Why is only Paypal available as a payment method on Folksy? When margins are very small, Paypal fees are high, and on top of listing and Folksy commission it makes me wonder if its worthwhile selling here. I payed 33p on a £3.80 transaction that included postage. Do other sellers factor in Paypal fees to their listing prices and P&P?
Of course we factor all our fee’s that’s all part of the costs of running a business. Any business that doesn’t factor in ALL it’s overheads is doomed to failure.
Folksy fee’s, paypal fee’s, cost of equipment, cost of raw materials to make the items, time, cost of packing supplies, cost of getting the item to the Royal mail or courier. It all has to be factored into your pricing and don’t forget to factor in for your profit as well.
If you are not covering all these things and making more ie profit than you are spending you will be running at a loss and in the end go bankrupt.
Oh and with paypal you get Seller protection as long as you follow their rules ie sending an item to the address on the paypal receipt.
I’ve never looked into it in much depth but I suspect that most of the other payment processing companies would charge a similar percentage if they are set up to charge per transaction (some like sagepay charge per month and I imagine that sorting that out for a shared market place would be a logistical nightmare). Paypal has the advantage of being widely recognised and trusted by customers.
If you are selling low value items you might be better off switching/ applying for paypal’s micropayment option, it has a lower set fee (5p instead of 20p) but higher percentage (5% rather than 3.4%). The micropayment option would have cost you 24p not 33p. Its meant for people who have most of their transactions under £10.
What alternative payment method would you prefer? Other than asking buyers to pay by cheque/bank transfer, I’m not sure which other methods there are that would be cheaper.
Even bank transfers and cheques will cost you if you have a business bank account (unless you are in your first year - 18 months free period)
So paypal micro would be better for you if your item prices are low
As a buyer myself I look for the PayPal logo. I’ve always done this and generally unless it’s a big or known company I don’t pay via my card.
I have no problem paying a fee to PayPal for a transaction. Cheques are a hassle I find. You have to travel to the bank to put the Cheque in and then wait for it to clear before you send your customers package. I like to get packages posted in a timely manner. x
I have a business account with HSBC and although there is a charge for cheques bank transfers are free.
(I have had the business account for well over the 18 months free banking period)
If you’re selling a lot of items under a fiver, I’d apply for Paypal’s Micropayments ( https://www.paypal.com/uk/webapps/mpp/micropayments ), it’s 5% + 5p per transaction under £5, so your fee on the £3.80 sale would have been 24p instead of 33p, which is the standard 3.4% + 20p
Credit or debit card transactions would be an option as on the other popular site beginning with ‘E’ we are not supposed to mention. I just find it a bit odd that Folksy opted to offer one system only - and to an organisation that has been part of Ebay.
I have made a profit, and certainly wouldn’t go bankrupt! I was just surprised at the amount of the fee.
JoSara - thank you for being helpful - I didn’t know about this option, I will look into it.
Hi - I have no problem paying a fee, I was just taken aback at how much they charged. I wish I had shares in Paypal!
The ‘E’ site charge you 4% + 20p for handling payments made via their check out option rather than paypal so slightly more expensive than if it had be paid via Paypal (and with no micropayments option for sellers). ‘E’ was set up in 2005 but didn’t set up the direct checkout until 2012, Folksy was started in 2008 so maybe in a few years it will have grown enough to be able to set up a direct payment facility, we’ll have to wait and see. Until then yes buying shares in Paypal seems like a good idea!
You still end up with processing charges even if you don’t use paypal
Many business bank accounts will charge for every cheque you pay in, often around 75p-£1.50. Plus the cost of a trip to the bank or envelope and postage, plus waiting a week before you can ship the goods.
If you have a remote credit card terminal with Worldpay or whoever they will have a system you could use for your own website - charges are similar to or slightly above Paypal. No fee advantage there, even if Folksy set up that option for us.
Even ebay defaults to Paypal, though they give sellers the chance to have other options too. Imagine how much programming there is for that to work properly! Imagine if Folksy fees were raised as high as ebay to cover the cost of making it work!
Anyway, I am quite happy with Paypal: the customers have heard of it and so it makes us appear to be a bit more trustworthy too. And all the income from online sales is in one place, so easy to keep track of and for end of year accounts. Oh, and remember they also do currency conversion too.
Ingli I’m afraid if 33p seems like a big fee then I suspect as Eileen says you haven’t priced your items properly. It certainly should not have been a surprise.