eBayers coming over to Amazon...sigh...

While going through the joyful process of getting some of my items listed in Amazon, I noticed that there were quite a few sellers with some of my items, and they were selling them for a really great price.

Now, in this case "really great" means really great for the buyer, but it means "almost no profit" for the seller.

Let me explain...

Some of these sellers are ebayers, who have either jumped ship and trying out "the river" or are selling on Amazon as well as ebay.

If you fall into this category, here are a few words of advice.

By the way, I don't care how many people sell on Amazon, or how many people sell the same things I do. If you want to sell what I sell and undercut my price every time, I welcome it. Because the more you do this, the more likely it will be that you'll go out of business!!!

1. Don't price your amazon items like you're selling on ebay. The fees will kill you. You were likely operating on a low profit margin on ebay in the first place, so you will be making even less on the river.

2. Quit using your stinking ebay-watermarked pics! You know what I'm talking about...the pics with the little camera watermark in the lower right corner. Amazon hates watermarks. Either photoshop them out or take new ones. BTW...I'm one of those jerks who'll report your pics. Remember...all's fair in love and war...and business.

3. Take quality pics. By "quality" I don't mean a pic taken with your good sofa as the background. Pics should have all white backgrounds. They should be in focus. They should focus on the product. And skip putting "God bless you all" text on the edge or side. Seriously.

4. Don't get caught up in a price war with other sellers. There are plenty of sellers out there who will willingly lower their prices because they know you'll do the same to get the coveted "buy box". They can take the temporary loss in profit. Can you? If so, get your war paint on, because this is one war that can go on for a long time. Word of advice: price fairly, don't always try to undercut the competition.

If you want to sell on Amazon and you were (or are) and ebay seller, Amazon can be a welcome change...or an absolute nightmare of rules, requirements, and warnings.

So do your research. Then do more. I did this for months before I listed my first item. And it saved me a lot of headaches.

Perennial question #1: paying taxes

So...

If you ever go through the ebay message boards, there are usually a few questions people post that I like to call "The Perennial Tax Questions":

1. "Do I have to pay taxes on the stuff I sell?"
2. "Do I have to collect sales tax?"

What I'd like to do here is address the first question for now. I'll handle the other one eventually in another post.

PLEASE note, though, that I am not an accountant (nor do I play one on TV), but my accountant IS an accountant and also a former IRS agent. So the words I speak are true.

And here are your answers...

1. maybe.
2. maybe.

OK, maybe not so clear cut. But these are usually not simple answers.

A lot of people will bring up some piece of the IRS code about "hobbies". And you can do whatever research you want into this.

But I'll save you some time. If you answer yes to these questions, then you need to declare your ebay income (or whatever venue you use) on your taxes...

1. Do you sell regularly?
2. Do you buy stuff to resell in one form or another?

For example:

1. If you sell monthly, this ain't no hobby. You're a real seller. Have a collection of 80's New Wave LPs you want to sell? But not much else? OK, maybe you're not a real seller. The keys here are "volume" and "regularly".

2. If you hit the garage sales to find stuff to sell, then by gum you're a real seller. If you buy yarn to make and sell laptop cozies or beercan hats, then, again, you're a real seller. The key here is "resell".

So lets put the keys together, shall we? "volume", "regularly" and "resell".

Does that describe your sales activity? If so, then guess what? You'll get to become great friends with Schedule C.

Does this describe your activity? For example, a sporadic activity or a hobby does not qualify as a business. If so, then you're probably safe.

Now, you may be wondering "Hey, Rich. I sold a ton of stuff so far this year, so I am probably a real seller, but I hardly made anything. Shouldn't "profit" be part of what makes me a 'real seller'?"

No.

And for 2 reasons:

1. Being a "real seller" doesn't automatically make you a "good seller". There are plenty of real sellers out there who end up netting only about 5% to 10% of their total sales.
2. Schedule C is for profit OR loss. If you cleared (for example) $100 on $2000 in sales, you still made a profit, and you are a real seller...just not a very good one. If you lost money in sales, you made a loss, which is beneficial for you at tax time anyway! BTW, either if these describe you, you may want to revisit your business model ;-)

Still confused? God, you shouldn't be. If you are wondering if you need to use Schedule C or not and reading this blog, then you probably do need to use it.

Hope this helped a little bit.