# Why pay when you can use pay-pal for free



## paulamandel (Mar 18, 2010)

My next step on my website is to set-up the online store, but I am still wondering if there are actually any benefits to pay monthly to have an online store, like yahoo’s Merchant Solutions, or should I just put pay-pal buttons for free, avoiding monthly fees.


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## vadan (Mar 9, 2010)

Hey, you are in USA and I am in UK but what you must remember is whichever merchant you go with... nothing is free.. PayPal still charge a transaction fee. What I would suggest is looking around at merchants, working on forecat figures for sales and taking averages for all the merchants. See who comes up cheapest overall and go with them. With a merchant yo may also have more leverage in discounts for quantity where as PayPal is fixed.

V


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## jiarby (Feb 8, 2007)

LOL that you think pay pal is free!


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## mrbigjack50 (Jun 9, 2008)

I am with Glenn on that one Bahaha.. they charge like 3% or something, but, I strictly use it for all my online transactions : )

Worth it because keeps things organized, print labels easily and secure.
Love using their debit card to : )

Is a pain thou when they take $50 bux off a 1200 job errr


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## paulamandel (Mar 18, 2010)

LOL! Had no idea pay-pal would end up being more expensive, I guess i'll have to do more research..Thanks!
Plus being able to do discounts sounds good.


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## Teeser (May 14, 2008)

I think Paypal Buy Now buttons are pretty cheesy especially when you can find a not to expensive hosted solution. A yahoo store is no bargain and last time I looked into Yahoo they had more restrictions than other options.


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## Neon Bible (Mar 24, 2010)

Pay Pal is easy if you need to set up a cart on the fly. But they charge 3% compared to a typical merchant account like innovative merchant solutions or merchant warehouse that will in the 1.5-1.75% rate


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## vadan (Mar 9, 2010)

But don't forget... With merchants accounts you have a service provider (who takes the payment) and a gateway (who processes and authorises the transaction). Both charge so you ned to do averages whoever you go with.

You will also need an IMA (Internet Merchant Account).

Even though paypal is popular, proper merchat services are always favoured. This is te case in UK atleast.


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## Chap Ambrose (Oct 21, 2008)

To add more confusion, PayPal does have a payment gateway service, PayPal Website Payments Pro, and it's considerably easier to accuire than some of the other gateways out there.


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## ScaredPanda (Dec 5, 2009)

We have a PayPal business acct set up and all our transactions are handled via the WP Ecommerce plug-in in Wordpress. Granted, we are using Wordpress, but PayPal business accts are easily integrated into your market via a key/value pairing. 

When someone clicks check-out from our website we then push them over secure http to PayPal and the payment is then handled from there. Users can either sign in with their PayPal user id or pay with a credit card. This also gives us the option to print shipping labels for these orders as well.

In the end we do pay a percentage for processing these transactions to PayPal. But I find that being a boot strapped start-up this is one of the easiest and cheapest methods available. This also allows us to implement a secure, reliable and simple shopping cart while giving us time to build up our brand until we decide to bring the sales transactions in-house.


Hope this helps ya out.


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## saulnier31 (Jun 30, 2008)

I've used Yahoo Merchant and they aren't cheap. You pay the monthly fee, plus a 1.5% transaction fee, then if you use paypal, they also charge you a 2%-3% fee as well. So it starts to add up. There are many solutions out there.

I use one for the shopping cart. It costs about $50 a year with no transaction fee and I use paypal as the gateway. Still at 3% it's pretty cheap compared to the rest out there.

So do a bunch of research and see what works best for you.


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## jiarby (Feb 8, 2007)

No offense intended to anyone but my perception when I see a website that only accepts payment via PayPal (rather then a standard merchant account) I think that the site is run by low-volume amateurs. 

If you are worried about expensive merchant fees then you have your prices set too low. Merchant accounts, websites, hosting, etc... are all part of your normal overhead expenses....just like electricity, internet access, phone service, etc. 

You have to spread all your overhead costs across each one of the shirts you sell every month. 

It's like this:

Say you want to open a hamburger restaurant. If you only sell 10 hamburgers a month then they had better cost $10,000 each or you are going to go broke fast. You have to pay for your building, insurance, end all that kind of stuff BEFORE you even consider the actual costs of the goods themselves (meat, buns, pickles). If you sell 100,000 hamburgers a month than you may be able to sell the exact same burger for $1 because you can spread the over head costs across more units. 

Your merchant account costs are as much a part of the price of selling online as the shirt itself. Raise your prices a buck, or start more units so that your gross profit is high enough that a percent or two isn't a killer. 

My merchant fees average $350-500/mo usually over the last 3 years... but I certainly encourage large orders ($1k+) to write a check if possible.

Merchant account tips:
1. Never rent/lease equipment! Buy it upfront. 
2. Do not sign a contract with any kind of termination fee or cancellation fee. 
3. Do not sign a contract with equipment return fees. They treat your eqipment separatly from your merchant acount. 
4. Shop around! Get 3-4 quotes for same service. Do not allow them to see your other quotes. Tell them to pitch their best offer. YOU will compare and choose. 
5. They are good at flim-flamming fees so you think you are getting a good percentage rate deal but find that they then added in a "transaction fee" or "statement processing fee". 
6. READ THE FINE PRINT. If you do not understand it then find someone that does to read it to you.


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## paulamandel (Mar 18, 2010)

Thank you everyone, very helpful. I think since pay-pal doesn't have any monthly fees that would be better for a beginning since I don't even know how my sales would go, I mean imagine i pay merchant solution and not make sales for months, that would be depressing. Besides for a beginner merchant service provider/ gateway/ Internet Merchant Account sound a little bit confusing, i'll just stick with the easy cheesy pay-pal and see how it goes.


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## vadan (Mar 9, 2010)

Jiarby, that's really good, sound advice. Quite honestly majority of new businesses do not account for their total overheards within their cost price. Your per product cost price should include every running expense as well as the material cost as said.

Another service, although not hugely favoured by consumers is Google Checkout, it does require programming for checkout but they also offer buy now buttons. You also have access to email payments and are 0.5% cheaper than PayPal... BUT, I would still rather pay that bit extra to PayPal, Google as a business can't be trusted in my books!

If you're starting up, start small, minimising overheards is always an issue, but make sure the service you choose suits your needs fully.


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## Neon Bible (Mar 24, 2010)

I have bought terminal equipment on ebay for real cheap a few times and never had a problem.
Yes never lease equipment.


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## SHIROINEKO (Mar 31, 2010)

Well, I use Paypal on my site.

So far so good.


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## TeesForChange (Jan 17, 2007)

You will have to pay PayPal for individual transactions, but that's totally separate from the shopping cart that you use. There are plenty of free shopping carts out there (zen cart, cube cart) or ones that charge a monthly fee (big commerce, yahoo stores). If you have few monthly orders you can start out with a free cart and then swtich to a paid one if the free one doesn't give you all the features you want.


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