT: But maybe im just too emotional to see the true value in bit coins

Would it help if bit-pay signs up as a payment provider?

http://www.3dcart.com/payment-provider-application.html

[fm1234]

posted by scribe:

Fascinating and well-needed thread.

I think it may be one of the most important threads ever put on the forum.  It's not often one can get real feedback from real merchants about a currency solution; unfortunate that he has to get the typical dickhead talking down to that runs rampant on discussion forums, but nice that helpful and knowledgeable people are chiming in as well.


Frank

[TheBitcoinChemist]

Of course, in reality, the chance of an increase in value pretty much balances out the risk of a decrease in value. If you want essentially zero risk, Tony provides that service, and it's still cheaper than credit cards.

Yes, but HOW... I would either need to shift my whole cart to a new platform, or do everything by hand (and still pay the exchange fees). Both increase costs. taking bit-pay as an example I only save .59% over pay-pal (16 cents on the average transaction.)

Perhaps, but you do save.  If the bitcoin trade volume never amount to much, you've lost nothing for trying it; however, if the trade volume justifies a lower cost method, you'll be motivated to make it happen at that point even if no one already has. 

Still, I'd wager that, now that the developers know that there needs to be a plug-in for 3Dcart, it won't be long before you have what you need.

[jwzguy]

taking bit-pay as an example I only save .59% over pay-pal (16 cents on the average transaction.)

Many of your potential Bitcoin customers aren't going to be shopping with you if you don't accept Bitcoin. So you don't "save 16 cents." You gained a sale where you previously didn't have one.

[scribe]

Of course, in reality, the chance of an increase in value pretty much balances out the risk of a decrease in value. If you want essentially zero risk, Tony provides that service, and it's still cheaper than credit cards.

Yes, but HOW... I would either need to shift my whole cart to a new platform, or do everything by hand (and still pay the exchange fees). Both increase costs. taking bit-pay as an example I only save .59% over pay-pal (16 cents on the average transaction.)

Perhaps, but you do save.  If the bitcoin trade volume never amount to much, you've lost nothing for trying it;

Except opportunity cost. And implementation costs. The gulf here is between hobbyists who are happy to invest their free time, and business-owners who need to know that investing time is going to bring payback. Time isn''t just money, it's risk.

[nmteaco]

Many of your potential Bitcoin customers aren't going to be shopping with you if you don't accept Bitcoin. So you don't "save 16 cents." You gained a sale where you previously didn't have one.

I have acknowledged that there is a good reason to take bit coin, and thats to get customers who would not have known about us... but thats a separate argument then if bit coin will save me money over traditional currencies.

A lot of people here just assume its the best thing to do in all cases, and anyone who is not accepting bit coin is an idiot.

My goal here is to play devils advocate, by addressing your solutions with real world examples of why it might not work. Simply saying "its cheaper then credit cards or paypal" is not a good argument for why my business should accept bitcoin. As I have shown, using bit-pay, it would take years to just break even on the investment to get it setup. Your asking me to invest money in something that after years ill get back to where I started. If bit-pay develops the plugin for my cart, then of course I would implement it, even if it costs the same (or slightly more), because if no one uses it, I have lost nothing, and if everyone uses it, I will get new customers.

For me, the more compelling argument is the marketing aspect of accepting bit-coin. Being an early adopter in this market means that my business will really stand out. Also technical people like to support the thing they are passionate about. If a sizable portion of bitcoin pioneers like tea (in my case) then it makes since to put my products infront of them. But its a risk... I know I wont make my money back on the savings of credit card fees, so I have to take a gamble that enough of you all want to buy my product that it would work out at the end....

Its far from a no-brainer!

[jwzguy]

Many of your potential Bitcoin customers aren't going to be shopping with you if you don't accept Bitcoin. So you don't "save 16 cents." You gained a sale where you previously didn't have one.

I have acknowledged that there is a good reason to take bit coin, and thats to get customers who would not have known about us... but thats a separate argument then if bit coin will save me money over traditional currencies.

A lot of people here just assume its the best thing to do in all cases, and anyone who is not accepting bit coin is an idiot.

My goal here is to play devils advocate, by addressing your solutions with real world examples of why it might not work. Simply saying "its cheaper then credit cards or paypal" is not a good argument for why my business should accept bitcoin. As I have shown, using bit-pay, it would take years to just break even on the investment to get it setup. Your asking me to invest money in something that after years ill get back to where I started. If bit-pay develops the plugin for my cart, then of course I would implement it, even if it costs the same (or slightly more), because if no one uses it, I have lost nothing, and if everyone uses it, I will get new customers.

