Topic: As a merchant, what percentage do you afford to lose on fees? (Read 346 times)

Even if it is hundreds of transactions you can consolidate them for negligible fee like 3-4 sat/vbyte as of now. Or you can utilize the batch transaction feature from the payment processor which combine the multiple outputs as single transaction but obviously you have to pay the fees for them so considering this still its cheaper compared to paying 1 or 2% as commission for paying fiat payment processors.

Read again please!
I make my retirement stash from this, I'm not using it to buy Bitcoins, I'm gaining Bitcoins from my activity and storing the profits for when I'll be older, I'm not investing my retirement savings in this.


Because it's far easier?
Because my clients don't want to use banks?
Because I can't accept credit cards, because I don't want to be scammed via paypal or other garbage services and because of an idiot to lose thousands in trap funds?
Why the hell do we even have Bitcoin for then?


When I get paid I get paid in a hundred outputs, to spend those to either get fiat to buy more products or pay directly in BTC,  I need to do a tx aslo, and when you have a hundred tx you need to spend in a week since you need the capital it starts to burn.
The ignorance on the original BTC forum on how things work is astonishing, especially coming from users who were supposed to have a decade of experience.


Of course no, I would have closed shop well before of that was the case since I do have money locked in escrows deals, I need sometimes even a week to get those.
But this prolonged high fee period which fortunately ended started to get on my nerves, it was cheeping away my capital with low inputs worth 20-30$ and at the end of it I also had money trapped in altcoins, another headache as I really didn't want to be tied to doge volatility, as doge at the end become the favorite alternative to btc for my customers.
I ended up buying 0.5 BTC just not to spend $400 on a consolidation worth not even that much.

That's essentially what I said. It's not economical to instantly convert any income in bitcoins received from small purchases, but if you can cumulate income from say dozens of small transactions, then paying a transaction fee (even if it's much higher than usual) could become trivial. Especially when the alternative is to not make sales at all.

Are you really serious?

With your money from retirement savings, if I understand a source of your capital correctly, you must use it very carefully. Buying and selling Bitcoin, in other words, trading is very risky practice and its not recommendable.

You are doing a more risky practice, buying and selling stuffs with Bitcoin. Again if I understand your description correctly, you use Bitcoin to buy stuffs like gift card, books, collectibles and resell those items to get profit?

During such trades, you will probably be scammed by your trade partners.

If you have bitcoin, hold it as your retirement asset.

You suggest a waiting game for tackling high transaction costs and network traffic - sit tight, use reserves. It might work occasionally, but high-traffic businesses might face lost revenue, unhappy customers. Also, the cash reserve strategy assumes sizable buffer zones. But think of the little guys, the bootstrapped ventures scraping by? When networks demand a king's ransom, their reserves might run dry! Shouldn't we entertain off-chain or layer-2 options for these David’s among Goliaths?

In cryptocurrency, transaction fee will be depended on transaction size and the fee rate you use for one transaction. Fee rate or gas price will depends on a blockchain network situation to confirm transactions with low or high demands from users. When demand is high, fee rate or gas price would be higher than usual and when demand is low, fee rate or gas price will be lower than usual.

As a business operator, you must avoid to make on-chain transaction when fee rate or gas price is high or very expensive. You must have your business reserve in cash or stable coin to keep your business operations and to proceed transaction, payment for your customers too. If you don't have reserve, you will have to go with on-chain transaction and accept to pay very expensive on-chain transaction fee.

Obviously, but I don't imagine you would need to instantly convert bitcoins received from every single transaction? Especially when we're talking about small-value transactions, as you said the larger ones are not much of an issue. Unless your liquidity is at a very low level, you could just wait with conversion to fiat after at least a few transactions, effectively reducing transaction fee costs.
And if your liquidity is low, just look for a way to build up some cash reserve, that could solve your profitability problems, reduce costs as well as save you some time.

You can just mark up your goods with additional 20% and give that 20% discount to your client who are asking for that extra.  It is just an easy problem.  And if they are whining about fees, why not do the transaction in a centralized exchange taking advantage of internal transfers since they are free.


