Bedford Ramblings
Steve Mills

Finally eBay, FINALLY! Where have you been?

Posted Saturday, October 31, 2009, at 11:36 AM
View 23 comments
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  • Steve how do you go about selling on ebay? Do you have to get a local county and city business license, and a sales tax ID for selling online through ebay and/or website?

    Or can you set your account through ebay or a website to not be able to sell to state of Tenn. and avoid getting the Sales tax ID? Also are you getting your supplies through a supplier for a lucrative sales rather than finding things around the house and such? And if you are getting them through a supplier, do you get to inspect the item personally yourself so you can express the condition of the item and ship it as well, or do your supplier just provide you all the info, and ship it for you, and you get a percentage of the sale for introducing a buyer, kind of like an affiliate sales rep on line?

    I'm interested in doing this as well, but I want to know what exactly does it involve having done legally, and how everyone is getting their supplies for the selling on ebay.

    -- Posted by Momof3&3step&1gran on Sat, Oct 31, 2009, at 4:54 PM
  • I am not a tax consultant, so PLEASE take my comments as just being my experience. We have tax number, but to my knowledge at this time, the business license is not necessary if you are selling online.

    If you sell as a business and sell to a general consumer inside the State, you would need to collect and therefore pay sales tax. I say general consumer, because you could possibly sell wholesale but your buyer would have to have a sales tax number as well.

    You can select States to charge sales tax, but I will have to research the blocking of States to eliminate the need to charge sales tax. You can do that with countries if you choose to sell Internationally. Collecting sales tax and reporting/paying it to the State is not real difficult.

    Another twist to the State sales tax is whether or not you are selling your personal things (like a yard sale) or buying to resell. For more information you might want to go to the TN Department of Revenue: http://www.state.tn.us/revenue/tntaxes/salesanduse.htm

    I personally do not feel comfortable with "Drop Shipping" our items for sale. This is what I think you were referring. Some people do this successfully, so it is an avenue of sales, but I would not suggest starting out that way.

    One big reason for this is that you put your reputation and sales success in someone else's hands. If they do not ship on time, package poorly or ship inferior product, it is YOUR eBay name that takes the hit, so, if you choose to go that way, get to know your drop-shipper VERY WELL.

    Internet affiliate marketing is something a bit different. This is where you have a blog or active website that attracts traffic and your visitors click on affiliate links you have set up in advance. That is a topic that should be discussed separately.

    We own most of the items we sell or in the case of consignment sales, we take possession of it 99.9% of the time. We do not want something we have listed on eBay to suddenly not be there when the sale takes place. As with drop-shipping, our reputation is what would take the hit, not the consignor's.

    I would learn with things around your house. As you develop sales, you will get a feeling for what you want to handle. You might not want the extra packaging that is needed with fragile items, or the extra shipping details for large items. You might know silverware well but little about ceramics. Choose items you are know something about, or be prepared to learn before you sell.

    If you have an existing relationship with a good wholesaler and know the product, certainly explore it, but I would not go out and spend a lot of money on inventory. Start small.

    Also, I would recommend not starting out with an internet sales company that promises you a website and merchandise to sell unless there is little to no investment. I do not know of any that meet that criteria and regrettably I have had students come up to me after class who have invested $10,000 or more in such "get rich quick" programs. I refrained from asking why they were coming to me for en eBay class, if this turn-key program was so good. I am afraid I knew the answer anyway.

    There is a lot to learn, but once you have the basics and start small, you can grow into a nice sideline or full-time business. Hope this answers you questions. (probably more than you wanted, but....)

    -- Posted by stevemills on Sat, Oct 31, 2009, at 11:11 PM
  • I've seen the first ad and while I can't say it jumps out at me, it is a start. Just about anything will be better than what we have (not) had for two years.

    eBay plans to have some mini-eBay Live events scattered across the nation in 2010. They hope to have them within a day's drive of most eBayers, but I have not seen a schedule that brings them close to us yet.

    In the past, these events had some educational benefits, networking with suppliers and socializing. If it is not too far away, we will probably attend.

    -- Posted by stevemills on Sun, Nov 1, 2009, at 10:07 AM
  • Thanks Steve, what you have said makes alot of sense. I did not know if you had to have a certain amount of items to sale before you can become an ebayer or not, that was why I was concerned about having to have a supplier or able to sale things around the house.

