Potential Problem with Paypal Subscriptions
I’ve had a good amount of success with DogWalker.com, and there are around 250 paying advertisers on the site right now (maybe more). Nearly all of them pay annually using a Paypal subscription, which is connected to my company. As every business owner knows, recurring payments can be an important revenue stream (just ask Domaintools, Apple, and every other company that employs auto-renewal subscriptions).
Perhaps due to the website’s success or the fact that it’s a very good domain name, DogWalker.com has been my most inquired about asset. Offers from entities ranging from dog walkers to large companies outside of the domain space have inquired about buying the domain name and website. As with everything I own, there’s probably a price for which I would part with it, so I’ve thought about the feasibility of selling the website.
The Paypal account I use to collect payments is associated with my company, and it is attached to bank accounts, email addresses, and websites that aren’t related to the DogWalker.com website. I’ve searched, and there doesn’t appear to be a way for me to automatically change the billing/subscription email account for the current advertisers without having to get them to re-subscribe.
Herein lies a big problem. If I were to sell the website, the buyer would have to contact all of the advertisers with auto-renewing subscriptions and have them sign up again on a different system. It’s not the end of the world, but as my experience tells me, the cancellation rate could be significant, and it would wipe a considerable amount of recurring revenue from the books in the future.
If you build a website and use Paypal or any payment collection service, make sure it’s independent of your other websites, email addresses, and separate entities. If I end up selling the website, it will be a process to convert the current advertisers.
I am fairly certain that I am going to spin off this website into its own entity in the near future, and it will have a separate bank account, payment account, and be completely independent of my other businesses. Had I known that I would have this many advertisers in less than a year, I would have done this from the start. I have also learned that there are tax advantages to selling a business rather than selling an asset of a business, although that’s not something I am entirely familiar with yet.
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