If you think of solutions like AirBNB, Uber, Etsy, Kickstarter, IndieGoGo, AirTasker, Fiverr, Lyft, TaskRabbit and Freelancer these businesses run on a MARKETPLACE PLATFORM. The business that facilitates the marketplace platform OWNS the transaction, not the goods or services sold. So AirBNB does not own accommodation, Uber do not own cars, and Etsy does not have an office filled with glitter and glue guns. The transaction involves three entities; customer, supplier and the business facilitating the platform. A typical scenario is a customer commits to purchase something from the supplier via the marketplace transaction. At some stage the customers’ payment is taken. This may be before or after the service is delivered. Then the payment is split with a transaction/ administrative fee paid to the business facilitating the marketplace transaction and the remaining payment paid to the supplier.
The full payment the customer makes typically will not hit the facilitating businesses books. Imagine if it did – its turnover would be astronomical and potentially would trigger increased taxation depending on the jurisdiction.
My query was could an Australian business use Xero and offer a marketplace platform?
This is what my research revealed.
Stripe:- https://stripe.com/connect
Stripe seems to have all the bells and whistles.
Stripe pricing: accept payments 1.75% + 30c for domestic cards
Paying sellers 0.5%
If you are using Stripe and Xero, you also need a solution called http://sush.io/ which automatically reconciles payments from Stripe in Xero.
Sush.io pricing 3000 transactions at $50 per month.
PromisePay: https://promisepay.com
Melbourne start-up, does not offer recurring subscriptions or integration with Xero yet. In start-up mode a player to watch.
ShareTribe https://www.sharetribe.com/
Starts at $39US a month – quick set-up no developers required. Looks easy to set up.
This seems to have a large educational area worth checking out. Does not integrate with Xero, but does integrate with PayPal – so could just push the payments in via a PayPal feed and deal with them then.
Magento https://magento.com/
There would be a basic Magento cost
Monthly subscription modules https://www.magentocommerce.com/magento-connect/catalogsearch/result/?q=subscriptions&pl=0
Marketplace Multi-Vendor module https://www.magentocommerce.com/magento-connect/marketplace.html $349
Various integrators that can connect Magento to Xero
https://www.magentocommerce.com/magento-connect/catalogsearch/result/?q=xero&pl=0
PayPal Braintree: https://www.braintreepayments.com/
This one is not currently available in Australia.
I do have a concern about Xero integration and its System Limits:
Xero is designed for volumes of up to 1,000 Sales invoices (Accounts Receivables) and 1,000 Purchases bills (Accounts Payables) per month, dependent also on the frequency of invoicing during the month, variability of amounts and the frequency of sales tax reporting requirements. http://developer.xero.com/documentation/getting-started/xero-api-limits/ as the solution grows we need to treat transactions in batches.
Further reading:
Owning the Transaction: http://platformed.info/marketplace-rake-own-the-transaction-like-saas/