FastSpring is currently attending the CeBIT Expo and Conference in Hannover, Germany. Known as one of the world’s foremost tradeshows for the digital industry, CeBIT comprises a mix of exhibits, conferences, keynote addresses, corporate events and business lounges makes it a big annual destination for ICT buyers, sellers, developers and users from around the globe.

FastSpring has many European clients and offers support for all major European languages, currencies and taxes. We are looking forward to meeting clients, learning more about the specific e-commerce needs of clients in the EU, and establishing new relationships. “Connected Worlds” is the overall theme of the conference this year, and one we find appropriate to our presence here.

For more information on CeBIT, go to www.cebit.de.

Tweet This Post 

Click icon to bookmark

FastSpring is in San Francisco as Macworld, “a five day celebration that will educate, entertain, and immerse you in the Mac community,” kicks into full gear today at the Moscone Center. This year, feature presenters include writer/director Kevin Smith, John Gruber of Daring Fireball, NY Times columnist and author David Pogue, and tech broadcaster Leo Laporte.

While Apple itself and, significantly, Adobe, are not exhibiting, Macworld continues to be the destination of choice for Mac developers and a long-standing tradition that set the bar for many other technology conferences since 1985(!).

This year, there is even an iPhone App called iMacworld that presents a handy way to explore and navigate the conference, with detailed entries for each exhibitor. The days of the Steve Jobs’ keynotes – a trademark of the show since 1997 – are over (as are the short-lived East Coast conferences), but the show goes on.

FastSpring has had the pleasure over the past few years to get to know some of the finest Mac developers of the latest generation, and we look forward to touching base with them and, in general, learning more about the e-commerce needs of the thriving Mac development community.

Best of Show winners this year at Macworld include Canson Papershow, Carina Software SkyFi, FastMac U-Socket, Frolicware Autopark, Inrix Traffic Pro, Marketcircle’s Billings Touch and more. There is also a special iPad event scheduled on Sat. Feb. 13 hosted by Macworld VP and Editorial Director Jason Snell. For more information, you can visit www.macworldexpo.com.

Tweet This Post 

Click icon to bookmark

In an exciting new development on the Haiti relief front - and right on the heels of our post yesterday - FastSpring has learned that several of its clients have committed to donating all proceeds received from sales tomorrow to the charity of their choice bringing aid to Haiti. Such charities include Doctors Without Borders, UNICEF and the Red Cross.

The program is called Indie+Relief, and features an wide range of interesting contributions. It’s great to see the software development community getting involved in this program. The array of companies and products is truly astounding, as is the spirit behind this highly collaborative effort.

Tweet This Post 

Click icon to bookmark

FastSpring is preparing its annual 1% donation of annual profits to the United Nations World Food Programme. This commitment, one made in the initial start-up days of FastSpring back in 2005, is timely now due to the WFP’s role in bringing aid to Haiti after the recent devastating earthquake that has left Port au Prince and the impoverished nation in ruins and in great need of aid, food and support.

This moment gives us a valuable opportunity to reflect on the pervasive need for corporations of all sizes worldwide to practice some form of social responsibility, to preserve the common good and to give back to those in need — both in general and in direct response to crises such as so evident in Haiti currently.

The WFP’s web site, www.wfp.org, has detailed reports on its actions to help in Haiti.

The UN food agency started distributing food within 24 hours of the earthquake striking and plans to reach 2 million with weekly rations as part of its emergency operation over the next month. In the week since the quake, more than 250,000 ready-to-eat food rations have been distributed by WFP and the U.S. military in and around Port-au-Prince. [Source: wfp.org]

These days making a donation to aid in a cause is easier than ever.  Right now, for example, if you text the word HAITI from your mobile phone to the number 90999, $10 will be seamlessly donated to the Red Cross in its efforts to aid the victims of the earthquake.

As the new year unfolds, we at FastSpring hold a place in our hearts for those who remain in need.  Let’s all do our part to work toward an improved world in 2010.

