How to reduce paypal fees?

15 replies
I offer writing services and I am losing a lot of money on paypal. For example when I get paid $20 for 3 articles I actually get $18.92 and the rest is towards paypal fees. This amount adds up to a lot of money at the end of the month. I know you have to pay paypal fees to use it, but is there anyway we can reduce it?
#fees #paypal #reduce
  • Profile picture of the author fitz10
    This isn't really a direct way to reduce the fees but if you're in the US don't forget to count those PayPal fees on your taxes. I was able to reduce my tax burden a bit just by claiming those as business deductions. Money not spent is money earned in the long run.
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  • Profile picture of the author Tina Golden
    Once you make a certain volume level, you can get lower fees. Until then, the smart thing to do is to price your service accordingly. If you want to get $20 for 3 articles, charge $22.

    You need to factor all the costs of doing business into your pricing structure.
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  • Profile picture of the author imdomination
    As Tina says, you do have to factor the PayPal fees in. There's no real way to get around them other than higher volume. Business and personal accounts also have different fee levels if I remember correctly, with personal accounts having lower fees if I remember right.
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  • Profile picture of the author SteveJohnson
    Originally Posted by jimsmithtoday View Post

    I offer writing services and I am losing a lot of money on paypal. For example when I get paid $20 for 3 articles I actually get $18.92 and the rest is towards paypal fees. This amount adds up to a lot of money at the end of the month. I know you have to pay paypal fees to use it, but is there anyway we can reduce it?
    You could have your client send you a check or money order.

    I'm all for reducing the costs of doing business, but all-in-all, for most small business people PayPal's fees are very competitive if not substantially lower than a merchant account.

    Bottom line is if you want faster access to your money and you want the convenience that comes with enabling your customers/clients to pay with a card or via PayPal, you have to pay for it. If the size of the fee affects your margins, you'll need to raise your rates (thus paying even more PayPal fees ).
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    • Profile picture of the author Vijay M
      Ask/Request you clients to pay you via mass payment.

      Mass payment is a paypal feature which allows us to incur only 1$ paypal fees, irrespective of the $ amount sent/received. Otherwise, the fee paypal gets is a %age of the amount transacted, which would be much more than the 1$.

      It is good to educate your clients about this feature, to save you both on some paypal fees. I found a fantastic video by warrior Jay which explains how to do this clearly.

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    • Profile picture of the author Robert Michael
      Originally Posted by SteveJohnson View Post

      You could have your client send you a check or money order.

      I'm all for reducing the costs of doing business, but all-in-all, for most small business people PayPal's fees are very competitive if not substantially lower than a merchant account.

      Bottom line is if you want faster access to your money and you want the convenience that comes with enabling your customers/clients to pay with a card or via PayPal, you have to pay for it. If the size of the fee affects your margins, you'll need to raise your rates (thus paying even more PayPal fees ).
      there are fees for cashing checks/money orders though too.. LOL
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      • Profile picture of the author SteveJohnson
        Originally Posted by Whos That Guru View Post

        there are fees for cashing checks/money orders though too.. LOL
        There are fees for everything - and always will be. Probably something they ought to add to the "death and taxes" list, eh?
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  • Profile picture of the author onegoodman
    I own a website similar to fiverr where people sell on it.

    I am really suffering of PayPal fee specially for international payment in other currency. PayPal are getting 10% fee out of $5. My commission end to be zero after PayPal is done with the transaction !!!

    I am honestly consider replace PayPal with Credit Card direct payment, but I am concerned many people still more comfortable with PayPal.

    Yes, if you made over 3000 sale they reduce the fee but the reduction is almost nothing less than 1%

    I think unless you make 1,000,000 sale a month you don't have enough power to push PayPal to give you a real good fee
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  • Profile picture of the author Istvan Horvath
    Originally Posted by jimsmithtoday View Post

    [...] and I am losing a lot of money on paypal. [...]
    You will lose even more if your mentality will not change. :rolleyes:

    Just for the record: you are NOT losing any money. Period. You are paying a fee for a service to be able to run your business. It' a business expense. Business people, when making a business plan, calculate the expenses/investment and the revenue.
    Revenue minus expenses = profit.

