In a marketplace model (e.g. ebay, airbnb, amazon, seamless / any food delivery), the take rate generally falls between 10%-20%.
Credit card processing fees are somewhere around 2% - 3%, so in a marketplace with all credit card transactions, impact on margin will be 6% - 30%.
If that marketplace can implement alternative payments (e.g. ACH, bitcoin, etc), impact on margin can get down below 5%. Not sure how the ebay / paypal integration influences this - would be interesting data.
One additional method to reduce margin for marketplaces is to allow transactions to occur offline and then invoice the seller based on a % of the total amount. Then your impact on margin will be exactly what your processing fees are.
There will be much different dynamics for different revenue models (e.g. as patio11 said, in SaaS, it is basically irrelevant).
So, I argue that % impact on margin is not a very useful metric unless you are comparing a specific revenue model in a narrow vertical.
Would you rather have $10B of margin with 50% going to processing fees or $1M of margin with 0% going to processing fees?
Good point, but for me right now this is a more useful question.
2-3% is incorrect - it's 2-3% + $.30 a transaction. Keep that in mind - for anything under $30 the $.30 is a bigger deal than the 2-3%, anything over $200 the $.30 has largely ceased to matter and the % is what is relevant.
2.75% for in person transactions is what Square does, and it's a disaster. That's higher than they're generally paying. They're ostensibly doing that for online payments too, but that's only for Square Wallet, which is proximity and in-person as well.
You can't take Square online and only pay 2.75% - if you could though, that'd be amazing!
Great looking site and clear focus, but your Facebook Connect permission requirements caused me to give up before trying your product!
Getting past the home page requires connecting with facebook and providing the following info:
Your basic info
Your e-mail address
Your birthday
Your relationship status
Your photos
Friends' birthdays
Photos shared with you
This app may post on your behalf, including status updates, photos and more.
I suggest you allow me to browse more of your site while not logged in, limit the initial permission request to just my basic info + email, and/or provide alternate login method.
First, this is great. The Bootstrap Sprites definitely need some love and this is a solid forward step.
I am close to dropping in Font Awesome, but the small font sizes really need work. Here is a comparison screenshot of the standard bootstrap sprites vs font awesome sprites in Chrome on Mac: https://s3.amazonaws.com/gusta/sprites-less-vs-font-awesome-...
Again, awesome work. Font Awesome is on my short list to use once it's cleaned up a bit.
A couple of years ago, I spent Thanksgiving with a friend and the first thing he warned was, "My family does not drink alcohol!". Interesting... I am accustomed to intoxicated family parties, but on that specific Thanksgiving, 20 of us drank tea and ate turkey. It was pleasant.
After dinner, his father (a Doctor, along with 80% of the family) shared his views about alcohol, predicting that in one generation alcohol will be socially rejected the way tobacco is today because of how utterly destructive alcohol is to the human body.
Remember! Just 50 years ago, the majority of the United States had no problem with cigarettes.
I still drink, along with almost every adult I know, though I cannot help but think that my friend's dad is right.
>After dinner, his father (a Doctor, along with 80% of the family) shared his views about alcohol, predicting that in one generation alcohol will be socially rejected the way tobacco is today because of how utterly destructive alcohol is to the human body.
I think this has a likelihood approaching nil.
The consumption of alcohol is literally as old as human civilization; humans first stumbled upon fermenting grains into ale around the time humans first began farming.
There would have to be some sort of ground breaking discovery to attach the same sort of health stigma to alcohol as tobacco. Right now, the research is extremely mixed. The continual debate over possible health benefits of wine would be one indicator. The fact that data indicates that complete abstainers generally live shorter lives than those who drink would be another.[1]
>Remember! Just 50 years ago, the majority of the United States had no problem with cigarettes.
Remember! Less than 100 years ago, the anti-alcohol movement in the United States was strong enough to put Prohibition into place.
And what's interesting about that is that it illuminates another key place where I think the idea that alcohol will suddenly become socially unacceptable is completely off the mark. We've consumed alcohol for thousands of years, and we've been fairly aware of its destructive effects for nearly as long because alcohol is more immediately destructive than tobacco.
One of the biggest drivers of the temperance movement in the late 19th and early 20th century were women. In the time predating modern social safety nets and women's liberation movements, a woman with a drunk for a husband would end up with mouths to feed and very few options for making an income.
Yet prohibition was a disaster on a grand scale because society at large rejected it. It would take a major sea change for things to be any different today or in 50 years.
Alcohol's been around for millenia because for millenia, humans could not reliably find safe water sources. All sorts of microbes like to grow in water; if it weren't for the cellular poison known as ethanol, you'd probably be drinking giardia, cholera, E.coli, and all sorts of other microbes along with your water.
