The last two decades have seen the burgeoning of the body and sex positivity movements and the broadened acceptance of online shopping. As a result, selling sex toys has been transformed from a clandestine, back-room affair to a highly lucrative, accepted way to find commercial success. If you are contemplating taking a dive into the adult intimate paraphernalia ecosystem, however, there are four important things you need to know.

1. You need to find your audience.

It’s not enough to simply know what you want to sell; there are already thousands of people in this crowded sector. Your challenge is to figure out the customer base you want to attract, source the products they want, and market to them. Anything you can do to set yourself apart will be extremely helpful, including the following.

• Finding a niche client group such as moms, tech-savvy folks, the LGBTQ+ community, etc.
• Coming up with a mission or set of ideals that appeals to this demographic.
• Learning the best ways to advertise to these niche customers.
• Finding unique products that will appeal to your subgenre (for example, fantasy or anime-inspired toy themes).

This is where you can call on the powers of social media to provide low-cost or even free advertising as well as forums for your customers to coalesce into a community of loyal brand ambassadors.

2. Your sex toy business is not considered conventional.

Regardless of the types of products you sell, you need to set up a specific infrastructure when you accept online payments. After all, your customers will want to pay with credit or debit cards, via third-party digital providers like PayPal, and through recurring billing or ACH. For this to happen, you need to find a payment service provider to facilitate your customers’ purchases and ensure that your funds are securely transmitted and deposited in your account. This is true of all online sellers; however, your adult industry affiliation requires that you take things a step further.

As a sex toy seller, your online company will automatically be categorized as a high-risk business. Some lenders choose to avoid partnering with any company that represents a more elevated chance of failure or defaulting on payments. Selling sex toys falls into this designation because of the following characteristics.

• There is a higher-than-average chance of chargebacks. These fund reversals happen when buyers ask their credit card companies to provide a refund on what they have bought from you.
• There are added regulations and age restrictions requiring more work and scrutiny to enforce as well as the chance that a business might violate them and be shut down.
• There is a greater likelihood of fraud.
• This industry is volatile and subject to fluctuations and trends, putting your long-term stability into question.

Even though your business is deemed high-risk, there are plenty of reputable companies with expertise in the adult entertainment sector who will happily take you on as one of their clients. Just be aware that you may undergo further scrutiny during the application process, and expect to pay higher per-transaction fees. There may be other charges and restrictions as well, so be sure to find an affordable, fully transparent provider with reasonable costs.

3. There are things you can do to lower your fees.

While you can expect to pay more to your high-risk payment services provider, there are steps you can take to ensure a low chargeback rate. Over time, this could result in reduced costs from your processor.

• Make your shipping, returns, and exchanges policies clear, and prominently display them on your website. Many chargebacks stem from misunderstandings.
• Respond to customer questions and concerns promptly and effectively.
• Implement fraud prevention strategies. After a purchase, send a clear receipt. Use address verification and 3-D Secure protocols to further authenticate purchases.
• Use your point of sale system to analyze when and by whom chargebacks are occurring to identify possible patterns.

When you are figuring out what to look for in a merchant account and payment processor, consider finding one that provides chargeback prevention services. These can combat time-consuming and expensive forced refunds and help you to reduce their numbers.

4. Privacy is still important.

Although people are a lot more relaxed about adult products and services these days, you still need to work hard to protect your customers’ privacy. Consider every aspect of your business, from the way products are titled and packaged to the way they are described on a client’s bill. This discretion will help to inspire trust and will encourage repeat business.

Globally speaking, the sex toy industry represents almost $35 billion annually — and growing. By doing your research and finding the right products, customer base, and payments infrastructure, you too can profit from this lucrative and fun sector.