The Importance of Cost Reduction In Daily Business

Cost Reduction

Importance of Cost Reduction

Merchants who work in retail today are going to see a high instance of associated costs that may seem to come out of the blue. What it boils down to is that processing credit cards incurs fees that merchants must pay. For instance, Sweet Services, an online candy store, has explicitly advertised about the bulk order option to their customers in order to save on cost that can easily skyrocket.

Some merchants overcome this by appending an additional surcharge to such transactions which overcomes the loss; but this can statistically diminish clientele, and so isn’t the best option.

A better option is to find a business offering merchant services for credit card processing that has the lowest available rates. You’ll need to find an organization that has a ubiquity of clients, as this will give them a sustainable business model which allows them to offer discounts.

Something else to consider are fixed margins. A good number would be 0.25%. Per transaction, $0.10 more than the interchange (as pertains to processing of payment in a storefront) can be attained. Additionally, you want to avoid long-term contracts, as these can lock you into a sub-par solution that actually ends up fleecing you with time.

Another extremely worthwhile consideration comes in the form of a pre-signing analysis of costs. The right company will compare their provisions against those which your current provider is offering. This will make it so that you get the lowest possible price.

A Worthwhile Pricing Model

There’s something called the “interchange-plus pricing model”. If you can find a provider of merchant services that offers such a model, you will likely sustainably receive the lowest possible rates.

You want to be sure that all margins are clearly defined. There are no shortage of merchant services providers who slyly sidestep such definition in order that they may scrape a little more off the top over time.

In addition to all these things, you want to be sure you’ve got an “escape” option. The right services will offer this, and here’s how it will be worded: “no early-termination service fees”.

These are designed to lock merchants into long-term contracts. Certain contracts may seem amenable, but don’t have clearly-defined margins, and so end up being more costly over time, prompting merchants to exit.

Obviously, such an exit is bad for any provider of merchant services, so they get around this by charging a stiff fee for withdrawal of services. The best providers of such credit card processing merchant services aren’t going to fleece you like that.

Cost Reduction in Daily Business

Trustworthy providers know their model is top-tier and saves you money, so they’ll let you experience the “proof that’s in the pudding”; and if you still don’t like it, then you can withdraw without paying an overt fee to do so.

The Not-For-Profit Angle

Some other areas where you stand to save include non-profit rate reductions and cost-free online access to accounts. Some merchant services are going to charge you to check the status of your account online. Usually they’ll do this by giving you one or two freebies, then charging you thereafter.

This can be avoided. If you’re a non-profit, it goes without saying that you shouldn’t be charged as much as for-profit merchants, or to check the status of things online.

A Recommendable Solution

According to, recommendable merchant providers offer solutions “…with flat and fixed margins…you always get a fair deal. No long-term contracts, no hidden fees.”

Merchant services that charge $0.12 per transaction, over the course of 100 transactions a day, end up costing you an extra $672 a year over a $0.10 cent option. If you’ve got a thousand credit card transactions in a day, that’s $6,720 a year you could save. Every cent counts.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.