Jack over at Reiver Games just wrote an interesting post about cashflow issues when publishing a board game. It’s an interesting post, like his blog, providing customers a behind-the-scenes view of games publishing. One of the few blogs out there I regularly read.
It’s a nice counterpoint to my own revenue / product purchase cashflow post and an aspect of business that most people who don’t deal with it would not think about. Certainly the entire merchant account / bank processing issue is entirely an online business problem.
Just to add another piece of the puzzle – most merchant accounts hold a ‘reserve’ amount that they can use to settle refunds / chargebacks/etc. It’s basically to safeguard themselves from merchants closing business and the merchan account provider not having the funds to pay Visa/Mastercard back. That amount can range from 5-10% depending on your chargeback rates/etc.
It’s also why pre-orders are such a hassle for us. Having to set aside board games that have not been paid for can seriously impact your cashflow.