How To Squeeze Extra Profits From Your Merchant Services Without Extra Effort

David Serwitz (00:00):
And we do have customers that say that they’re like, Oh my God, I was with my last processor for 15 years. I would have made 50 grand if I, if I had been with you guys the whole time. So that’s absolutely true. And you know, people do ask us, well how can you do this? And we say, look, it’s very simple.

Announcer (00:16):
Welcome to the digital marketing secrets show with Carlos A Vazquez where we share actionable strategies and tactics to grow businesses no matter what industry you’re in. Now your host Carlos A Vazquez.

Carlos Vazquez (00:31):
Hey, what’s going on? It’s Carlos Vazquez,

Carlos Vazquez (00:33):
Your host D M secrets. And today I have a very special guest. His name is David Serwitz, the CEO of Commission Buddies. And I’ll tell you right now, Commission Buddies is, is one of those, you’ve probably heard the story of market disruptors and I don’t want to spoil you just yet, but I’ll tell you right now, Commission Buddies in my opinion, is a merchant disrupter, especially when it comes to merchant services. And David, thanks for coming on board man.

David Serwitz (01:05):
Awesome. Carlos, thank you so much for having me. I’m excited to be here.

Carlos Vazquez (01:08):
Thanks man. So I was very excited cause I was, I had one of your, one of your, your teammates approach me because I was on the Infusionsoft certified partner directory and Commission Buddies just came out of nowhere. Like I’ve never even, I’ve never heard of it. I’ve never actually like been exposed to it. And when I started doing the research I was actually shocked that this was actually available for us. Just business owners. It doesn’t matter what size you are. Can you tell me a little bit more about Commission Buddies and what you do and how you got started in this whole thing.

David Serwitz (01:43):
Yeah, absolutely. Absolutely. So, you know, Commission Buddies is really simple. Essentially what we do is we say, “Hey look, we are going to make our customers a 50% partner in their own merchant services account”. So what we mean by that is whatever money we actually make on their account, we actually are going to pay them 50% of whatever we make every month on a check or direct deposit right back to them. So we’re doing things, you know, differently. And that’s of course, without increasing any rates or fees, we simply match what they have and then pay them. You know, half of what we make, we got into this and we are the only ones doing this. We got into this because, you know, I myself, my first business, which I still run is a 43 location, a tutoring company called grade potential tutoring and a, here in California, we have our headquarters with about 50 employees, our headquarters here.

David Serwitz (02:37):
And basically, you know, I got to the point where I was paying hundreds of thousands of dollars in merchant services fee each year and it just felt like too much to me. So I decided I was going to vertically integrate and start my own processing company, only to sell it to myself. And after doing that you know, we had some friends that are business owners that know me and trust me and said, Hey Dave, you set us up as well. So I said, sure. And then pretty soon friends of friends were calling and it kinda got us excited that maybe we had a second brand here. So we said, Hey, we’re going to do this, but we’re going to do it really, really differently. And I’m, you know, I’m sure we’ll get into that more. But that’s kind of how we got going and, and how we work.

Carlos Vazquez (03:15):
Wow. Okay. So then you were already running your own business, your tutoring business, and then you decided, wait, wait, I’m paying too much in fees. I’m going to start a whole little, whole little process internally so I can save on the fees. I mean, how did that actual process start?

David Serwitz (03:31):
Sure, sure. So, you know, I’m not sure what size it makes sense, but know, because it costs us, I mean, probably close to a million bucks a year, you know, to accept credit cards. I just said, Hey, look, this is such a large expense for us that I am going to, you know, vertically integrate and literally, as opposed to buying it from somebody else, I’m going to wholesale it to myself at no Mark up essentially. Right? I mean, that was the impetus for getting going. And yeah, I mean that’s, that’s basically what we did. Once I got some friends going and friends of friends and we decided we were going to do this as truly a second brand, you know, we did say, “Hey, look, there are thousands of merchant services providers is the truth. Right? So if we’re going to do this, we want to do it differently”.

