Volume Number: 20 (2004)
Issue Number: 12
Column Tag: Programming

Software Marketing

Choosing an E-Commerce Partner

Reviewing BMTMicro, DigiBuy, Emetrix, eSellerate and Kagi

by Dave Wooldridge

In a previous issue, we explored serial number strategies for software developers and methods for streamlining the customer registration process. The next step is figuring out how you want to handle sales transactions and the distribution of serial numbers to paid customers. If you work for a large company with thousands of orders every month, then building a custom web-based shopping cart and managing your own merchant account and credit card processing may be worth the time and financial investment involved.

If you're a shareware developer or small company who does not have the budget or time to implement a custom e-commerce system, then using a third-party, turn-key e-commerce service may be the perfect solution, allowing you to utilize sophisticated selling features for a small service fee per transaction.

While the vendors profiled in Part 1 and Part 2 of this e-commerce "roundup" specialize in software sales, many of their services (if not all) can just as easily be utilized for selling any other kind of digital content such as electronic books, music, stock art, screensavers, video clips, scripts, etc. There's even a growing market of web sites that sell needlepoint designs that can be printed from your computer. If your product can be sold and transferred digitally, then one of the e-commerce vendors reviewed here may prove to be the ideal solution for you, regardless of whether you're a software developer, musician, writer, teacher, artist, or needlepoint enthusiast. Even though the services of each vendor will be explored with the needs of software developers in mind, remember that many of those features can also benefit non-software sales. Sellers of any kind of digital content can profit from secure download delivery options, cross-selling incentives, and increased exposure through third-party affiliate programs - just a few examples of the various services that many e-commerce providers offer.

Satisfying Your Business Needs

Upon first entering the sales world, many sellers are inclined to bypass the larger service fee of turn-key e-commerce partners by opting for the smaller service fees offered by solutions like PayPal. While PayPal is vastly popular in the online auction arena and is used by many shareware developers to process online software sales, the service does not offer much beyond credit card and bank account transactions. If your software application requires serial numbers for activation, PayPal does not offer a way to generate or distribute unique serial numbers to customers after a purchase has been made. You would have to manually e-mail a unique serial number to each customer after receiving an order confirmation from PayPal. Obviously, some developers do this and some have even found ways to program their computer or mail server to handle this manual step with AppleScripts, server scripts, etc., but if you don't have a way to automate this process, then forget about ever taking a vacation again. If customers have to wait a week (or even a few days) to get their paid serial number, expect to receive a landslide of irate e-mails and phone calls. If you're a one-person, home-based operation, a manual system like this may chain you to your desktop indefinitely if you don't have a way to automate the sales process to be completely hands-off. Otherwise, with a flood of orders, you'll be spending more time e-mailing serial numbers and less time programming.

Another factor to consider is that PayPal's interface cannot be customized to match your web site's visual appearance. While this is not necessarily a deal breaker since PayPal is a known brand that people trust, it prevents developers from seamlessly integrating PayPal's vanilla white shopping cart with the "look and feel" of their own site design.

On the positive side, PayPal now accepts credit card orders from non-PayPal members. In the past, a major deterrent to using their service for software sales was that customers had to have a PayPal account in order to make a purchase. If they did not have a PayPal account, then they were prompted to create one before completing the purchase. PayPal has since changed their shopping cart system, allowing any one to complete a purchase with or without a PayPal account. And since PayPal is a trusted e-commerce name, many software companies who have their own shopping cart systems or utilize a third-party solution like eSellerate or Kagi, also offer PayPal as a payment alternative for those customers who feel more comfortable with PayPal. It means more work on your end to send serial numbers to those PayPal customers, but depending on what kind of products you sell and who your customers are, it may be worth the extra trouble.

If your needs extend beyond simple credit card transactions and fraud protection, then you may not want to choose PayPal or a simple merchant account gateway service as your sole e-commerce solution. There are several e-commerce providers who offer sophisticated services, tailored specifically for software and digital content sales. Need an easy way to split the revenue between two or more authors? Need to offer your software on CD-ROM without incurring costly manufacturing fees and shipping headaches? Need to manage product activations and reduce piracy? Want to offer digital coupons? Want to increase your grass roots marketing by offering an affiliate program without the accounting hassles? What about extended download services, multi-currency support, cross-selling, volume pricing, phone and fax ordering, sales reports, and other services that can greatly enhance your software business, but may be too costly to build from scratch and maintain yourself? These are all services that e-commerce providers like eSellerate offer. While the fees per sales transaction may be higher than those of PayPal and other basic services, the powerful features that you have at your fingertips will more than justify the cost.

