What To Do When PayPal Goes Down Copyright 2004 by Kevin Bidwell All-In-One-Business.com Do business through PayPal? Here is exactly what you do the NEXT time PayPal goes down: Run and hide in a closet, hoping it will be up again soon. OK, maybe that’s not too helpful. There is a reality every site owner needs to face: Things completely out of your control can happen and jeopardize your business. Right now you will regularly see articles about how a company "lost" it’s merchant account. It is happening more and more even to successful, honest online merchants. Often without warning. In addition to random technological glitches like PayPal, there are the regular shut-downs hitting successful web businesses. My friend Brad Fallon was recently told he needed to make a $75,000 deposit to continue doing business. (Brad is the Million Dollar Wedding Guy-you can get his story here: http://All-In-One-Business.com/se-results ) It has been occurring so often, it is as predictable as a hurricane in Florida. So, how to most people respond? Simple: They rant and rave and cry out about the injustice. They seek sympathy from other site owners who join in their rant. It makes them feel better, but it doesn’t make them any money. If you’re like me, you would rather have cash than sympathy any day. If you are doing business online I can guarantee you will, at one time or another, lose your primary payment processor. Either there will be a temporary technical glitch in their system, or they will go out of business or they will simply refuse to do any more business with you until you have made a deposit-maybe a huge one. Since you know this is likely to happen, here’s how you can be prepared: 1. Sign up for a secondary payment processor. This is typically a simple process. If you are selling a digital good through ClickBank, for example, set up another account with some other vendor. If ClickBank hits a technical snag and can’t process your orders, you are then able to switch over to your secondary processor for the duration. This cheap insurance will likely cost you less than $100, but it might just save you hundreds or thousands in lost business. 2. Have pages already created for emergency changeover. Now that you have your secondary processor, go ahead now and make the correct order pages for the new processor. That way if your primary processor goes down you can simply upload the pages and in 5 minutes you are back up and running. 3. Take Mail-In Orders for Big Ticket Items. One of the best ways to get your merchant account shut down is to suddenly do a huge amount of business. That makes the merchant account people nervous. Here’s what I mean: Let’s say you have a website selling costume jewelry and you have average sales of around $15,000 per month. Everything is running just fine. Then, you have a great idea. You decide you could put together a "make and sell your own jewelry from home" package that you sell for $2,500 each. You quickly sell 30 people your first week. Yippee! $75,000 in just a week. Then your merchant account provider calls: We have temporarily suspended your account. We need you to fax us all the details on your $2,500 sales and we will get back to you in 24 hours. 24 hours later they tell you they will require a $30,000 deposit in order to re-open your account. When you are considering an "irregular" offer-one you make once a year for example-ask people to pay via check or money order. That way you don’t lose your ability to keep doing business. 4. Create an emergency cash reserve. This is especially crucial if you have your own merchant account. At some point your merchant provider is going to call or email you saying, "We are going to keep the money from your most recent orders and we want an additional deposit of $XXX" If you are trying to fill 100 new orders, that can really mess with your cash flow and might even close your business. Since you know this is likely to happen, build a cash reserve over time for 50% of your typical monthly charges. That way when you do $30,000 in business you will still be able to fill your orders and stay afloat. These four things will not keep PayPal from going down, they will simply keep your business going when it happens again.

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