Amazon Archives

To Start an Electronic Buy Back Business or Not?

We all know that the internet has unlimited possibilities, but many people do not know what it really takes to get a online business off the ground (self included).

I myself have been contemplating the idea of starting an electronics buy-back website (apple products and camera gear), but am a little timid to put a lot of time and money into an unknown investment.

A little background, I sold a large amount of electronics in 2011 and made a little bit of side income. I was buying items from eBay and selling them on Amazon (as I’ve previous written about).

Was I making money? Yes, but the real money is in buy-back websites.

The prices that some of these buyback websites are buying electronics back for are just simply too low. I’ve personally seen items that I was buying for $60-70 that had a sell back price of $20 or sometimes less.

Even with paying shipping, overhead, advertising, etc, I think the margins would have to be at least 500% to 800% larger what I was working with in 2011.

So now comes the question, how serious am I about getting a website of my own up? It’s completely new territory, I would have to hire a programmer, and pray that it actually works out. There are a million questions to be answered, but I believe it could potentially be a very lucrative move, if done properly.

The questions:
1. How much is the budget?
2. How much demand is there for this service?
3. What’s my break even?
4. What’s my goal ($$ wise)?
5. Who to hire (prefer local hire, but most likely have to outsource)?
6. Where to host?
7. How to make shipping arrangements?
8. Write terms of agreement?

It might be the right move on paper, but it could easily turn into a large waste of money, but what’s investing if not anything but uncertain.

I’ll keep you updated.

Selling Electronics on Amazon to Make Money

Selling Electronics on Amazon

Selling Electronics on Amazon

I have been toying around with going back to selling electronics on Amazon to make extra money. Full disclosure, my stocks are doing very well but I feel the urge to get more side-hustle going. This website has shown me the dark side to making money via blogging, and that ultimately the only real way of making a living via web content is to do some questionable things.

Therefore I am going to most likely get back into selling electronics on Amazon for some extra cash. I had a very successful year in 2011, but decided to give it up due to the hassles and time constraints.

Why am I reluctant to get back into this?

  • People. You might be surprised to find out how many bad consumers are out there, and when your margins are slim — it can be painful to have a big ticket item get “lost in the mail.” I mitigate this risk a lot by using signature confirmation on everything I ship, but at a cost.
  • I spent too much time on the computer.
  • Taxes. Nothing hurts more than seeing my refund take a nose dive when I go to pay all of my taxes on my profits.
  • Book-keeping. A lot of time and hassle goes into bookkeeping for my online business.
  • Physical organization of inventory can be a hassle.

How much money are we talking here?

  • If I went all out, I would think $500 to $2,000 a month. A good year would probably be $15,000 extra in cash.

How are you doing it?

I have made a couple of posts in the past talking about it. Check it out here.

Final note - iPad 1st Generation 32gb is currently under $250 on amazon. Don’t forget to click on the “used” tab.

 

Amazon sellers can rejoice this time of year, the time of year when prices for used items such as electronics increases. I myself am an amazon seller and I’ve watched the prices of items throughout the years and things usually get pretty crazy right about now.

I sell a lot of iPod touches and iPod nanos in particular. An example of this pricing increasing is an iPod Touch 1st generation 8gb. Currently selling for $139.00!!! Mark my words, these will be below $90 in January. I myself have sold at least a dozen of these under $100. Also I would like to warn anyone buying these iPod touches to make sure you check all generation’s prices. The used 3rd generations have been cheaper than the 1st generation’s all week! Just because it’s the oldest generation does not mean it is currently the cheapest.

2954733_sbAnother interesting story this year is the lack of inventory for LeapFrog – LeapFrog LeapPad Explorer Learning Tablet. Apparently if you don’t buy this toy for your child you do not love them enough, I am told. The way people talk about this device is that is virtually is a game changer. I personally have no experience with it other than watching it go for $99.99 one week to going to $179-$199 a week later on amazon. The company failed no matter how you look at it. They either did not make enough inventory or they did not price it properly, but amazon retailers are always happy to cash in on mistakes like this.

All of these prices are sure to drop soon, but it’s an early Christmas for many amazon sellers.

1099Many people make a living with online sales through eBay and amazon, but many of these sellers are not up on their taxes what-so-ever. 2011 is a game-changer, now companies like amazon and eBay are required to serve their sellers a 1099-K. The 1099-K outlines how much these sellers have been distributed.

Why is these changes so important? Sadly, many sellers do not pay their taxes. Going through the amazon seller forum, you see posts entitled “Do I have to pay taxes on my income?.” You click on some of their profiles and they very active and have been selling for 5+ years! Unbelievable these people snuck buy for so long, but it ends now.

Taxes such as:

  • Sales tax if applicable (That amazon does not collect)
  • Payroll taxes (which eat a substantial amount of your bottom-line)
  • Federal taxes
  • State taxes
  • City taxes

Many sellers were able to hide in the shadows of the online world, but no longer.

I myself am a very active amazon seller. I am now in the process of researching the best method to approach my taxes with my side business that I started this year. This year I will most likely have to file a Schedule C (to figure out net income for taxes) and a Schedule SE (to pay employment taxes).

Many people suggests S-corporations or LLCs that offer some tax benefits, but at the end of the day – no matter what you choose it going to result in you paying a lot taxes and doing a lot of paperwork. A sole proprietor offers virtually no tax benefit and is viewed as slightly brutish, but it is also the easiest way for someone who makes a few thousand bucks a year. Note that if you are selling only personally items and are not making a profit (selling for less than you paid), then you most likely do not have to file anything.

Many sellers maybe required to file quarterly estimated taxes. You think most of these online sellers are doing quarterly taxes? They are not. That isn’t to say the big players aren’t on top of things. If you have revenues of over a million – odds are its in your best interest to hire an accountant. Sadly I think there are an overwhelming amount of people who are making some money (think $15k – $40k) who are going to be crippled or even removed from online selling once they fact the true tax bill and time to keep proper books.

I for one want to be as transparent as possible to the government. It is important to pay your taxes – I just wish all of the paperwork wasn’t involved.

Disclaimer: Follow all federal, state, and local laws. Keep proper records and pay all applicable taxes. CONSULT A PROFESSIONAL ACCOUNTANT for your tax needs. Epicfinances.com is not to be used as a reference for your actual tax preparation.

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