This month and next month, we take a look at a handful of these turn-key e-commerce solutions to reveal the services they offer and the positive implications they can have on your software business. Don't have a merchant account? No problem. All of the e-commerce companies featured here process all sales transactions through their own merchant accounts as part of their service, plus they all offer secure online payment systems with fraud protection.

Please keep in mind that at the time of this writing, every attempt was made to provide accurate information based on available data, but by the time you read this, some services and rates may have changed, so I strongly recommend visiting each of these companies' web sites before making any kind of decision regarding your e-commerce needs.

BMT Micro

Originally launched as a multi-line BBS service in 1992, BMTMicro - http://www.bmtmicro.com/ - grew into a successful web business once the Internet evolved into a commercial, mainstream medium. Similar to other software-centric e-commerce providers, BMTMicro provides a web-based Developer Information Center where vendors can log into their account to add new products, view sales reports, configure order confirmation e-mail messages and registration key delivery options, and more.

In an attempt to tailor solutions to fit the various needs of developers, BMTMicro offers three service tiers. To utilize their basic e-commerce features and shopping cart system, and have BMTMicro issue serial numbers from a predefined list you provide, the WebSeller Standard Plan has an order processing fee of only 9.5% per transaction (with a $1.25 minimum). In order to customize your order forms to match your own web site's design, integrate a custom key generator for issuing serial numbers and to have BMTMicro host your product demo file on their FTP site, you'll need to sign up for at least the WebSeller Plus Plan with a processing fee of 15% per transaction (with a $1.25 minimum). For all the benefits of the WebSeller Plus Plan as well as access to a BMT-hosted support e-mail address for your business use, a BMT-hosted customer mailing list and additional marketing options like search engine submission, you'll have to join the Comprehensive Plan with a 20% processing fee per transaction (with a $1.25 minimum). There is no set-up fee for any of their service plans. If you're looking to promote your software and increase your sales through affiliates, luckily their full-featured Affiliate Program is offered to all three service tiers. Like the affiliate programs that are 100% managed by other solutions like eSellerate and RegSoft, BMTMicro handles all commission tracking and affiliate payments for you.

BMTMicro accepts Visa, MasterCard, American Express, Discover, Eurocard, Diner's Club, Carte Blanche, JCB, and Optima and supports multiple currencies. Online orders are received and processed 24 hours a day every day. Even though their telephone-based orders and support is only available from 9:00 am to 5:30 pm EST, 7 days a week, there are no extra charges for phone and fax orders, plus there's a toll-free phone line for U.S. and Canada. Voice and fax orders that arrive after business hours are processed the next day. Mail order payments by U.S. check, money order or Eurocheck are also accepted.

Standout Feature: While most e-commerce providers offer a defined set of services, BMTMicro seems to take the most pride in their ability to address the unique marketing and sales needs of each vendor, whatever they may be. They want to be thought of as your business partner and not just a third-party service. For those who have outgrown the basic CD on demand features, BMTMicro can offer custom CD package assembly, shrink-wrapping, and more. Need some promotional guidance? BMTMicro can not only help you with merchandising options like t-shirts and mouse pads, but they can also distribute product press releases, create media press kits, provide publication reprints of product reviews, submit your site to search engines, assist with web site design, etc.

DigiBuy

Owned by Digital River, DigiBuy - http://www.digibuy.com/ - offers many of the common features for processing software sales. Through their web-based administration system, you can manage your account with new product listings and prices, configure multi-user licenses/volume pricing, access and export sales reports, place test orders, and more. They allow you to customize their shopping cart order forms to match your own site's design for a seamless user experience. DigiBuy accepts Visa, MasterCard, American Express, Discover and Diner's Club, plus phone and fax orders.

While DigiBuy's order processing fee is 13.9% (or $3.00 minimum) per transaction, they offer two service levels, allowing you to sign up for the package that best matches your budget and needs. Their Essential plan has a one time set-up fee of only $29.99 for the first product, but does not allow you to customize order forms. Their Advanced plan includes all features, but incurs a $199.00 one time set-up fee for the first product. Each additional product incurs a small one time set-up fee of $9.99 when entered into their system. They also offer DigiBuy University, an affordable e-commerce program for university students and faculty (no set-up fees). After DigiBuy's service fees have been subtracted from your monthly sales, payments are made to you via ACH (electronic bank deposit) or by check, a convenience that most of DigiBuy's rivals also offer.