For me, the more compelling argument is the marketing aspect of accepting bit-coin. Being an early adopter in this market means that my business will really stand out. Also technical people like to support the thing they are passionate about. If a sizable portion of bitcoin pioneers like tea (in my case) then it makes since to put my products infront of them. But its a risk... I know I wont make my money back on the savings of credit card fees, so I have to take a gamble that enough of you all want to buy my product that it would work out at the end....

Its far from a no-brainer!

It's really not that far.

If you don't have the demand to justify whatever investment a merchant service provider's solution will cost you, then you really don't have a problem. Handle the small amount of orders you get manually and send the bitcoins straight to Bitfloor, and cash out once a day or once a week, and then move the money (for free) via ACH to your account. For the vast majority of Bitcoins history, holding onto your BTC for a few hours or a few days makes you money.

Once you start getting enough Bitcoin customers so that this is no longer feasible, then a small investment in a merchant services solution will make sense.

[nmteaco]

If you don't have the demand to justify whatever investment a merchant service provider's solution will cost you, then you really don't have a problem. Handle the small amount of orders you get manually and send the bitcoins straight to Bitfloor, and cash out once a day or once a week, and then move the money (for free) via ACH to your account.

I did not know about bitfloor... but looking over their site and thinking about all this over the past few days has given me an idea....

Here is what I can do:

1) The shopping cart experience stays the exact same.
2) When they get to the payment window there is a check box that says "pay with bitcoin" (this will really be just an offline payment type so that the order can go though)
3) When the bitcoin checkbox is selected our bitcoin wallet id will show up.
4) there will be instructions to send the dollar amount in bitcoins (the customer will have to do their own conversion)
5) They are checked out, and before I send the order, I just make sure the bitcoins have been transferred.

We are closed on mondays, So I have the afternoon to try and implement this!

[TheBitcoinChemist]

4) there will be instructions to send the dollar amount in bitcoins (the customer will have to do their own conversion)

Why?  Is there some reason that the script couldn't check the MtGox spot price when called and do the math right then?

[jwzguy]

nmteaco - you might want to check out these guys: https://paysius.com/

They are offering merchant services, and are 1.49% to cash out instead of 2.69%.

I don't see "3dcart" on their supported carts page, but if they are hungry to compete, perhaps they will do the work necessary to add support it if you contact them.

By the time your Bitcoin customer base is large enough to justify it, there will probably be more merchant services available.

Anyway, like I said before, I don't even drink tea, but if I was local to you, I would stop by your business just for the novelty of completing a POS bitcoin transaction. I'm glad you're sticking around.

[nmteaco]

Why?  Is there some reason that the script couldn't check the MtGox spot price when called and do the math right then?

Im sure... but do you know the script? I am searching for it now!

[ShireSilver]

nmteaco - you might want to check out these guys: https://paysius.com/

They are offering merchant services, and are 1.49% to cash out instead of 2.69%.

I don't see "3dcart" on their supported carts page, but if they are hungry to compete, perhaps they will do the work necessary to add support it if you contact them.

By the time your Bitcoin customer base is large enough to justify it, there will probably be more merchant services available.

Anyway, like I said before, I don't even drink tea, but if I was local to you, I would stop by your business just for the novelty of completing a POS bitcoin transaction. I'm glad you're sticking around.

I drink tea, but I'm a bit too poor right now to be ordering. (I'm working on that though)

The Paysius guys wrote a plugin for me when I asked. It probably helps that I know them and my cart (Ubercart on Drupal) is fairly popular. It only took a couple days to get it written, installed, tested, and debugged. There's been a couple hiccups due to my webhost being retarded, but we got it figured out easily enough.

[nmteaco]

All you guys got me in the reality distortion field I figured it would implement the simple by hand transaction on the checkout page of my cart... however it looks like its not that simple.

https://bitcointalk.org/index.php?topic=96796.0

So back to square one it looks like.

[ChrisKoss]

Hey NM Tea Co,

Thanks for coming here and posting. 

I think you have given the Bitcoin community some great insight about the unmet needs of merchants.  I especially liked your point about setup costs: the time cost of setting up bitcoin payments far outweighs the benefits at the moment.  We need to make it easier to set up and have a stronger economy in order to make it economically rational for merchants to integrate bitcoin payments.

Hearing about your Quickbooks Z$ solution was interesting too.

Hope you can get payments set up! I'll buy some tea if you do :-)

Thanks,

Chris

PS:  To the Bitcoiners in this thread - this is how merchants feel.  We should be doing more listening and less arguing.  He already had a challenging experience, and we aren't going to convince him that it is actually simple and easy (it isn't).  We are lucky to have a merchant with the patience to wade through all these replies, most would have given up already.

