In recent years, the internet has opened up a whole new world of opportunities for individuals looking for ways to earn money. One such opportunity is through various online marketplaces that allow for online selling. While there are many perks to online markets, there are a few legalities that buyers need to be aware of.
How Do I Make Money As a Merchant?
If you are interested in becoming a merchant and selling your products or services on the internet, the first thing you need to do is register with a payment processing service like PayPal. When you register with PayPal, they will provide you with a unique ID. You will then use this ID when completing transactions with PayPal.
As a merchant, you will carry out three tasks:
- Selling
- Bookkeeping
- Purchasing
Selling is the process of bringing a buyer and a seller together and facilitating the transfer of goods or services. In the world of e-commerce, the sales process typically involves the seller offering the product or service for sale to the general public. The buyer then makes an offer to the seller, and once the terms are agreed upon, the transaction is completed and money is exchanged accordingly. Bookkeeping is the process of monitoring and recording financial transactions, often online.
Purchasing is the process of paying for products or services. As a merchant or business owner, you will commonly use PayPal to handle all your purchases since they have an extremely streamlined and easy-to-use interface.
Once you have registered with PayPal and established a business account, you can then start accepting payments from customers. You can accept both online and offline payments through PayPal. You will just need to set up your online store with a payment processor that accepts PayPal transactions.
The Good, The Bad, And The Ugly
PayPal has a pretty good reputation among merchants as a safe and secure way to take payments. Also, since they are a global payment system, you can often find solutions to specific problems if you have questions about their operation. However, they do have their quirks that can be a pain to work around. Here are some of the things you need to know about PayPal.
- The Bad
- They can be quite frustrating to work with if you are not dealing with their approved payment processors.
- They do not give you much information about your customers and instead suggest that you ask them for their personal details.
- Their ‘cutoff’ for small transactions is quite high.
- The Ugly
- It can be hard to find a way around their restrictions when you are a new business.
The Dreaded 30% Cut
When a customer makes a purchase through your online store, you will receive payment from the processor (the company that handled the transaction for you). The processor will then give you a 30% cut as payment for bringing in the business. You will need to negotiate this with the processor directly since it varies from business to business. Some processors may give you a 20% cut, while others may want 30% or more. This is why it can be frustrating to work with PayPal since their cut is baked in as a percentage and will not be reduced regardless of how many transactions you complete. This may not be the case with other payment processors.
PayPal is undoubtedly the most popular online payment processor since it is extremely easy to use and has a worldwide reach. Also, since it is a wholly owned subsidiary of eBay, it is protected by the same payment services provider as well. This gives consumers additional security and peace of mind when making transactions with PayPal since they are protected by the same company that accepts all the credit cards we are all used to using every day.