After purchasing your software, DigiBuy can deliver a unique serial number to the customer (pulled from a list of serial numbers you supply). If you need to deliver unlocked software to your paid customers, DigiBuy also offers electronic software delivery (for an additional fee) with dynamically generated download links that can be secured with time limitations or number of download attempts. Customers and vendors also receive e-mail order confirmations, which can be resent from your admin system if necessary.

Standout Feature: Although DigiBuy's web site appears to tout its customizable order forms as one of its key-selling points, one of the features that seems to set DigiBuy apart from its competition is it's integrated support for some of the leading online affiliate marketing programs such as Commission Junction, AffiliateTracking, ClixGalore, and FlyCast. While other e-commerce solutions also offer affiliate programs, they are usually their own affiliate program engines that are not compatible with existing affiliate marketing programs.

Emetrix

While not quite as well known as heavyweights like Kagi and eSellerate, Emetrix - http://www.emetrix.com/ - offers solid features that should not be overlooked. Using their web-based admin system, vendors can customize their order forms to match their own site's design or choose one of Emetrix's existing page template designs, as well as configure shopping cart options, view sales statistics, choose whether to activate Emetrix's electronic software delivery (for post-purchase full version downloads) or generate serial numbers (to register shareware). You can even utilize their built-in communication tools for e-mailing product news to your customers, complete with opt-out options. Apparently, vendors are not able to customize the order confirmation e-mail message, but can elect to have a separate custom e-mail message sent after every successful order.

One of their key selling points is that beyond their 13.9% processing fee per transaction (or $3.00 minimum), there are no sign-up fees or hidden costs. While some companies charge extra fees for telephone-based orders and sales support, Emetrix accepts phone, fax, check and money orders at no extra charge. Emetrix supports multi-currencies, volume pricing, cross-selling, discount coupon codes, CD on demand, and even integration with third-party affiliate programs. Emetrix can also help you devise a marketing plan, tailored specifically for your target audience. They can provide assistance with press releases, submission to software portal sites and search engines, and more (although some of their marketing services may cost extra depending on how much help you need).

Standout Feature: For those shareware developers who find themselves spending too much time chasing down illegal warez sites or too much money on file downloading bandwidth charges, Emetrix's parent company, Digital River, offers a new file downloading service called FileKicker - http://www.filekicker.com/. While this separate service does cost extra, it provides a convenient function at a great price. FileKicker gives you 30 gigabytes of data transfer (file downloading) for only $14.95 a month. Not to be confused with the electronic download delivery of purchased products, FileKicker is for shareware and trial downloads. Just upload your software files and configure your warez site block lists, and FileKicker provides extensive download statistics reporting, handy download URLs with optional expiration dates, and wards off linking from warez sites. Since FileKicker is a stand-alone service, you do not have to use Emetrix in order to take advantage of FileKicker.

eSellerate

Founded by MindVision Software (the creator of Installer VISE), eSellerate - http://www.esellerate.net/ - offers one of the most comprehensive e-commerce packages for software publishers. Their Sales Manager admin site allows vendors to configure every aspect of the selling process with access to extensive sales reports. With most other e-commerce providers, whose shopping cart systems are strictly web-based, adding new products is a very simple task. eSellerate works a little differently, but for good reason. They offer three ways to sell your products: Web Store eSeller, Installer eSeller and Integrated eSeller. The Web Store eSeller, as you might guess, is the typical online shopping cart system, which you can link to from your own web site. With their parent company being at the forefront of Mac and Windows installer tools, the Installer eSeller essentially packs eSellerate's secure purchasing power into Installer VISE, enabling customers to purchase your software during the installation process. The Integrated eSeller is a software toolkit that allows you to actually add the secure eSellerate purchase engine right into your applications, providing a convenient method for consumers to purchase your product from within the application itself. As a vendor, you can decide to either use one of these eSeller options, all of them, or a combination. For example, if you do not use installers with your software, using a combination of an Integrated eSeller and a Web Store eSeller gives your users the flexibility to either purchase your product from within the application or purchase it online through your web site (which links to your eSellerate web store).

To add a new product to your Sales Manager admin site, you first add a new Product listing. From there you would add a new SKU (Stock Keeping Unit) that links to that product. To finish the process you create and configure new eSellers to suit your needs. To add one of your products to an eSeller, you would add the product's SKU to the eSeller, not the actual Product listing itself. If you've ever worked in a retail environment, you're probably familiar with the concept of products and SKUs. For those unfamiliar with this kind of set-up, it can be extremely confusing at first, but this modular architecture provides the flexibility needed to seamlessly work with the various types of eSellers, affiliates and portal partners (more on this later).