    Compare the $1.08 expense (Paypal fee) to waiting weeks for a cheque or money order, going to the bank to cash it, maybe even losing on the conversion rate (if I send you CAD).

    If it is OK that you are paid for a service you provide (article writing) it is equally OK to pay for the service that facilitates the payment between you and your client.

    P.S. Normally, you should be charged for the business-like thinking education that we provided for you in this thread... but we are generous and gave it to your for free :p
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  • Profile picture of the author laurencewins
    I often have people "gift" me the money and that helps a bit. However, the fact that most people deal in US dollars and I am in Australia hurts but I have now changed so I charge everything where possible in Aussie dollars. It's the bidding sites that hurt the most but I agree that the fees are the cost of doing business and I include them in my charges.
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  • Profile picture of the author Robert Michael
    HAHA agreed my friend. you die and finally think you get to escape the fees and then BAM! more burial plot taxes... only its your family who is stuck with them this time.

    even in death you can't get away from stupid expenses.. sigh
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    • Profile picture of the author Charles Jones
      REALLY??? SERIOUSLY???

      Your entire cost of doing this business transaction is 3%+.30 or so if they are paying via credit card. You are JOKING right??

      If you haven't built that SMALL amount into your business model, then you have missed business 101. Most businesses have 50% or more in business expenses. all you have to pay is 3% of $5 (a whole .15) + .30, so .45.

      The ISSUE is not the fee...it is the business model that you have set up for yourself. Writing an article for $5????? That is the problem.

      Up your game and get paid what you should be making and stop bitchin' about the small fees in order to accept credit cards......BTW, we accept credit cards through our processor...guess what, they have a FEE each month for the account PLUS the 2-3% +.20. BTW, if you accepted credit cards through a normal processor...you would end up paying the higher end % 90% of the time...why because everyone uses cards that offer cash back, miles or something else...bet you didn't know that all credit cards do not get billed the same amount did you??

      Now go out there, set your prices where they should be and make some money....OR change to a different market or service where you can charge more.
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  • Profile picture of the author blillard
    Yeah either charge more or just bite the bullet my friend. Use a ebay calculator before pricing it will tel your paypal fees before you sell anything.
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  • Profile picture of the author Andrew Milburn
    Originally Posted by jimsmithtoday View Post

    I offer writing services and I am losing a lot of money on paypal. For example when I get paid $20 for 3 articles I actually get $18.92 and the rest is towards paypal fees. This amount adds up to a lot of money at the end of the month. I know you have to pay paypal fees to use it, but is there anyway we can reduce it?
    Hi,

    I know this may sound sorry and I am sorry if you take it that way, but the only way is to give your items away free of charge.

    Paypal fees are a fact of life if you sell online, and if we are honest we get a good deal. If you were to look at companies such as worldpay, then you pay around £600.00 set up fee, £25.00 per month fee then 3.7% fee then between 25p - 50p transaction fee.

    As other people have said PayPal (and eBay fees are a fact of life).

    Another way, advertise your articles, then when someone buys, send them an email and ask them to send you a cheque, wait 10 days for the cheque to arrive and then email the articles to the person.................................but then you will have to pay £1.00 to pay your cheque in at the bank.................. then the cheque could not clear and that will cost you £25.00, now you are in minus figures.

    Please, please, do not be concerned about these fees, they are part of your business.

    On a more positive note there is one way of reducing your fees down to about 1.5% sell more stuff. Honest it is that simple, if you want to reduce those fees just sell more.
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  • Profile picture of the author emigre
    Count yourself lucky if all you lose are fees.

    International users lose on exchange rate too - Paypal has the worst exchange rate anywhere in the universe.
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