Tweet This Post 

Click icon to bookmark

FastSpring received a nice gift for the New Year in the form of a strong review of company strength in 2009—and prospects for the future—by the Pacific Coast Business Times (www.pacbiztimes.com). The article is included below.

FastSpring revenue soars on e-commerce

by Stephen Nellis
Pacific Coast Business Times
Monday, 11 January 2010

Dan Engel had to learn the lessons that helped him build Santa Barbara-based FastSpring the hard way, but those lessons have paid off with 550 percent revenue growth over the past year.

The 15-employee firm makes an e-commerce backend for companies that sell downloadable products such as software, e-books and video games. Companies who sell files face some special challenges, such as matching up serial numbers and authorization codes for digital rights management and distributing back-up discs.

Those go along with the usual e-commerce tasks of handling payments, collecting state and foreign taxes and dealing with coupons, rebates and price testing. But when Engel was building a photo software company, he couldn’t find an off-the-shelf product to meet his needs.

“There are a host of other services we’re providing along with just the payment processing that if vendors try to accomplish themselves, they’ll spend a year or two. Pretty soon you’re in the e-commerce business rather than in the software business,” Engel said. “Part of how I know that is that I did build an e-commerce system specific to one software company, and it took me about two years.”

That company was Morpheus, another of Engel’s companies that makes software for blending and morphing photographs together in digital animations. He gained some experience in photo software heading market development at Picasa, a photo-sharing site acquired by Google. Before Engel struck out on his own, he had also headed online sales for Google and left shortly after its initial public offering, and then worked online sales for what later became Citrix Online in Goleta…

…With FastSpring, Engel is working to smooth the path for sellers of downloadable products, and has seen his firm catch on with everything from videogame and e-book sellers to financial researchers selling PDF reports. Part of the hook is offering ways to make life easier for the sellers, such as handling foreign payments through FastSpring’s own merchant accounts to avoid extra fees and handling the increasingly complex collection of taxes. Software products permeate borders much more readily than physical products, and California and New York have approved online sales taxes, as have many countries in Europe.

“All the money needs to be sent to the tax collection folks in the European Union, who need to be told which counties get money and how much money each gets,” Engel said. “It gets pretty complicated. We went through it all ourselves [with Morpheus].”

But Engel said the key to FastSpring’s success hasn’t been its technical tricks, but rather its old-fashioned customer support. When a client or a client’s customer has a problem, a human being at FastSrping responds within 12 hours and more often with one or two hours — even on nights and weekends.

“We’re kind of nuts about customer support. We’re the kind of geeks who vendors want supporting them,” Engel said. FastSpring’s customer support specialists “work in the night time. They don’t sleep much,” he said.

E-commerce has proved a resilient place to be, even during the recession. According to the U.S. Census Bureau, e-commerce sales for the third quarter of 2009 were $34 billion, up 1.8 percent from the year before even as total retail sales decreased 7.5 percent over the same period.

“Online retail sales have been until recently growing in the range of 20 percent,” said Jeffrey Grau, an senior analyst with New York-based eMarketer, a firm that studies e-commerce. “The recession knocked that down quite a bit, but it also knocked down total retail sales.”

Though big, consumer-facing e-commerce names such as e-Bay and Amazon may have become household names, Grau said there’s still room for market-share battles and revenue snatching in narrower parts of the industry.

“The low-hanging fruit are the ideas that appeal to a lot of people. Once those are covered, the thing to look for is specialties and niches,” Grau said. “It takes more research to understand the particular business model.”

In both business-to-consumer and business-to-business e-commerce, mobile phones are a growing target. FastSpring has been taking advantage of that – after all, its e-commerce back-end is basically an app store. Some of its clients are already selling mobile apps, such as Moonrug, a company that makes an app to link a Google-powered Android phone into a Microsoft Exchange e-mail server.

As for FastSpring’s growth and long-term plans, Engel said an acquisition or IPO is in the future – but not anytime soon. “We’ll be much more valuable in the future,” Engel said. “We don’t expect to grow 550 percent every year. But we’re really at a place where, while we’re doing a lot of active sales, we don’t have to to get new clients, because our existing clients are generating enough buzz.”

