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How to handle the eBay/PayPal split as a dropshipper

Written by Jeff Allen on October 3, 2014 in Ecommerce News


Unless you’ve been living in a basement with zero reception or media feed, you’ve probably heard about the big split happening next year between ecommcerce giant, eBay, and it’s major financial appendage, PayPal. And it truly is big. eBay/PayPal have been synonymous since 2002. When people think eBay payment, they think PayPal. It’s secure, it’s safe, and it’s guaranteed. There was a comfort surrounding PayPal that many sellers fully embrace, and a majority of eBay sellers refuse any other type of payment. Yeah. Big.

When eBay/Paypal announced the split, you can imagine what the response was like. How would online businesses do payments? What would happen to the ease of the eBay buy/sell process? What will happen to the largest online auction business in the world? Well, for them, it’s quite a lot. For you, probably nothing huge. But before we go into that, lets take a look at why they split.

In a nutshell, the two massive businesses needed room to spread their wings. Their 12-year partnership had essentially confined their ability to seek out new business ventures. True, the two businesses fit together like peas in a pod, but they were getting too big for each other. In the past 12 months, eBay hit revenue of $9.9 billion, with PayPal coming in with a sizeable $7.2 billion ( source Forbes ). They were essentially restricting each other’s ability to improve.

The split needed to happen. Now PayPal can explore new business ventures without being predominantly overburdened by eBay sales. eBay can now focus heavily on building a better, optimized ecommerce experience for its customers. Generally speaking, the future looks bright for both companies. Without one having to depend on the other, both can expand into better organizations.

One thing to look out for, however, is eBay will start to look very appealing to Microsoft or Google, or pretty much any big company with a lot of money. Without PayPal, eBay’s worth drops quite a few notches. But we’ll get to that if/when it ever comes.

In the meantime, how does this affect you? Well, as stated earlier, don’t expect to have your business turned upside down by the decision. eBay will still be the worldwide online giant that it is today. Without PayPal, though, buyers will be free to pay however they want, without having to make a PayPal account (something many have negative feelings about). On the other hand, sellers, as you can imagine, are reacting to this news with some hesitation.

Without PayPal, the safety of transactions seems a bit foggy. Well, rest assured, eBay won’t sit idly. You can bet that they’ll quickly enact a type of buyer/seller insurance that will be just as effective as PayPal. In fact, word is that Apple Pay, Apple’s new secure payment system, is up to take PayPal’s place. If this is the case, eBay stands to make huge improvements. You can check out details about Apple’s payment system here.

The move also makes eBay more nimble with ecommerce changes. People who avoided eBay before because they didn’t like the auction-style environment, may take interest as eBay becomes more adept in the ecommerce world. If you’ve ever felt restricted by how eBay handles online selling, keep an eye on the company as it makes new changes to adapt the ever-evolving online scene. With over 143 million active user accounts, you can safely assume that eBay is going to do everything it can to give its users the best experience possible.

All-in-all, this is sure to be a good move for everyone. As it’s still over a year away, for now you can continue to sell on eBay as usual. Most likely you’ll receive more detailed information from eBay themselves as the split approaches. The future of ecommerce is great, and eBay’s freedom from PayPal gives it much needed room to be more than just an auction site, and become the ecommerce giant it was originally intended to.

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