When selling a product or service on-line, you will need a method of collecting payment. On-line entrepreneurs have a number of options, each with pros and cons when selecting a payment acceptance method. In this post we will share how we analyzed our options and what we learned from the process.

One method of accepting payment is to only accept cash or checks. This is by far the simplest approach and may work well for locally based service providers. By accepting only cash or checks, business owners avoid both fixed and variable fees charged by 3rd party services. Accepting checks is also an option when selling products on-line, but if it is your exclusive payment option, you will likely lose sales to potential customers that prefer paying with credit cards or Pay Pal.

If you decide to offer your customers the ability to pay with credit cards, your analysis becomes more complex. Personally, we were somewhat overwhelmed when we began to sort through our credit card processing options. One of the first things we learned is that two elements are required when processing credit cards on-line:

1. Internet merchant account and payment gateway (both of these services are often offered by the same provider), and
2. Shopping cart software and SSL certificate.

Most service providers charge a fixed monthly fee for these components. Some also charge a variable monthly fee if transaction volumes falls below certain thresholds. In addition to monthly fees, credit card processing companies charge transaction fees that generally range between 2 and 4 percent. The exact percentage depends on the service provider as well as the type of credit card your customer uses. There are generally three credit card categories (ranked from lowest to highest fee):

• Qualified rates – credit cards issued to individuals,
• Midqualified rates – represents debit cards, and
• Nonqualified rates – represent business and government cards where no personal name is attached to the card (given the riskiness this rate is the highest).

Many small businesses new to the on-line world choose Pay Pal – and for good reason. It is easy and more affordable if the number of payment transactions is low. When using the “no fixed cost” Pay Pal method, the payment gateway and shopping cart are included in one bundled package for free; all costs are calculated at the transaction level.

While Pay Pal’s fee per transaction is a little higher than other payment processing services, there are not fixed fees or minimum transaction level penalties. Pay Pal is also a recognizable name that most potential buyers know and trust. Even if customers do not have an existing Pay Pal account, they can still pay using a major credit card. In addition, Pay Pal’s integration into your website is simple. If you are a start-up or expect relatively small transaction volume, Pay Pal is probably your best option. Once volume increases you can upgrade within Pay Pal or switch to another processor.

Even though Pay Pal is the best option for many small on-line businesses, it has some shortcomings. Pay Pal requires you to submit requests each time you transfer money from your Pay Pal account to your business checking or savings account (credit card processing services generally deposit your funds directly into a specified checking or savings account). Pay Pal also does not integrate directly with many accounting software packages, which means a more manual accounting process. Pay Pal’s basic package does not have a virtual terminal, which means you will not have the ability to accept credit cards over the phone.

Another way to approach your internet business is to obtain the internet merchant account from one vendor and the shopping cart from another. One benefit to this approach is that you can accept credit cards via telephone or at point of sale. Most shopping cart vendors also allow you to customize the secure check out process so that while visitors are directed to a secure third party site, it has the look and feel of your website. This method has fixed costs as well as variable. The fixed cost hover around $70. The variable transactions fees are slightly lower than Pay Pal’s, but still are slightly over 2 percent.

Originally, the Pay Pal shortcomings caused us to choose separate gateway and shopping cart providers. We were willing to pay higher fees to integrate with our accounting system and deposit funds directly into our account. However, after paying an extra $75 per month for a few months, we chose to go with Pay Pal and save these monthly fees and spend an extra hour per month addressing Pay Pal’s more manual aspects.

Denise and Kelly Bossard formed Acumen Associates, LLC to develop and market educational games. Visit their website to learn more about Er-u-di-tion and an assortment of sight word games.

Here are all the details of both my investments and online income.

My Investment Portfolio

My asset allocation plan has not changed, even during this difficult market. Here's the plan as modified to increase bonds to 30%, a change I made at the beginning of the year:

My actual investments track reasonableyclose to this plan. Here is a snapshot of my portfolio from Morningstar:

One of the great features of Morningstar is its X-Ray tool, which will show you exactly what a mutual fund owns. For example, mutual funds will always hold some amount in cash. They do this to have funds on hand when investors sell their shares, and some funds hold cash when they are scouting for investments. The key point to remember is that if you want say 30% invested in bonds and cash, recognize that even your equity funds will hold some amount in cash. So even though the above chart shows that I have about 23% invested in bonds (PTTRX, VWEHX, TPINX, and VIPSX), I really have more than that when you add in the cash all the equity funds are holding.

Note: You can find more articles on how to use Morningstar to become a more informed investor in the online investing section of The Dough Roller.

If there is any area that has deviated from plan, it is my allocation to large U.S. companies. The plan was 15%, yet my allocation is closer to 25%. Again, this is somewhat misleading because these funds hold cash, so my allocation is not off as much as it appears. But I am shifting from large U.S. equities to bonds through monthly contributions as a way to align my actual investments with my asset allocation plan.

Online Income

My online income (cash received) for June 2008 was $1,629.73. This income came from a variety of sources including Adsense and several affiliate programs. Most of this income came from The Dough Roller, although I am starting to generate online income from other sites I'm developing. Like investing, making money online takes a lot of hard work and patience. It won't happen overnight, but it is a great source of extra income.

