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It's Payday Everything you need to know to manage and protect your payments on ebay.

By Marcia Layton Turner

Opinions expressed by Entrepreneur contributors are their own.

Whether you're a new eBay seller or a seasoned pro with a fast-growing online empire, eBay has all the tools to make collecting and processing payments from customers faster and easier. From enabling credit card payments to finding online shipping links to tracking payments, eBay has amassed a range of services to make payment processing and tracking a snap.

Although many eBay sellers recognize that steps like inventory management, financial record keeping and shipping are important to the success of their online businesses, the truth is that payment management may be even more important.

Offer Buyers Choices
One strategy for increasing buyers' willingness to spend is to offer several payment options. "Being able to process payments, particularly in the way your buyer wants to pay you, is critical," says Jason Miner, a PayPal community specialist and the host of PayPal Radio. Limiting buyer options will only limit your sales. "Some days when you're shopping, you might want to pay via your bank account, and some days you would prefer to pay with a credit card," says Miner, just as your buyers may prefer different forms of payments on different days. Accepting only one form of payment may dissuade buyers from making a purchase if they aren't given the option to pay using their preferred means.

Since buyers typically have several eBay sellers from which to choose when shopping online, you can increase your odds of winning their business by offering several methods of payment. One simple option is PayPal, which offers buyers the flexibility to pay however they like--directly through a checking or savings account, via credit card or by tapping a balance that's already in their PayPal account (which may have accrued from their own eBay selling).

Signing up for a PayPal account is easy--and free. At, you can register for a Premier or Business Account in addition to your Personal Account. This allows you to immediately accept credit card payments from buyers. While many offline businesses have to qualify for a merchant account and pay high fees to be able to accept credit cards, eBay sellers have an advantage with PayPal. Says Miner, "PayPal has helped level the playing field for new small businesses," including eBay sellers.

By signing up for a Premier Account, you can do business on eBay under your own name; however, if you want to sell using a business identity, you need to register for a Business Account. "It's eBay policy to have either a Premier or Business Account if you're selling and accepting PayPal payments," explains Miner. For buyers, there's no cost to use PayPal, but sellers pay 1.9 percent to 2.9 percent of the item's purchase price, plus a fee of 30 cents per transaction.

eBay sellers who are also doing business offline--such as through a retail storefront--or online through their own website can sign up for Virtual Terminal through PayPal. Virtual Terminal allows you to process payments via phone, fax and e-mail, as well as online, with no setup fees, equipment to buy or long-term contracts to sign. The service costs $30 per month and provides even more payment flexibility, as buyers don't even need to have a PayPal account to initiate the transaction or make a credit card payment to the seller.

Protect Payments
While offering several payment methods can boost sales (for example, simply adding Express Checkout to your website increases sales by an average of 14 percent) you'll also want to take steps to protect yourself from fraudulent transactions.

PayPal sellers with a Premier or Business Account also benefit from the service's Seller Protection Policy for transactions with chargebacks or reversals, as long as a few conditions are met. Specifically, the sold item needs to be shipped to an eligible address within seven days of receiving payment; it needs to be a tangible item, rather than an electronically-delivered product or service; you need proof of delivery; and for items worth more than $250, you also need proof of signature from the recipient. When these conditions are met, PayPal stands behind those payments made to sellers for up to $5,000 per year. In other words, they won't be reversed. The policy applies to transactions where the seller and buyer are both in Canada, the United States or the United Kingdom. PowerSellers in the U.S., as well as those in some other countries, may also qualify for expanded seller protection, which eliminates the $5,000 per year coverage limit and expands the protection to 190 countries.

eBay sellers who use PayPal benefit from the fraud protection tools both companies have in place, including transaction screening and address verification, as well as card security code checks, which serve as the first line of defense against unscrupulous buyers.

You'll also want to protect the password you establish for your PayPal account. And as your business grows, you'll want to explore multiuser access features, which allow you to generate a login ID and password for employees. That way, they can check eBay transaction data without having access to information or accounts you want kept private; you can even set differing levels of access depending on individual job requirements.

Track Trends To Maximize your Profits
Another facet of effective payment management involves monitoring your eBay transactions. Once you've sold an item, you'll want to check its payment status in My eBay on a regular basis to know when to proceed with shipment of the merchandise.

A more useful and convenient method, however, is to download various kinds of payment data from the PayPal website. Using Paypal's history section, you can sort and view buyer payments by the day, week, month or a specific set of dates. Taking a broader view of that data can be invaluable in spotting buying trends, says Miner. "For example, you might discover from your downloads that you're getting more [money] for your Auction listings around Valentine's Day, while your eBay Store sales volume is going up around the holiday shopping season. This allows you to develop business strategies to maximize profits."

By using PayPal to aggregate your payment data under one umbrella, you'll have the opportunity to see shifts in your business that you may have missed if you were managing checks and money orders by hand. By managing payments manually, says Miner, "you lose valuable insight into how to best focus your business and grow it."

Tap Free Resources
eBay sellers interested in learning more about managing payments and growth can listen to PayPal Radio, a weekly one-hour show centered on payment practices and online selling, available on iTunes or at Archived shows can also be sorted to find specific topics or guests who appeared on the show.

Both eBay and PayPal have plenty of free tools to help you monitor sales, track payments as they come in and issue invoices by e-mail--in My eBay, simply click "Send Invoice," and in PayPal use "Request Money."

No matter what level of eBay seller you are--whether you're selling five items a week or 500--your goal in managing the payments that you receive should be safety, simplicity and speed, says Miner. Process payments quickly, protect yourself from fraud and make use of those funds immediately to generate even more sales.

Marcia Layton Turner's work has appeared in Woman's day, Health and Black Enterprise. She is based in Pittsford, N.Y.

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