Small Business Online Transaction Question

[SweetV]

I am trying to run a small online business.  Does Paypal hold the funds sent by the purchaser (for goods), resulting in my having to pay for their purchase upfront using my own funds ( i.e. 3-5 days wait until they release the funds to me)?  I want a clean transaction and if it is very large transaction, I don't want my money tied up for long periods of time.  It reduces my ability to run my business smoothly and its risky to me as an entrepreneur. 

Is there a tax estimator involved in purchases or do we have to figure the tax within the shipping and handling charges?  Thank you

[angelleye]

You'll need to figure out the rates you need to charge for taxes, and then depending on how you integrate PayPal you can add those calculation rules to your PayPal account profile or include them in API requests (or if you're using a 3rd party tool of some sort you could probably configure taxes inside of that.)

As for payment holds, this is something you'll need to be prepared for regardless of who you take payments with online.  Depending on a number of variables, your funds could be held for a period of time to ensure you don't have disputes / chargebacks but then don't have the cash to provide refunds.  

If it's an eBay sale or anything you're shipping make sure to update the PayPal details with tracking system so their system can see it's delivered.  That will help.

Once you have some history with PayPal where they see you haven't had issues the holds will become much less frequent.  Also, there is no guarantee you will have to deal with holds at all.  There are a bunch of variables involved with that, but if it does happen, just follow the procedures and it really shouldn't be a big problem.

[nevadasmith]

It sounds like you do not plan on having  this large amount item on hand,and rely on the customer $$ to buy it so you can fulfill his order. 

selling something you don't have is a clever idea until it went AMOK !

while  money is withheld,customer expects you to ship in a timely manner.

who is going to ship this large amount item,the wholesaler/factory or you?

can you rely on your wholesaler to ship in a timely manner with online viewable tracking from a commercial carrier?

if the customer wants to return the item,whose address would be used as return address?

Take a look at your Paypal account,is your wholesaler return address one of your return address?

and how does your wholesaler know it is from you as it has no record of doing business with your customer?

what is the item and would your wholesaler accept the return if it has been used ?

[nevadasmith]

for large item,certain hi risk category,new seller etc,Paypal would not release the fund until tracking shows it has been delivered,then 3-21 days later,it would be released.

so it would put you in a catch 22 situation ,if you need the money to be released to buy the goods and Paypal would not release the fund until it has been delivered with proof from tracking .