Tweet This Post 

Click icon to bookmark

We hear from vendors pretty often these days about the problems they had with PayPal before they switched to FastSpring. Here is the most recent one, about a pretty concerning situation, one that we’ve heard about a few times recently:

“I log into my PayPal account and what do I see? ‘For my protection’ they have limited the ability of my account to withdraw or send money but most severely, they also disallowed the account to receive payments! Frantically, I go to MacGraPhoto’s buy page, click buy and see a message ‘The seller can’t receive payments at this time’. At about the same time I get an email from a potential customer that says that he can’t buy the bundle. In the server log I see other people trying buy the bundle and leaving. Lost sales. Not good. Not good at all. My PayPal’s page lists lots of things that I need to provide to PayPal regarding my personal identity and regarding the sales. Some requests are totally not relevant to the case or to our business. And, it’s totally impossible to directly talk to the people who actually decide… I receive another email from PayPal. The subject was new: ‘PayPal appeal denied’. So, now the money (most of which is not even ours but of our bundle members) is held for 6 months. Sure, they are ‘making every effort to minimize any disruption to your business’. Sure, no disruption at all… Needless to say, I didn’t get any response: not after 72 hours, and not after a week. I called support again and was told that they won’t respond me because my appeal was denied and they don’t reopen cases. I won’t be using PayPal to sell anything from now. They have grown too big to be efficient and caring for their customers. [They are] quick to make totally disruptive decisions and to dismiss legitimate businesses without really taking a look at what it is.They took the liberty to totally halt our business, to cause lots of lost sales and a major cash flow blow only because we got successful with one promotion, after being their customers for a long time. Right, they ‘regret any inconvenience this may cause’. They are ‘making every effort to minimize any disruption to your business’. If you’re selling anything and use PayPal as your only payment option, I urge you to reconsider. They can cut your oxygen supply right at peak of your success, of course ‘for your own protection’. We decided to leave PayPal as our payment processor at Apparent Software and moved to FastSpring.”

We did an earlier post that covered some other complaints we’ve heard about, which you can view here: http://tinyurl.com/oxbs9r

With that said, I’m sure there are plenty of satisfied PayPal clients out there as well. This is just info on some of the unsatisfied ones that help you have a better idea of what potential pitfalls to watch out for if you do use PayPal, and of course it helps explain how FastSpring can be a tremendous alternative for PayPal vendors who sell digital products. As it is, we do support customers paying for vendors’ products via PayPal in addition to our other payment methods, but through FastSpring you don’t have to deal directly with PayPal and expose yourself to these types of potential issues.

Tweet This Post 

Click icon to bookmark

FastSpring’s 2009 growth was featured in a recent news item in Socaltech’s TechNews:

Santa Barbara-based FastSpring, a firm which provides e-commerce services and payment processing for online software sellers, claims that the firm had 500% growth in its revenues in 2009. According to CEO Dan Engel, the growth was driven by new clients such as AteBits (makers of Tweetie), Mailplane, BreezeTree Software, and Moonrug (makers of Moonrug Mobile for Android). Engel did not disclose actual financials related to the firm. Engel was an executive at Picasa at the time of its acquisition by Google, and has also served at such firms as GoToMyPC, Morpheus Software, Google, and Sanity Software.

» View article at www.socaltech.com

Tweet This Post 

Click icon to bookmark

by Gordon Graham, Editor, SoftwareCEO

Originally published www.softwareceo.com, 9/29/2009.

Building a website for your software firm is one thing. Developing an entire e-commerce system to sell software over the web is another.

Ask any developer, and he’ll tell you, “Sure! I can do that in a few days.” Ahhhhh… would you believe 18 months?

That’s how long Dan Engel says one of his software companies struggled to build an e-commerce platform.

“I went down that path myself. We spent one and a half years trying to build a system. We wound up having something decent, but it took away from our focus on growing revenues. That’s how I learned the lesson.”

