For example if I am a seller and I have a product listed for $10, someone buys my product. However, my withdrawal limit is $50. Where is the $10? I need to be able to understand the entire process from a seller's perspective. Thank you.
If your withdraw limit as as $50 then you can withdraw your balance when it will $50 or more. $50 wil be the minimum balance to make a withdraw request. If the balance is below $50 then seller will not be able to make a withdraw request.
Thank you for your response and I understand that part of it. What I want to know is where is the funds held in the meanwhile? Does it go to the admin's Paypal account, or the seller's Paypal account until a withdrawal can be made? Or, is it just in “limbo”?
It depends on the payment method. If you will use normal paypal then the entire balance will get into admin's account then seller have to make a withdraw request and admin will split that money manually. But if you will use paypal adaptive system or stripe then after purchasing any product admin and seller will get their percentage directly to their paypal or stripe account. That time the withdraw feature will disappear.