Berkshire Hathaway & Common Hope

As regular readers know, I invest 50% of my online income in shares of Berkshre Hathaway (through my Sharebuilder account) and donate 50% to a charity called Common Hope. Through June, we have been fortunate enough to contribute $5,210 to Common Hope. Our goal for the year is $10,000, so I'm cautiously optimistic that we'll meet our goal.

Investments in Berkshire Hathaway total $1,298.36, which represent a $200 loss from my initial investment. The last two months I've not contributed to Berkshire due to some unexpected expenses. I do expect, however, to resume investments soon. Using ShareBuilder has been great. Each investment costs just $4 and it is very easy to use.

Although much of the financial news is negative, I am optimistic about the short term. The tools and means to make and manage money online have never been better. And both the stock market and real estate market offer many excellent buying opportunities. In fact, my business partner and I just purchased another HUD Foreclosure, which I'll be writing about on our real estate investing blog later this week.

We've also finally arrived at a tagline for the site, which had been conspicuously absent for several months. After tossing around several ideas, I finally decided on "smarter money management." This encapsulates my vision for this site, which I hope to fulfill in everything that is published here. And speaking of smarter money management, we generated another sizable contribution to Common Hope. Here are the details, followed by a list of free money offers that I thought I'd add to each month's review post. Enjoy!

Subscription Stats & Reminder

Readers who subscribe to The Dough Roller via an RSS Reader or email increased in April by over 6%. If you haven't already, please consider subscribing to The Dough Roller. You can subscribe via an RSS Reader such as the Google Reader, or via email. If you subscribe via email, you will receive an email from Feedburner, the site that handles virtually all subscription services for blogs and websites. You'll need to click on a link within the email to confirm your subscription. We have about 50 email subscribers that haven't confirmed their subscription. Sometimes the email gets routed to your junk folder because of the links inside the email, so make sure to look for it so that you can activate your subscription.

Common Hope

Total revenue for the site last month was $1,535, which means we'll be contributing $770 to Common Hope. Revenue was down a tad from last month, but remember that we track on a cash basis. We actually earned some affiliate income last month that hasn't been paid yet. This contribution brings our total for the year to $3,850. I still think our goal of $10,000 for the year can be met, but we'll have to work hard to get there.

Question: I get email each month asking how we generate income from this site. Since The Dough Roller is about smarter money management, I'd be happy to write some articles about how to generate income from blogs and websites. Please let me know if you'd be interested in such a topic by voting below (one of the new features added to the site in April, by the way):

[poll=5]

Berkshire Hathaway & Sharebuilder

We once again purchased $500 worth of Berkshire Hathaway in April. Through ShareBuilder, you can buy partial shares of just about any stock with automatic monthly investment plans. Through April 30, 2008 we have invested $1,500. The value is down to $1,465 due to market declines.

Top Referrers

I'd like to give a quick thank you to those blogs that referred the most visitors to The Dough Roller. Here are the top ten:

1. MSN's Smart Spending (we are one of their partner blogs--Thanks Donna and Karen!)
2. Being Frugal
3. Moolanomy
4. Paid Twice
5. My Two Dollars
6. Gather Little By Little
7. Cash Money Life
8. Mrs. Micah
9. Get Rich Slowly
10. Single Guy Money

A hearty thank you to all.

Most Popular Articles

Finally, here are the most popular articles from March 2008:

• Best of March 2008
• 0% Balance Transfer Credit Card Offers
• Revolution Money Exchange�A Free PayPal Alternative
• Tax Rebate�A Complete Guide to the Economic Stimulus Package

Photo Credit: 708718

If you ask a typical American if they care about the environment, the answer of course will be yes. But if you then ask them to name three things they've done in the last 30 days to conserve energy, you're likely to get a blank stare. And if energy conservation costs money or is inconvenient, forget about it. While global warming may be a real scientific phenomena in other parts of the world, it's just a myth here. Just ask the Bush administration, they'll tell you it's a myth. So the key question is why? Why don't we Americans take concrete actions to lesson the impact our living has on the world? Before I give you my answer to that question, let's take a look at some facts.

The typical American's impact on the planet

Here are some facts taken from a variety of sources (listed below). The data are as of the last few years:

• The U.S. accounts for about 4% of the world's population, but produces 25% of the world's carbon dioxide (CO2) emissions.
• The total current capacity of the earth to absorb CO2 is about 2.2 metric tons per person. The U.S. emits 10 times that amount per person.
• The automobile is by far the largest polluter for the average American, belching out a whopping 11,000 lbs. of CO2 per year.
• The U.S. consumes more than 20 million barrels of oil per day, about 1/4 of the world's consumption.

Sources:

1. EVO
2. Energy Information Administration

To put oil consumption in the U.S. into perspective, here is a graph of the oil consumption of the top 10 oil consuming countries:

Why do we Americans consume so much?