David Serwitz (04:18):
And my mentor in this industry, he said to me, “you know, David, 75% of the haggling or 80% of the negotiations in merchant services are overpriced, right?” So I said, “okay, how could we take that out? I said, look, what we’re gonna do is we’re not going to do any price negotiation at all. We’re just going to take your current deal site unseen, whatever you negotiated last time. We’re just going to accept it and then we’re going to immediately make you a 50% partner in your own account. So whatever you negotiated last time, we’re giving you the same rates and fees and whatever money we make, we give you half”. And that allows us to skip over, you know, 80% of the negotiation because you know, price is not part of the negotiation does, does that kind of make sense what I’m saying or how that works?

Carlos Vazquez (04:59):
Yeah. Okay. So I got it. So like for example, most of most of the people I work with, they’re usually using something like Stripe, right? Stripe. They have like an interest, not an interest, but I have like a transaction fee of 2.9% of the transaction with an additional 50 cents or 30 cents. Okay. I think I confuse it with like maybe eBay or something. Okay. So they charge you a flat rate per cents and then they do 2.9% so yep. You can actually grab that. The same, not the commission, but the actual transaction fee. And of the 2.9% let’s just say 3% so of those 4% you will, you can actually give back 1.5% to the customer. Is that

David Serwitz (05:44):
Okay? So I wish we could give back half of the retail, you know, price, that would be amazing. But in credit card processing, there is wholesale costs that go to all the banks that facilitate things behind the scenes. So if they’re Stripe or PayPal or whatever, that’s super easy for us to master pricing cause it’s published online. If they’re with another third party, they just send us their bill and whatever they’re being charged, we match. Okay. But there is something called an interchange in, in the industry and that is the wholesale price. And there’s hundreds and hundreds of different levels of interchange all the way from like 2/10 of a % all the way up to over 3%. So we do pay our customers half back after whatever the you halfback, after our cost of goods sold. Right? So let’s say that it’s 3% and let’s say that on that transaction, you know, the interchange was 2% that means we’re making one and we’d be giving them back half. So let’s just say half of that, half a percent. That’s just a simple example, but it can vary greatly.

Carlos Vazquez (06:46):
Gotcha. So, so there’s still, I mean, there’s still a cost because the service does require some level of costs and then whatever the, I guess that that commission is what you’ll be able to split up with the customer or with whoever partners with who are we uses you as a merchant service. Okay. Gotcha. Okay. So, so it’s either don’t get money back or get some money back. You choose. So at the end of the day, you either,

David Serwitz (07:14):
I mean, we’re usually met with kind of like three stages of, of people that we work with. The verses, they kind of don’t believe it. They’re like, I don’t get it this way. Why isn’t everybody doing this? You know, why isn’t everybody doing this? Right. And I don’t know if I believe this and blah, blah, blah, blah. But since we’re 100% referral based, you know, they’ve usually been referred by a trusted friend that’s already a customer. And so they give us a shot, right? Once they’re up and running, they’re like, this is awesome. I’m getting a commission check in the mail every month. I’m not doing anything different. There was no increase in costs or fees. The only difference is now I’m getting a check every month and they say they love it. And then the third step is they’re like, I don’t, why wouldn’t everybody do this?

David Serwitz (07:51):
Like everybody should do this. And we say, get out there and tell your friends. Because that’s, that’s how we operate. You know, we’re 100% referral based. We do pay half the money, we make, you know, right to the business owner themselves. And then we pay out another 25% of what the business owner makes to the person who introduced them. And we have what we call our referral network, which we can talk a little bit more about later. But people always start off in disbelief. They give us a crack because their friend recommended us. They’re up and running it and loving it and then they’re going, man, why isn’t everybody doing this?

