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Choosing an E-Commerce Partner

Volume Number: 21 (2005)
Issue Number: 1
Column Tag: Programming

Software Marketing

by Dave Wooldridge

Choosing an E-Commerce Partner

Reviewing Reg.Net, RegNow, RegSoft, Share-It!, SWREG and V-Share

In Part 1, we reviewed the services of BMTMicro, DigiBuy, Emetrix, eSellerate and Kagi (and even explored PayPal as an option). This month, we continue our profile of third-party e-commerce providers for software publishers. As we discussed last month, if you're a shareware developer or small software 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 offer sophisticated selling features for a small service fee per transaction. While all of the e-commerce companies featured here process all sales transactions through their own merchant accounts using secure online payment systems with fraud protection, many of them also provide valuable services such as affiliate programs, CD on demand, extensive sales reports, serial number generation, telephone sales, and more. Even if you're familiar with eSellerate, Kagi and a handful of others, which one should you choose? Hopefully, after reading this two-part report, you'll have enough information to take the next step.

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. 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, or artist. 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.

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.

Reg.Net

Owned by Digital River, RegNet - http://www.reg.net/ - does not charge any sign-up fees, but their service fee is 20% for each product purchased with a price under $20. For software listed over $20, they charge 10% plus $3.00 per product sold. Reg.Net's shopping cart system supports multi-currencies, volume pricing, cross-selling products (which they refer to as point-of-sale options), and accepts Visa, MasterCard, EuroCard, American Express, Discover and Diner's Club. They also offer telephone sales support 24 hours a day, 7 days a week. Inside the U.S. and Canada, customers can place orders through Reg.Net's toll-free line and international customers can use their toll sales line.

If you need Reg.Net to issue serial numbers to customers after purchases are made, you can submit your key generating program to their Author Relations Department. The only deterrent for Mac developers is that Reg.Net prefers Windows-based C++ or Visual Basic key generators. If you need to deliver unlocked versions of your software to customers after purchase via time-limited download links, then Reg.Net also offers Electronic Software Distribution with a unique user name and password system that remains active for three days. If you wish to give your customers the option of purchasing your software on a data CD, Reg.Net offers CD on demand, delivering the customized CD to the customer via USPS, FedEx or UPS.

Beyond its online Author Center for product management and sales reports, Reg.Net offers an integrated affiliate program. While they do automate handling of payments to affiliates, the overall feature set offered to affiliates and participating vendors does not seem to be quite as extensive as those offered by rivals like eSellerate.

Standout Feature: Reg.Net heavily promotes their Affiliate Program on their web site, but it's their marketing opportunities that seem unique. Reg.Net vendors can choose to participate in Reg.Net's Software Spotlight (on their home page), Receipt Spotlight (the featured product in order confirmation e-mails), and Phone Spotlight (the featured product on their telephone system). Reg.Net can also help you develop e-mail campaigns to send to your customer database. While I'm not inclined to believe that many consumers go to the Reg.Net home page looking for the latest software (Software Spotlight), having your product featured in their order confirmation e-mails (Receipt Spotlight) and their telephone sales system (Phone Spotlight) could provide a great deal of extra exposure. The only downside to the Receipt Spotlight from a vendor perspective is that other vendors who sign up for it get to feature their products on the order confirmation e-mails that are delivered to your customers.

RegNow

Also part of the Digital River family, RegNow - http://www.regnow.com/ - is one of the more feature-rich solutions available. Along with the polished feature set comes a 16% processing fee per transaction (with a $2.00 minimum) and a one-time set-up fee of $9.95. Beyond online orders, they do accept orders by phone, fax and mail for an additional fee. Their call center is open 24 hours a day, 7 days a week, but they'll charge an additional $3.00 for each order taken over the phone ($2.50 for fax or mail orders). The upside to this additional fee structure is that RegNow gives you the choice of either absorbing these phone, fax and mail order fees (deducted from your monthly revenue) or you can pass the cost onto the customer to hopefully motivate customers to purchase your products online to avoid these extra service fees.

RegNow supports multi-currency, multi-licenses, volume pricing, coupons and discount pricing options. After payment is successful, RegNow can deliver a unique serial number to each customer, pulled from either a predefined set, a custom code generation program (C++/Perl/Java) or a third-party registration scheme system. If you need to deliver a full version of your software to paid customers, RegNow also offers unique, expiring download links for your protection. Registration options, along with sales reports, order form and confirmation e-mail configurations, can all be accessed via RegNow's web-based admin system. Need to offer physical CD versions of your software? RegNow also provides CD on demand options, shipping the product directly to your customers.

