We use Shopify Invoicing, not PayPal. Why?

The Good

Most of the Makers in the Artisan Keycaps space and otherwise use PayPal to send invoices for the products. PayPal provides excellent buyer protection and in theory, seller protection. This enables customers to purchase a product without having to worry about getting scammed, since they have the purchase protection on their side. 

Most makers are operating as single individuals and this offers them the right set of tools to get started without investing in an e-commerce platform. That is how we started as well, with PayPal invoicing. 

The Bad

However, PayPal lacks a number of things that an online seller would otherwise expect. The most obvious ones are 

  • Sales tax
    Yeah tax is bad, but has to be paid. If the customer doesn’t, the business has to bear it. PayPal doesn’t do automatic tax calculation based on shipping address. This makes it very difficult to know how much is to be collected and from whom.
  • Shipping Rates
    Most makers charge a flat fee based on where the customer is located. This ends up being more for local customers at times and undercharged for international orders. 
  • Shipping Labels
    This one is a no brainer. PayPal does not let you bulk generate and print labels for International Orders. For domestic ones it works nicely. However all the international ones need to be generated one at a time.
  • Inventory Management
    I guess this ones not much of an issue in most cases, but having a set inventory helps avoid invoicing errors. 

The Ugly

On top of that, PayPal withholds funds from orders till in some cases (our case) 21 days! after delivery. This is a big burden for small businesses since they don’t have a separate “Operating Capital”. On top of that PayPal has a “Reserve Holding” thing per account which is dynamic and keeps changing. What that means is they will hold on to a set percentage of sales even when everything is going smoothly, for times when it fails and they have to refund customers. 

Also, all orders need to have tracking updated for the funds to be released, but PayPal does not provide an integration with any 3rd Party Shipping providers that can do bulk international shipments, neither provides a straightforward API to update it. So these need to be updated manually for every order.

So Shopify?

The thing that people love about PayPal is the Purchase Protection. I doubt there is any other thing, but I could be wrong. So to tackle some of the issues above, we switched over to Shopify.

  • They provide a variety of checkout options, including credit cards, and yes, PayPal. If you use PayPal, it still gives you the purchase protection and gives PayPal authority over holding back funds as they please, but at-least gives us bulk label generation and order tracking tools.
  • They have an excellent API so most of our work-flow with regards to sales/invoicing/etc is automated using that.
  • They do sales tax calculations on the fly, and also charge the appropriate shipping, not less/not more.
  • As an added plus, it gives us the flexibility to just list extras or FCFS sales very easily.
  • They have a variety of 3rd Party Apps we could use someday if we find the need.

This comes at a little cost though. Shopify emails sometimes skip primary inboxes and go into spam or promotions. If you whitelist our address which is on the sale forms, that should avoid that. We also have a cool little bot on our discord that can ping you an invoice if you want.

 

Would we be switching back to PayPal someday? Maybe, if they decide to get their act together. But this has been a complaint from a plethora of businesses over the last decade or so. So I don't see that changing. If anything, we might actually stop accepting PayPal entirely someday in the future.


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