PayPal vs Clickbank for a Membership Site
As you know, I have a membership site launch coming up this month. I am rushing to have it ready to go for a launch date of either February 18th or 19th.
One aspect I just decided on today was my payment processor. I was very torn between using PayPal or using Clickbank.
I had to look at the pros and cons of both.
PayPal is cheaper, only 2.9% + 30 cents. On the other hand because of recurring billing charges and my price point Clickbank would take 9.9%. Plus, with ClickBank i’d need to pay a $50 set up fee.
For a while, I just assumed I would go with PayPal. Then I realized that ClickBank would be better for my membership site for the following reasons…
1. Not everyone has a paypal account and many people may not feel comfortable registering for a paypal account just to join a membership site. That one is a biggie. Sure, clickbank might have higher fees, but if that means more members… it is worth it. Therefore, with ClickBank I wouldn’t have to worry if people had a paypal account or not.
2. ClickBank will pay all my affiliates for me. Not that I wouldn’t mind doing it myself, but that is one less thing to think about. They have been in business since 1998 and have never missed a payment.
3. Tax Reasons. If I were running my own affiliate program I would have to collect the tax information of all my active affiliates and file 1099s for them each tax year. Imagine having hundreds of affiliates and doing all that paperwork! ClickBank does all this on their end. They do all the tax information.
4. Bookkeeping Reasons. Currently I log every single transaction that goes through my paypal account into Quicken. With ClickBank I will get statements with all my transactions and will get my share deposited every 2 weeks.
5. Larger Affiliate Base. It is a great way to get more exposure for my site.
I have put in a ton of work on the affiliates section of my membership site. So far I have banners and a few brandable viral reports where my affiliates can actually embed their clickbank ID right into the .pdf and give it away.
I am also doing review templates, articles, promotional emails, text ads, keywords and possibly even squeeze pages for my affiliates to use. I want to make anyone who chooses to help me promote, has all the tools necessary to make some great money.
I am also choosing to go with a 40% commission, which is residual on a monthly basis for each member referred.
So get ready… next week is going to rock!
Progress Overview
I have never used clickbank but I am sure you will be able to explain it to us. Looking forward to the new site!
I agree on most points… If you want affiliates then Clickbank is the way to go but for plain subscriptions and being able to get the money right away its hard to beat Paypal.
-Jim
Good luck with your decision Amy. You are right that Clickbank will do a lot for you, but takes a healthy chunk of change. Have you posted this on the Warrior’s Forum to get advice there?
And I’m so…. curious about your site. I had considered creating a membership site on a topic, but realized I don’t currently have enough unique information to sell. I won’t be just another membership site packaging up recycled info, and I know you won’t either. Good luck and I’ll be checking back early next week to see what you have.
I’m sure you are busy knocking yourself out trying to get this going. Good luck and don’t be hard on yourself if the start gets delayed by a few days. I know I’ll keep checking until I see an update here about the membership site.
Thanks it is actually all ready to go, I am just waiting on my approval from clickbank. I put that in monday and it is supposed to take around 3 business days. So I am crossing my fingers for wednesday.
Come on… give us a hint. The suspense is awful. I know I should get a life (or product) of my own, ha ha.
I would stay away from any (recurring) transactions with Paypal.
I had a membership site that used paypal to process monthly, recurring transactions.
We had our site going for about 2 months, and were processing about $3k per month, and steadily growing.
Then, out of nowhere, paypal decided to cancel my account.
I LOST ALL MY SUBSCRIBERS OVERNIGHT…
I tried to contact paypal over and over, and I kept getting a canned response… even when I called.
We are still completely unclear as to why our site was shut down, but one of the responses hinted that someone had used a fraudulent credit card to sign up from our site.
So… because somebody overseas used a phony credit card to access my membership site… paypal decided to completely cut us off.
Anyway… sorry for the rant, but I will NEVER use paypal for recurring transactions again.
They are great for one time purchases, but BE CAREFUL if you decide to use them for recurring transactions.
Lesson learned though…
I’ll get off my soap box now, but I hope that helped.
Have a good one,
Ryan
Wow Ryan, thank you for sharing that.