It was only the development of municipal water chlorination that made alcohol unnecessary. That didn't start getting widespread adoption until the 1930s (two generations ago), and wasn't legislated until 1972 (one generation ago). So it's certainly conceivable that within one generation, alcohol will go the way of tobacco.
Prohibition was rejected because it was forced upon people, but I could see people start to "naturally" reject alcohol as they have tobacco. Drinking and driving used to be the normal thing to do, now you are an evil, evil person for even considering it. The straight up consumption of alcohol could easily go the same way.
The difference is that we have clear evidence that tobacco is vastly harmful to your health in the long term. Alcohol? Not so much.
Pretty much everyone agrees that it's bad to be an alcoholic. Most people get annoyed with people that routinely get sloppy, out of control drunk. That's already socially unacceptable.
The general consumption of alcohol becoming an outright social faux pas, though? I just don't see it happening any time in our lifetimes.
A couple of cigarettes each year is not going to increase your chances of health problems any more than a couple of drinks. Yet, we look down upon the people who even try a cigarette just once.
And what about drinking and driving? One drink is legally okay in most jurisdictions, and generally considered to still be safe, but it is often taboo to even do that these days. Zero tolerance is a strong meme in that area.
And those attitudes are not necessarily bad, but it takes what does cause harm in excess and applies the same logic to moderation. I'm just not certain alcohol is immune to those same social pressures.
>Slavery, Torture as a judical tool and blood feuds are also literally as old as human civilization and yet have recently fallen out of favor.
Those things all fell out of favor because they inflict direct harm upon others, not because of their long-term health effects to the individual.
And as I noted, the temperance movement was largely driven by the harm inflicted upon by alcoholics on their families, which resulted in impoverishing women (largely because women weren't viewed as fully autonomous at the time, something else that's socially fallen out of favor).
>As for mixed research results - no surprise when there's a huge industry and status quo bias funding one side of it.
Ah, yes. Occam would clearly dictate that conflicting scientific data is best explained by vast, shadowy conspiracy.
It's neither shadowy nor really a conspiracy - but do you really want to deny that the results of research are often biased in favor of the organization funding it, and that the various alcohol-producing and -distributing industries have a lot of PR money between them?
"conflicting scientific data" does not by itself mean there isn't overwhelming evidence for one position - although that's of course exactly what those whose livelihood depends on that evidence being ignored want people to believe, in so many areas - be it the effects of alcohol, the existence of global warming, or the efficacy of homeopathy.
What counts is the quality of the actual science, size and rigor of studies, etc. And yes, I'm too lazy to go into that level of detail here.
There are plenty of studies that show alcohol is good for people in moderation, unlike smoking. Your friends father's views on alcohol will not happen. Prohibition was a massive failure in the U.S.
Even heavy drinkers outlive those who abstain. Let that sink in.
The big issue with drinking isn't what happens to one's body, but rather what drinking causes some to do -- drunk driving, rape, assaults, etc. The biggest scourge from drinking is that it causes some people to do terrible things. And while heavy drinking can cause issues with one's body, that pales in comparison to what a drunk can do to others.
> The sample of those who were studied included individuals between ages 55 and 65 who had had any kind of outpatient care in the previous three years.
So they sampled a conveniently sick group of elderly men and then "controlled" for all the things that make them elderly men and that showed that the heavy drinkers lived 2nd longest (not the longest)?
I suspect that they probably had to cook their statistics in order to support their hypothesis. You find that when they have to "control for everything", instead of finding research subjects that they can actually randomize and properly control. They probably had so many variables controlled that it was just bound to fit whatever model they came up with.
Big, big difference. If someone gets drunk at the same table as me they aren't doing me any harm, as long as they don't attack me, or drive me anywhere - that's a long way from sitting next to someone puffing away on a cigarette...
There have also been many studies that show that the idea that alcohol makes you agressive or dangerous are, to a large part, placebos (http://news.bbc.co.uk/2/hi/health/3035442.stm). It seems that when people behave like dicks "due to alcohol", they're probably using the alcohol as an excuse just to behave like a dick. Getting rid of alcohol would likely force something else to be the socially-acceptable reason for being a dick - "The devil made me do it!"
The link you provided does not say what you say it does.
Further, I find it hard to believe that the placebo effect is stronger than the well-documented effects of alcohol in impairing judgment, impairing the frontal lobe and motor skills, creating long-term changes to the reward circuits in the brain, and by lowering inhibitions on all forms of ill-advised behavior, which includes aggressive behavior.
I was originally looking to link to something less like a lab report, but you can see the original studies here, and in the references associated.
Basically, the more impaired you expect to be, the more impaired you become. So, if you expect alcohol to make you violent then you will behave more violently under the influence. Of course, one would question why, if you expect alcohol to make you violent, you would drink at all - other than to use it as an excuse to behave like a dick.
