No More PayPal Fees, Order Import, and More
With order management out of the way I am in the zone. Revelations, solutions, and updates seem to come easy. Most of them are hiding quietly in the background, but there are some worth mentioning.
Order Import is “Finished”!
All the order history has now been imported into our new online system. Sellers can see all their orders, get accurate balance information, and request payments. So why “finished” in quotes? The import process was quite complicated in a labor intensive sort of way. It’s quite a relief to get it over with. However, I would be a fool to believe that a process with so much manual work has been done perfectly. I expect that we’ll find mistakes and will need to make adjustments, but it’s happily “finished enough”.
No More PayPal Fees On Seller Payouts
I am sure this will be most welcome news for sellers. In the past we sent payments through the regular PayPal process. It took effort for us and meant that sellers ended up paying PayPal fees on their payouts.
Today, we completed payout process integration using PayPal Mass Payments. Not only will sellers get paid faster, but we’ll now cover the PayPal fees! With no cost and quick payouts PayPal should be the preferred payout method for sellers. Since it’s easier to automate, it’s better for us as well. And our cost for Mass Payments is very reasonable.
Order Completion Process Improvements
How do we know that an order was completed successfully? We simply assume that it was unless we are notified by either buyer or seller. If no one yells within a day or two after pickup we complete the order, charge the buyer, and pay the seller. Typically, this works well and doesn’t require us to bother anyone more than necessary.
But there’ve been surprisingly many buyers (and some sellers) who don’t report issues at all. Or at least not until they see a charge on their card. We don’t charge the card precisely because we want to identify issues before completing the order, but they use the charge as the trigger to report issues. I guess they assume that lack of charge means we know what happened.
Resolving issues gets harder and more expensive as time passes, especially if seller has already been paid. So we’ve taken a number of steps to encourage proper reporting:
- Buyers or sellers can mark orders complete or report issues online at any time after their appointment.
- Unmarked orders are completed automatically after about 3 days.
- Buyer confirmation emails now feature more explicit and prominently displayed instructions on how to contact us in case of pickup issues and what the timeline is for reporting issues before the order is considered complete.
- Buyers are now sent an email within 24 hours of their appointment reminding them that issues must be reported within a day.
Seller Item Profits Shown/Recorded with Increased Precision
Since commission is percentage based and seller profit is buyer price minus commission, actual seller profit can have a large number of significant digits after the decimal point. We’ve always calculated seller payouts by only rounding the final result. It’s the most accurate method, but now that we store orders and show invoices to sellers we need to store and display per item profit.
We could round profit on each item to 2 digits, but this can have a measurable effect on the final result. Although each item can only be wrong by less than 1/2 cent, the error is compounded by the number of items in the order. If we store and display to 2 digits, but calculate without rounding, subtotals and totals will be inaccurate and confusing.
We could also simply not display per item profit. It is quite common for commission/discounts to just be displayed as a separate line on invoices. However, most sellers care quite a bit about what they make on each item and some set item prices based on profit they want to make.
Our solution is to store, display, and calculate based on item profit rounded to 4 significant digits. For example, instead of $0.60 or $0.5953424… we’ll show and use $0.5953. Using 4 significant digits reduces calculation inaccuracies to an acceptable level while allowing us to display per item profit.
One downside is profit display becomes a littler stranger and more cumbersome with 3-4 digits behind the decimal point. The other downside is that sellers who enter data into their own systems still have to solve the rounding problem for themselves (assuming their system only supports 2 significant digits.)
It may not be a perfect solution, but it seems to offer the best balance.
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