pay pal fees and posting fees for a new shop

The Maid of Orleans

hello more of many questions that will arise whilst my grandkids and I slowly piece together a shop.
1. if an order is less than 30c and here in Australia we get charged that and 2.6% of the fee ,how do I cover that. I really dont wish to put a minium order on the shop as we will be new and unexperienced( therefore no fancy dancy new whizz bang pieces) with only selllling used Lego.
Plus at this stage we dont feel confident enough to sell outside of Australia , we were wondering if this is ok to do when we start up.
thanks

paulvdb

You can charge higher shipping costs to cover the Paypal fee.

Emporiosa

The important thing is to not specifically charge a PayPal fee (as their terms do not allow you to place a charge for accept PP fees) but they say you can charge a handling fee (usually as part of your shipping) where you put that into. I'd still recommend a store minimum as the flat fee can really eat up your revenue from the order, because you will definitely find people order just that tiny $0.20 part and paying the local shipping. $5 is a good low point as it still allows for the very small orders.

Calibrick

I had the same question for myself when I opened up shop... first thing, I thought of what shops I like to do business with as a buyer. When I bought a LOT over on another site (and then moved over here before opening shop), I avoided ALL stores with lot limits (e.g., average $$ per lot must be X) and handling fees, so I knew I wouldn't do that. I also knew I appreciated stores that had no minimum orders - one day I bought a $0.10 part only from someone - but I also came back a month later and spent over $100 at that same store. So I was pretty sure I didn't want to set order minimums based on my own buying behaviors - and really, sometimes a fellow AFOL just needs a plate or pin! ;-)

For my own part, what I decided to do was have no minimum order and no handling fees. Following what Paul said, I charge straight actual shipping costs with $0.50 tacked on. $0.30 of that covers the PayPal fee; the other $0.20 is a swag to cover the actual packaging costs, invoice printing (paper, ink), etc. In that scenario for me, it doesn't matter how little or how much a customer buys - a single $0.009 technic pin or a $200.00 set, as PayPal and BO fee *percentages* are built into my part pricing structure.

Just an alternative POV! As with anything, it's really whatever decision works best for your store model, there is no right or wrong answer. :-)

White Horse Bricks

I do exactly the same as Calibrick.

The only thing I would add is that make sure you have two Paypal account, and have one set up for microtransactions. You can set BO to get payments sent to this account for small orders. This will cut down on your Paypal fees for tiny orders.

Calibrick

@White Horse Bricks can you elaborate on the benefits of two paypal accounts and micro-transactions? I have never heard of this, admittedly. I have one PayPal account and use it for everything, so it sounds like I'm uninformed here!! Does BO push all orders under $X to one account and one order over $X to a diff account, and PayPal offers a unique fee structure based on order value or some such?

leopard37

@Calibrick You set your shipping settings so your line of which is cheaper associates with the email for the correct account. I believe the micropayments has no fee other than a set percentage, therefore once you are at the point where the 0.30 plus lower percentage is cheaper, those packages are handled by that email.

Last time I evaluated it only would save me around $2.50/month, but I should do that again because of the greater number of orders now. I didn't want my "bank" split over two PayPal accounts and have had huge issues getting the second activated.

It may be that PayPal has cracked down on their double account creation since others have gotten theirs in place, because I could start a new account with a different email, but the second I got to entering credit card or bank account information, they figured out I already existed and wouldn't let me continue.

@White Horse Bricks Do you have two separate businesses set up?

Tyson.

Calibrick

Thanks, @leopard37 ! We actually have a second PayPal account that is unrelated to our business, though honestly if it's not worth it to your store it may not be worth it to mine - cosmically we look about the same size, though you've obviously been in biz a lot longer. :-)

paulvdb

@leopard37 a creditcard or bank account can only be associated with one Paypal account. So you'll need to use a different creditcard or bank account for your second Paypal account. I think you can remove a creditcard or bank account from your first Paypal account and then associate it with the second Paypal account.

And there is a base fee of 5 cents for micro payments (amount can vary depending on currency; for my euro account it is 5 cents). But the percentage part of the fee is higher so for higher payment amounts it is cheaper to use the regular Paypal account. The exact cut-off amount depends on your country and the buyer's country. BO will only let you set one cut-off amount for all payments so you'll have to figure out for yourself what works best for you.

Calibrick

Thanks for the add'l information, @paulvdb, I'll look deeper into this!

Colorado Bricks

I have a micro payment account without issues since the beginning, in the US cut of is $12. Micro payment fees in the US are 5c +5%. It has to be a different email address and a business account.

White Horse Bricks

Bit late returning to the thread but regarding @paulvdb 's comment about one account associated with one PP account, this is not the case in the UK. I have the same bank a/c linked to both my PP accounts no problem.

It will only save you a few £ a month, particularly if you have a store minimum, but why pay more fees than you need? It only takes a few minutes to set up.