    And my other concern would be selling something that I have not inspected myself and find out something is wrong with it or it is not as described. Do you ship your products through UPS, and do you have a certain type of scale to measure weight/size so that you know what the charge would be for Shipping? I did not know that you were teaching an ebay class, do you still teach it? If so, How much is the class, how often is the class, and what all would you need to have or know to take this class?

    -- Posted by Momof3&3step&1gran on Sun, Nov 1, 2009, at 2:12 PM
  • I agree with Steve on the drop-shipping, Don't do it. It will eat up so much of your resources, your time and money.

    Regarding tax, if you make more than 600 dollars per year then you need a tax id and business license.

    -- Posted by Evil Monkey on Sun, Nov 1, 2009, at 3:12 PM
  • The T-G would prefer I don't discuss class details on the blog, so e-mail me at Steve@bedfordtradingpost.com. eBay teaches us to work with beginners as well as experienced, so the basic thing is to have some comfort with a computer and the internet.

    It may seem strange, but I have had students who did not own a computer and never worked on one before. That was a bit too green, but they brought a younger relative who understood the basics.

    We ship with US Post Office for several reasons. The first is that it is the closest shipping service to us. Secondly, unless we have an account with UPS and can arrange delivery or pick-up, they are expensive (at least in my opinion). Same goes for FedX.

    You can make listings where the customer pays for shipping, but a smart shopper looks at the total cost to get their product so you need to be able to tell them how much shipping would cost. eBay tries to encourage sellers to offer "free shipping". Free shipping is not free, and it changes the way you have to market you items.

    You want to know the packaged weight and size of the item you are shipping. You can package a few things and take them to the Post Office before you prepare your listing, but that gets old quickly, so if you know you are going to sell a number of things, invest in a digital scale. Selling the same thing, makes it easier too, but we often do not have that luxury.

    You can buy a reasonable scale, at a good price on eBay, but make sure that you match it up to your regular shipper's scales. Our scale goes to 54 pounds and measures in tenths of an ounce, but it is 3 ounces different than the Post Office, so we have to mentally take that into account each time. A more expensive scale could be adjusted.

    Most shippers do not work in tenths of an ounce so if it is 10.2 ounces, it is always rounded up to the next ounce. Get to know your shipper's categories and what that means to weight and size. For example, once you go above 13 ounces with the Post Office, you can no longer ship First Class, it becomes Priority.

    When it shifts into Priority the size of the package becomes important. Just like weight, they deal in whole inches. A quarter of an inch over could make a big difference, especially if you are shipping International.

    Getting to know you shipper of choice "in person", can help immensely, which is another good reason to work with someone local.

    -- Posted by stevemills on Sun, Nov 1, 2009, at 6:49 PM
  • I've been selling on ebay for four years and average a monthly income of $2,400, that's not including my earnings on etsy, amazon, bonanzle, ioffer, and ebid. The best part, I don't have to pay a sitter or gas to commute. I design everything I market--craftwares mostly, with almost no overhead expenses other than S&H.

    -- Posted by nee_nee2abby on Sun, Nov 1, 2009, at 9:37 PM
  • Anyone can sell on ebay--yard sale items, stuff in attics/basements, crafts you design, art, and even dropshipping if your into that (usually less profitable than other options). The most important thing to remember--it's all in how you market your product(s)--presentation will make or break you.

    Display lots of "flattering" photos...put your best foot forward. And use words like "vintage" or "retro chique" and "lots of life left" or "lots of character." I once bought a "vintage" tea set at auction for $8 and sold it for $112 on ebay three weeks later. It was all in my wording and photo presentation.

    If you really want to learn to sell on ebay, there are plenty of ways to learn for FREE. I never paid anyone to teach me and I now earn more than most of the ebay "teachers." The best place to start (which I never knew about when I was starting out, so you're already ahead of the game) is to read article tips from the website "ehow." Just enter "how to sell on ebay" in the topic search and you will find tons of articles with step by step guides--and it's free!

    Best of luck.

    -- Posted by nee_nee2abby on Sun, Nov 1, 2009, at 9:54 PM
  • And yes, once you get "rolling" on ebay, you have to consider it a business and report earnings for taxation, otherwise you will face a huge headache in the future.

    -- Posted by nee_nee2abby on Sun, Nov 1, 2009, at 9:56 PM
  • Regarding tax, if you make more than 600 dollars per year then you need a tax id and business license.

