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Selling Expensive Items on eBay – PayPal Work-Arounds Which Avoid Fraud


San Diego, CA – September 17, 2007 – Anyone who has tried to sell an expensive item on eBay, and wanted to offer it internationally in order to reap the best return, has run into PayPal’s $10,000 limit per transaction on funds from abroad.

John Dunlop, CEO of, suggests two work-arounds which can solve most seller’s problems.

“Documentary Letters of Credit are the appropriate payment method for items over $10,000, especially if the transaction is one time only and conducted between strangers,” he said. “eBay auctions frequently include automobiles, boats, planes, earth moving and farm equipment, and factory machinery, that Americans could be exporting for more money if the payment options were available. Although I talk about America and dollars here, the following suggestions work world-wide, and avoid fraud.”

Until eBay includes generic commercial banking terms for Letters of Credit on their payments page, traders can use the following guidelines to structure transactions (these guidelines also work for domestic sales):

EITHER 1. The seller must specify that they will accept a Letter of Credit in the body of their ad. The winning bidder uses PayPal for the deposit, and has ten days to open the LC with a commercial bank for the balance due, plus insurance and freight. The following are the internationally-accepted instructions to arrange this sort of payment:


40A: Form of Documentary Credit - IRREVOCABLE

50: Buyer / Applicant - Name, address, telephone and facsimile numbers, and email.

59: Seller / Beneficiary - Name, address, telephone and facsimile numbers, and email.


32B: Currency – USD (US Dollars)


42C: Drafts – AT SIGHT

43P: Partial Shipments – NOT ALLOWED

43T: Transhipment – ALLOWED

44A: On Board / Taking Charge – SPECIFY SELLER’S U.S. PORT or AIRPORT

44B: For Transportation to – BUYER’S NAMED PORT OR AIRPORT


INCOTERMS: FOB (for an ocean shipment),
CPT (for an air shipment).
EXW (Ex Works - seller makes the goods available at a specified location [e.g. factory, warehouse] to the buyer. Seller is not responsible for loading the goods in the vehicle provided by the buyer, or for clearing the goods for export.)

46A: Documents Required –

1. BILL OF LADING - Ocean shipment – 3/3 Ocean Bill of Lading

2. AIR WAYBILL - Air shipment




48: Period of Presentation – 21 DAYS

FOR EXPORT: Before the Seller accepts the bid, it’s a good idea to call the local U.S. Export Assistance Center to ask if there is any export formalities required on this item. eBay provides some “Know Your Customer” information as well as access to lists of prohibited items for export to which countries, but the USEAC offices offer the best guidance.

OR 2. The buyer opens an LC at an international commercial bank, and complete all the import paperwork BEFORE they start bidding.

The buyer waits to see an advertisement that indicates in the written description that Letters of Credit are welcome, and bids on the item. If they win the bid, the seller can use the above list to see that the terms match before accepting the bid.

When the bid is accepted, the buyer tells their bank who the seller/payee is, the LC is amended and activated, and the transaction proceeds.

Sometimes the seller wants to be paid before the combine harvester leaves the farm, and also needs help with the paperwork. Companies like are able to provide pre-shipment short-term financing, as well as prepare all the documents for presentation over the internet along with one-on-one coaching to the seller, for a reasonable fee.

ABOUT has been providing Letter of Credit management services since 1992. In 2003 Export Transaction Financing™ was added, making it possible to provide pre-shipment short-term loans to the beneficiaries of Documentary Letters of Credit. In return the buyer instructs the issuing bank to honor an Assignment of Proceeds, so the peer-to-peer lenders are repaid their principal plus mark-up when the transaction is concluded. This form of alternative social lending is more flexible than commercial bank financing, and does not require SBA or Ex-Im bank guarantees. Loans start at $10,000 (where micro-finance often ends) and go as high as $10,000,000, and are available almost anywhere in the world.

Enabling exporters to work around PayPal’s financial restrictions is the latest example of the flexibility this kind of financing can offer.

ABOUT John Dunlop, CEO

John Dunlop has been managing Letters of Credit since 1992, and used the Uniform Codes and Practices Version 500 issued by the International Chamber of Commerce (which governs the international banking protocols) to program the company’s website (which includes over 60 international trade finance documents).

In 2002 John was asked how to make money on the internet and without a second thought answered, “There’s a great need for small companies and new-to-export entrepreneurs to borrow money for about a month, and be given coaching through the export documentation process.” Export Transaction Financing™ was born.

John spends every weekend in La Jolla, and most weekdays at the branch office in Beaumont, TX. He is a member of the San Diego Area District Export Council, the San Diego World Trade Center, and has presented to the North American Small Business International Trade Educators association (NASBITE) and assisted with writing their CPA-level Certified Global Business Professionals examination questions.


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