PayPal, How Would You Do It

Hi All

I plan on setting up an online store, I don't have a merchant account so plan to use PayPal the problem is working out the PP fees so that I am not at a loss.

I mean the PP fees will vary depending on the amount spent, so if someone spends £20 they will be a lot less than if someone spends £200.

Would like to know how others do it

Thanks In Advance

Dee

 

Why not just get a merchant account?

 

Dee,

PayPal charges a percentage of the total value of a transaction + a small fixed fee. The exact fees will depend on your location (us, ca, uk, aus....etc). Check out your local paypal site to find out the exact fees involved.

When you know the exact fees you can then simply add the percentage (or a bit more) paypal charges to your prices.
The other option would be to charge your buyers a surcharge for paypal transactions, but this may be illegal on some paypal sites.

While the fee on a $100 transaction is going to greater in absolute terms than the fee on a $20 transaction, percentage wise the fees are the same.

 

and remember you should be making a percentage profit on every sale so even if you lose 2-3% in paypal fees you would still be making your profit margin on every sale.

So for example (easy numbers)

Your Markup 20% (1.2 x Your Buy Price)
Paypal Costs: 2%

Item 1:

Cost £10
Sale £12

Profit = £2 - (2% of sale, £0.24) = £1.76

Item 2:

Cost £100
Sale £120

Profit = £20 - (2% of sale, £2.40) = £17.60

Also the more you sell each month the lower the Paypal fees!

 

I don't know if you will primarily getting paid from your country currency or not, but sometimes cross border fees from other countries to yours can be a lot. Someone sent me some money from another country one time and I got zapped with fees. I forget from where, but I think some are more than others. Paypal is nice but all those fees and %'s sure add up.

 

just get authorize.net or ccbill.com

 

Are they better than Paypal then?

Also do they have ready made modules for Oscommerce?

 

the person sending the money decides who pays the fee.

 

If your profit margins aren't extremely thin, I would just start with paypal until you get enough orders... then you can move up to a proper merchant account with lower per-transaction fees.

 

You can alway upgrade or downgrade your paypal account any time you want