    -- Posted by Evil Monkey on Sun, Nov 1, 2009, at 3:12 PM

    EM. what if you are not selling the products in the state of Tn. Would you still have to have the Sales Tax ID. If so what is the purpose of the sales tax in that situation? Thanks.

    I had noticed that some websites I visited that sold products on it replies that they do not sale products in certain states, or it may say sorry US only, and I believe (Not Sure) they have a way of blocking any state that shows up in the address to recieve the product deny the item to be purchased. And the same for US only sellers.

    -- Posted by Momof3&3step&1gran on Sun, Nov 1, 2009, at 10:37 PM
  • And yes, once you get "rolling" on ebay, you have to consider it a business and report earnings for taxation, otherwise you will face a huge headache in the future.

    -- Posted by nee_nee2abby on Sun, Nov 1, 2009, at 9:56 PM

    Thanks nee_nee2abby for your info. and advice as well. I need to ask, are you referring to reporting the "Income earned" or "Sales Tax" for taxation. These two are seperate, I understand reporting your income earned; my question is will it be simplier to sale outside of Tn. and avoid the sales tax id, or not. I tried to sale some products before on a website, and they did not sale, But even though I did not sale anything I still had to pay money in on the sales tax ID. I do not believe it was for a renewal fee either. I did buy, some products from an Supplier in Ohio, you were required to show a Sales Tax ID in order to buy the products, and of course being that I was not in the state of Ohio I was exempt from paying Sales tax on the items. Maybe that had something to do with it, not sure.

    What is your advice on the Sales Tax ID, is it reported every 4 months, 6 months or annually? Am I only paying in on the sales tax of Tn.? Or other things as well, like renewal fees aren't they going to seend this seperate? Thanks for your help, I will defanitely check out ehow. And I am glad things are going good for you and other ebayers as well. Much success to you all.

    -- Posted by Momof3&3step&1gran on Sun, Nov 1, 2009, at 11:06 PM
  • Currently, eBay sellers and online business owners are not required to collect sales taxes on items that are sold and shipped to customers in another state.

    If the state the eBay seller or business is located in has a state or local sales tax, then you are supposed to collect sales tax on items sold and delivered to the same state, but many people are not complying with these rules. Basically, when it comes to [small] online business, such as ebay sellers, tax payment/collection is literraly based on an honor sytem. It's up to you to do the right thing, because there is currently no one regulating these "entrepreneurs."

    Think of it like this, if you hold a yard sale and sell items that you already purchased once and paid a sales tax on at [original] purchase, should you charge a sales tax again? It's a gray area. If all you are doing is selling some old things around the house, like you would in a yard sale, then I wouldn't worry much over it. But if you plan to expand into a business in the income levels that I deal in, trust me IRS will eventually bite you in the B_tt if you don't give them their cut...both state and federal.

    Also, with the Democrats back in power they are once again pushing for the proposal to tax ALL online transactions across the board, which means you would be required to charge sales tax on every state according to that state's tax rate, and online marketplaces such as ebay and Amazon would be required to report your gross earnings to IRS. Trust me it's coming so your best off to deal with it now, rather than face a possible audit in the future. (Also, some states require you to charge tax on the S&H charges too).

    Here is a link to help you get started getting a tax ID/reseller's license (note, a sole propietor/single owner business can use their social security number in place of a tax ID).


    Also, here's a little tip:

    If you are only selling leftover items around your home that you bought for personal use, you only have to claim them as "Self-Employment Tax" (Pub# 533 SE Tax) on your FEDERAL return if your GAIN is over $400 per year.

    Before you stress over having to pay into state and federal taxes, just remeber that you can claim a lot of deductions on your tax form. For instance, if you work in your home, you can claim a portion of the home and any needed repairs or renevation as a business expense. The same goes for your vehicle wear/tear, gas expense, postage you buy, laptop, software, materials, etc.

    Once you register for your Tax ID you'll receive monthly/quarterly forms. I file mine quarterly.

    On a different note, I HATE the new "tax and report all online sales" proposal. Because most sellers eventually run into "non-paying" bidders, it is unfair to have ebay report your gross sales on a 1099 without deducting out those transactions that never completed. The margin for error is too great and it's the little sellers like us who will suffer for it.