You can always look for another option for payment.  No one is pointing a knife on you to keep yourself on using BTC.  If it is devastating for your business then look for an alternative and if ever you still wanted to be paid in Bitcoin as mk4 stated, centralized services such as internal transfer on centralized exchange can be a great help.

Aside from the markup that you get to earn as a merchant, on top of that should have the fees that shall be paid. No problem if you increase it a bit and explain it to them but yeah that's a problem for some customers because they might feel that it's no longer worth it when there's a slight increase in the fees. 10%-20% of fee from the profit is quite high but still if you'll see that 80% as a profit, I think that won't hurt you because it's more hurtful to lose a loyal customer, right?

Currently, transaction fees are very cheap, like $0.5 to $1, and it depends on how much your profit is; if you are earning $5 profit, then 10% or even 15% is not too much to pay for transaction fees, but it depends on the business you are doing; if it's a big business, if you encounter a loss in one product, you could use another to cover it up. There are some businesses like mine in which any item you sell is going to earn you up to $50 in profit. If the profit is too small, then it doesn't go below $20, and it doesn't affect my business. At least if you earn $50 profit and decide to cover transaction fee for customers which could be $10 fee, then you still will have $40.

OP actually I didn't understand much of your thread but these days I was thinking about how to convince merchants in my area to accept Bitcoin without going through an intermediary and how not to make them lose even a cent or rather maybe a small profit.  So the challenge is to pay the sales fees to the merchants.  Let me explain if you buy from a CEX you have to pay a percentage that is 3%, 5% or 10% it doesn't matter, you have to pay it anyway.  So if the merchant wants to sell his cashed btc why not pay a small percentage of the sale?  Thus they will be encouraged to accept BTC and a circular economy could be created.

The buyer is the one who will make the transaction to your wallet so if you are a merchant you don't have to pay a penny no matter the network is clogged or not. So the topic itself not exist since the ideology behind the thread is invalid.

I hope the thread will be locked...

In any case, the general rule in trading says that the trader cannot risk paying network fees in excess of his profit margin.
I worked for a long time as a trader, and I was forced many times to stop sales because of high fees or to charge the buyer to pay the fees if he insisted on buying. At the time, Bitcoin and Ethereum were the two major currencies in circulation. While today there are many ways to overcome the crisis of high fees, the most important of which is the Binance platform, which provides free internal sending service, and almost all active users in the field of crypto today have Binance accounts, as well as stable currencies that do not cost fees exceeding $ 1 in the most cases.

I already answered it before, if the client not feel worth it to pay with Bitcoin, he can just use fiat money, why you must force your client to use Bitcoin? you can convert it to Bitcoin by yourself.

Your main problem is you don't want get paid less in Bitcoin and the most make sense answer is demand them to pay more, what's answer you're looking then? you seems already know what the answer is, I believe it's either centralized solution or altcoins based on your thread.

What would you do a a client if I were to ask you for an extra 20% if paying with Bitcoin? Just as every single one of the customers I have they will either ask for a payment in another coin or don't buy, which would end up with me and them stop using Bitcoin, and I doubt that's what anyone here would want to hear as an outcome!


And if the the person seeding it realizes he pays 35$ out of his pocket for 25$ do you think he will stay pay? No they don't!
For the second part, my total turnout is probably twice my holdings, I can't afford to have everything locked in BTC and wait for the fees to come down to 1sat/b, I need to either use those or take a loan, and that is something so crazy I would not think for a second seriously as a solution!


For large deals with mining gear and accessories or anything else I can eat the fees myself, it's 10$ over 10k, for guys that pay for a small hosting deal or a voucher it's a no, we're talking about 5$ -15$ monthly fees and I've haven't been paid by a single one in BTC in the last two months.


I'm dealing only with online payments, so it's either cc or bank if I go that way and I would rather not!


Not much difference in the size of a 10 tx with 1 inputs and one tx with 10 inputs, if I remember correctly it's under a 25% decrease in size.


I still need to use the money I get from a sale to buy more of the products or pay my own bills for the services I provide.
So I need to spend all those tiny inputs and I end up paying the same as the customers has when I need to use the money I earned!

