Making an ebay business full time.
 

I am really looking to get into this a bit more as I always did it as a weekend hobby. It's just I don't really know where to start to make a decent amount of money to live off of. I live pretty cheap and my goal for the first few months would only be 300.00 dollars as that would cover my rent. My biggest problem is constant stock of items to sell. I have been told by other ebay powersellers what they do is get a ton of stuff and sell it for only a few dollars of profit on each item.

Any ebay powersellers on here that can give me tips on how you work?

Buy storage lockers, sell the easy stuff at garage sales once a month and the hard stuff on ebay. I know a guy that makes 40k extra per year doing this but he also works a regular salary job. Changed his life.

you can buy iphone 5 cases from china and sell them on eBay. I am sure you will get $300 profit per month.

Are you at all crafty? Things like girls hair ribbons and custm painted lunch boxes have HUGE markups and are easy to make

I hear you have to have the hook up for that and you need to buy a large number of them.


What I was doing was hitting up garage sales and pulling out vintage games then putting them up on ebay. I know how to repair cell phones to an extend. Replace glass screens, lcds, home buttons. Problem I run into there is when the mobo is fried not much worth keeping..

I suppose there is an investment I need to make before I really getting going huh? Buy in lots etc.. I just can't afford to take a 5k burn.

I was running a drop shipping eBay business when I was in med school. Was helping clear piles of hard to find HD-DVD & Blu-Rays for a warehouse. In that setting you are just a middle-man selling other peoples stuff and snagging a commisison off the top. Similar to a consignment store - which was something I had thought of doing before I decided on med school, as a franchise business model. Didn't go through with it though, but that turned into a multi-billion dollar industry a year or two later. Would've been awesome...

Anyways, I had no money out of pocket in that business, all I did was list items all night long, collect my commission, transfer the rest of the money and send them a list of addresses/orders to ship the products out to. Worked very well for a while but I was a one-man show and I couldn't handle it.

Eventually it was just too much work for me but you could def clear well over $300. I think in the 4 months of business I netted a profit of ~$10k, gross revenue was $45k+ (thats what the IRS's love letter said when it reached my parents house).

Who would I contact to get into that?

This was many years ago (HD DVDs are now long gone) I wouldn't even know who to contact any more in terms of Blu-Rays.

Was just trying to give you an example of a niche market in which you could work as a middle-man for others who have products to sell and you wouldn't be putting money down yourself.

How do ebay commissions compare with using Amazon's fulfillment services? You can ship items in bulk to Amazon and they deal with the headache of picking items and mailing them out. Your items are available via Super Saver shipping and Prime shipping.

Anyone that has the answer to a question like that wouldn't give it to you. That's the basics... why would I share my business's secrets with you so you can compete against me?

This is what I've learned about buying and selling stuff.
1) Find products. Figure out what's popular. Figure out what's hard to get. The items that are more popular and are harder to obtain will yield the best margin for you.
2) Find sources. Google, phone book, look online, alibaba, etc.
3) Go up the chain. Find the biggest distributor or get in touch with the manufacturer.
4) Have cash to buy inventory. Nobody turns down a cash deal. The more you can buy, the better the deal.
5) Selling is the easy part.

Fwiw I run a fairly successful eBay operation. $1M+ annual sales @ 15-20% margins.

Amazon's fulfillment service is pretty good but I wouldn't recommend it for small vendors.

It's too easy for stuff to get broken on it's way to Amazon and stuff gets lost in Amazon's warehouses occasionally. I wouldn't be too comfortable with them holding on to a large amount of my inventory. You have to be willing and able to absorb losses when dealing with them.

I had 100 units ($10/ea) of one of my products flagged as Hazmat in their system - couldn't sell the product and couldn't get the product back (they refused to ship it), ultimately the product was destroyed with no reimbursement... I had to write it off as a loss.
$1000 is not a huge deal when you have $200K worth of stuff in their warehouses but for a small vendor that's something that can easily put you out of business.

What were you selling for $10 that could even be considered as being hazmat?! :eek:

You couldn't call a human there to discuss with them? Seems unreasonable.

thanks :)

You might also think about selling parts. Buy used/broken items, part them out & sell them to people who want to repair/build items. Works for phones, computers, bicycles, laptops, etc etc. You almost always make a profit on the parts vs. the whole, but it can take a while & you have to sit on a pile of inventory.

How are you going to eat? I think you need more then $300 a month profit......

Anyways look for local auctions, i buy stuff all the time through local online auctions and resell them on ebay for 4x the price.

It's fun making extra money on the side, i make $70K a year at my salary job, and own a rental property that makes about $1000 a month.

Honestly this is a little off-topic, but you should keep your job, and try to get approved for a cheap rental property(2-4 family). Have a renter in the otherunits pay all your bills. Then you have no rent. Assuming you only pay $300 a month, there HAS to be cheap property near you.