Their system supports volume pricing, cross-selling, multiple currencies, coupon codes, URL aliases, custom order confirmation e-mail messages, and can even automatically handle split payments for sharing a percentage of each sale with other specified vendors. Kagi used to be the only e-commerce provider that offered split payment management, but now eSellerate also provides this time-saving service. You can also completely customize the look and feel of your Web Store eSeller with your own HTML layout or choose one of six page template designs.

When a customer purchases your software, eSellerate can issue serial numbers from either a predefined list that you provide, their own serial number engine, your own custom key generator program, or a third-party scheme like Armadillo. One of the advantages of the Integrated eSeller and Installer eSeller is that after the purchase is successful, eSellerate can transmit a unique serial number back to your software application, registering the product instantly. If you find yourself frequently helping confused customers who do not know how to find their serial number in the order confirmation e-mail, then this can save you time and money in reducing those tech support inquiries. For advanced anti-piracy measures, eSellerate also offers a powerful Product Activation feature that can be built into your software for use with their service.

Need to offer a backup of your products? eSellerate provides a CD on demand option called eCD for only $7.50 each, which includes the duplication, packaging and shipping of the CD worldwide. You can either pass on this low price to customers or tack on a small profit margin for yourself. For example, selling the CD for only $10 gives you a $2.50 profit from each sale. Beyond CD-ROM disks, if your product SKU requires a secure electronic download (such as the full version upon purchase), then the eSellerate Download Service (eDS) is also included in the shopping cart as a selectable option for only $4.99. eDS is an extended download service that grants the customer the ability to re-download their purchased software for up to one year after the order date. Customers are not obligated to buy the eDS option, but eSellerate gives you, the vendor, $1.00 for every customer who purchases eDS with your software.

To utilize eSellerate, there are no set-up fees or monthly dues, but they charge a competitive order processing fee that's calculated by your yearly sales volume. If you sell less than $15,000.00 within a twelve month period, the order processing fee is 10% per transaction. If your annual sales are between $15,000.01 and $50,000.00, then the fee would be $15% per transaction. From there it starts to drop back down again. Sales of $50,000.01 to $100,000.00 incur a 14% fee per transaction, sales of $100,000.01 to $500,000.00 incur a 13% fee per transaction, and so on... There is no processing fee for purchasing the eDS option. Where some rival solutions include telephone sales as part of their basic service, eSellerate offers phone and fax ordering as an extra option that when enabled by the vendor, costs a flat $20.00 per month and phone orders can only be accepted Monday through Friday, 9 am to 5 pm. As a convenience for you and your customers, eSellerate hosts an After-Purchase Services admin site that customers can use to login and print order receipts, re-download purchased products (if they opted for eDS), request serial numbers from vendors, make billing inquiries and more.

There is an integrated affiliate program, where affiliates can promote and sell your products online and eSellerate manages the capture of affiliate data and automatically handles all payments to affiliates. Beyond the affiliate approval and tracking tools located within the vendor Sales Manager admin site, affiliates are also given their own online admin account for tracking their sales commissions.

Other marketing opportunities include their Portal Program, which includes high-traffic portal partners such as Tucows and TopDownloads.net. The difference between an affiliate selling your products and a portal partner selling your products is in the pricing structure and the amount of exposure you receive. Affiliates earn a small commission (that you specify) for every product they sell, but affiliates can range from large, popular sites to personal sites that receive very little traffic, so their effectiveness is often hard to quantify. Portal partners, on the other hand, can put your product in front of a lot of eyeballs, especially consumers who are actively looking for software. You pay the portal partner a commission (that they specify) on every sale that comes through their portal in exchange for high volume product exposure and their targeted promotional services.

Standout Feature: Like eSellerate's Integrated eSeller, Kagi also offers a software toolkit for Cocoa and Carbon developers to add the Kagi e-commerce engine into their software applications, but at the moment, eSellerate seems to have a more comprehensive offering with their Integrated eSeller available as a Mac library (CodeWarrior), a Windows library (Visual C++), ActiveX control (Visual Basic, Delphi, etc.), and a REALbasic plugin (for both Mac and Windows). Another benefit of the Integrated eSeller is its built-in ability to check for version updates (if the vendor chooses to use that feature). Having your software check a remote online server for the latest version works fine for simply notifying the user of an available update, but what if it's a paid upgrade? The Integrated eSeller can not only inform the user that the paid upgrade is available, but can also load another eSeller that handles the customer's upgrade purchase, all within your software application.