This is exactly why I called Ordinals as it is: a malicious attack on bitcoin.
Weirdly enough some users were claiming that this attack "helps bitcoin adoption and future survival" and yet I don't see any of them in this topic responding to OP's concerns!

As someone who owns a business, receiving payments with Bitcoin directly is an option and when it comes to fees I think it will be borne by the customer directly, not the business owner. In my opinion, business owners should be able to calculate fees + the price that their customers have to pay, that's all. Here, business owners only provide convenience for Bitcoin owners who want to pay using their assets without the hassle of exchanging them or for any other reason, so the fees will be borne by their customers directly. If they object, they can use other payment methods which may be cheaper, no one forces them to pay with Bitcoin, but if they want to pay with Bitcoin they can follow the rules like this.

I think this is a burning issue for many merchants at the moment, because the thing with the "Ordinals" are causing congestion on the Blockchain and this is pushing up the on-chain transaction fees.  

I agree with you that the Lightning Network adoption is slow and more difficult for clients, but that might be your only solution, if you want to accept Bitcoin as a payment option. (Give a little brochure for people who wants to learn how to setup a LN hub)  

0.5% is fine. I can afford 1% if i am desperate. Anything above 1% simply isn’t worth it. I would rather use other cheaper options instead of losing 1% of every purchase. I don’t care how many people use that service, I won’t accept it. If I am selling a good product, people will switch to the alternatives and they will buy my product. They won’t insist on using that expensive payment method. In the end I will be on the winning side as a merchant and that expensive service will hemorrhage users. There are local merchants that only accept cash and don’t do any business with any credit card companies and they make making lots of money. Smart merchants will find a way to come on top.

Struggling with Bitcoin transaction costs? You're in good company—it's a universal issue. Walking the line between profits and client rapport—it's a high-wire act.

Ever thought about SegWit? It curtails transaction heft and fees. Might not be a silver bullet, but it's a pathway. Thinking about alternative coins? That's your play, leader. Bitcoin and blockchain glitter with potential, but they're green. Bitcoin's tenacity and incessant innovation spark faith.

Steering customers towards the Lightning Network? It's an uphill climb due to complexity. But, how about dangling a carrot for its usage

For me, the amount of fee I can afford to pay on a Bitcoin transaction will strictly depend on how urgent the deal is to me because, on a normal day, I can afford to pay between 1-5% of my Bitcoin as a fee, but in case of a worst-case scenario where Bitcoin is my only option, I can also afford to pay 5-10%, but anything more than 10% I will opt out for a different means of making payment. Because I can remember a few weeks ago when the fee for Bitcoin transactions was very high, and what I did was that I didn't touch my Bitcoin throughout that period, as I was still having some fiat in my bank account for use, and it did help me to save more and spend less.

If your business is huge and the amount of money you earn is very high than Bitcoin is the best option for the payments, but if your business isn't huge and you hardly earn enough to fulfill the needs of your family and enjoy your life with family then in that case you should opt for another payment option.

If your business is a local business type than you should use fiat for that purpose because you won't lose anything in fees, however if you business is worldwide then you can use other crypto-currencies as payment method. In such case LTC is preferable because its fees are quite low and can be a useful option in current times. I often prefer LTC for transactions that are of low value, for example I prefer LTC over BTC for transactions below $10, and I'm quite sure that many others are also doing the same.

In my opinion, it is best to calculate how much share you can allocate for payments according to your own economy. If I say 10% or 20% here, it doesn't mean anything. You need to do this calculation in order to maximize your profit by creating the income and expense balance yourself.

What I don't understand is that your only loss is the fee you pay when converting crypto into your local currency. If you want to tell that you have paid this fee every time, you can start withdrawing your money on a weekly or monthly basis. You convert more volumes of money at once.

That's correct, but I think it'll be profitable only if they implement a Lightning Network. It's because with LN, transactions can be sent without incurring high fees, which is important considering Bitcoin's current high fees. Otherwise it might not be very profitable for businesses as far as I know.

There are several alternative ways to handle this situation. For example, as you mentioned they could use fiat currency instead or they might choose to use another crypto with lower fees, such as Litecoin.