Alcohol will affect your reaction time and your motor co-ordination. It makes you feel awful the next day as the liver is taxed by removing the poisons from your system. It's an addictive substance and is associated with a myriad of substance abuse problems.
Whilst it is true that alcohol will have an effect on your body chemistry, it does not make you violent, it does not make you behave badly or aggressively. Those behaviours come from within you. Alcohol is not an excuse for behaving like a dick; it may, however, be something that you accept as an excuse for letting out the dickish behaviour you wish to display.
I don't know of any scientific studies that show that alcohol lowers inhibitions, but the above studies (and the references in their bibliographies) show that people will lower their inhibitions when they think they are consuming alcohol, regardless of the alcohol content of the drink.
You're right that alcohol doesn't transform a normal person into an aggressive person, but it does lower inhibitions to otherwise anti-social or ill-advised behavior.
Light alcohol consumption has been shown to have a beneficial effect on health. I'm not sure where this doctor is getting his information from, but in terms of stress relief, a couple alcoholic beverages a week does not appear to be utterly distructive to the human body.
>predicting that in one generation alcohol will be socially rejected the way tobacco is today because of how utterly destructive alcohol is to the human body.
He's not the only doctor to think that way. "Alcohol is the most dangerous drug in the UK by a considerable margin, beating heroin and crack cocaine into second and third place, according to an authoritative study published today which will reopen calls for the drugs classification system to be scrapped and a concerted campaign launched against drink." http://www.guardian.co.uk/society/2010/nov/01/alcohol-more-h...
yeah, because 500 years ago we were also smoking and only figured now that it was really terrible.
on the other hand, 500 years ago we were also drinking and we've still no clue how alcohol is!
oh uhm, actually it appears we do with great details. Damn.
Maybe in some Protestant circles, but in many parts and communities of the country, that was never the case. Catholics, Jews, Germans and some other immigrants 100 years ago were very much into drinking, as it is part of their culture.
I know plenty of people who smoke pot. Despite this fact, in light of national legislation against it, I don't consider it to qualify it as "socially acceptable".
Anyway, the point is that alcohol has waxed and waned in popularity. For every article I read about binge drinking related problems, I read another about the benefits of moderate alcohol consumption. I expect our current trend of binge drinking to fade, for awhile, but I certainly don't see alcohol consumption in general going away, ever.
In the UK I'd say that in lots of non-smoking circles, weed is indeed fairly socially acceptable. Not universal, maybe not even for the majority of people (I've no idea how the figures add up).
But for my company, as an example, if I walked into the office on Monday and said "I had a great weekend, was permanently stoned" (not true!), my CEO would be very critical - to what extent I don't know - but he's already critical of my smoking (he attempted to bribe me to quit with a new coffee machine for the office, which almost tempted me), the rest of my colleagues would have no problem with it, so long as I never did it immediately before or during work. Not only with people who don't smoke weed (possibly everyone in our company I believe) but those who don't smoke cigarettes, too.
Certainly in my peer group of 3rd and 4th year university students, weed is entirely accepted. (Perhaps a distorted view...) I don't personally smoke weed, but people will have no qualms about talking about it and I don't think I've ever heard anyone say anything more than "I don't do that" about it.
Given a lump sum of cash and annual withdrawal of a certain percentage of that cash (3% per year is safe, 4% is pushing it, 5% is a sure way to lose your money), you would need the following amounts of money to pay yourself $50,000 per year:
$1.67 Million @ 3% (1 / .03 * 50,000)
$1.25 Million @ 4% (1 / .04 * 50,000)
$1.00 Million @ 5% (1 / .05 * 50,000)
Put another way, if you have X Million, how much could you safely withdraw each year at 3% per year?
$1M: $30k / year
$2M: $60k / year
$3M: $90k / year
$10M: $300k / year
Keep in mind you will pay tax on these figures (15% Long Term Capital Gains tax if you're lucky, or more if it's regular income). And this does not account for inflation, so assume the value of money gets cut in half every 25-30 years.
Credit card processing fees are somewhere around 2% - 3%, so in a marketplace with all credit card transactions, impact on margin will be 6% - 30%.
If that marketplace can implement alternative payments (e.g. ACH, bitcoin, etc), impact on margin can get down below 5%. Not sure how the ebay / paypal integration influences this - would be interesting data.
One additional method to reduce margin for marketplaces is to allow transactions to occur offline and then invoice the seller based on a % of the total amount. Then your impact on margin will be exactly what your processing fees are.
There will be much different dynamics for different revenue models (e.g. as patio11 said, in SaaS, it is basically irrelevant).
So, I argue that % impact on margin is not a very useful metric unless you are comparing a specific revenue model in a narrow vertical.
Would you rather have $10B of margin with 50% going to processing fees or $1M of margin with 0% going to processing fees?