Ebay 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.

 

jamFor those of you who are not aware of etsy.com, it is similar to eBay.com, but it is oriented more towards homemade, handcrafted, and vintage items. Looking for a vintage 5-qt 1960’s lime green club brand pot, it might be a cool place to look. It has a ton of interesting items and lots of artistic flair. I however have a major problem with etsy and eBay, food sales.

Want some online chocolate chip cookies, granola, or jam? Etsy and eBay have them all. Homemade food. My problem becomes, who is regulating these sales.

I understand that regulation can be a barrier to small business, but this is an issue of safety. How can these online sites be allowing people to distribute food without verifying that they are safely prepared and stored?

With a cover-all statement found on their sites:

Etsy:
“Do I need a license to sell edibles on Etsy?

According to Etsy’s Terms of Use, it is up to each seller on Etsy to abide by the appropriate laws, statutes, and regulations relating to your business and selling your products.  However, many laws vary from country to country and from state to state.  For example, many states require that all items intended for human consumption are stored, prepared, labeled, and packaged in a licensed kitchen. Other states require notifying the local health department and filing the respective paperwork for a food permit. Alternatively, a seller may have to secure a licensed kitchen with yearly inspections and a state approved food handlers.  The state may even limit what you can legally produce for sale on and off the Internet. Your first step is to contact your local health department or department of agriculture depending on where you reside.”

 

eBay:
“Be sure to follow federal and state laws when listing food items. Here are a few examples:

  • Ingredients: Federal and state laws require labels to state, among other things, the food’s ingredients, nutrition information, and place of manufacture.

  • Food licenses: Almost all states require food manufacturers and sellers to register with or obtain a license from the state.

  • Import/export: Laws restrict the import and export of many food products.


In other-words, make sure you don’t break any laws, statues, or regulations. Also make sure you have every permit you need and make sure everything is up to code.

I’m not buying these cover-all statement.

Etsy and eBay should be forced to verify that these individuals distributing food, have the right to do so.

Some of these items in particular items containing fruits – could be harmful. If went to a major distributor with my homemade jam, you can bet that they would be legally required to verify that I have the proper kitchen, permits, etc. to prepare this item. That major distribution also has to fear distributing a potentially harmful product. Furthermore, not to sound crazy, but if you are selling 100 jars of jam a day and you want to hurt people (for whatever reason) you could have a mass poisoning through your distribution chain for your jam. By the time people figure it out – you may have hurt or even killed hundreds of people (I realize this sounds extreme).

I understand that this can be a barrier for people who legitimately want to sell their products, but this is a recipe for disaster. Mass distribution methods for food need to be regulated for safety.

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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