If I want to sell a template with a buy it now button, and I only want to sell one copy, how would I do this with paypal? Currently I have quantity set to 1, so im assuming it should only sell one. What would happend if a second person tries to buy the same template? Would the second person's payment be processed?
Pretty much it is a coding issue. Your script should no longer sell your template once it has already run out meaning having 0 stock left. What this means is that the buy now button should not exist anymore. I hope this makes sense. I am not familiar with what script you are using or if you custom coded it.
You can pm if you would like some help or would just like me to take a look at your site to offer a suggestion.
Paypal ipn is a great way to go. I didn't realize that you were not using any scripts to sell your template(s). I would suggest that you use the freely available open source ecommerce solution called oscommerce at www.oscommerce.com.
It is easy to setup and comes by default with paypal ipn. It would control your sales, stocks, ect. Some people use it as their site. It is easy to integrate with your current site to work as your shop.
Check it out as I swear by it. I have been working with oscommerce for a couple of years now and really enjoy it.
There are also other paypal ipn solutions but the majority require you to purchase them.