[rjk]

PS:  To the Bitcoiners in this thread - this is how merchants feel.  We should be doing more listening and less arguing.  He already had a challenging experience, and we aren't going to convince him that it is actually simple and easy (it isn't).  We are lucky to have a merchant with the patience to wade through all these replies, most would have given up already.

^ THIS
We need to do less theorizing and arguing, and start creating more solutions.

Some ideas for a collections of little tools for merchants to use, that I don't think are available yet:

• A script to pull a pre-generated address from a database table, and present it to the user when ordering. Should be able to trigger an email to the admin when the number of remaining addresses is reduced.
• A script to securely generate new addresses in bulk, and dump the keys to a wallet format while adding the addresses to the aforementioned table. Used for occasional ("quarterly"?) maintenance. For merchants that want it, it could instead store everything in the database for instant transactions.
• A script to instantly create a transaction from a zero-confirm incoming transaction that forwards to another wallet (the exchange, or maybe the cold wallet first). It could have the ability to split the payout between 2 or more addresses by a percentage or other factor. Whether this script actually sends coins would be determined by whether the merchant wants to keep all of its private keys online, or whether it wants to run the transactions in a batch occasionally on a different box. This script would ideally interface with a separate hardware device that has yet to be designed.
• A script to pull data from several exchanges in order to calculate an exchange rate. It should also consider depth, especially for expensive items. This could also interface with the previous point in order to determine which exchange to trade on.
• A script to perform a simple trade on an exchange. It could optionally perform a trade upon receipt of a zero confirm transaction, using funds stored on the exchange already, in order to lock in the rate.

I'm sure there are other tools that should be available, but some kind of reference implementation of each of the above in various languages would be ideal for merchants and such as a starting point.

[EskimoBob]

PS:  To the Bitcoiners in this thread - this is how merchants feel.  We should be doing more listening and less arguing.  He already had a challenging experience, and we aren't going to convince him that it is actually simple and easy (it isn't).  We are lucky to have a merchant with the patience to wade through all these replies, most would have given up already.

^ THIS
We need to do less theorizing and arguing, and start creating more solutions.

Some ideas for a collections of little tools for merchants to use, that I don't think are available yet:

• A script to pull a pre-generated address from a database table, and present it to the user when ordering. Should be able to trigger an email to the admin when the number of remaining addresses is reduced.
• A script to securely generate new addresses in bulk, and dump the keys to a wallet format while adding the addresses to the aforementioned table. Used for occasional ("quarterly"?) maintenance. For merchants that want it, it could instead store everything in the database for instant transactions.
• A script to instantly create a transaction from a zero-confirm incoming transaction that forwards to another wallet (the exchange, or maybe the cold wallet first). It could have the ability to split the payout between 2 or more addresses by a percentage or other factor. Whether this script actually sends coins would be determined by whether the merchant wants to keep all of its private keys online, or whether it wants to run the transactions in a batch occasionally on a different box. This script would ideally interface with a separate hardware device that has yet to be designed.
• A script to pull data from several exchanges in order to calculate an exchange rate. It should also consider depth, especially for expensive items. This could also interface with the previous point in order to determine which exchange to trade on.
• A script to perform a simple trade on an exchange. It could optionally perform a trade upon receipt of a zero confirm transaction, using funds stored on the exchange already, in order to lock in the rate.

I'm sure there are other tools that should be available, but some kind of reference implementation of each of the above in various languages would be ideal for merchants and such as a starting point.

And if you can shift all that to a "coin hub" like service, we have a winner.
A merchants do not want to become a payment processing centres like CC or DC have
Merchant probably wants to download and install the plugin to his favorite shopping cart and register his shop with "coin hub" like service and be done with it.
Yes, it needs some effort but so does CC, DC etc set up.

Question is, how to find few motivated programmers, who can actually write the software for the hub and plugins for the shopping carts.
One way to do it start a GLBSE company and rise the capital (sell equity) via IPO.
 

[Stephen Gornick]

So back to square one it looks like.

The Bitcoin community is much larger than it was over a year ago when you were first a BItcoin-accepting merchant.  You might find the additional sales volume we could bring to you to be worth your while.  There are a couple vendors of tea, but there is definitely room for more merchants in this category.

Here's a low-risk option.  Sell your gift card through BitMit.net.  It is kind of like an eBay for bitcoin and it has Buy Now, so you can set the price you wish to sell at.  You can even set the price in USDs, and mark a checkbox so that it will adjust the BTC price relative to the exchange rate.