    Anyway, I hope I was able to help. Definetely check out ehow because they have tax articles too. There are lots of free resources out there, but the best advice for tax issues will come either from your accountant or an IRS tax advocate...trust no one else.

    -- Posted by nee_nee2abby on Mon, Nov 2, 2009, at 1:17 AM
  • We have some good discussion going.

    There is no doubt that you can teach yourself and there are many, many sources for ideas and information. I browse many of them as well because it is always good to get ideas, BUT if you want specifics about a particular trading site (eBay, Bonanzle, etsy, etc) be sure to go to their site for accurate details. Sometimes those sites are overwhelming with information, but with time and patience, you can glean what you need.

    Free advice always needs to be double checked, even mine, and I have been trained by eBay. Why? This is because we are human, because the sites are always changing and because no one can be an expert on the whole trading platform. Even the "Dean of eBay University" Griff, does not claim to know it all.

    There are a number of sites who solicit articles on various topics to generate traffic to their site. Examiner, eHow, Wonderhowto, Howcast, are just a few. I know of some very talented people who write for them and you can get some good ideas and information. Some are eBay Education Specialists like me, but don't consider it Gospel. Research it yourself.

    Momof3&3step&1gran you mention selling sites and websites and I want to make it clear to others that they are two different species of internet selling. A website has a great deal of flexibility, but you need to know how to build it, manage and promote it. I use a wysiwyg (what you see is what you get) software to build my sites because I have limited html knowledge.(lingo for website programming) But this is just the start of what you need to manage inventory, accept payments, promote and optimize your site.

    My suggestion is to choose a selling site like eBay, Atomic Mall, Bonanzle, etc and learn their system. Get your momentum there, then branch out to others, while developing your web presence and business name. Don't feel bad if this seems overwhelming. It is to many, even me at times. It all can be self-taught, but it will take some time and patience unless you already know internet & marketing, &..........

    You won't learn all this in one course either, so don't think there is a magic pill. Anyone or any program that promises to teach all of that is probably blowing smoke and I would avoid. I would suggest staying away from any program that promises you knowledge and a product for a "small fee plus monthly charges" .

    Regarding your question about restricting sales to particular States, I do not think it is possible in eBay. Here is the link for "Selecting Buyer Requirements" http://pages.ebay.com/help/sell/buyer-requirements.html You can limit countries, but even then I have seen buyers get around it by registering with a friend's address in the U.S., then they ask you to ship it somewhere else. (Handle with care or refuse that sale) You can try to restrict it in the listing, but eBay or other sites may not help you enforce that. We sell worldwide, have sold over 5,000+ items and I can probably count the Tennessee sales on my fingers. (I have all ten)

    nee_nee2abby pointed out something that used to trouble me about Education Specialists until I dug deeper. Their sales feedback seemed low for being an instructor. After checking further, I found many who created a separate identity to use for being an ES and actually sold quite a bit from the original eBay name. Others who I have met in person at eBay functions may not sell a lot, but they sure do know eBay and know how to teach. The two do not always match up, so I would contact any potential educator and get a "feel" for yourself.

    I believe in constant "personal development" so in another life I live, I go to sales seminars, etc.. If I am concerned, I don't hesitate to call up the company or instructor and ask them why they are qualified to teach on a particular subject. This gives me a feel for their personality and how they handle point-blank questions.

    -- Posted by stevemills on Mon, Nov 2, 2009, at 8:08 AM
  • Here are some proven tips for becoming a Powerseller on ebay quickly and increasing your selling potential.


    1) Your eBay account must be in good standing, meaning no overdue charges.

    2) Your Feedback Score must be at least 100 with a 98% positive rating.

    3) Your average sales must meet a minimum of $1000 for a 3 month average

    It looks like a lot, but believe me it's not that hard to meet your goals if you dedicate yourself! The first one is easy, you must keep your account in good standing. Simple, make sure you pay the invoices on time when they are sent to you.

    For the second requirement, you will need feedback of at least 100 to become a Powerseller.

    Tip #1: Build Your Feedback If You Haven't Done So Already.

    Here a few inside tips on how to build your feedback fast and inexpensively. First of all, click on the advance search link located in the top right of ebay's home page. Now, you will see another link called advance search, click on that link. Now type "Free Shipping" in the Keyword Section. Go to the next section where it says Min and Max Price. Enter something low like $.99 for the maximum and minimum amounts. Now select the "Buy it Now" option and begin the search. Now look through the items to see if anything genuinely interests you and you want it, then buy as many $.99 free shipping items as you like.