Like many other e-commerce solutions, RegNow also offers an affiliate program. While they automatically handle all affiliate sales tracking and payments, the service is not free to RegNow vendors. An extra 15% of the affiliate commission (whatever you decide to pay each affiliate) from all affiliate-generated sales is deducted from your monthly revenue. While this may seem excessive, RegNow gives affiliates the ability to customize the RegNow order forms to match their own site's look and feel for a true, seamless consumer experience - a feature that is usually only granted to vendors.

Standout Feature: While many of the other e-commerce providers offer customizable order forms, RegNow has one of the more flexible offerings, allowing vendors (and even affiliates!) to import header and footer HTML code along with dynamic tags for a truly customized order form. Where some companies only allow you to choose from a selection of professional page templates, define the interface colors, or import your company or product logo, RegNow's order forms can be modified to emulate every visual aspect of your web site's design.

RegSoft

As yet another one of Digital River's e-commerce services aimed at shareware developers, RegSoft - http://www.regsoft.com/ - is well-known for its two homegrown marketing vehicles: their integrated affiliate program, SellShareware.com, and their software portal site, HotDownloads.com. Unfortunately, their HotDownloads.com site does not seem to display properly within either Safari or Internet Explorer on Mac OS X and most of the featured products are Windows-centric. While that may be largely due to the number of RegSoft vendors who develop Windows-based software, it tends to make HotDownloads.com a less attractive marketing opportunity for Mac software (although this may change as more Mac developers hop onboard).

A nice attribute of their SellShareware.com affiliate program is the fact that by using cookies, they can track users who download trial software through affiliate links, so that when the user finally decides to purchase the software through RegSoft weeks later, the affiliate will still receive credit for the purchase. It's certainly possible that other rival affiliate programs also support this underlying feature, but SellShareware.com does a great job of promoting this key-selling point on their web site to all potential affiliates and vendors.

RegSoft charges a one-time set-up fee of $9.95. If your software product retails for more than $30.00, then you'll benefit from RegSoft's low-processing fee of only 8.9% per transaction. If your product sells for less than $30.00, then RegSoft charges a flat $3.00 processing fee per transaction (which is a hefty deduction if your product is priced at only $10.00). They accept Visa, MasterCard, American Express, Discover, money orders, checks and Eurocheques. Besides online sales, they also accept fax orders and toll-free phone sales at no extra cost (toll charges for customers outside the U.S.).

Within RegSoft's web-based admin system, vendors can customize the online order forms and order confirmation e-mail messages, view sales reports, and customize price codes for offering special discount prices. You can also assign serial numbers from a predefined list or a supported code generation program (Win32 .exe or PHP script) for RegSoft to distribute to customers upon purchase completion.

Like many of their rivals, RegSoft offers a CD on demand option for customers who wish to pay extra for a backup hard copy of your software. There is no charge to the vendor for offering this option and RegSoft will even share the extra profit by paying vendors $3.00 for every CD sold. The only drawback is that the fixed price of the CD is $12.95 (plus $2.00 shipping fee), preventing you from offering the CD option at a lower price. In comparison, eSellerate tells vendors what the CD base cost is and lets vendors decide if they want to markup the price (to generate a profit) or offer the CD at cost (passing the savings onto the customer).

Standout Features: Like eSellerate, RegSoft offers an optional Extended Download Service to customers for only $4.99, which allows them to redownload the software they've purchased for up to one year from the order date. If you create shareware that is unlocked with serial numbers, then you may not have a need for EDS, but if you're providing full version software to only paid customers, this is a nice convenience to offer. Another unique feature is RegSoft's ability to group products into bundles, so that vendors can offer two or more of their products at a special, discounted bundle price.

Share-It!

Share-It! - http://www.shareit.com/ - bridges the international gap with corporate offices in both the U.S. and Germany. For those unfamiliar with its parent company, element 5 AG is the largest European e-commerce outsource provider for software publishers. Digital River recently acquired element 5 AG to strengthen their position in international markets. Already a favorite in Europe, Share-It! is gaining popularity in the U.S. and Canada as well. Beyond offering the usual features like customizable order forms, multi-license pricing, multi-currency shopping cart support, digital coupons, CD on demand option, an affiliate/reseller network, sales reports, and a web-based control panel for vendors, Share-It! accepts a broad selection of credit cards and payment methods. Customers can purchase your software using either Visa, MasterCard, American Express, JCB, Diner's Club, Switch and Solo, or they can mail checks to either the U.S. or European offices. For telephone and fax orders (and even e-mail sales support), their sales staff can communicate in six different languages.