FHA loans only require 3.5% down, so save up $2000-5000 and boom you're set for life.

Landlording isn't for everyone. It's easier if you live on the same property (ie renting out half of a duplex or an in-law apartment) but it can be a tiresome and frustrating job for something you do on your "off time."

It was a face cream (moisturizer), contained alcohol as one of the ingredients.

There are humans that work for Amazon, only problem is they're all outsourced - not much you can do to reason with them when they're only able to read off a script and follow protocols.

There are Amazon seller forums that I looked at before, there are many complaints about the Amazon fulfillment program... books classified as hazmat, small books charged as oversize shipping, etc...
Which reminds me, I had some makeup powder (< 1oz) that was being classified as 15 lbs when shipping. I ended up paying all the shipping costs, no reimbursement from them either.

Like I said, it's a great program when you ship thousands of items and can afford to take a hit on a few of them. But I wouldn't recommend it if you don't do volume.

Agreed. Also, it's not that easy to find properties readily available.

Even for those who specifically invest in newer condos for the purpose of rental income ($300k+/condo range), you'd think they would be easy to maintain and not too many issues with tenants since they would be more "flush" to begin with, but there are still plenty of hassles involved.

Oh ok, I should've guessed it was something like that. I'm not planning to enter back into any reselling/retail business, as it was more of a hobby while in school, but it is really interesting to hear how how things are working currently in the realm of online small business. (Although in your case I guess its a larger business.)

My rent is only 300 and I have other money in the bank. Yeah I don't want to deal with rental being someone who has been with roommates who have destroyed rental properties and pay rent late.

FHA loans are not for investment property.
and you can get conventional loans for 95% LTV, you just may not like the PMI if your credit sucks.

Well you wouldn't be a tenant of mine then, also security deposits more then cover most damages to places.

Well, last place I was at the deposit was 1500.00.. 5 college students live there with animals. The carpet was destroyed. No holes in the walls or anything just dirt smuges in high traffic corners like heading into the kitchen. They took the deposit and asked for another 1200 to repaint everything and carpet everything. We didn't pay because the carpet was 5 years old, they bought it in a short sell. The walls, well no holes or anything just dirty. But then again I suppose you should expect to repaint after people have lived there.

So yeah I have been looking at alibaba and it looks like for the order I want to do it might be hard. So I looked at AliExpress which includes shipping, however their price is right under what ebay sells for. I might make 10 cents an item after ebay and paypal fees.

I have been looking at chinabuye but like aliexpress its right under ebay prices.

Reselling Chinese products won't get you far very quickly - as you've seen, your margins would be RAZOR thin, and the cost of the ebay & paypal fees + shipping material may erase that altogether.

A better bet is to flip products from Craigslist onto ebay. It has to be something you know very, very well & that is in demand. Laptops, tablets, game consoles, digital cameras, phones & video cameras are all good bets. The trick is to buy low on CL (people will sell at a lower price on CL since it's safer to deal with cash), and then sell high on ebay. Even better if you can add value to the product - for example, buy iphones, jailbreak & unlock them and resell them as unlocked. Or get a DSLR body, add a lens, bag & storage card & resell it. High value items like these are EASY to sell so you're not sitting on a lot of inventory - you just have to know the market very well, so you can know at a glance how much something is worth & how much you think you can get for it.

I did this for a while & if I put some time into it, I could clear about $1k in a good month.

2003 called and wans their eBay back. Back then, you couldn't find you're wholesaler/supplier on eBay. And now you can. Even the Chinese suppliers can be found on eBay. It is an overcrowded place, and unless you do not have a mainstream product (such as iphone 5 cases) you can succeed.

I dropshipped books on eBay for a while, but it wasn't worth the time. I earned around 400$ per month in college, but I had to reply to every question (which was a lot, since it were twilight books, lol) and reorder as soon as possible at the website itself (which was a huge downside, because it required me to be online and order every day)

Well, I have been going to thrift stores and will hitting up garage sales in a few hours. Problem is the things I know most which is video games are the things people try to sell at ebay prices. I get so tired of driving around to garage sales only to see items listed at ebay prices.

At least if I find something at thrift store its not an ebay price.

I was just thinking today of all the taxes an ebayer pays.....

lets say you make $500/week on your job. The government will probably take $100 leaving you with $400.

Now lets say you get a great deal on a clearance laptop at Staples for $300. You pay $21 in tax to the government.

Now you list the laptop on Ebay and it sells for $550. Great!

Ebay and Paypal will "tax" you about $50 on $550.

The government will also want a cut of your profit. I believe it is 30%. So $279 x .30 = 68.70

Now you need to ship the item which is about $35 via USPS.

You started with $500. The government gets $224.70. Paypal gets $50.

You are left with $475.30.

