When I was a cosmetologist, I used to throw that word around like it would actually hide that fact I was a freaking beautician. Sure, I stood on my feet all day and did hair. It doesn't seem like much would go into the training and education of the lowly hairdresser, but you might be suprised what we know. We have to learn about chemistry, biology and pathogens. We even spend time studying the workings of electricity. We even spend an amount learning the differences between standard verses contract employment.

"You might be more willing to pay a larger slice of your profit pie to a third party who will make your business life easier."

Cosmetologists have basically two choices when it comes to how they earn their living. They can either work for a salon on commission/salary basis or they can rent space in a salon and be a contract laborer for the salon owner.

A cosmetologist who finds a salon where they earn a 50 percent commission on their services has made a rare find. The booth-renting cosmetologist keeps all the money from their services minus the cost of their lease. It would seem at first glance that the contract laborer (the cosmetologist that rents a space) is the winner in the income competition being that they get to keep all the money.

The poor commission hairdresser has to give away more than half of what they earn to their employer. But if one looks harder at the contract laborer, they will find that booth renter has to furnish all their equipment and tools and products. They have to take care of bad customer checks themselves and they have to pay their own taxes and furnish their own insurance.

The commission hairdresser gets to breeze in, use all the products they want, let their employer deal with the taxes and ordering and go home at the end of the day. The contract laborer gets to keep all the money, but they get all the nuisances and eat all the costs. The commission cosmetologist gets less than half of the money but gets freedom from worry and responsibility.

When you decide to take that big step and open up a paysite. You have to decide if you want to be like the contract hairdresser and make all the money while getting all the headaches? Or do you want to be like the commissioned coiffeur and lose a little money in trade for peace? You have to decide how you are going to take money from your customers on the Internet. You have to decide if you are going to set up your own merchant account so you can process credit cards or hire a third party billing company to handle your e-commerce transactions.

To take payment from surfers over the Internet, there has to be an agreement between the credit card companies, a bank and a party. If you want to be that party, you have to get a merchant account with an acquiring bank who handles your money and deals directly with the credit card companies.

If your site gets a certain percentage of chargebacks, the credit card company will enact a penalty. If you can't pay that penalty, the acquiring bank will have to. This means to get a bank to be your acquiring bank takes a flawless credit record and many times a hefty deposit.

You will also have difficulty finding an acquiring bank that is adult friendly. If you do get and acquiring bank and enact a merchant account-based shopping cart on your site, you will only have to pay out one to three percent of your incoming money to your bank. This nets you the most coin. But those nasty chargebacks can haunt you. If your arrangement with your acquiring bank limits the chargeback ceiling to the common one percent, they will freeze your account if your percentage exceeds that one- percent. That means no transactions and no money until your problem is resolved. An acquiring bank will drop you as a client if you continuously exceed chargeback percentages.

On the other hand, you may not choose to go through the grief of appropriating a merchant account. You might be more willing to pay a larger slice of your profit pie to a third party who will make your business life easier. A third party processor already has a relationship with an acquiring bank. That means if you have untried or inadequate credit, you don't have to go through application stress or pay that massive fee to an acquiring bank. Your third party billing company handles the troublesome details like fraudulent customers and transactional security. What ever you need in order to accept payments online, they will do for you and some even lease web space. Your trade-off for this is about 15 percent of your income.

It really comes down to percentages and preferences. The merchant account lets you keep all the money except around two or three percent. A third party processor takes (on average) fifteen per cent of each of your sales. Either way, you take a risk. More income = more hassle. Less income = less hassle.

If you are new to this whole paysite thing or not in a financial position to shell out big deposits and fees, then a third party processor is probably for you. If you have solid credit, a chunk of deposit money, a dependable customer base, superior shopping cart software and security measures, then you are ready to handle the money all on your own.

Well, you and the credit card companies.

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