Figure 1. Share-It!'s web-based control panel for vendors.

There are no initial sign-up fees and Share-It! offers two service fee models to choose from. You can either select Model A which is a $2.95 processing fee plus 5% of the product price per transaction, or you can select Model B which is 14.9% processing fee (with a $2.50 minimum) per transaction. Depending on the selling price of your software, you can calculate which model is more cost-effective for your needs.

After a customer purchases your software, Share-It! can distribute a unique serial number from either a predefined list that you provide or a custom key generator program. As a convenience, they offer a downloadable SDK for working with their key generator interfaces with sample code in several popular languages such as C/C++, Delphi, Java and Visual Basic. If you prefer to distribute a full version of your software to paid customers, Share-It! also offers electronic software delivery options via secure, time-limited download links. They can even deliver your software to customers as an e-mail attachment.

Share-It! provides its vendors with one of the best suites of marketing opportunities such as search engine optimization, web site usability statistics, e-mail marketing tools for communicating with your customers, and product submission to major software portals like Jumbo.com, Tucows.com and Download.com.

Standout Feature: If you've outgrown the generic packaging of most CD on demand offerings and wish to offer your software in your own custom designed, shrink-wrapped boxes, probably the only things holding you back are the daunting tasks of warehousing and shipping your physical product. Share-It! is one of the only shareware-level e-commerce providers that offers a complete warehousing, picking, packing, shipping and returns processing system for your custom shrink-wrapped product. There are no on-going or monthly fees, but the costs are calculated on a per-order basis, so obviously, the more you sell, the more cost-effective this service will become. If you're ready to take this next step in custom physical product distribution, this unique feature alone may make Share-It! the optimal choice for you.

SWREG

Launched in 1987, SWREG - http://www.swreg.org/ - claims to be the oldest software store in the world. Offering multi-currency and multi-license support, SWREG can provide paid customers with a unique serial number from either a predefined list you provide, a custom key generator program or one of the supported third-party registration systems such as Armadillo. They also offer a CD on demand option (for only $8.00 worldwide), an electronic software delivery option, and a basic affiliate program as well. All of this, along with customizable order forms and order confirmation e-mails, sales reports, and the ability to establish reoccurring customer transactions for software subscriptions, can be managed from their web-based vendor admin site.

SWREG accepts more forms of payment than most of its rivals, including Visa, MasterCard, American Express, Eurocard, Delta, JCB, Switch, Solo, Discover, Diner's Club, UK cheque, US check, Postcheque, International money order and even PayPal. If you offer an alternate PayPal purchase link on your site to accommodate PayPal payments, now you can consolidate your e-commerce options and accept PayPal payments through SWREG.

SWREG charges a low per transaction processing fee of $1 plus 6% of the product price (with a $1.50 minimum fee). For low volume sellers, it may be more economical to choose their flat 15% per transaction rate instead. SWREG regards their service like a no-frills airline, offering a low processing fee and then charging for all extras, such as refunds, chargebacks, spam complaints, certain payment options, etc. Products purchased with American Express incur a 2% surcharge (on top of SWREG's process fee) that is also passed onto you, the vendor. Their logic is that only the people who use the extra features should have to pay for them. SWREG also offers a special micropayments deal where items priced at $7 or less are charged a flat 69 cents per transaction processing fee (this deal has certain rules and restrictions, so see their web site for details). If you choose the micropayments deal or the default $1+6% plan, SWREG charges you a $20 monthly account fee, but the flat 15% rate does not incur this extra monthly fee.

Prefer to use a shopping cart system that's truly integrated and hosted on your web server? With SWREG's Intermediate Level, you can collect the order data on your site within a customizable shopping cart and then when the customer clicks the checkout button, all product data is sent via the URL command line to SWREG's secure servers where the customer finishes the order process by submitting their billing information. This option is obviously not for novice web developers since some scripting skills are required to properly implement this shopping cart system. The upside is that your products' shopping cart pages are hosted on your site, completely integrated into your site's existing design for a very professional appearance.

Standout Feature: While most e-commerce providers offer only a U.S.-based toll free telephone sales line and penalize international customers with a toll-based phone line, SWREG offers local toll free phone lines in 16 countries, making it cost-effective and convenient for your international customers to order your software over the telephone.