You made $75.30. Congrats. Now hopefully the buyer doesn't try to rip you off or change their mind and want to send the item back.

Ebay now takes 11% and 1-2% on shipping. PP is another 2% so it is more than $50.

The problem is Ebay is pro buyer. It is to the point where buyers do not have to return items. So, buyer purchases computer, files complaint, keeps computer and receives money back.

even if ebay was great about returns for sellers, it is hard to make much money after ebay dips in twice and the government takes their share.

Gov only takes their share if you hit 20k correct?

Uhh. No.

Explain. From understanding ebay/paypal only sends you an IRS form if you hit 20k or so many items sold.

And you've somehow conflated that with whether it's necessary to pay tax on that income?

Why?

Because everyone reports ALL income

Oh, tax fraud.

Ok then.

GL

Most people don't hit the $20k per year annual income on PayPal. That part is obvious.

However, there are people who make money on eBay but dont break the lowest income tax bracket. No 'fraud' going on there.

I was reported when I had only made $11k (profit), IRS sent me a letter for it. I didn't even realize that was enough money to get taxed on at the time.

Nope.

1) Find a popular item on ebay.
2) Look at the "Completed Listings" to determine the average selling price. Subtract ebay and paypal fees. Determine what price you need to buy the item to make the amount of profit you want.
3) Get a business license.
4) Get a resaler certificate so that you do not need to pay sales tax on the items you are purchasing for resale. If you do not have this, manufacturers/distributors will not deal with you.
5) Contact the manufacturer. If the manufacturer will not supply you with the product because the quanitity you are purchasing to too small, then ask the manufacturer for the contact information of one of their distributors.
6) Ask the manufacturer/distributor what quantity you will need to buy to get the price per unit that you want. The more you buy, the lower the price per unit. $20 per unit for an order of 100 units. $13 per unit for an order of 1,000 units. Use your profits to buy more items/larger quantities so that you can make more money. The larger quantity you buy, the greater profit you can make, but you are taking on more risk. If customer demand drops or a competitor sells below your cost, you will start losing money.
7) Get a sales tax permit if you sell your items to people located in the state you live in.
8) Setup an ecommerce website and list your products. On your ebay product listing put a link to your website and include a coupon for a discount. The coupon will lure buyers away from ebay to your ecommerce website since they can buy the item cheaper. No ebay fee and paypal fee = more profit.
9) Estimate your state/federal taxes and make state/federal estimated tax payments if you are making a profit.
10) You might need to pay property tax on inventory if you hold the inventory for a certain period of time.

Random Question.

I buy item for $10 but it only sells for $7.

I buy for $7 and sell for $10

I do this 1000 times for each and make nothing, Do i still get hit by paypal for said "profit" because they don't see expense.

Yes, you get charged a fees because of the marketplace they offer. You are being "hit by paypal" not for any "profit", but for the convenience of making a sale by using the marketplace that they created. It is a commission, that is just a cost of doing business for you.

You will need to account for this fees, and you can obviously deduct it for taxes (i.e. you will report a net loss in your example after fees).

import from china,but not knock offs

This is really solid info. Thanks for taking the time to share. :)

What kind of rental property do you have?

like what?

You need to also take into consideration and remember - that urlhasbeenblocked about 15% of your sales price in their fees and store/listing fees, and paypal takes 3.9% when you receive money/customers payments - - so take that into consideration when figuring out your business plan.

Good luck. You can make money but $300 a month really means $400 in sales or profits on items.. . . . .


If your tax guy knows what he's doing - all of your ebay profits can be wiped out or negated due to Cost of goods / advertising / Ebay fees / computrer fees / internet fees or costs, home office supplies etc..... just keep good records.

GREAT POST SLICK DADDY - - - # 8 is a key point if people can do it . . . .:nod:

Has anyone sold something on ebay and had it shipped directly to the buyer from a regular retailler (ex. target, wlamart, etc).

sometimes things are selling higher on ebay than they are priced on sale at big retailers. it cuts one of the shipping costs out...

I personally wouldn't do that because they would have your invoice for that item. Not all retailers give you the option to provide a gift receipt in the package. You also have no control over the delivery of that item and signature confirmation if it item sold for $250 or more. Most retailers will not require signature unless they are in the $1000 range or more. So if something happens to the product, you are out the product, and out the funds, and the shipper (Target, Walmart, etc) and the buyer keeps the money.

Quickbooks
 

Just FYI, I started a thread on the usage of quickbooks to run your business. So anyone who is pretty savvy with that software, definitely welcome your feedback to questions posed there.

http://slickdeals.net/f/5804104-Q...y-Business

Due to the IRS change on Paypal, I expect a lot of folks to be running their eBay moreso like business than hobbies to avoid paying more tax than they need to pay.

do you manage your own books or have someone else do that? If you do it, what do you use to manage the bookkeeping?

