As usual I gain more advanced insights with my eBay Specialist Team to pass along to eBay DropShip Sellers and last week our discussion topic was on more clarity to eBay's upcoming Payment Processing as the Merchant of Record using Adyen as their payment gateway.
Two weeks ago, eBay announced this to Sellers using vague terminologies and as usual, causing confusion to interpret the impact it will have on sellers.
To date, the following will bring more clarity, but not in details that eBay may change or announce in May, 2018.
Simply put...Customer click on Buy It Now Button. eBay manages the Payment Process at checkout. At that point of checkout, customers can choose to pay eBay via PayPal, This means even if, customer chooses to use PayPal, rather than payment going directly to you, it will be paid to Ebay's Adyen Account.
Once paid at checkout, eBay will debit fees, claiming lower costs of payment processing, yet hasn't revealed on how long it will take to make available for your withdraw. It looks like may be as short as 24 hours or as long as 2 weeks, depending on how eBay/Adyen reviews your account, Not clearly defined yet, but most of my team agrees, eBay will manage return requests from customers when monies are not available to withdraw. where all can be viewed your Seller Hub.
Don't Panic! This won't happen overnight- and - you have plenty of time to prepare.
eBAY/PAYPAL SPLIT AGREEMENT
In 2015, eBay and PayPal created an agreement to exercise an option to replace/remove PayPal. as its Merchant on Record and likewise allow PayPal to offer the same on other eCommerce Selling Platforms.
It appears, both are now in agreement to use this option affecting two countries...USA and UK, yet nothing has been said about this affecting other country selling platforms such as Australia to date.
In an effort to assure a smooth transition eBay has agreed to a slow rollout to replace PayPal with another Merchant of Record, which in this case will be eBay as the new Merchant of Record retaining fees otherwise paid to PayPal.
eBay will begin this intermediate Payment Process starting on a small scale in the 3rd Quarter of 2018, BUT only up to 5% of its payment volume. Then slowly increase to 10% in 2019 until 2021 when eBay will become its own Merchant Payment of Record and PayPal will most likely will move away from eBay all together to expand its services to other eCommerce Marketplaces. It will, however, still be a payment option for customers up until then.
HOW DOES THIS AFFECT DROPSHIPPING METHOD?
It's easy to see the payment process of receiving payment to your PayPal account before ordering the product will no longer be available along with managing customer service return requests on some sales. It also means lost control over return requests from customers, knowing eBay is very generous to buyers, using our money to instantly refund buyers with no discretion or dialogue with customers.
Second Line of Credit to Purchase Product Orders
For eBay DropShip Sellers this means using a revolving credit card or credit line to purchase products to fulfill sales orders and pay down on credit card within 30 days (avoid interest fees) until payment from eBay is available to withdraw.
Additionally, this will also cost eBay Sellers more time to manage a new accounting practice, which I'm sure costs in time and money will not offset any reduced payment processing fee that eBay may or may not offer AND TRUST payment processing time has no glitches.
MY TAKE AWAY?
To this point, we've been jumping through hoops to comply with eBay's changes and demands. putting up with costly glitches to improve their platform. However, now forcing Sellers to fund sales orders from our own customers; allowing eBay to manage customer requests to return items and wait for payment requiring additional accounting practices, just so eBay can capture payment processing fees, otherwise paid to Paypal to generate an additional $2 Billion/yr Revenue.....has definitely got my attention.
Good News! Since these new changes will gradually rollout over the next 2 1/2 years, there's plenty of time to prepare.There's always a solution to any business challenge.
This might be the one time, eBay has done its Seller's a favor. So don't panic and relax.