Carlos Vazquez (08:23):
Right. I mean that’s, that’s how I felt when, when, when I learned about it, I was like, I, I, I, I’ll admit I had some level of skepticism because I’m like, it sounds really too good to be true. It’s like, how, how are you able to give me back some type of money from it? I’ve never got money ever from my credit card transactions. It’s kind of like getting like an affiliate commission with, from yourself almost. It’s like a new little stream of income that I was never expecting since I’ve started my business in 2003 and now you’re telling me there’s years of money I’ve been giving away. Now there’s an opportunity that I can get some of that back. It’s,

David Serwitz (09:02):
And we do have customers that say that they’re like, Oh my God, I was with my last processor for 15 years. Like I would’ve made 50 grand if I, if I had been with you guys the whole time. So that’s absolutely true. And, you know, people do ask us, well how can you do this? And we say, look, it’s very simple. You know, traditionally there are sales agents for merchant processing that are out beating the streets and cold calling or whatever. And if they signed somebody up, typically their company that they work for gets half of the earnings and that salesperson gets the other half the earnings. That’s the typical way. Okay. We just say, look, we’re 100% referral based, so we’re going to let you be your own sales agent. Like, since we don’t have to hire sales agents, right, we are going to pay you the commission.

David Serwitz (09:45):
That typically would go to the sales agents since we don’t have to have them. Right? So that was our whole that’s, that’s the way that we can do it. And a lot of people say to us, you know, why don’t other people do this, right? Why can’t people do this? And the answer is yes, it’s much, much, much more difficult to Hey customers, back half of what we’re making then is just to give them a discount, right? So most of our competitors, if they’re trying to earn your business, they’re like, Oh, we’ll discount you. Let me do a rate review, let me look at your, you know, whatever you’re paying and we’ll save you 200 bucks a month, et cetera. Right. That’s much easier. It’s much more difficult to pay thousands of people every month. But the reason we’re able to do it is I already had the backbone and infrastructure created for my tutoring company.

David Serwitz (10:30):
So for my tutoring company, we already built our own backend CRM custom built. Now you said you’re an Infusionsoft certified partner. We actually used to use Infusionsoft at my tutoring company until we outgrew it and we actually built our own custom built CRM for our own backend. Right. And for our tutors, we literally calculate and pay thousands of people every month. And so we already had this system in place that we were able to like copy and paste and move it over to Commission Buddies. So it is much more difficult, but we already kind of had the system built, if that makes sense.

Carlos Vazquez (11:02):
Got it. Yeah. You already did the hard work for yourself, so that way you were able to replicate it for basically your customers. So that’s the story. Usually the story that I’ve learned a lot about about how these businesses started out, they, they, they applied the figured out they have a problem and they figured out how to solve it. And then when they realized that they were the only ones that provided the solution, then they started offering it to other people. And then that’s how other businesses, they basically grew there themselves.

David Serwitz (11:30):
Absolutely, really, I mean, I see, you know, I mean I’m certainly not in the kind of business consulting or industry, but what I personally see a lot of times is there’s two types of businesses that going get going. The first is a technician that then organizes the other technicians, right? There are plumber, they start getting successful, they hire other plumbers, right? You know, there are tutor, they start getting successful, they start hiring other tutors, right? So the other side of it, which, which I am is, is this is the recipient, the customer. Right. You know, I needed a tutor through my frustrations in having the process be difficult. I ended up starting a tutoring company to solve my own problem of. Right. That was the same thing with Commissioned Buddies. I was a large customer of merchant services. I was frustrated by the whole process. So I solved by own problem and now I’m trying to solve other people’s problems. I mean, that’s my take on it.

Carlos Vazquez (12:22):
Gotcha. All right, so then how do you, so how does, does someone have to be in business for long to be able to use Commission Buddies for their service?

David Serwitz (12:31):
They certainly don’t have to be in business for long. I mean, there are certain levels of processing that make it probably more worth it to them. You know, the average customer that we have, we pay him about two grand a year. Okay. Now the average customer we have, we pay him about two grand a year. With that being said, I mean, we have customers that we pay over 10,000 a year. Our largest customer, we pay over $30,000 a year. Okay. So that’s $30,000 of profit. You know, one of the things I always explain to these people too is this is not revenue. This is profit, right? There is no cost associated with this. This is straight bottom line profit. And so, you know, if a company says, Oh, I have a 10% profit margin, I’m like, look, us paying you $30,000 of profit is the same as a $300,000 a year increase in sales, right? You know what I’m saying? So I’m always [inaudible]

Carlos Vazquez (13:20):
The costs.

