Many payment options are available for sellers of pre-owned device wholesalers. This article explores the costs and benefits of the most popular payment networks. Read on to see whether you should consider offering new payment options in addition to the tried-and-tested methods you already use.
Wire transfer is the most common form of payment in the phone wholesale industry, and the one that businesses are most comfortable with. Wire has the virtue of being relatively fast, irreversible, and can be sent from a smartphone.
A downside is the transaction fees—which are steep at $30 to $50 per payment—charged to the sender. The sender must be precise in sending to the correct routing and account numbers (remember these transfers can’t be reversed). Also worth noting, many wholesalers will only accept wires sent from a business entity (as opposed to an individual).
Automated Clearing House (ACH)
ACH payments are sent on the Automated Clearing House financial network, which allows for inexpensive ($5 to $10) digital transfers between bank accounts. These transactions can take a few days, but are highly reliable. Most businesses use ACH payments to pay regular bills, so they are usually familiar with the payment method. ACH transfers can be initiated digitally—via your banking app or website.
It’s important to be aware that ACH payments can be reversed.
Cash on Delivery (COD)
COD transactions delay payment until the purchaser receives the goods, then pays the delivery company. While the name COD suggests cash payment, electronic or check payments are often used.
COD has a $10 to $15 service fee, making it an economical payment option. Buyers typically prefer it, because they don’t have to pay anything upfront. But it presents challenges to sellers, because it takes longer for sellers to receive the money, and there’s a risk that the payment could get lost in transit.
For these reasons, COD is primarily used in long-term business relationships that have a high degree of trust.
PayPal is a longstanding online payment method that works similarly to ACH payments. In PayPal, the buyer has a choice of payment methods. Many select credit cards to earn points and get favorable terms on their purchases. There is a 3 percent to 4 percent transaction fee, charged to the buyer.
If buyers are unsatisfied with their purchase, they can start a claim with PayPal that may refund the money by taking it back from the seller. This makes the platform a bit risky for sellers.
Nonetheless, fast and flexible transactions make PayPal a popular payment method.
The most common form of “terms” is Net 30. Under Net 30, buyers have 30 days from the transaction time to pay. This benefits buyers by giving them time to sell devices before they must pay for them, allowing buyers to purchase more devices and grow their businesses. Sellers using Net 30 or similar terms necessarily accept higher risk by not requiring immediate payment, but this risk can be worth it if Net 30 wins more business for the seller.
If a buyer doesn’t pay, the seller may have to pursue collections and file a claim with their insurer. Because of the risks involved, Net 30 is usually only available to trusted business partners.
Cryptocurrencies are relatively new in payments. There are a variety of “coins” in circulation on the internet, with varying levels of soundness and stability. The best-known crypto coin is Bitcoin, and it is representative of crypto’s volatility, having lost more than 50 percent of its value in 2022. Sellers must weigh whether good PR and positive sentiment among crypto enthusiasts outweigh the risk of accepting payments in an unstable currency.
What is important for every seller to remember is that offering a variety of payment methods is an easy way to win more business as long as you keep an eye on your risk.
WeSellCellular is the premier online platform where wholesalers, retailers, refurbishers, and distributors all over the world can buy used cell phones wholesale. Our refined grading process ensures you know what you’re buying. Review our guide for selling wholesale cell phones to other retailers for other business tips.