You are a bit off with the shipping, very high in your estimate. Coast to coast, probably $20, so put $15 back in your profit there. And the expenses of obtaining the laptop will go in your favor as well. Most folks here only talk about the profit, but never the other items along with selling this item, deductions, that go back in your favor.

After ebay, paypal and shipping, It looks closer to 8%-10% taken off the paid value. That is the trend I see.

Some would disagree with you there. Even after all is said and done, you still came out with profit. If your expectation is go buy something for $300 and sell for $600 and keep 99% of that, I don't know what business model has such a return.

Interesting info...
A sales tax permit takes away the responsibility of collecting taxs on items sold in your state? Also, are eBay listings flagged with links to personal ecommerce sites with the same item or additional items you have?

Spoken like a true businessman :) - anyone truely successful isn't going to share their secrets, just give you some basic common info.

Keep in mind that you have no control over returns and Amazon can give your money away just to keep the customer happy. Also keep in mind you pay a monthly storage fee and if its there for a certain period of time you have to either recall it or pay a huge fee.

Overall the FBA service is good, but i certainly wouldn't use it for expensive items or items that the retail box has to arrive in mint condition (collectables etc).

Its easier to make $1 10,000 times than to make $10,000 once :)

Check out various videos on youtube. There is one guy i like, search glendon007 and watch his videos. I've not watched any of the recent ones but check out his older ones.

Speaking from experience, this happens a lot more than you would imagine. And you can't apply logic. When the item is flagged as hazmat you have to get the manufacturer to fill out a form and then send it to Amazon.

I've had shampoo flagged as hazmat. I know of another seller where Amazon was going to destroy several thousand dollars worth of merchandise because it was flagged as hazmat and that meant Amazon couldn't return it or sell it. I believe that item was glade plugins.

I've been out of the loop for a bit, but i believe you can buy a multi-unit property with a FHA loan as long as there are less than X units (i can't remember if its 3 or 5, but like i said its been a while since i dealt with that industry) and you are going to live in one of the,.


Paypal isn't reporting profit, its reporting sales. Theres a difference. It just forces people who do a reasonable amount of business to report everything. Hell, you may have lost money and can take the loss against your other income :)

Business Licenses and annual license fees are not cheap, same with sales tax permit, and hosting services of ecommerce websites, let alone credit card fees.

QB Enterprise.

I've played around with pretty much every 3rd party app to import sales data from ebay/amzn but they all pretty much suck.

The real solution is not to think of QB as a way to keep track of individual sales or inventory. ebay and amzn do that sufficiently already.

QB is just an accounting software, if you keep that in mind and only use it for accounting you should be fine.

You can add a product as a merchant shipped to see if it falls under HazMat. It will then go through their review process and clearance. If it clears you convert it to FBA and send inventory. If not then find non-Amazon channels to sell.

Being an Ebay seller is a tough business to be in especially if you sell used items. Ebay is totally slanted to the buyer these days. Buyers will try every trick in the book to get their money back after buying an item and Ebay will give them the money back.

Used items need to have every flaw no matter how small described. Photographs of flaws are good too. Ebay has certain keywords that need to be in listings for used as-is items to make it more likely you will win if a seller wants their money back.

Are you ready to meet the nearly 24x7 demands of buyers and potential buyers? Buyers and potential buyers expect near instantaneous responses to Ebay messages and email messages. Do you have a thick skin for the person who emails at midnight and then sends a nasty email at 6 am because they didn't get a reply yet? A lot of Ebay sellers list business hours and explicitly state they only answer communications during those hours, but many buyers don't read and will be upset when they don't get an answer outside of those hours.

If you go out of town and post notice of such you'll still get idiots who will buy your stuff and expect same day shipping even though there is a banner stating you won't ship until some future date when you are back in town.

If you have another job are you going to end up getting in trouble because you are trying to run your side business during work hours?

How often does this happen though to folks? I would say 9 out of 10 buyers are good buyers. You will always have that one who has expectations that not even they could meet. Those are the buyers who get blocked and you never do business with them again. I will agree there A LOT of DUMB BUYERS on eBay who expect small time sellers to be like huge corporations, thinking everyone is sitting by eBay waiting for their message. But just keep it professional, learn from your experience and keep on pushing and it will have its reward.

It only takes one or two returns a month to kill your profits for the month. Yes, buyers are supposed to return things, but they don't always come back in the same shape they left. You're still out the shipping costs usually.

My brother had someone claim they never received a shipment. My brother was pretty sure it was a scam, but he had to spend a lot of time going back and forth with Ebay before he convinced Ebay the buyer had received the item. The buyer claimed the shipment had been sent to the wrong address which was why the tracking number showed delivered.

I'm not telling folks not to sell on Ebay. Anyone doing it just has to realize that doing it as a business can be a huge commitment.