Ebay Makes Paypal Mandatory for Sellers

Scared you, right? Well if you're a seller on eBay AU or eBay UK, you've already been met with this fate. Yesterday, eBay announced that all sellers on the ebay.uk site must accept PayPal to sell on the venue. eBay AU's announcement came just a month earlier.

What does that mean for US sellers? Historically, eBay tests new features and/or majors changes on eBay UK about 6 months to a year prior to introducing it on eBay.com. So.....

eBay.com sellers MUST EXPECT that PayPal will be a required payment method to sell on any of their auction sites in the next couple of months.

What does this mean?

Well, probably not all that much. eBay has been trying to make themselves into Amazon.com for quite a while now. Amazon only processes their own payments, but it's included in their fees. EBay, on the other hand, will allow other payment methods other than PayPal.

In fact, our most successful clients all accept PayPal. Yes, there is a bit more fraud to deal with, but you should already have a third party insurer to back you up in case this happens. We still see that when presented a choice between CC and PP, over 80% of eBay purchases (on average) will go PP.

The only thing to worry about is if PayPal will be raising their rates. I doubt it, since PayPal is ever trying to expand their off-eBay business, and trying to compete with other merchant service providers.

Bottom line? Not much to worry about here... Read More...

EBay Powersellers: Don't Forget to ENROLL in Expanded Seller Protection

Early February, PayPal announced it would be giving special benefits to powersellers. Especially of interest, transactions without confirmed addresses would qualify for Paypal Seller Protection.

Well, it's finally come to pass. Just remember...you have to sign up for it! Enroll for expanded seller protection here.

Read the following excert from the eBay Powerseller Program Benefits page to learn more:

PowerSellers that reside in the United States, United Kingdom, Canada and Hong
Kong with a registered PayPal account in one of these countries that is linked
to their eBay account are eligible for expanded PayPal seller protection against
claims, charge backs, reversals for unauthorized payments, and merchandise not
received. The expanded protection covers transactions on eBay paid through
PayPal. It's free, there's no annual limit, and transactions no
longer require confirmed addresses to be covered.

Read More...

EBay and Paypal Changes that Will Affect your Holiday Sales and Q1

Why, oh why, does eBay have to mess with things during the most important months of the year. I don't think I'll ever understand it. I've been reading a lot about the recent and upcoming changes to eBay and PayPal, and I decided I should compile a list of ones that will affect business as we know it.

1. PayPal recently announced it will be delaying "select" transactions for up to 24 hours. From what I've heard thus far, buyers are not notified of the delay via email. I have heard reports that it shows up in the buyer's PayPal as "pending." I think this change is going to drastically increase customer service emails and wreak havoc on your DSRs (Detailed Seller Ratings).

2. *Sigh* EBay announced it will be making major changes to the checkout. It sounds like it will actually be a beneficial change, but why change the buyer experience at such an important time? Luckily for our Laris E-commerce Management Software users, you won't be using eBay's checkout anyway ;).

3. EBay Neightborhoods - EBay is dabbling in mixing social networking with e-commerce. While this is definitely the way of the future, and one of my favorite parts of today's web 2.0 revolution, eBay didn't really hit the mark here. They got the social networking part down, combining eBay groups, guides, and discussions, but the e-commerce part is lacking. It just diplays a complete mess of listings with little organization. For this to be at all useful to boost sales, they're really going to have to do a lot of work on the e-com module within Neighborhoods.

While this change actually won't be impacting your holiday business much as it is now, it's something to look into as it evolves.

4. Some Good News!!! EBay is actually slashing rates on insertion fees for the next two weeks by 33%. Auctionbytes.com reported that a major factor in the decision was to "see what happens" and also to ensure that sellers will be pushing a wide variety of inventory for the holiday season. NOW is the time to test out product lines for the holidays on EBay.

5. EBay is testing longer BIN options on auction style listings. Normally, a BIN will disappear after the first bid is placed, making it useless to to a BIN on an item that normally gets a lot of bids. The most prominent experiment seems to be on the Austrialian EBay site where they are leaving the BIN available until the bidding reaches 50% of the BIN price. I'm game for this one =). EBay is currently testing difference variations in a few categories on the US and Canada sites.

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That's all for now. As if you didn't have enough to think about going into this holiday season, right? Just make sure to keep these points in mind as you refine your sales planning. I'll be continuing to cover the impact of changes to the selling environment as we head through Q4 and into Q1. If you have anything I missed, please share it with everyone in a comment! Read More...

Paypal to Raise Website Payments Pro Transaction Rates

On Septmeber 1, 2007, Paypal will raise their fees for their Credit Card transaction processing service Paypal Website Payments Pro. This will not effect regular Paypal rates.

Auctionbytes reported the change:

"...monthly service fees for Website Payments Pro and Virtual Terminal will increase from $20 to $30 per month. Transaction prices will remain at $0.30 per captured transaction, but a $0.30 fee will now also be assessed on all successful authorizations that have not been captured within 29 days. In addition, Virtual Terminal transactions will cost between 2.4% and 3.1% depending on processing volume. Currently, those fees are set at 2.2% - 2.9%."

Is it time to evaluate switching? It depends on what your margins and dollar value of products are. In my opinion, Website payments pro is the best way to go for integrations with your system for Credit card processing on both your website and eBay. The hidden fees that most other CC processors charge rack up very fast, and their rates usually don't end up being what they say they are.

However, if you're only doing a small amount of transactions at a higher dollar value, the extra cost for the convenience is not justified.

It looks like our business units (and most of our clients) will continue to use Paypal WPP, but I suggest running the numbers to see how it will impact your profitability. Read More...

Reducing Your PayPal Fees with Merchant Rates

I'm always surprised at how many of our clients don't know how to take advantage of PayPal's Merchant Rates, so I will spell it out in a bit more detail and provide some strategies to reduce your overall transaction fees.

Firstly, let's go over PayPal Merchant Rates. Rule #1: You must APPLY with PayPal to take advantage of the reduced rates! I can't tell you how many of our customers assume they don't qualify for the reduced rates because they haven't seen it automatically change. The requirement is only 3k per month and you only have to qualify once!

Here's the rate table for reference:

$3,000.01 USD-$10,000.00 USD
2.5% + $0.30 USD
$10,000.01 USD-$100,000.00 USD
2.2% + $0.30 USD
> $100,000.00 USD
1.9% + $0.30 USD

To Apply for your merchant rates, you only need to have done 3,000 in sales in the previous calendar month. Once you get your new rates, you don't necessarily even have to maintain the volume. One PayPal's site, they threaten to downgrade you if you drop below, but we have yet to hear reports of someone being downgraded.

Finding the application for merchant rates is always a fun little scavenger hunt. The easiest way I've found is to sign into PayPal, click on the "Fees" link at the bottom of any page, click on the link under Premier/Business account that says "1.9% to 2.9% + $0.30 USD," and then click on the link near the bottom that reads "Merchant Rate Criteria." There is an application link on that page.

Added Tip for Sellers who use DropShipping

Use your PayPal debit card to make your purchases from the dropshipper. The 1.5% cashback you'll get every time will reduce your effective transaction fees for each sale. Read More...