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🤔 Should You Open Separate PayPal Accounts for Each of Your E-Commerce Stores?

Last updated: April 04, 202122 Comments

paypal_logo

PayPal remains one of the most popular ways of accepting online payments, so you’re bound to be using it if you’re involved in online business. A question that comes up sooner or later is whether you should open a separate business account for each of your brands or products.

Separation of Personal and Business PayPal Accounts

First of all, I want to clarify that you should, first of all, have separate personal and business PayPal accounts. This is allowed by PayPal as detailed in this FAQ. You shouldn’t be mixing your personal transactions with those of your business. You should keep separate personal and business bank accounts and you should also do likewise with PayPal. Then link the personal PayPal account to your personal credit card or bank account, and the business PayPal account to your business credit card or bank account.

PayPal Business account

With that out of the way, the next stage as you continue to grow your business will be launching and selling more than one product. With revenue from both of these products coming in through the same PayPal account, there can be some challenges.

The first challenge you will encounter is that of accounting. Since you will be seeing the total amount of revenue generated from both your businesses, it will be hard to visualise at a glance how much of that revenue belongs to each business. Of course you will also hopefully have good reporting facilities from the e-commerce platform you are using which will somewhat compensate for this disadvantage. Moreover, if you are accepting payments through other systems apart from PayPal (e.g. Stripe/Braintree), you shouldn’t be looking at the revenue stats in PayPal as a measure of how you’re doing because that figure will be missing all other payments that would have come through via the other payments systems.

What to do if you have a separate company for each brand

As long as you have separate companies, there should be no issue at all. A company is legally distinct from its owner. Each can and should have its own bank account, credit card, email, etc.

As a result, you will be able to sign each one up individually at PayPal. You will be the representative of your company for each PayPal account, but the PayPal accounts will each belong to the respective company.

And if you don’t have a separate company for each brand?

Here’s when things get tricky. Many business owners create a company and then sell a number of products/brands from that one company. This is usually when the question arises about whether they should have separate PayPal accounts for each product/brand.

There are a number of pros and cons for each way to go and no clear answer to this question.

If you are planning to spin off and sell a particular product or brand, you should always create a separate PayPal account for it and treat it as a separate entity from the rest of your business. During the selling process and the due diligence period, it will be so much easier for you and the buyer if you have a separate PayPal account housing the transaction of just that product that you will be selling off. Otherwise, you will have to filter things that can get messy, plus you won’t be able to just transfer the ownership of that product’s PayPal account to the new owner, which is a disadvantage for them as they won’t get the history of that account. This will affect your selling price so keep that in mind.

For the new owner, having a PayPal account that has been previously set up and having everything working smoothly is a very important bonus. The changeover will be easier and they will have a handy history of every transaction recorded from the inception of that product. Moreover, you have to also keep in mind that PayPal allows lower transaction rates depending on your monthly volume of sales.

Another thing to consider is whether you will have subscriptions and recurring payments processed through PayPal. If that’s the case I would recommend using two separate Paypal accounts as it will be very messy or downright impossible to move over those subscriptions to a new account in the future if needed (for example in the case of a sale of one of the products to a new owner).

Most e-commerce software systems provide additional and handy functionality through PayPal’s IPN system. This can allow you to do things like give refunds from the e-commerce system itself rather than having to log in to your PayPal account to process the refund. If you use PayPal Standard, you can use a single account for multiple sites. If you use PayPal Express, you need to use a separate account for each site. This is because PayPal Standard supports multiple IPN URLs while PayPal Express only supports one.

Now if you decide to go for one PayPal account to cover all your products, it might be a good idea to still pass your payments through separate email addresses linked to the same PayPal account. This is very useful if you are receiving payments from several different sources. To give you a concrete example, imagine a blog having affiliate arrangements with tens or hundreds of product vendors. If they all have their own affiliate systems, as is frequently the case, you would have signed up with each vendor and gave them your PayPal email address. Now if in the future you sell that blog, the new owner would have a very tedious job having to log in to each of these affiliate accounts and change the PayPal email address to his instead of yours. However if you had used an additional email address to your company’s PayPal account, the transition would be much smoother. You would just have to unlink that email address from your company’s PayPal account, and concurrently the new owner would add that email address to his company’s PayPal account. From that moment onwards all payments will reach the new owner’s account, without having to change any settings on the vendors’ side.