Here's an example of an electronic gift card ecode that can be purchased through BitMit.
 - http://www.bitmit.net/en/trade/i/2846-100-at-t-gophone-prepaid-wireless-refill-card/description

Here's something else you might wish to consider.  This is bleeding edge, but maybe consider it.

From the proceeds of your sales which were paid using bitcoins, you could turn around and sell the bitcoins to your customers.



After you've accumulated enough you print and load a few of these notes, put them in sealed envelopes, and put them in the til.    (Note, however, that project is still under development so a site that prints them similar to http://www.BitAddress.org is not yet functional).

Your only requirement might be that the buyer redeems them to their mobile or tablet before leaving the store so that there is no chance that the coins were redeemed by someone else (since these are bearer codes, once they leave your store you really wouldn't want to guarantee anything)

There are no other sellers yet in your city, so you might find buyers:
 - https://localbitcoins.com/location/nm/albuquerque/

If there is any demand for them, you could have a graphic designer take that SVG and change the design with your own brand.

Or instead of printing your own note, you could resell a physical bitcoin from someone else:
 - http://www.Casascius.com

or one of the several which have been described but haven't yet been produced:

 - http://bitcointalk.org/index.php?topic=87441.0
 - http://bitcointalk.org/index.php?topic=64980.msg810841#msg810841

[Caveat, there may be various legal restrictions on offering these in your jurisdiction without there being an issuer.]

Here's another idea:

Give out a tiny bit of bitcoins with each purchase, say 25 millibits (0.025 BTC, worth just under a U.S. quarter dollar).  These can be printed using the same method as the notes above would be).   Put an expiration date on them so that you can reclaim any funds that aren't redeemed within say a month.   But what might these customers do with 25 millibits?  

They could accumulate them and after they have enough to pay for a tea, they pay for their next purchase using them.  (Just like the buy 10 and get the next one free type of promotion.)   You know they won't be going to any other tea or coffee place using them.   Or ... perhaps your customers like to play video poker?   That amount is good for nearly two dozen hands of blackjack from an iPad tablet.
 - http://www.bitZino.com

[nmteaco]

You can now use bitcoins to checkout on our site....

It is not an ideal solution at all, I have to set the exchange rate by hand every day in the code of the checkout page (I could not figure out how to pull the current price from another domain with javascript)... and everyone who orders will be sending their bitcoins to the same address... which in the other thread I was told could lead to fraud.

However I think people looking to cheat the system are not going to be spending their energy trying to get free tea. Also this is just a stop gap measure until a plugin for my cart is available.

So... just use the shopping cart as normal and when you get to the payment page select bitcoin as the payment method and you will be given instructions on the address to send the payment.

-David

(It would be nice if someone tests out the system.... if you want your bitcoins returned instead of the order just write that in the comments box (i think bitfloor might keep some of it) )

[myrkul]

Hey, david... I have an idea that may help, at least a little, with the exchange rate:
BTCTicker has an image that calculates any exchange rate (using MTGox) for you for example:

http://btcticker.appspot.com/mtgox/1.00btc2usd.png
is


and let's say you sell $17 worth of tea:

[SgtSpike]

Nmteaco - being an accountant myself, I completely understand your concerns regarding the extra accounting headaches that accepting Bitcoin creates.  I think this is, and will continue to be for a long time yet, a major hurdle in the effort to get legitimate and already-existing businesses to accept Bitcoin directly.

Bit-pay is an awesome service, but doesn't really offer enough of a discount compared to credit cards to make a compelling reason to accept yet another payment method for most merchants.  I know the pain of reconciling credit card deposits into a single bank account from multiple payment methods, and adding another isn't something I would want to do without good reason.  So, even though they give you direct ACH deposits daily, which can be reconciled with sales just the same as payments made with credit cards, it's still one more thing to deal with.

That said, hopefully, we will continue to see improvements in integration with existing systems (shopping cart plugins, etc) that will make accounting and reconciliations much easier.

I think the biggest reason a merchant should accept Bitcoin NOW is not because of the lack of chargebacks, or the "lower" fees, but because in most cases, they will suddenly become the go-to merchant for a group of 10,000+ people who need that particular item.  In this case, if anyone here wants to buy some tea, they are now more likely to order it from you than they were before.  I don't know what your margin is, but bringing in extra sales is usually much more significant than saving half a percent of fees on a few transactions you would have already made.  So then, don't think of it as saving extra on fees - think of it as bringing in extra sales with a little more work.