Setting Up a PayPal Account on eBay

The best way for new merchants to collect money is through PayPal. PayPal, an Internet startup in 1998, created a simple payment system that allowed individuals to e-mail money to each other. Members could “load” their account with cash, then tell PayPal to say, “pay this e-mail address $10.” PayPal would look up the e-mail address, and if it belonged to someone with an account, it would transfer the money to that Set Up PayPal Account on eBay.

If the owner of the recipient’s e-mail address didn’t have an account, PayPal would send an e-mail message saying, essentially, “Come to PayPal and set up an account, and we’ll give you $10.” The perfect “viral marketing” tool! Who wouldn’t set up an account on being told by a friend or colleague that he’d be “PayPalling” money and on receiving the notification message?

There are fees associated with PayPal transactions, which vary from 30 cents plus 2.9 percent to 30 cents plus 1.9 percent, depending on your sales volume. PayPal has a much simpler fee structure than the credit-card merchant accounts (see Chapter 18), though the base rate is a little higher than for credit cards (if you do more than $3,000 in transactions a month, the rate is comparable or lower). Cross-border transactions are 1 percent more.

Although money transfers were not part of the company’s main business plan, PayPal found that people on eBay had discovered the system and recommended it to each other. It eventually became so popular that eBay bought PayPal. Today, PayPal has 65 million account holders in 45 countries worldwide; one in three U.S. online buyers has a PayPal account, and 90 percent of eBay sellers accept PayPal. An even higher percentage of regular merchants use it. And, of course, it’s easy to set up your PayPal Account on eBay.

  1.  Click the My eBay tab at the top of the page.
  2. Click the PayPal link in the Related Links box at the bottom left of the page. (Accepting PayPal means you can accept credit cards, too. If a buyer doesn’t have a PayPal account, he can pay PayPal with a credit card, and the money is placed into your PayPal account.)
  3. Click the Sign Up for a PayPal Account button.
  4. Create an account Password—you must use at least eight characters—click the check box at the bottom of the page (acknowledging that you have read the Privacy Policy and User Agreement), and then click the Register link at the bottom of the page.
  5. A page appears when the setup is complete. You haven’t finished yet, however. Check your e-mail for a confirmation message, and then click the activation link. A page opens in which you must enter your password to log in. When you do so, the Enter Security questions page opens.
  6. Similar to setting up your eBay account, you must also provide Security Questions. Choose the two questions from the drop-down list boxes, and then type the answers into the Answer boxes.
  7. You’ll be placed on your account page when you click the Submit button. (Being verified protects you against unauthorized withdrawals. You’ll be considered more trustworthy by eBay buyers and sellers this way, and you’ll be able to transfer money to and from your bank account.)
  8. Your account is currently unverified. You can verify the account by adding bank-account information; you may want to add credit card information, too. You’ll be able to transfer money between PayPal and your funds.
  9. Click the Add bank account link to see the page.
  10. Again, add your bank account information: the Bank Name, Account Type, Routing Number, and Account Number. Then click the Add Bank Account button at the bottom of the page.
  11. Though the process will seem complete, it isn’t. It still has a few days to go since PayPal will place a few small deposits into your bank account—essentially, only a few cents. When you see the warranties—in a statement, online, or through phone banking, perhaps—log back into your PayPal account and click the Confirm Bank Account link that appears, and then enter the amounts deposited (thus proving you have access to the report).
  12. Follow a similar procedure to link a credit card to your account, beginning with clicking the Add credit card link. This process takes a few moments, with eBay contacting the credit-card network to verify the card.

PayPal provides several services to assist and protect eBay merchants, including the following:

  1. Automatic PayPal logo insertion When you create an eBay listing. If and select PayPal as a payment method, the logo appears automatically.
  2. Offer PayPal Buyer Credit PayPal pays you, and the buyer pays PayPal over time.
  3. Seller Protection Policy PayPal guarantees you won’t be hit with a chargeback caused by fraudulent use of an account as long as you follow specific steps (require a delivery signature for goods over $250, keep proof of delivery, and so on).
  4. Shipping Center Calculate costs, pay for shipping (UPS and the post office), and print packing slips.
  5. ATM/Debit Card You can get a free debit card that allows you to take money out of your PayPal account at any ATM or store that accepts MasterCard. Plus, if you use PayPal Preferred in your eBay listings (see Chapter 5), you’ll earn 1% back on your purchases.

There are other handy services, too. See the PayPal site for more information Set Up PayPal Account on eBay.


A:Postage must be added to your cost of goods sold and deducted from the ultimate sales price (the winning bid in your eBay auction) when the item is sold.



Preparing to Sell on eBay

The Perfect Online Product

Creating Your eBay Presence

Listing Your Items Effectively on eBay

Creating an About Me Page on eBay

What Makes a Good Online Product?

Monitoring, Modifying, and Manage Sales on eBay

Setting Up a PayPal Account on eBay

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