Honestly speaking, no fee is acceptable when it comes to accepting payments. In my country, merchants can accept payments for free just by using a service called UPI. After the launch of UPI, both Visa and MasterCard are seeing a huge decline in their card services and transaction volumes. They used to take 2.1% transaction fees plus 18% tax on that fees amount. With UPI, it has become free.

So when it comes to accepting payment, I am personally not ready to pay fees because of the available option. The world will slowly move to UPI infrastructure. 8 countries have already been onboarded and Japan is the latest addition. Bitcoin and cryptos can't compete.

What's the point of thinking about how much money is to be spent if you have a chance of avoiding those fees?

As a businessperson, customer satisfaction is always a top priority, but that does not mean you should be running on empty just to satisfy your customers. If the fees for payment are really huge and if you want those fees to be deducted from your side, this should be based on the amount of goods purchased by the customer. If the total purchase is calculated and profit from the cost of goods is deducted, will your profit from the goods be enough to cover up the transaction fee? If it's not enough, I will advise not to engage in such a transaction because you will be running a business with losses instead of making profit.

If payment with Bitcoin is very important to you, then I will suggest some kind of centralized system, which is not that advisable, but to some point it is cheaper since you can use an in-chain transfer option, and when you have received enough payment from your customers to cover up your transaction fee, then you can withdraw back to your self-custodial wallet, where you can have total control over the coin. This could be a little way of reducing transaction fees, but it's not the safest.

I don't get it. If you sell goods, it would be the buyer who would get hit by high tx fees, not necessarily you. So why would you drop selling any low value items? If customers are happy to buy them regardless of the extra costs, let them. On your end, you should make it easier for them to accept payments via lightning network.
Even if you're acting as an intermediary, and have to make purchases with BTC and pay fees, you could still ask/pressure sellers to start accepting LN payments, it's in their best interest so shouldn't be that hard.

As a merchant you don't lose a big money on fees at all because the customer is the one who pays the fees by buying your product or your service, the only moment when you lose on fees is when you change your cryptos to your local currency, and the fact that you don't have to do this each time you get a payment is a nice way to save money, I mean, you can wait until selling 10 products to only spend 1 transaction fee to sell those coins.

And another way to save money in fees is by using altcoins, a good example is LTC where you only have to pay 0.0001LTC/Transaction, that's $0.0088. And you have other options like Dogecoin, Tron and some others with fast blocks and low fees.

If we are to consider the bitcoin transaction fee network, no one will be happy to give what is more than 1sat/vbyte which is what we all have been so used to in time past, using a percentage is not what many users will prefer because it will be too high compared to what they have been having before as well except if it will be less than 0.01 percent, having a reduced transaction fee with bitcoin is part of the desirability people have for choosing bitcoin and nobody will have the opportunity of using a lower transaction rate and except to use the higher one.

Really cant answer that question without knowing how important that demographic of customers are with your business, how much fees you can shoulder without the risk of you losing money for the day, etc etc.

What I'll say is — just go for centralized solutions if you really need to. There's really no shame on it. You're just doing what you have to do to help your business.

There are various ways to go round the transaction fees hike either the customer pays using the lightening Network or simply bear and use the other cryptocurrencies with lowers fees like usdt and then you can actually buy the bitcoin at a later stage since the transaction fees rise doesn’t take that longer. If the buyer doesn’t agrees with then I would advise you settle with the fiat method. I wouldn’t advise you to take a lose for just incorporating bitcoin payment to your business


Most at times this actually chase away some customers because they wouldn’t want to pay high, no one wants to take the hit. The only thing is to suspend that payment method at that moment if it is leading to a loss in business


Mostly it is cheaper than all this payments with credit cards especially when it is cross boarder transactions. The fees are just too expensive for few times that the mempool gets congested which doesn’t take long before it gets down

Only in some moments, the Bitcoin transaction fee is high when the network is congested, but when the network is normal the fee is quite cheap.

For small sales payments, isn't there already a Bitcoin Lightning network and it will certainly be more efficient and faster?
The Bitcoin Lightning network provides faster transaction services and is very suitable for small transactions because of the low cost.

Bitcoin is indeed an optional payment in countries that have adopted Bitcoin, but countries that prohibit it will certainly not have a Bitcoin option.

