Letters to the Editor
Letters
to the Editor
Editor's note: The
following letter to the editor addresses a growing breed of ISOs who
do not understand the cost of being a registered ISO office beyond
the cost of Visa and MasterCard representation.
Subject: Uneducated
Greed
Dear
Paul,
I wanted to address the
sales representatives who think they should buy equipment and
processing buy rates for the same cost as the legitimate ISO. These
reps are usually unwilling to bite the bullet and make the financial
commitment necessary to be in this position.
To become a legitimate
ISO, it is necessary to invest $45,000-$50,000 in office equipment,
computers, phone systems, and inventory. You must also be willing to
commit to $8,000-$10,000 per month in overhead business expenses.
These expenses include an office lease payment, Yellow Pages
advertising, utilities, UPS & Airborne or FED EX fees, business
licenses, legal contractual expenses, printing costs, employee
payroll, insurance, and federal and state employer taxes. There is
also thousands of man hours creating a sales program, hiring and
training the constant flow of reps that can't make it in our
industry, and the costs of processing and tracking applications from
these representatives.
With all of these costs
to do business, 99% of the reps I talk to think they should be buying
equipment and processing buy rates for the same cost as our company
pays for them. They're not satisfied with $500-$600 commissions plus
a piece of the residual income. They want to make $1000.00
commissions and all of the residual income. When I suggest to these
reps that if they want to earn that amount of commission and residual
income, that they bite the bullet and commit to the investments I
have mentioned above, they are unwilling to do that. I spoke with a
rep in Georgia the other day, and he said he was leaving too much
money on the table. He felt that the ISO he represented was making
money on the equipment & he should be making all the money over
the cost, which he was familiar with, and the ISO should pay their
bills from their residual income.
This "UNEDUCATED GREED"
is a big part of the reason that 8 out of 10 ISOs go broke and out of
business within 5 years. If you have no concept of what is involved
to run a business, pay your bills and make a profit, then you
shouldn't be considering trying to run a business. If an ISO doesn't
make a profit on equipment sales and isn't earning residual income,
how do you suppose we are going to pay these expenses and stay in
business? If you're unwilling to commit to the daily stress of having
to meet a payroll, and all of the other expenses that go along with
owning a business, then do us all a favor and stay content with being
an Independent Sales Representative. Banks must also share in the
responsibility of this ongoing problem. If banks did not allow every
rep who makes a few sales to become an ISO, when they don't have a
professional office and a sales force, this wouldn't be the HUGE
problem that it has become.
Thomas P.
May
National Marketing
Director
California Bankcard
Systems
********************
Hello
Paul,
Just read the article
for small ISOs to receive scholarship money to attend ETA conferences
through, I believe, the Wyatt Baxter Scholarship Fund and would like
to find out eligibility requirements to attend the March 1998
Conference in New Orleans. I was at the fall show in Long Beach and
learned a great deal as well as made a lot of business contacts which
have enabled me to start off on my own! Please let me
know.
Ron Gamm
Editor's Note: Ron
did receive the Wyatt Baxter scholarship to attend the ETA show. We
wish him luck in his business and hope the show proved
benenficial.
********************
Attn: Paul
Green,
I want to start out by
thanking you for putting out such a strong publication for our
industry. It is not only filled with current issues regarding us all,
but also some selling points for the offices and reps around the
country. This publication goes a long way to making our industry more
professional and one of integrity. Hats off to you and your
staff!
Secondly, I would like
to address the old issue of Artex leasing which you covered in your
past publications. For the record, CBS and Joe Bertucci, President,
had no ties to Artex except as a vendor. We did not fund the leases,
Artex did. All we did was to fund/pay our offices/reps when we
received funding. Artex was started by a gentleman named Art. He
alluded to all that he had money to run an extensive leasing
operation, when in fact he had only some $250,000 to $300,000 in
liquidity. Get the picture. In stepped a company called Etrans. They
took over operation and handling of Artex in the hopes of securing
financing to continue to hand the program. Since then, Art of Artex
passed away in November of 1997 and Etrans has not come out with a
new program. How do I know all of this, because we stayed in contact
with all principles in this matter in an attempt to find funds to put
this program out for Etrans. I have (CBS and Joe Bertucci) come under
the fire that I was responsible for the Artex/Etrans failure, but all
we were doing was trying to find them a solution.
My company, CBS, has a
working relationship with a totally separate company-ATM-USA, which
is a division of American Lease Professionals, LLC (Nevada). ATM-USA
has come out with a dynamic lease program that rivals the big boys!
They are funded by one of the POS field's industry leaders, whose
parent company is a billion dollar corporation. ATM-USA has gone to
great lengths to secure this deal, for not only today, but the
future!
There seems to be a
effort by several ISOs/offices/reps to want to derail this venture
due to the association in the past with Artex/Etrans. This is unfair
and people need to know and understand the truth behind what is going
on. It hasn't been easy for myself to sit through all this name
calling the past year or so, but I have had enough and needed to
sound off to our industry.
Sincerely,
Joe
Bertucci
************
Dear
Paul:
I flew from Florida to
attend your seminar in Long Beach, CA, and wanted to give you some
feedback on the seminar.
The Green Sheet seminar
was excellent. We got a lot out of it and were able to make some good
contacts.
The equipment companies
were very informative. I enjoyed Bob Carr's presentation. I think the
day was well spent.
Kevin
Winter
First
Bankcard
********************
Send Letters to: The
Green Sheet, P.O. Box 6008, Petaluma, CA 94955-6008 or
greensheet@greensheet.com.
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