Engel should know what he’s talking about. He’s had a successful career at a number of software companies, including marketing for GoToMyPC (now Citrix) and Picasa (now Google). And he was in charge of online marketing for AdWords and AdSense for Google.

Then he joined Santa Barbara, CA-based e-commerce service provider FastSpring, a company focused on helping software publishers increase sales and save headaches on e-commerce.

“We’re dealing with one pretty large company now and they’re looking at outsourcing e-commerce because they’re losing so many opportunities there,” he says. “They can’t do promotions, they don’t localize their order page, they can’t deal with the VAT and all the taxes.

“They’re a $5-million software company trying to become a $10-million company, and we fully expect that we can grow their bottom line 25 percent over the next year.”

After chatting with Engel, we came away with these seven tips on how to boost profits with e-commerce.

“Each piece adds a few percentage points,” he says. “So if you get two percent here and three percent there, it starts to add up. And it will far exceed the cost of outsourcing this, in terms of slightly higher transaction fees.”

So before you sink another $50,000 into building your own back end, listen to some words of wisdom from an e-commerce specialist.

Boost profits with e-commerce tip #1: Focus on developing and marketing your software, not on building e-commerce

Building e-commerce is a lot like any other big project, cautions Engel, say renovating a house.

There are lots of unforeseen complications, and many issues you won’t see going in. It can easily become a major distraction that sucks up resources, but never gets finished.

“It’s a lesson that’s been learned many times over by many developers and business people,” says Engel.

“The best strategy, if you’re interested in generating revenue from software, is to focus on product development and marketing and sales, and completely outsource the e-commerce to a firm that specializes in nothing but e-commerce.

“It’s hard enough growing your software business, without being in charge of your own e-commerce too.”

Boost profits with e-commerce tip #2: Accept multiple forms of payment

Sure you can already accept Visa and PayPal, but how about American Express? A company check? A money order? A purchase order?

How significant are these other forms of payment?

Well, they can certainly add up, says Engel.

“Certain types of customers are more likely to pay with an Amex card. More technical customers are more likely to have a PayPal account. Old school, old-fashioned customers might want to use a check or money order.

“Sometimes schools or corporations order hundreds or thousands of units at once, but they do require a PO. When a school purchaser comes to your site, you have to cater to their needs; the last thing they want is someone who can’t deal with POs.

“At the end of the day, these multiple forms of payment make your sales appealing to a much wider audience. You don’t want to lose 10 percent of potential revenue because you don’t have a payment option for certain people.”

If you’re developing your own e-commerce system and negotiating with every partner, you’ll want to make sure that the demographics of each payment system work for you.

But if you can get one-stop shopping for all these options from a service provider like FastSpring, why not?

Boost profits with e-commerce tip #3: Increase sales with CDs and download protection

Engel says these two simple tactics can help build online sales.

“The variables are, is it opt-in or opt-out? And how complementary to the purchase is it?

“If you’re selling software to the average joe, and you ask if he’d also like it shipped on CD as an opt-out, we’ve seen 80 percent accept that CD for an additional $10.

“Extended download service doesn’t cost anything, but it gives your customer the assurance that they can come back and download in the future, if their computer crashes or whatever, so that’s a nice service that can get you another $5.”

The funny thing is, most companies would do this for free if a customer called in to say they needed to re-download.

So there’s a way to bump up most sales by $15 just for dropping a CD in the mail.

Boost profits with e-commerce tip #4: Don’t forget volume discounts and bundles

This one sounds like a no-brainer, but there are lots of sites out there without it.

“You want to give an incentive for a customer to buy five copies, or 10 or 50 or 100, so they make that purchase immediately,” says Engel. This applies equally well to seats for SaaS products.

And you likely want to offer a discount off your other products at the time of sale.

“Software is not like most businesses, you don’t have any physical product in most cases, so when you’re discounting or bundling products together, there isn’t really the same cost of goods sold that you have with something like hardware.

“You want to take advantage of that.”