David Serwitz (13:21):
Make sure people understand this is bottom line profit, not just increase in revenue, right? But you know, if somebody is only doing a few hundred dollars a month in credit card transactions, I mean, the reality is we’re not going to pay them enough to make it worth even, you know, them, you know, exploring us. But with that, we do have some, once you’re a customer with us, then you can start making referrals into what we call our referral network. Okay. And we have earn a lot more by, by referring us. Since again, we’re a hundred percent referral based. We have a lot of very small customers that signed up with us and even if they’re only making $20 a month, they signed up with us because they were super, super excited to refer their sister who’s a dentist and their friend who owns a restaurant, et cetera. Right? Or maybe they’re in a business networking group and they want to share what we’re doing with their business networking group, et cetera. So we do have a lot of really small customers that it may not make sense just for their own account, but they’re excited to be part of our referral network.

Carlos Vazquez (14:25):
Well, I mean, I dunno, I, I, I, I liked the idea had I known that when I was starting out, I mean there was never, maybe there could have been an opportunity for this possible solution, but if I was starting out and I knew that I can just generate, maybe it was a few pennies, I don’t care if it was even a little bit and I grew, eventually it’s going to just continue pay me. It’s, it’s almost like, it’s like an almost like an interest bearing account almost. Like it’s just going to keep building and building. All I had to do is keep selling and using this service. And then I will eventually get to the point where something will move the needle. Plus I can refer people. So if I knew that I can just start and, and I, I’m not going to pay nearly as much as someone else would that has a higher volume than me. Plus I have the ability to grow. I still don’t see why I would not want to move forward with that. Right.

David Serwitz (15:19):
Oh, 100% agreed. I mean, I have to be careful, you know, we were talking to one prospect once and I said, Hey, it’s like free money. And I really offended them because they said, well, my dad told me there’s no such thing as free lunch instead of dah, dah, dah. And like I was kind of on my heels and apologizing and I didn’t mean to offend them and dah, dah, dah, dah, dah. And so I’ve learned, I gotta be careful how I communicate, but you know, without being crass, the reality is it’s true because everything is identical. Everything’s the same. There’s no changes in any way in which our customers operate. They just get a check every month. Right. So, so I don’t want to, you know, I, I’ve learned to not be like, Hey, it’s free money. Cause maybe there’s a negative connotation with that, but as you’re saying, the reality is it really, it, you’re just getting money. Again, I hate to say for nothing getting money for nothing, but, but it’s true. You know what I mean? Everything’s the same. You just get half the money that’s made on your account every month, whether it’s a little bit or a lot. It’s certainly more than zero.

Carlos Vazquez (16:18):
Right. I mean, in other words, maybe it’s not free money, but there’s no extra effort to generate that revenue because you’re just doing business as usual and you continue selling your product, you continue selling your service and at the end of the day, by working with this, this, this merchant with Commission Buddies, you’re able to just get an extra, you wouldn’t even, an extra check that you were not even expecting. And yeah, just go ahead.

David Serwitz (16:44):
100%. You know, a lot of our customers, they tell us it’s the favorite check they get every month because they didn’t have to work for it. Like, you know, they say, man, I get my check for 200 bucks from Commission Buddies and it puts a big smile on my face because I’m, you know, I’m just getting a check that didn’t have to really work for and, and it’s just kinda fun and feels good and, and you know, people seem to like it,

Carlos Vazquez (17:05):
Man. That’s, that’s actually exciting. It’s funny. That’s funny. I can’t believe that it actually exists. So commissioned buddies works with in, if you’re using infusion soft, you can actually connect with Commission Buddies. Right. I know a lot of my, a lot of my clients, they use ClickFunnels. So I know, I know you guys. So it sounds like you guys will figure out how to make that connection. That’s what it sounds like to me.

