A high-risk business is a company that deals in products and services that are designated as high-risk, or a company that has the maximum risk of financial failure. Several other factors can influence this high-risk designation. Such as a high probability of chargebacks or industries with expensive goods, including jewelry and antiques. Running a high-risk business in niches like travel and timeshares, electronic cigarettes, debt collection, or adult is more challenging, but by using the right strategies, you can make a success of it. Here are the key factors to keep in mind.
1. Sign Up With a Reputable Payment Processing Service
Having a reliable credit and debit card processor is critical to ensure that your customers can place orders and make payments. High-risk payment processors secure your business by verifying the buyer’s identity and credibility when processing payments. You may have to pay a higher fee rate than other industries, but as you continue to work, the service may offer you more economical fees. To make that happen, you must provide all the necessary paperwork like financial statements, tax information, and licenses when applying for the merchant account. Transparency reassures the provider about the legitimacy of your company and operations and wins you favorable fees.
2. Stay Compliant with Cybersecurity Regulations
Regardless of the industry where you work, you must secure the Personally Identifiable Information (PII) that customers share with you. Updated government regulations require business owners to integrate cybersecurity measures and higher security standards to safeguard their systems. This requirement becomes all the more critical if you are activating in high risk businesses. Reassure your clients by using a team of certified professionals with the CompTIA Security+ credentials.
3. Minimize Chargebacks and Refund Requests
Do what you can to minimize expensive chargebacks and refunds by offering detailed product information on your site. Deliver what you promise and build excellent customer service channels. Hire a staff of knowledgeable professionals who can handle complaints with tact and offer solutions like discounts and incentives in place of refunds. Clearly specify your returns and refunds policies on the product pages, checkout forms, and when confirming orders, so there is no room for errors.
4. Assure Buyers About the Legitimacy of Your Company
Customers investing in high-risk merchandise are understandably wary about the seller’s legitimacy and the authenticity of the products they’re buying. However, you can reassure them by building an aesthetically appealing website that carries all the information they would look for. That includes having a secure rating by search engines and displaying contact details such as the company’s physical address and phone number. Also make sure to include high-def images, a smart web page design, and well-formatted product pages.
5. Have a Robust Social Media Presence
High-risk or low-risk – customers are more inclined to trust companies that have a robust social media presence. Create a LinkedIn page with the founder’s bio and background information. You will also want to have a Facebook company page. It should carry your company’s logo and any other relevant details that customers may search for. Be aware that buyers look up products and reviews on social media and choose brands that have a regular presence on social networks. This will build your brand name and make you more appealing to clients.
6. Implement Smarter Business Processes
A smart business process can reduce the risk of fraud. High-risk companies often use tactics like getting buyers to sign a release and as-is form when finalizing their purchases of high-risk products. Requiring signatures on delivery will also lower the risk. Since high-risk industries are heavily regulated by the government, policy changes are quite common in these fields. Stay updated with the rules relevant to your industry and offer accurate information to buyers visiting your site.
Working in a high-risk industry and running an e-commerce business can be challenging. But, following these tips can help you achieve long-term success.
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