Don’t overlook discounts and bundles, not to mention bundling third-party products too.

Boost profits with e-commerce tip #5: Start using rebates

“Companies are making a lot of money with coupons. But to date, rebates have been too much of a logistical headache for anyone to offer on software,” says Engel.

To overcome this, FastSpring recently partnered with another company to bring the concept of offline rebates to online sales.

Note: A “coupon” is a code a buyer can enter at the time of purchase for an immediate discount, while a “rebate” is an offer to send in for a check by snail mail.

The big difference: Everyone will use a coupon that’s in their hands, but not everyone will use a rebate. In fact, perhaps 60 percent will never get around to mailing in for their rebate… which puts that money back on your bottom line.

FastSpring’s rebate partner has mailboxes all over the world, so a customer in Germany can mail to an address in Germany and get their rebate dropped into their bank account in Euros.

Here’s a flow diagram that shows all this.

But wait, there’s more…

“We just did a study and found that only 20 percent redeemed the rebate: 60 percent never redeemed it in general, and we convinced another 20 percent to use the money on other software, instead of redeeming it for cash,” says Engels.

“Say on your home page, you have a product for $50. Now you can say it’s only $30 with a $20 rebate, knowing that 80 percent are never going to use the rebate.

“What I love about this is that you can reduce the price you present to the customer up-front, from $50 to $30 with a $20 rebate, and that’s really compelling. Imagine how many more units you can sell if you reduce your selling price by 40 or 50 percent?”

And to reduce your costs even more, you can offer to redeem the rebate for software instead of cash, bundling in another $30 program that you’ve discounted down to $20.

“Our clients are very excited to start testing this out, and we think it’s going to be a very big success,” says Engel.

Boost profits with e-commerce tip #6: Automatically localize language and currency for each visitor

Imagine your order pages being so “smart” that they automatically reconfigure to match the language and currency of your visitors.

Ideally your e-commerce system would analyze the IP address, mailing address, and browser settings of each visitor, and change to accommodate them. So if they speak Spanish and come from Spain, they see the European Spanish version of your order pages with the prices in € (euros).

That’s another development challenge that’s already been solved by FastSpring. Prices can be given in euros, pounds, yen, or Australian, Canadian, or American dollars, and the order pages support something like 14 different languages.

“On most sites, when you see a converted price, instead of $60, you see $59.23 or something. So we let our publishers determine what the price will be in each currency as a nice round number.

“And there are no currency exchange fees like those charged by banks; no one wants that extra $3 to end up on their credit card bill.”

FastSpring will also match the branding and look and feel of your original site to avoid turning off shoppers.

“If you don’t do that, people are more likely to abandon the shopping cart,” says Engel.

Boost profits with e-commerce tip #7: To optimize results, test and re-test your order pages

We’ve heard this advice before. But with all of Engel’s experience on so many sites, aren’t there some rules of thumb for what works best?

“I really wish there were,” chuckles Engel. “Then I could write a book and make a lot of money.”

But like most things, it all depends.

“It really depends on the type of product and the type of customer, whether they’re corporate, or consumers, or my parents’ generation. It’s foolish to assume that you know all this without testing.”

He suggests that software firms should run through between 25 and 75 orders for each variable being tested.

With FastSpring, you can re-test the whole order flow, the number of pages, the buttons, the cross-sells, anything.

“You can try a single-page order flow or three pages; you can try the credit card on the first page or on the third page. And all that stuff should be re-tested at least once a year,” he says.

“There is always something out there that you haven’t tried, some little tweak that makes a difference.”

We could go with the other features of FastSpring:

• Collecting sales taxes and VAT
• Eliminating chargebacks, with a rate below 0.5 percent
• Minimizing fraud, with a 12-point self-correcting algorithm
• Multiple merchant accounts, so you’re never frozen out due to a sudden spike in ordering activity or fraud
• A blog with lots of marketing tips and ideas.

So what does all this cost an ISV?

FastSpring charges either 5.9 percent plus 95 cents per transaction, or a flat 8.9 percent, with a minimum of 75 cents per transaction. You take your pick.

