Farmer looking to open a formal shop, have some concerns

Some background about my operation: I run a total of 1039 accounts on a cluster of 28 HP Proliants from various fabrication lines which I have converted into pseudo-ASICs. My /bots/ run on a modified version of Linux which directly cold boots into a render scraped runescape client which injects itself to objects with an entropy line which pass a certain error threshold. My monthly electric bill is $1629, about a half of which is from my server cluster.

I have been a provider to resellers for a year and a half now, I can proudly say I've dealt with every major resellers (and several smaller ones) at least once in my run in rwt. I've primarily done very large face to face exchanges, but lately it's been grinding to a halt so I've reverted to undercutting myself selling to resellers.

Today, after almost 2 years of realigning my server cluster from webhosting and obsolete SEO services, I've hit the 2B/day mark in gold generation.

It occurred to me that I now possess enough capital and a strong enough credit line to take the next step in my rwt career. I'm looking into starting an online shop of my own, one on par with what the Chinese do enmasse.

I want to give my clients the option to pay via paypal, as it's the most convenient out of the online wallet services. I've lost a hefty amount of money on sythe, 1% of my total spread. Lots of websites accept paypal which is known for a one-sided chargeback policy. Are these websites making a loss on payments made through paypal? If not, how exactly are they avoiding the chargebacks? I've heard that putting a "buy now" button which directs the customer to a paypal transaction page lowers the probability(?) but I'd like someone with experience to elaborate how.

 

Your best bet would be to take a government issued ID of the buyer, and check if they are using a proxy/VPN.

The ID would be to ensure that they are not using a hacked Paypal, and a proxy/VPN to ensure they won't be trying an unauthorized transaction. Calling them as well, although I can't remember why some sites call the buyer.

Still, I believe chargebacks would be possible, and it would be best to use Paypal with customers for a maximum of X gold. I'd suggest 100M, maybe more. Western Union and Moneygram for orders of 500M+ or something like that.

 

I considered ID matching.

However, realistically, I don't think manually checking every ID making sure it matches the paypal account is possible. I imagine the bulk of payments will go through paypal which would mean that my system would have to iterate through a ton of ID matching processes. It also produces an additional hoop for the buyer to jump through before they receive their gold. From my time in webhosting, the overhead of any manual effort just isn't worth it.

Ultimately, as all my gold is farmed, this shop is really just an quixotic way for me to unload my gold without having to deal with a reseller calculating their margins.

I'll be having the development of the payment framework sourced out, so I'd just like to know if there really any real security for accepting paypal for intangible goods before I commit to paypal. (the alternative would be btc)

ie: Steam accepts paypal as a form of payment. Steam only keys for electronically delivered video games. If a customer was to pay with a hacked paypal or was behind a proxy, could they still chargeback Steam?

 

If you want a successful site, it would have to be 24/7. Always available for delivery.

That's why you'll want to hire 2-3 workers.

Yes, they would be able to chargeback Steam. But Steam would most likely take actions such as ban the account.

 

The answer is there is no 100% safe way to recieve paypal payments, what apith has stated above would certainly decrease the likely hood of frauded payments being made to you, but it will not rid them entirely.

The way most gold selling websites get over this is by actually just calculating the charge backs into there profit margines.

if you do how ever decide you want to sell bulk gold and continue what you were doing before then feel free to shoot me a message

 

I never considered formal vendors calculated chargebacks into their projections.

Thank you for bringing that up.

Also, I know you resell a lot of your gold via PA. With the volatility of paypal chargebacks; does that mean people have, on occasion, charged you back even through PA?

I've always taken a very laissez-faire approach to business practice, I love the concept of residual income. Penny stocks 4 years ago and rental properties 2 years later. Neither of these required much effort from myself, if not none. I don't like the idea of hiring workers as it adds to overhead which cuts into profit margins. Especially because all my gold is farmed and not resold, there is a base % I must make for this project to be more profitable compared to conventionally unloading to resellers.

From what I've gathered so far, I'm leaning towards having an payment framework developed included with an OCR for visual confirmation.

 

These established gold companies make a clear cut profit. Yes, they do face chargebacks, more than often, however that's the risk involved. As Apith mentioned, requesting the customers ID/Checking their IP and ensuring it's their paypal account helps significantly. You have to remember that most buyers who directly head to gold sites aren't in it to chargeback. They more than likely don't even know the mechanics behind it and are simple naive buyers. It's more so those users who've used forums such as Powerbot, Sythe etc and that know about chargingback and profiting of it and what not, and attempt to take advantage of that.

Also, you would need to run 24/7, and have workers if you even hope to penetrate the current market and acquire customers.

Most Websites, well gold websites come with a fraud detection function (not sure on the exact terminology), which help identifying fraudulent payments and repeat offenders.

I'd suggest contact R2Pleasent, Grave or Arcus Isidar, they can probably give you alot more insight into the matter.

 

it can be profitable making your own site etc yes, but if your only able to bot around 2b gold a day i dont think that would keep up with the daily demand that your customers would be needing though, and you probs need to have a few staff on board to make the site run smoothly etc.

 

The goal of the shop isn't to keep up to demand. I'll be selling below resale rates but still higher than what I conventionally sell at for extremely fast unloading.

I should stop calling it a shop, it's more of an automated fixed limit dumping ground.

 

If you're worried about paypal chargebacks, then you can always use PlayerAuctions. This would allow new users to purchase RSGP via paypal without the risk of a chargeback. However, the fees are relatively high at 10% + $1 per transaction.