Nov 25, 2020

My sales were bouncing back, but I got some bad news today.

PayPal is withholding 100% of my money!

If you sell products, use PayPal to receive money, and make many sales in a day, PayPal will look at your account and hold back some (actually a lot!) of the funds in your account.

They say they do that because they want to protect buyers who don’t receive the items they ordered. They need to hold back money for chargebacks or refunds in case the products aren’t delivered.

Usually, they will immediately move a part of your money into a reserve. It’s called the “Jumpstart Reserve”. PayPal will keep it here for up to a year and release it to you after that.

When you receive money from a new customer, PayPal will deduct 15-50% of the payment and direct it to another reserve called the “Rolling Reserve”. They do this for every transaction.

This means that if you make only 20% or less in profit, you’ll rarely have money available in your account. Most of it will be in a reserve.

It’s a nightmare, but we all have to accept it if we want to use PayPal. Stripe might be a better option, but it’s not available in Thailand yet so I can’t use it. But I heard that Stripe also holds your money.

My money was often withheld by PayPal after I started making good sales.

Most of the time, they withheld 15-30% of every transaction and released it after 45 days.

But this time, they directed 100% of my new transactions to the rolling reserve and said they would release it after 45 days.

Holy crap!

It meant that I’d have only a little money available in my PayPal account, and all new transactions would be put into PayPal’s reserves.

I had around $60k in my account at the time. I spend around $20k a day, so it meant that I could promote my products for about 3 days.

That was bad, because it was the end of November and I had all of December ahead of me to make tons of sales.

I had my team contact PayPal immediately to resolve this issue. Holding 100% of new transactions really sucks. I would lose tons of opportunity if this wasn’t solved soon.

There was a funny story. A while back, when PayPal held a lot of my money and I didn’t have much money left to spend on ads, I stopped working.

Then, PayPal called me and asked, “Why did your sales decrease dramatically? Do you have any problems? Do you need any help from us?”

“Well, fuck you, PayPal!” I thought.

“Well, you’re holding a lot of my money and I don’t have enough to spend on advertising. That’s why my sales decreased. How can I promote my products when you hold on to my money?” I told the PayPal representative.

“Oh…I’ll see if I can help and contact you soon.”

A few days later, they decreased the amount of my money in the rolling reserve to 15% (from 30%) and said they would release it within 15 days (from 60 days).

So, I paused many ad sets and reduced the daily budget of many campaigns. I left only a few that had produced many sales with a very low CPP.

These actions would help me spend less money and make a better ROI. I could also run ads for more than 3 days.

Anyway, let’s check the stats for all the products. Then I’ll know which ones I should slow down.

As you can see, the performance of most of my old products started dropping. I could accept that, because most of them had made tons of profit for me already. They were in the declining stage. I had to find new winning products.

But the good thing was that most of my new products (Product #10, #11, #12) performed very well after I added more budget to them.

It was easy for me to decide to pause many ad sets in campaigns for the old products.

I paused ad sets whose CPP was over $15 in the past three days. If all the ad sets in a campaign had a CPP of over $15, I paused the whole campaign.

Now I had only a few campaigns left for each product:

Product #1 - 1 Campaign left
Product #2 - 14 Campaigns left (down from 89 campaigns)
Product #3 - 4 Campaigns left
Product #6 - 0 Campaigns left
Product #7 - 0 Campaigns left
Product #8 - 1 Campaign left

The overall budget for these products had decreased by about $10,000.

I didn’t create any new campaigns for these old products because they’d started to perform worse and PayPal was holding my money. So I had to be careful where I spent my budget.

I move budget to the new products and created new campaigns for Product #10, #11, and #12.

For Product #10, I duplicated 6 good-performing campaigns and set their daily budgets to $300 ($1,800 in total).

For Product #11, I duplicated three campaigns and set the daily budget to $300 for each one.

I tried to create two campaigns and used a Carousal Ad. This carousal ad contained links to Product #2, #7, #10, and #11 (All in the Mom to Son Niche). I set the daily budget to $100 for each one.

I also created another campaign with a Lookalike Audience created from visitors to Product #2.

I added $1,100 in total to Product #11.

For Product #12, I created 7 Multiple Facebook Campaigns with all-new Facebook Interests and set the daily budget to $100 ($700 in total).

That’s all for today. I paused most of my campaigns and created the new ones for my new winning products (Product #10, #11, and #12).