“Most companies think they’re paying 2 percent because that’s what gets quoted,” says Engel. “But they’re really paying between 3 and 4 percent. If they have transactions in AMEX or Paypal, or overseas, or anything other than the standard transactions, all of those cost significantly more.”

You can be up and running in as little as one day, with no setup or cancellation fees, and a lot of advice on tweaks you could make to increase sales.

We think that’s reasonable, and moving to a service like FastSpring makes a lot of sense.

About the author: Gordon Graham is an award-winning journalist with 30 years in the software industry. And as That White Paper Guy, he helps B2B software firms tell their stories with crisp, compelling white papers.

Tweet This Post 

Click icon to bookmark

FastSpring Selected by NextUp™ to Power E-Commerce Store

NextUp cites FastSpring’s rapid-response customer service and its platform’s ease-of-use as critical to its decision

Santa Barbara, CA ( April 28, 2008 ) – FastSpring, offering a next-generation e-commerce payment and merchandising solution for companies that sell products online, announced that it has been selected by NextUp to power NextUp’s e-commerce store. NextUp provides award-winning Text to Speech software for consumers, business customers, educators, and those with visual or vocal impairment, or learning disabilities.

“We are pleased to formally announce our relationship with FastSpring,” said Rick Ellis, NextUp’s Vice President of Business Development. “When it comes to a higher level of customer service and a platform that is easy-to-use, nothing compares to FastSpring.”

“We, too, are excited to announce this relationship. NextUp is a leader in their industry, and we’re pleased to be their e-commerce provider,” said Dan Engel, Chief Executive Officer of FastSpring.

About NextUp

NextUp provides award-winning Text to Speech software for consumers, business customers, educators, and those with visual or vocal impairment, or learning disabilities. In addition to TextAloud, NextUp markets other innovative Windows software designed to save time and deliver vital information. NewsAloud™ is a talking personal “news agent” that finds the stories users want, and then reads them aloud or to portable audio files. WeatherAloud™ is a weather application that lets users select and listen to personalized weather forecasts, while StocksAloud™ reads stock updates and related news headlines aloud for specific companies of interest. For more details about NextUp, visit the corporate Web site at www.nextup.com.

Tweet This Post 

Click icon to bookmark

FastSpring Selected by MediaRECOVER™ to Power E-Commerce Store
MediaRECOVER cites platform flexibility, ease-of-use, company’s rapid-response-based customer service function as critical to decision

Santa Barbara, CA (April 15, 2008) – FastSpring, offering a next-generation e-commerce payment and merchandising solution for companies that sell products online, announced that it has been selected to power MediaRECOVER’s e-commerce store. MediaRECOVER provides easy-to-use and award winning data recovery, photo recovery and security software, for consumers and business customers.

“We are very excited to be working with the seasoned team at FastSpring,” said Korey Bachelder, MediaRECOVER’s CEO. “These guys pioneered software e-commerce years ago, and have invented the next-generation system yet again. Like us, they value customer service ahead of everything else. Their platform is highly configurable and was built to adapt as we grow, which is perfect for us. Additionally, our marketing team found their e-commerce platform to be extremely easy to use.”

“MediaRECOVER came to us in search of a technological leader who offers a higher level of customer service, ease-of-use and an expandable platform, and we’re very pleased they have selected FastSpring to manage their store,” said Dan Engel, CEO of FastSpring.

About MediaRECOVER

MediaRECOVER is a leading data recovery and security solution provider creating innovative and award-winning products for corporations, organizations and individuals. The company began as a provider of digital photo recovery services and software. Increasingly, vital information is stored on computer media. To manage this data MediaRECOVER provides leading technology products for file recovery, disk wiping and restoration. The company’s products are distributed world-wide via retail, e-commerce and a direct sales force. Founded in 2001, the privately-held company is located in Chandler, AZ. For more details about MediaRECOVER, visit the corporate Web site at www.mediarecover.com.

Tweet This Post 

Click icon to bookmark