V-Share

While V-Share - http://www.v-share.com/ - may not be as well known as Kagi or eSellerate, they do offer competitive pricing and plenty of features to entice newcomers. As part of their service, they are equipped to handle telephone, fax, mail and online orders, and accept Visa, MasterCard, American Express, Discover, money orders and checks. Upon purchase, V-Share can supply a unique serial number to each customer using either a predefined list that you provide, a custom key generation program, their own proprietary key generator, or a URL-fetched key. They also offer electronic software delivery with secure, time-limited download areas if you need a safe method for distributing full versions of your software to customers. V-Share indirectly supports CD on demand, requiring you to establish a separate account directly with SwiftCD (unlike some rivals that offer an integrated CD on demand solution).

V-Share's service fee structure is dependent on your product's price. For products priced lower than $15.00, they charge a 20% processing fee per transaction. For products priced at more than $15.00, the processing fee is $3.00 plus 5% per transaction.

To help promote your software, they maintain an online software portal site called V-SharewareShop.com, but like RegSoft's HotDownloads.com, the selection seems small compared to VersionTracker.com or MacUpdate.com. The site features several hundred titles, but only fourteen of them are Mac-compatible, so in it's current state, it is unlikely to become a destination point for Mac consumers.

Standout Feature: Besides the typical web-based admin for vendors, V-Share also offers a login screen for customers, so that anyone who has purchased software through V-Share can access their order information, print a receipt, verify registration key and credit card charges and more. This is a nice touch for customers and a time-saver for vendors who spend much of their day answering these kinds of simple customer queries.

Read the Fine Print

When deciding upon an e-commerce partner for your software business, take the time to read all of the information and contracts that are provided to you. You do not want to invest your time and resources into configuring your web site and applications to use a specific e-commerce engine, only to discover hidden fees, rules and restrictions that negatively impact your business. Here are some things to look out for:

Download Bandwidth Fees. Most software-centric e-commerce companies offer electronic download services for those vendors that need to provide a full version of their product to customers upon purchase. Some include this feature as part of their service, while others charge bandwidth transfer fees. If you need this functionality, find out what their policy is on bandwidth fees before signing on the dotted line. No one likes to get surprised by a $500.00 bandwidth bill for unknowingly exceeding the download quota.

The Perception of CD on Demand. Some software developers misinterpret the purpose of CD on demand. It should not be viewed as an alternative to purchasing the digital download version or serial number license. Think of it as a backup copy of your software. That's why the CD on demand options are usually so inexpensive for customers to purchase (ranging from $7.50 to $12.99). Even if they choose to buy a CD, they still need to purchase your software license, which typically costs more than the CD. For this reason, do not place full, unlocked versions of your software on the CD, unless the shopping cart system has a built-in safeguard that prevents customers from only buying the CD.

Exclusivity. Check the contracts or ask a sales representative about their exclusivity policy. Most of the companies featured in this 2-part roundup do not require exclusivity, which is good for software developers who wish to offer several purchase options to their customers. For example, some consumers feel more comfortable paying for software with their PayPal account than using a credit card.

Compatibility. In Part 1 (previous issue), we explored the software toolkits offered by eSellerate and Kagi for easily integrating their e-commerce engines directly into your product, so that customers can make a purchase without ever leaving your application. Fortunately, these toolkits are Mac-compatible, but other e-commerce providers such as Plimus and OSoLiS, who offer similar functionality, only provide software modules for Windows developers. It was for this reason that those two companies were not featured in this profile. With Microsoft Windows owning the lion share of the OS market, there will always be a handful of services that focus only on Windows developers, so do your homework and make sure the e-commerce provider you choose can properly support your Mac software products.

Maximize the Partnership

Many developers who utilize the full-featured services of RegNow, eSellerate or any of the other companies listed in our roundup, often don't realize the amazing depth of opportunities at their fingertips. If customizable order forms are part of the service, don't settle for the default plain vanilla template. Take the time to design an order form that matches your web site's "look and feel" to gain a more professional appearance. If a fully-managed affiliate program is offered, take advantage of this incredible marketing opportunity and let affiliates promote your software and increase your sales. With many of the value-added features like anti-piracy product activation, extended download services and CD on demand (and the list goes on), spend some time investigating all of the features that are included in the service. They are all designed to enhance your software business and increase your revenue - you're paying for them, so you might as well use them.


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.

 
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