This is the big question. Why don't more Americans seem to give a rip about our impact on the planet. Now don't misunderstand this question. There are plenty of folks in the U.S. that care deeply about the environment, just like there are plenty of folks outside the U.S. that don't. But as a nation, we cannot run away from the data. We are an oil and food consuming machine, far out pacing the rest of the world. Why? Here are my thoughts on that question, in no particular order:

We can: This is in my view, the single biggest reason the U.S. consumes as much as it does--it can. Through the hard work of generations past, and a county rich in natural resources, we have built the single largest economy in the world and the world's highest standard of living. This allows the average American to live far above most others in the world. A two car family is not the exception; it's the norm. Weekend trips to Wal-Mart, movie theaters, Best Buy, restaurants and so on are typical. If other countries had the capacity to consume as much as we do, they probably would. Why? Human nature.

Lack of self-control: As a country, we are not particularly fond of self-control in certain areas of our lives. Just look at our savings rate--it's negative by some measures (The Negative Saving Rate and the Age of Easy Credit). And as compared to other countries, the U.S. savings rate is pathetic. Here's a chart from data taken in 2003:



Our savings rate then was just 1.4%, and our consumption accounted for more than 70% of GDP!!

And when it comes to food, we lack in self-control, too. Yes, we are the fattest country as measured the the percentage of the population that are deemed obese:



Expensive, inconvenient alternatives: We Yankees are a very practical bunch. We measure everything by the almighty dollar (well, it use to be almighty, anyway). Give us solar technology that actually works well at a lower price, and we'll be hauling solar panels home from the Home Depot atop our mammoth SUVs. The problem is that eco-friendly technology hasn't been all that practical. Yes, you can add solar panels to your home, for a cost that will take 50 years to recoup. That's not going to cut it in the U.S. Unfortunately, alternative energy has developed something of a bad reputation in the U.S., even though great improvements have and are being made each day. That's one of the reasons I started the Energy Saving Gadgets blog. I don't want to just showcase every gadget that claims to consume less energy. I'm looking for gadgets that actually work well, make our lives easier or better in some way, and consume less (or no) energy.

One-person-can't-make-a-difference myth: Finally, we suffer from the notion that individually we can't make a difference. It's the view that what I do won't save the planet, so why should I be inconvenienced while everybody around me enjoys the energy-consuming lifestyle we know and love here. Frankly, there's no easy answer to this. In my view, we need to do what we can to burden our choices with the costs they truly represent. For example, the cost of gasoline should reflect not only the cost of the oil and refining process, but the environmental impacts of burning that gallon of gas, too. Of course, internalizing these external costs isn't easy, but who said this was going to be easy.

The U.S. does contribute to the solution

I should end this article on a high note. The United States has contributed quite a lot to understanding our impact on the planet. The world today knows far more about the environmental impact we human beings have on the planet in large part because of technology and innovation developed in the United States. Two simple examples are the satellites circling the earth collecting data and the super computers that crunch the data. And even under the Bush administration, the U.S. Government spends billions of dollars each year protecting and studying the environment. Many believe it should do more, but frankly, shouldn't "we the people. . ." be taking the lead?

So what do you think? Why don't more Americans give a damn about the environment (or do you think they do)?

It turns out that parents can outsource quite a lot.  Having trouble potty training your child?  Potty training consultants can help you for $250 for the initial consultation, and $175 for each follow-up visit.  If we had used this service for our daughter, it would have cost us about $10,000. Your children having trouble sleeping?  No worries, a sleep trainer can come to your rescue for $250-$500 per consultation.  At that cost, your child may be able to sleep, but I would be lying awake at night in a cold sweat worried about all the money I just spent.

Need a night nurse?  $20-$30 per hour.  Need a nanny tax accountant?  $475-$800 annually.  Want a personal shopper (and who doesn't)?  $30 for a single item, and $15 per additional item.  Don't want to get up in the middle of the night when your child is crying?  Here's what the Washington Post article had to offer:

Staying up with your baby "used to be a rite of passage," said Barbara Kline, president of White House Nannies in Bethesda.  "Now you outsource it."  Her company places night nurses at a cost of about $400 for 24 hours.

And here's my personal favorite.  You can hire a professional to baby-proof your home for $150 per consultation plus $500 per 1000 square feet for products and installation.  Now what I was growing up, there was no such thing as baby proofing a home.  Instead, we home-proofed the kid.  Here's how it typically worked in my parents' home.

Little boy Dough comes flying into the kitchen and whacks his head on the corner of the counter.  He goes down in a screaming fit and a pool of blood. 

Mom: Alright, alright. You're going to be fine. It's just a little blood.

Stepdad: What's all the racket?

Mom: Oh it's nothing, he just hit his head on the kitchen counter.

Stepdad: He didn't damage the countertop, did he?

Mom:  I sure hope not.  [She examines the countertop closely]  No, it looks like the countertop is just fine, although the blood may be a little difficult to get out of the lines in the linoleum.

Stepdad: Well that will teach him to watch where he's going the next time he comes flying into the kitchen.

And sure enough it did. 

Today, we cover every surface in a house with a least 3 inches of foam.  And now, to top it off, some of us are actually going to pay $500 per thousand square feet.  Maybe I'm just showing my age, but I'm really starting to miss the 1970s.