That was the first taught I had, when I read this post. Sometimes bitcoin payment due to its high transaction fees, isn't adviced for small sale payment or businesses, It is usually offered by big firm's or business for payment of large purchases.
     Just as jawhead999 has said, Bitcoin is just an alternate payment method and all countries offer other means of payment especially the local fiat so you don't have to bother yourself too much over Bitcoin and stop your business activities. You can try to convince your customers to pay in your local currency if they are making a small purchase.

Can't you pass all of that charge to your customers or at least have them share a bit of the transaction fees? I mean it's a normal practice for businesses to add the amount or cost of services to the product they are selling so you may as well consider that option.

The fees to send to you are paid by the person sending it, so you do not loose anything coming in.
Going out to pay your bills, would be where you have to pay. BUT, unless you have no other revenue and NEED to spend the BTC on bills that HAVE TO get paid then you can do a bit of scheduling to move the funds.

Even when the blockchain hit 100+ sat/vb for a while there will still days when you could move funds for less then half of that. So it was never that big a deal for most merchants.

-Dave

Nobody likes to pay too much in fees. Cheap fees makes it easier for people to use BTC as a currency for payment. As a merchant you're in business to make profit and not to 'lose', so a general answer is to do whatever works for you and will make you revenue.

If there is no way you can make revenue now through accepting payments in BTC, then you should stop it temporarily. I assume most of your customers themselves wouldn't want to pay in BTC because of the high tx fee that also affects them. If there are customers still willing to pay through BTC, then they have to pay a certain percent higher because of the high fees, or you accept the payment through a payment processor.

Now nearly none of the business initiatives accept payments directly in BTC. So, I think, for most traders transaction fees dont matter at all (except for those who use BTC as a currency). The other problem is adoption level. High transaction fees hamper adoption rate, so the only way to get a higher adoption level is to make fees affordable.

I don't have a business which accept Bitcoin payment, but I'll answer with my logical think...

There's no problem if you or anyone want to accept Bitcoin payment in your business, but let's not forget if Bitcoin isn't the only one currency can be used in your country, I believe most of people still prefer to use fiat to pay bills than using Bitcoin.

I mean it's just their choice to use which currency and if Bitcoin fee is really high and not profitable for you, you can ask them to pay higher 10-20% to cover up the fees even though it will make them discouraged to pay using Bitcoin.

I tried to open this topic a while ago but got caught in other things, fees have gone down by a lot but the curiosity still remains and maybe if some other fad hits again this would be again relevant, again, it was though of when the 100sat/vb hit. As I make most of my retirement stash from buying and selling stuff with Bitcoin, acting as an intermediary, poking a bit in every aspect of commerce and services, to my annoyance and as I am lurking in the forum I see to others also, the fees are not a blessing, and I try to understand how others deal with and maybe a way to optimize things.

The problems:
- I can't wait for the weekend to make a cheaper payment, I will lose the deal and the customer
- fees might be the same no matter the value, but if I sell a 25$ voucher I'm not happy with them while if I drop a 4x miner pack I won't even blink
- it's harder to get customers to pay with LN than with usdt or monero or others

Although those risks are always present they have been exacerbated in the last months, it's not nice losing 10-20% of the profits on fees,  I'm wondering how the others are coping!?!
- Do you take a hit not to lose trusted old time customers? Keep them happy even if you're doing basically for free?
- Dropping everything that will earn you less than cleaning windshields ?
- Argue and try to force your customers to use a different coin?
- Go for centralized solutions?

As for what I did is was simply stop dealing with everything low value unless it would earn me at least twice the fees, I would still not be at a lose when I will consolidate all my inputs, I would simply shred everything under  x, for example I'm no longer selling hosting or VPNs when you pay via BTC for under 6 months in advance, I'm not dealing with vouchers or refills under $50 or even $100 if I have a bad moody day as it takes one problem with a customers and with the low returns and high cost you need to sell 100 to recover. Tried in vain to convince some to deal with LN, all the conversions have been over monero and litecoin

Back to the title:
- How much do you think it's OK to lose on fees, just as an example, be it 10% of my profit, 1$ for every 5 earned, or 1$ for goods worth 100$, nothing!