An important pro for having just one account for all your brands (if you don’t plan to sell in the immediate future) is easier management. You don’t have to log in to several PayPal accounts to check on things, you just have one account. Another potential issue with having multiple accounts is which account to process expenses from. If it’s not easy for you to associate expenses to a particular product, it might be a struggle to choose which PayPal account to use for them. For example, if you are using a backup service for all your product sites, and you want to make an automatic monthly payment, which PayPal account will you use if you have a number of them? Having just one account eliminates this problem altogether.

Another thing to consider is that PayPal assigns different commission rates based on the volume of transactions per month that an account generates. Thus if you have everything going into one account there might be a better chance for you to get the lowest rate than if you separate the accounts and hence lower the volume of each account.

Hopefully, this is helpful to you when deciding whether to open separate PayPal accounts for each product you own or not. Please leave a comment if you have any further questions and I’ll do my best to answer them.

  1. Are You Losing out from PayPal’s Exchange Rates?
  2. 🤔 Which PayPal Account is Best for You?
  3. 💸 Changing Your PayPal Withdrawal Currency
  4. Accepting Credit Card Payments via Braintree in Europe
  5. Braintree vs PayPal Fees, Which One is Cheaper?
  6. 💸 Understanding PayPal Cross Border Fees
  7. How to Withdraw From PayPal into a Maltese Bank Account
  8. 💳 Withdrawing Money From PayPal for Non-US Accounts
  9. Which PayPal E-Commerce Checkout Service Should You Use?
  10. 🤔 Should You Open Separate PayPal Accounts for Each of Your E-Commerce Stores?
  11. 🆚 PayPal VS Wise Borderless
  12. 💳 Linking Virtual Bank Accounts and Cards to PayPal (Revolut, Wise etc)
  13. How to Change Ownership of a PayPal Account
  14. How to Buy Bitcoin and Crypto With PayPal

Filed under: Business

📧 Email Addresses to Set Up When Opening a Company

Last updated: August 11, 202250 Comments

choosing-perfect-email-address

When opening a company one of the first things you should do is choose an email provider. My favorite is Google Apps for Work. You can also use Zoho Apps if you are a small business and want a totally free solution.

Once you’ve got your mail set up you want to set up individual email accounts.

Personal Email Accounts

Each person in the company should, of course, have their own personal email address that they can use on a daily basis for internal and external communication. This is the email address that they can put on their business cards and also use for logging into the various tools that the company uses.

Tools like Slack are now aiming at killing email for internal communication, and they’re having a great of success. However, email is not going away anytime soon as there are many more uses for it apart from internal communication.

For personal email accounts I recommend using this format:

[email protected]

In my case, for example, I would use [email protected] If the person has a really long name or surname you can use the shortened version or even set up an alias to that account. For example, you can have the mailbox named [email protected] but then also set up an alias for [email protected] and emails sent to that alias will also end up in the person’s inbox. This also applies to people who have a name that’s hard to spell.

Read more: How to start a blog

Need hosting? I recommend Bluehost for starting out with your website. You can read my article on how to create your first website and sign up to Bluehost; it’s a reliable and cheap hosting service that won’t let you down.

Some companies prefer to just use the [email protected] option and omit the last name. This works for very small companies but you will soon run into problems when the second Joe joins your team. You’ll soon end up with a mess, with some people using their first name only and others having to use their first and second names or something unsightly like [email protected]

My recommendation is, therefore, to start right away with the [email protected] combination. If you get two people with the same first and last names, you can use introduce the initial for their middle name or something similar. For example if you have two people named Joe Smith in your company, the second one can use [email protected]

Generic Email Accounts

Next, you will want to set up a few email accounts to be used for mostly administrative, support, billing and as a first point of contact with your company. Make sure you cover all the business functions of your company.

Here are a few essential ones to start off:

  • [email protected] for administrative purposes such as being a Google Apps admin
  • [email protected] for your helpdesk
  • [email protected] for billing and payments
  • [email protected] as a general point of contact
  • [email protected] for job applications
  • [email protected] for domain management

[Read more…]

Filed under: Business

What Does a Successful Entrepreneur Look Like?

Last updated: October 16, 2018Leave a Comment

Ever wondered what it takes to be a successful entrepreneur? This infographic from StartupBros attempts to answer this interesting question. There are a lot of factors that come into play and there’s definitely a strong element of luck too. Many success stories are all about being at the right place at the right time.

If I had to list the four most important factors for my success, they would be:

  • An excellent and broad education (both school and family)
  • A compulsive need to think and do things differently than the rest
  • Travel and exposure to alternative cultures and ways of thinking
  • An unquenchable thirst for knowledge, mostly satisfied through reading and networking

[Read more…]

Filed under: Business

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