If you’re a business based outside of the United States but use Paypal to collect US dollars, Paypal might be double-charging you.  First, you pay the usual Paypal fees.  Second, you’re probably paying Paypal another 2.5% to exchange your money from USD to your local currency.

You’d think that if you have a US dollar account with your local bank, you could just have Paypal deposit it to your US dollar account.  But they won’t; they’ll only deposit US dollars to US-based banks.  They won’t send you a cheque either.  They’re making easy money by skimming 2.5% off the exchange rate, and they like it that way.

Here’s how we got around it in Canada.  You might be able to do something similar in other countries as well.

First, we looked for a bank based in the US that would let us set up a business account with them.  If you’re a sole proprietor, you might be able to set up a personal bank account, which is a little easier.  We used Harris Bank.

Then, we looked for a good foreign exchange (forex) business to exchange our US dollars to Canadian dollars.  Most offered us rates that had a markup of only around 0.5 - 1 percent off the mid-market rates.  This meant that we’d save about $200 each time we exchanged $10,000.  We’re planning on donating this extra money to charity.  We chose Calforex, which is reputable, convenient, and offers competitive rates.

After setting those up, here’s how we transfer money:
1.  Withdraw money from Paypal into our US bank account (at Harris).
2.  Write ourselves a cheque from Harris to our local US dollar bank account.
3.  Arrange a trade with Calforex to convert our US dollars to Canadian dollars.

This takes some extra time to set up, but it’s worth it if you have sufficient volume or you’re annoyed with Paypal.

When you’re making decisions on different marketing or advertising channels, a big question is how much can you afford to pay for each visitor or sales lead.  This can help you make informed and profitable decisions.  All it takes is gathering the right information and some simple math.

If you’re selling things online, you can use an online tool to track how many visitors you’re getting.  Say on average you get 5000 different people visiting each per month.  From your sales statistics, you had 250 customers last month with an average profit of $15.  Then you can estimate that 5% of your visitors turn into customers, so each visitor will contribute on average 5% of $15, or $0.75 to your sales.  This is just a quick estimate - it doesn’t account for things like repeat purchases or the chance that they’ll tell their friends - but it’ll serve as a starting point.

So now you can use this as a quick test to figure out whether you should use certain forms of advertising.  If you pay 50 cents per click for a sponsored search result on Google Adwords, you’re still earning an average profit of 25 cents each time someone clicks, so you should do as much of this as you can.  On the other hand, if you’re paying $200 a month for a banner ad that brings in 100 visitors, you’re paying $2 per visitor, which probably means you’re losing money, unless visitors from that banner are particularly likely to buy.

You can use a similar analysis to find out how much a retail window shopper or sales lead is worth to you.  But after you make your marketing decisions, go back to treating your visitors as human beings, not dollar signs.  This’ll be both more enjoyable and profitable in the long run.

What’s the best way to encourage people taking a mock test to do their best?  Should you pay them:
a)  2.5 cents per correct answer.
b)  Nothing.

2.5 cents is a lousy amount of money, but it’s better than nothing, right?  Wrong.  This was tested out in Israel, and it turns out that people do 10% better when doing it for free than when offered the small cash reward.

What’s going on here?  Test-takers in the two scenarios above had the following mindsets:
a)  What’s in it for me?  2.5 cents isn’t worth the trouble.
b)  I’ll help out.  If I do my best they can figure out if the questions are too easy or not.

It would seem reasonable that these mindsets could combine into something like “I’ll help out and earn a few bucks at the same time”.  But actually, it’s pretty much one or the other.  Scientists have even tracked the two mindsets down to different parts of the brain, and generally, only one is active at a time.

So when you need help with something, you should either pay enough to answer “what’s in it for me“, or ask for a favour instead (and return it later).  If you offer too little money, you just draw attention to the fact that it’s not enough.  Pay enough or don’t pay at all.