Somehow, you have to get paid. The best way for new merchants to collect money is through PayPal. PayPal, an Internet startup in 1998, created a simple payment system that allowed individuals to e-mail money to each other. Members could "load" their account with money, then tell PayPal to, say, "pay this e-mail address $10." PayPal would look up the e-mail address, and if it belonged to someone with an account, it would transfer the money to that account.
If the owner of the recipient e-mail address didn't have an account, PayPal would send an e-mail message saying, essentially, "Come to PayPal and set up an account, and we'll give you $10." The perfect "viral marketing" tool! Who, on being told by a friend or colleague that he'd be "PayPalling" money, and on receiving the notification message, wouldn't set up an account?
note There are fees associated with PayPal transactions, which vary from 30 cents plus 2.9 percent to 30 cents plus 1.9 percent, depending on your sales volume. PayPal has a much simpler fee structure than the credit-card merchant accounts (see Chapter 18), though the base rate is a little higher than for credit cards (if you do more than $3,000 in transactions a month, the rate is comparable or lower). Cross-border transactions are 1 percent more.
Although money transfers were not part of the company's main business plan, PayPal found that people on eBay had discovered the system, and were recommending it to each other. It eventually became so popular that eBay actually bought PayPal. Today, PayPal has 65 million account holders in 45 countries around the world; one in three U.S. online buyers has a PayPal account, and 90 percent of eBay sellers accept PayPal. An even higher percentage of regular merchants use it. And, of course, it's easy to set up your own account.
1. Click the My eBay tab at the top of the page.
2. Click the PayPal link in the Related Links box at the bottom left of the page.
Accepting PayPal means you can accept credit cards, too. If a buyer doesn't have a PayPal account, he can pay PayPal with a credit card, and the money is placed into your PayPal account.
5. A page appears telling you that your account has been set up. You haven't finished yet, however. Check your e-mail for a confirmation message, and then click the activation link. A page opens in which you must enter your password to log in. When you do so, the Enter Security questions page opens.
6. Similar to setting up your eBay account, you also need to provide Security Questions. Choose the two questions from the drop-down list boxes, and then type the answers into the Answer boxes.
Your PayPal account page
Your PayPal account page
7. When you click the Submit button, you'll be placed into your account page (see Figure 2-1).
note Being verified protects you against unauthorized withdrawals. You'll be considered more trustworthy by eBay buyers and sellers this way, and you'll be able to transfer money to and from your bank account.
Your account is currently unverified. You can verify the account by adding bank-account information; you may want to add credit-card information, too. You'll be able to transfer money between PayPal and your accounts.
Click the Add bank account link to see the page in Figure 2-2.
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10. Again, add your bank-account information: the Bank Name, Account Type, Routing Number, and Account Number. Then click the Add Bank Account button at the bottom of the page.
11. Though the process will seem complete, it actually isn't. It still has a few days to go since PayPal will place a couple of small deposits into your bank account—essentially only a few cents. When you see the deposits—in a statement, online, or through phone banking, perhaps—log back into your PayPal account and click the Confirm Bank Account link that appears, and then enter the amounts deposited (thus proving you have access to the account).
12. To link a credit card to your account, follow a similar procedure, beginning with clicking the Add credit card link. This process only takes a few moments with eBay contacting the credit-card network to verify the card.
PayPal provides a number of services to assist and protect eBay merchants, including the following:
■ Automatic PayPal logo insertion When you create an eBay listing (see Chapter 5) and select PayPal as a payment method, the logo appears automatically.
■ Offer PayPal Buyer Credit PayPal pays you, and the buyer pays PayPal over time.
■ Seller Protection Policy PayPal guarantees you won't be hit with a chargeback caused by fraudulent use of an account, as long as you follow certain steps (require a delivery signature for goods over $250, keep proof of delivery, and so on).
■ Invoicing You can send customers invoices, which are paid through PayPal.
■ Shipping Center Calculate costs, pay for shipping (UPS and the post office), and print packing slips.
■ ATM/Debit Card You can get a free debit card that allows you to take money out of your PayPal account at any ATM machine, or at any store that takes MasterCard. Plus, if you use PayPal Preferred in your eBay listings (see Chapter 5), you'll earn 1 percent back on your purchases.
There are other handy services, too. See the PayPal site for more information.
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