EcommerceBytes-Update, Number 85 - December 15, 2002 - ISSN 1528-6703     2 of 6

Reaching eBay Global Markets with the Help of PayPal Multiple Currencies

By Brian Cohen

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On November 11, 2002, PayPal, announced that its users could send and receive multiple currencies. PayPal members can now perform transactions in Canadian Dollars, Euros, Pounds Sterling, and Japanese Yen.

Prior to Paypal's Multiple Currencies, eBay sellers had the ability to list in foreign currencies but didn?t have the means to carry out those transactions: U.S. banks charge an arm and a leg to convert a foreign-currency check. Now, PayPal will deposit foreign currency in members' accounts and convert it to U.S. dollars.

This new feature has empowered U.S. eBay sellers multifold. International bidders will feel more at ease conducting transactions in their own currency on the eBay.com site; by letting international bidders know that you accept their home currency, you may attract more bidders to your auctions (assuming you are willing to ship internationally). Another benefit, one that will come to a surprise to many, is that eBay sellers can list on international sites and take advantage of disparities in seller fees across international sites in an arbitrage-like situation.

eBay global are international sites that are accessible by any eBay user. There are 20 global sites listed on the home page: France, Germany, Ireland, Italy, Netherlands, Austria, Belgium, Spain, Sweden, Switzerland, Canada, United Kingdom, Argentina, Australia, Brazil, Korea, Mexico, New Zealand, Singapore and Taiwan.

For those who wonder about U.S. sellers listing on other sites, explicitly states that Sellers can ?List on any of eBay's international sites under eBay's "Selling Internationally" help topic (see Note to U.S. Users http://pages.ebay.com/help/sell/ebp-us.html.)

How to List on eBay International Sites
To illustrate how we can use the multiple currency feature to lower eBay fees while reaching global marketplaces, we will focus on our neighbors to the North, eBay Canada (http://www.ebay.ca). I listed an item on eBay Canada for $14.25 Canadian (approximately USD $8.99). The fee for listing and using optional features was 65 Canadian cents. eBay only charged my account 43 U.S. cents due to the currency conversion. An identical auction posted through ebay.com would have cost 65 U.S. cents!

To demonstrate, log into eBay Canada instead of the usual www.ebay.com entry point. The first thing you will notice in the Sell Your Item Form (SYI) is that you are asked to choose a currency with Canadian Dollars as the default. You will also see some differences in the "Item Detail" section. Listing and other fees are now displayed in the Canadian Dollar. You list items in Canadian currency, and eBay seamlessly converts the fees into U.S. dollars.

When listing in Canadian Dollars, it is vital that you write, "We only accept Paypal for Canadian Dollar Transaction (no exceptions).? It should be in bold letters and placed prominently in the auction to avoid any potential confusion. PayPal will be the only acceptable method of payment, because you do not want to be stuck with a check drawn from a foreign bank or foreign money.

I also recommend that you state "International orders (orders outside CANADA) must pay ACTUAL shipping and handling." For shipping to Canada, I stated a fixed price of $5.65 Canadian, {approximately $3.57 U.S.}) It is a good idea to list fixed shipping charges for the target country because it will not be fair to the bidder to pay costly shipping charges if they are inadvertently mistaken that you are shipping from Canada. State how much it will cost to ship to anywhere in Canada, and you should prominently state that the item ?Ships FROM U.SA.?

In order to be listed in the U.S. eBay.com site, you must either select "Will Ship Worldwide" (to ship globally), or "Will Ship to Canada" and also select the "United States." That way, the listing will appear on eBay Canada in C$ and on eBay.com with the approximate U.S. conversion in red. The listing will now appear in browse and search in both eBay Canada and eBay.com, but there are some quirks I'll discuss later.

My auction closed successfully with one bid. As stated, I listed the auction at $14.25 Canadian (or approximately $8.99 USD). However, my auction closed up 4 U.S. cents at approximately $9.03 USD. I made money on the appreciation of the Canadian Dollar, though it could have gone the other way, too.

PayPal's Pay Now button that was inserted into my auction automatically recognized that the auction transaction is to be conducted in Canadian Dollars. Paypal does not charge any fees to process this currency conversion in your PayPal accounts, and you do not have to hold a balance in a foreign currency. You simply select that you want to accept the payment and have it converted to U.S. dollars.

Alternatively, you can accept the foreign currency, hold it in your account and transfer funds between currency balances at any time. You may wish to do the latter if you believe that foreign currency will appreciate and are willing to take the risk of potentially losing money via foreign exchange fluctuations. However, you should consult your broker or financial advisor before making any investment decisions. The information contained in this article is for educational purposes only. Foreign exchange exposure is inherently risky. The author takes no responsibility for any loses that you may incur relying upon information contained within this article. For a more formal introduction to Currency Exchange, spot rates, and the Foreign Exchange market go to: http://fxtrade.oanda.com/currency_trading/intro_currency_exchange.html and http://www.oanda.com.

Setting a Price in Foreign Currencies
When deciding what price to list an item for on eBay.ca, consider using a currency conversion site that gives a currency exchange rate such as XE.COM http://www.xe.com. You may also find the following chart helpful. Note that eBay does not have the same number of minimum bid fee threshold points for each eBay site. eBay U.S. has 5 fee limit points, while eBay Canada has 4. Below is a chart that you can use to eyeball what price you may want to begin your auction at (i.e. the minimum bid price). The fees are certain but the chart should not be used as an absolute method of comparison because currencies fluctuate, and there aren?t an equal number of threshold points.

U.S.Starting Price
(Threshold Points)
U.S.
Insertion Fee
Canadian
Starting Price
Canadian
Insertion Fee
November 17th Conversion
US$0.01 ? US$9.99 US$0.30 C $0.01 ? C$14.99 C$0.35 US$.22
US$10.00 - US$24.99 US$0.55 C$15.00 ? C$34.99 C$0.75 US$.47
US$25.00 - US$49.99 US$1.10 C$35.00 ? C$69.99 C$1.50 US$.95
US$50.00 - US$199.99 US$2.20 C$70.00 and up C$2.75 US$1.74
US$200.00 and up US$3.30 N/A N/A N/A

Will Your Item Appear in eBay Search Results?
I mentioned before that your item listed on eBay.ca will show up in searches conducted on eBay.ca and eBay.com if you choose to make your item available to Canadian and U.S. users. However, eBay uses different default settings on its search feature, depending on whether you use the main search box on its home page, basic search, or advanced search!

If you go to eBay.ca and do a search, the default is "worldwide," but if you check the "Canada" box, the item will not show up in search results. If you do a "Basic Search," the default is "located in Canada", so the item will not show up! If you do an advanced search, the default is also, "located in Canada", so the item will not show up!

You take your chances that potential buyers are just searching from the main screen, or have the sense to check the "available to Canada" boxes under other search options.

It's also important to note that U.S. eBay members who see your item on eBay.com showing up in search results with Canadian currency may think you are located in Canada. If they don't wish to buy from a Canadian seller, they may not ever click on your auction to notice that you are based in the U.S.

But particularly for items that might sell better on an international site, it is worth knowing all your options.

Stay tuned for PART II of this story, "eBay's Tower of Babel."


About the author:

Brian Cohen has been an active member of the eBay community since May 1998. He currently trades under the member name Bidofthis.com. His first AuctionBytes article was published in May 2002. Brian can be contacted through his website at http://www.bidofthis.com where he always has a "little Bid of This and little Bid of That."


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