David Serwitz (17:30):
Yeah. I mean, we can work with the vast majority of online systems such as infusion soft and click funnels. We can work with the vast majority of all software. Vast majority of all point of sales for restaurant, retail, like whatever, you know, there are some that are locked down or whatever. But the vast of systems we can work with. We have many customers on infusion soft, many customers on click funnels, many customers on Ontraport, a Zoho. I’m trying to think what other

Carlos Vazquez (17:58):
Shopify,

David Serwitz (18:00):
Yup. Shopify, woo commerce. All of these systems we certainly can work with. And I mean the, there’s going to be some that we can’t, but I mean there’s thousands of systems so I can’t list them all off. But you know, usually in the first call or email or, or inquiry, you know, we find out what system they’re using and you know, we’re not going to waste anybody’s time if we can’t work with them, but you know, nine out of 10 times we’ll be able to,

Carlos Vazquez (18:23):
Man, that’s super exciting. I’m really excited to have you on board because I mean, everyone that I know, they accept credit cards and just to know that you have an opportunity as a business owner to get some, some cash back. It just sounds exciting. I mean, it’s not even like an awards program. It’s money. It’s your money. You just get her back.

David Serwitz (18:42):
Exactly. One of my friends said, David, you’ve got to pitch this. Like, Hey, you’re used to getting credit card are used to getting rewards when you spend money on a credit card. Now you’re getting rewards when you accept money on a credit card. I said, okay. Yeah, that’s true.

Carlos Vazquez (18:55):
That’s awesome, Yeah, that’s a really, that’s it. It’s like, it’s like a rewards program, but you don’t have to spend the money. You just got to receive money.

David Serwitz (19:02):
Yeah, exactly. You just get the money, then you get a little extra on top.

Carlos Vazquez (19:05):
That’s awesome. David, thank you so much man. I’m gonna so I know that there’s a landing page that, that I can send people to. It’s, it’s it’s a miamimarketer.commissionbuddies.com, I’m going to go ahead and link it to it, but for you that’s listening on to the podcast episode, you can just go straight to commissionbuddies.com. Go straight to the page and I think there’s a form right, that you can just inquire.

David Serwitz (19:27):
Yup. There’s a form they can call us, they can schedule a a call back, you know, whatever they want to do. Of course, we’re happy to accept their inquiry in any way that they’d like. And if they don’t go through your landing page, of course, you know, we’ll, we’ll, we’ll ask them, you know, how they heard of us, et cetera. Of course.

Carlos Vazquez (19:42):
Yeah. But Hey, it, by you listening to the episode, I, I’m in no way obligating you to go through me. I, I really do believe in the service. I do believe in the, in, in the fact of you getting your money back that you work for, you earned it. Why not get it, you know, a percentage. It’s better than zero. Put it that way. So,

David Serwitz (20:00):
Absolutely. Absolutely. Well, you know, the same friend that the same friend that said, Oh, I got to pitch it like, and this is a rewards company, you know, and accepting credit cards. He’s like, man, David, you know, the average business owner is, you know, slogging it out every day, try and so hard to be successful and grow their business, which I can very much relate to myself. And they’re just getting taxed, right? They’re getting scraped off the top, you know, a relatively large portion of their hard earned revenue and you’re given a piece of it back to him and you should feel good about that. And I said, Oh, thanks man. Yeah, I appreciate that. I mean, you know, the reality is you know, even though things are going well for great potential, my tutoring company and commission buddies it’s a slog every day. And I’ve never met any business owner that tells me that things are on cruise control and they’re just crushing it. And they don’t worry, you know, I’ve never heard that. Right. And, and everybody is, is, is, I don’t see struggling with a negative connotation, but it’s just a struggle, man. It ain’t easy. Right. And the fact that we get to give back and contribute and you know, bring value to them does make me feel good

Carlos Vazquez (21:14):
David, thank you so much for your time. Thank you for coming on the episode and sharing this nice little secret for the crew. Is how do people get in contact with you? How do they reach out to you if they ever have a question?

David Serwitz (21:26):
Yup. I mean they can call us easily (888) 562-6489 that’s (888) 562-6489. They certainly can go to a commissionbuddies.com and reach out in any of the ways we talked about before or through your landing page. We’re certainly excited to talk to you and if we make sense for you, wonderful. If not, you’ll get a little bit of an education and we certainly always appreciate talking to passionate business owners regardless of how it works out.

Announcer (21:53):
Thanks for listening to the digital marketing secrets show with Carlos A Vazquez. Want to join the exclusive digital marketing community? Of course, you do. Make sure to visit us at miamimarketer.com/growth for more info. See you soon.

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