Kagi

The interesting thing about Kagi - http://www.kagi.com/ - is that the company started out as one of the pioneering e-commerce providers for software publishers, leading the shareware industry with their integrated support for the Register application, split payments for multiple vendors from each product sale, volume pricing, multiple languages, low service fees and more. When new competitors like eSellerate rolled out comprehensive e-commerce packages with attractive features that Kagi did not yet support, it was as if Kagi was caught off guard. Now ten years after their initial launch, this veteran appears to be playing catch up, quickly adding new services to stay on par with its rivals. With that said, it looks as though the competition has only made Kagi stronger. As one of the most well-known and trusted e-commerce names among shareware developers (and consumers), Kagi still maintains one of the lowest pricing structures of its peers with no set-up fees and no monthly fees. For products priced at less than $25.00, Kagi's order processing fee is 5% plus $1.25 per transaction. For products priced between $25.00 to $100.00, the processing fee is 10% per transaction. For products priced at higher than $100.00, the processing fee is 5% plus $5 per transaction.

One of the reasons solutions like eSellerate have become so popular in the last few years is that they offer web-based admin sites that allow vendors to quickly add new products and customize order forms with point and click ease. Kagi, on the other hand, still uses their cumbersome web-based Order Page Admin site which forces vendors to get their hands dirty modifying configuration files and raw HTML to add new products to their shopping cart's main display page. And even then, you must place a test order for each new product in order for the item to get added to Kagi's product database. Kagi continues to enhance their system, but it still does not seem to be quite as user-friendly as other vendor admin sites.

Kagi accepts credit cards, checks, cash and money orders worldwide and supports multiple currencies. Orders can be placed online 24 hours a day, 7 days a week and are processed quickly in real time. They can also receive orders by mail, fax or telephone, although phone orders cost the customer $5.00 (which includes a mailed postcard receipt). While some e-commerce providers either offer phone sales as part of their general service or charge the vendor for phone orders, Kagi places the cost on the customer to motivate them to order online instead (to avoid the extra charge). They do not offer a toll-free phone number for U.S. and Canada customers and the phone lines are only open Monday through Friday, 9 am to 4 pm.

With Kagi's basic service, you cannot customize your order form pages to emulate your own web site design, but they do offer customizable order forms as an expanded service for $20 per month. As part of the basic service, you can customize the HTML inside the standard Kagi page template by adding your company or product logo, styled text, etc. If you need to gather extra customer data, you can also define custom form fields on your order form pages.

Like their rivals, Kagi provides you with web-based access to customize the order confirmation e-mail message, view customer purchase summaries and product sales details, track affiliate data, and even create a database archive of all your customer orders. Kagi can issue serial numbers to customers from either a predefined list that you provide, a custom key generator program, a link to your key generator script on a remote server, or connect with a third-party engine like Armadillo. They also provide the Kagi Digital Download Service option (electronic software delivery) as well as integrated support for third-party CD on demand services from either SwiftCD or Albert. Like DigiBuy, instead of offering their own affiliate program, Kagi provides support for popular third-party affiliate marketing programs Commission Junction, Affiliate Tracking and ClixGalore. And if you're looking to outsource your technical support, Kagi even has a partner alliance with MacTank.

Similar to eSellerate's Integrated eSeller SDK, Kagi offers their Registration Module (KRM), a software toolkit for Cocoa and Carbon developers who wish to put the Kagi store inside their software application. This provides your users with instant purchasing power from within your product. Interestingly enough, using KRM incurs an additional surcharge and a higher processing fee than web-based Kagi transactions, while orders submitted through eSellerate's Integrated eSeller are treated like normal orders and do not incur any extra fees from eSellerate. While Kagi plans on bringing KRM to additional programming languages and platforms, eSellerate's Integrated eSeller SDK already does (such as its wildly popular REALbasic plugin for both Mac and Windows).

Beyond their normal fraud prevention measures, Kagi offers a unique Real-Time Order Approval Review option for vendors. If you choose to participate in this free service, Kagi will e-mail you when a sale of one of your products is in progress with a hyperlink to review the customer data online, giving you the power to either approve or deny that sale.

Standout Feature: Your initial Kagi order form page (what they refer to as your Product Display page) can be dynamically displayed in 12 different languages. All standard Product Display pages include a Kagi menu bar on the left that lists the supported languages. Customers simply click on the language of their choice and the default order instructions on that page are automatically translated into that language.

To Be Continued...

Stay tuned as we continue our roundup of third-party software e-commerce providers next month, placing the spotlight on Reg.Net, RegNow, RegSoft, Share-It!, SWREG and V-Share.

Dave Wooldridge is the founder of Electric Butterfly (www.ebutterfly.com), the web design and software company responsible for HelpLogic, Stimulus, UniHelp, and the popular developer site, RBGarage.com.