FastSpring was founded in 2005 by Dan Engel, Jason Foodman, Ken White, and Ryan Dewell, with a small budget. Engel originally had an idea for a shopping cart upsell product, which eventually transformed into what FastSpring is today. The platform powers over one billion in international sales per year.
What is FastSpring?
FastSpring is an ecommerce platform that also operates as a Merchant of Record. It handles the legal and financial responsibility of every transaction you make on the platform. FastSpring allows you to sell globally while calculating, collecting, and remitting global taxes. They provide sellers with a checkout page to help them manage online sales. You can sell software, digital products like ebooks and photos, video games, and online courses on the platform.
How does FastSpring work?
FastSpring works as a Merchant of Record. Basically, when a customer buys your product, FastSpring acts as the legal seller. They assume the legal and financial responsibility for the product. While international sellers often have to register for taxes in multiple jurisdictions, they won’t have to when they sell on FastSpring, as the platform is already registered. In addition, they handle chargebacks, fraud, and other payment disputes.
As a Merchant of Record, you can’t receive automatic payments. You can schedule your earnings on a weekly, bi-monthly, or monthly basis, depending on what you’ve set up. You will only make the net profit you’ve earned, as service fees and taxes have automatically been taken from your earnings before you receive them.
What you need to know about selling on FastSpring
Unlike most ecommerce platforms and Merchant of Records, there’s no transparency regarding pricing on FastSpring’s pricing page. The reason is that each customer is given their own customized price. You need to run a demo with the team to determine your price. However, the average annual contract tends to be in the thousands of dollars range.
Most Merchant of Records, like FastSpring, tend to keep the processing and transaction fees when your customer refunds the order or does a chargeback. That means you will lose money from every refund and chargeback your business gets. Plus, you won’t be able to manage your own chargebacks either.
Some sellers may prefer being the Seller of Record. With FastSpring, you are not the legal seller of your product. This can be frustrating for sellers who, for example, get kicked off platforms due to high chargeback rates.
Unlike platforms that allow you to have instant payouts, you can only receive delayed payments on FastSpring. The standard is 7-14 days for payouts. This can negatively impact your business’s cash flow.
You also don’t have flexibility in the payment gateways you’re offered. International customers may feel they’re locked into FastSpring’s payment processing system. Most sellers prefer using payment gateways like PayPal because they’re popular around the world.
Is FastSpring the best platform to sell products?
No, FastSpring isn’t the best platform to sell products. Payhip is a FastSpring alternative that has a simple setup that you can launch the same day. Plus, you can trust Payhip’s transparent pricing, which even includes a free plan. The platform also offers built-in tools, such as affiliate programs, cross-selling, and mailing list integrations, that make it easier to get your store started. To start selling on Payhip, sign up for free.