Payment: Paypal & other options
Saturday 07 November 2009
by SaleHoo.com
Hi everyone my name is Karn Evans and I am from Auckland, New Zealand.
I am 23 years old working full time in Logistics and have been successfully using Salehoo for two months now. For a year I have trialed numerous wholesalers by blindly searching online. With many let downs on quality, after sales service and the legitimacy of particular wholesalers.
For many of us including myself the internet can be a daunting place coming from the norm of retail purchasing. After just my first month of using Salehoo I got to fully understand all the benefits that came with membership.
Not only do you have access to over 8,000 suppliers, but the forums are amazing, you can literally ask about any products and you will have your questions answered by their own expert power sellers, how priceless is that. Another awesome feature is their “Weekly Wholesaler Review” where Salehoo will send you an email about a review of one of the suppliers in their network. This is how I came about finding my source. Since then I have been consistently importing shipments and making between 100 – 150% profit on each item sold.
I truly believe you could not make a better investment, whether you are already a seasoned importer looking to expand your network or just starting out in the game. With the “unconditional 56 money-back guarantee” seriously what have you got to lose?
Want to be the next SaleHoo success story?
We all love getting paid...but sometimes it's not that simple. Choosing which payment methods you accept effects how likely you are to get cheated and how much money you have to pay for the transaction.
In this newsletter, we'll take a close look at all the main payment options available, and weigh up which ones have the most advantages.
What options do I have?
Common payment methods on eBay include PayPal, Credit card, personal checks, cashier's checks, or money orders.
Each payment method has its own advantages and disadvantages and you will need to choose which ones are going to work best for you. As an eBay seller, the more methods you offer, the more convenience you provide to buyers. In saying that, however, there are some methods which will just be a downright hassle to you, despite the usefulness to the buyer!
PayPal
Alright I confess: I love PayPal. As a somewhat impatient person, PayPal is a source of great delight to me! And I'm not the only one. PayPal now have over 50 million members worldwide, and have, unsurprisingly, become the preferred method of payment on eBay. It's become such a phenomenon worldwide, that it's almost a currency in itself! Essentially, PayPal is an online bank that provides a fast and easy payment method. If you accept PayPal, you automatically accept the major credit cards: Visa, American Express, Mastercard and Discover.
Paypal is, therefore, a fantastic development for small businesses. Pre Paypal, businesses wanting to accept credit cards had (and still do) to go through a long and complicated process (not to mention costly!) of setting up a merchant account. Because of the costs, many businesses were unable to set up account, and had their business limited by not being able to accept credit cards.
But Paypal has changed all of that. Incredibly, you can have a Paypal account up and running in quarter of an hour.
Aside from the ease of setting up, the main advantage of Paypal is that it is safe.
To pay someone using your PayPal account, all you need is their email address. You simply tell PayPal who to send the money to, and they do the rest.
The beauty of this system is that the transactions are carried out between the two email addresses - the seller's and the buyer's. There is no need to exchange sensitive information - no account numbers or credit card numbers need to be exchanged.
In fact, many eBay users won't purchase from a seller who doesn't take PayPal as it is the only method they trust. PayPal offers several types of accounts. In order to accept credit cards via PayPal, you must have a Premiere or Business account www.paypal.com/So that's my pick - but I've listed the pros and cons of ALL the payment options available below, so you can decide for yourself!
A Comparison of Payment Methods Available
| Payment method | Why you should | Why you shouldn't |
| PayPal | Quick, secure payments using either credit card of bank account. Traceable payment. You can track the status of your payment using My eBay or your PayPal account. You pay directly from the item listing and payment is deposited directly into the seller's account. Doesn't require you to use your credit card online. Seller's don't see your credit card number. Up to $1,000 in free coverage. Paypal offers buyer protection, if an item arrives damaged, or not at all, the buyer will be reimbursed. |
PayPal takes a cut of your proceeds - usually 2.2%. If you are selling small-cost items then you might find that PayPal erodes into your profits too much. |
| Credit Card | Quick & easy payments Identity and purchase protection (the level of protection depends on the company). |
You will have to set up a merchant account: a costly and time-consuming process. |
| Personal Check | Simple to carry out. Everyone has a check book. |
Personal check risky for sellers. Time delay. |
| Cashiers Checks & Money Orders | Payment is traceable to a particular mailing address and provides proof of payment. Covered up to $200 under the eBay standard Purchase Protection Program (minus $25 for processing costs). Most banks offer a stop payment service if problems arise before the check is cashed. Some money order services may have the option of stopping the payment if problems arrive before the payment is cashed. |
Delay while funds are being cleared. Usually 7 working days. Payment almost impossible to recover in cases of fraud. Involves more running around There is a possible of getting a counterfeit money order |
| Cash | No fees |
You are unlikely to see the money. If it's cash on delivery, you risk the buyer simply not paying. If you take cash in any other circumstance, it's very likely you'll never see it again. |
How to receive a check payment
- The buyer gives the seller all the information from one of his checks via phone or email.
- The buyer then authorizes the seller to write a check for the purchase.
The authorization is for a specific amount. - The seller inputs the buyer's info into a check software program then prints the buyer's check using check forms and a computer printer.
- The seller signs the check on behalf of the buyer and deposits it.
- The seller waits for the check to clear and then sends merchandise.
**Warning**
eBay does not endorse cash or cash wire transfers as a payment method. Because cash payments don't provide any proof of payment, there is little or no remedy for transaction problems. eBay's Standard Purchase Protection Program does not offer protection for a cash payment.
Workbook
1. Work out the best payment method for your item:
- Write down the average amount you are selling your item for
- Multiple this amount by 2.2% (PayPal's average cut) and then divide by 100. Then take this
amount off your selling price. How much are you left over with?
Price x 2.2/100 = A
A - Price = B
Minus all your expenses (E) off this amount (B) also.
B - E = Total Profit.
Are you still making a profit with Paypal? If not, have a look at the viability of some other pricing options. For example, do you live near a bank? If yes, then money orders could be a good option. If not, check out setting up a merchant account at any of the links below, then consider accepting personal checks.
Helpful Links
It's all very well to know HOW you're getting paid. But what else can you do to ensure buyers do actually pay when and where you want them to? Learn all about it next week!
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