    Keep in mind that multiple purchases by the same seller generally will only issue you a 1 on your feedback rating score despite the multiple purchases. While all feedback is helpful, you may want to keep that in mind if your trying to get your rating score higher. Now, do the same as above but this time change the search criteria to eBay stores only.

    Even better yet, if you already own an eBay store (search the Help section of ebay for "ebay store" and you will find all the info you need to get started and open your own), go ahead and set up a multiple listing (say 30 or so items) of buy it now's for only $.99 or so. Sell a collection of recipes or a nice photo of flowers or landscape that you've taken--something you can send through your email for free so that you have very little expenses and can list the item for sale cheap.

    Offer two options, by snail mail (USPS) or by digital delivery. If you sell items by digital delivery (email) you will need to list in this section. Just search ebay's help section for more info. Make sure you put free shipping in the title to attract more buyers. That way, buyers will come to you first through the store searches. "Warning...EBay's listing policy permits you from listing this type of auction for ridiculous amounts like $.01. You want to make sure you list a FAIR product or service for a competitively fair price. This will prevent you from being sited for a feedback violation. If you are sited, your feedback could be erased, so BE CAREFUL."

    To continue, always leave positive feedback immediately after the $.99 (or higher) purchase. This is important, it lets your buyers or sellers know you are serious about collecting feedback quickly. And if they do not leave feedback after a couple of days, then send them an email requesting to leave positive feedback.

    I used to teach ebay seminars on becoming a Powerseller, but my sales are topping 400 items (averaging between $10-$29.99) between each of my various marketplace accounts so I no longer have time to teach but still enjoying helping others. Most powersellers don't want to give away all their secrets, after all who wants the added competition, but ebay has such a large customer base and my product is one-of-a-kind so I don't mind. I'm not trying to sell a service to anyone, or even any of my products, just help you get started and be successful.

    Best of luck and keep any eye out for Steve's ebay updates, because the rules are ever-changing at ebay lately.

    -- Posted by nee_nee2abby on Mon, Nov 2, 2009, at 10:27 AM
  • Change is the one constant on eBay. They stated that they will only do two major releases a year, but what is major or minor in their eyes is still to be determined.

    The new Top Rated Seller (TRS) program had good intentions but the actual application is getting mixed reviews and is unpredictable. More on that another time.

    -- Posted by stevemills on Mon, Nov 2, 2009, at 12:23 PM
  • I agree Steve, I don't care much for the TRS program. I have had some buyers who left me low DSRs (Detailed Seller Ratings) for S&H charges--even though ALL of my domestic S&H is FREE!!! Some buyers just do a "random" run through and put 3 or 4s, not realizing it hurts the seller. They [ebay] make it seem that 3 or 4 is an average/standard and fair rating by the wording, so many buyers don't realize it impacts your total DSR status, and thus your listing placement.

    Sometimes you just can't win for losing when it comes to selling on ebay.

    -- Posted by nee_nee2abby on Mon, Nov 2, 2009, at 1:14 PM
  • I know some sellers who went away from free shipping for that very issue. Since buyers did not pay shipping they rated this category with 3's, because they thought it did not apply.

    Now eBay suggests a 5 star for free shipping. Instead, they should make it a filled in selection. No choice but 5 star.

    For those of you just starting out, free shipping should probably only be used with Fixed Price or Store listings. Unless you are very confident that an auction will cover those expenses, I would leave those at "calculated shipping".

    -- Posted by stevemills on Mon, Nov 2, 2009, at 4:09 PM
  • Good point Steve, ebay should default free S&H to an automatic 5 star rating. And I agree, it's best to only go with a calculated or fixed s&h rate for "auction" sales.

    My sales are all fixed rate listings, so I set my price to include what I would spend for S&H and what I want to get out of the item. Then I list it with free S&H to make the buyer think they are getting a better deal and to get a better placement in searcg listings, plus a final value fee discount (available to powersellers in good standing). It's a little trick of the trade that most powersellers are using these days to beat out the competition.

    Best of luck in your sales this holiday season Steve. Hint to all, this is a great time to start selling because the online customer base doubles, and even triples, during the holidays.

    -- Posted by nee_nee2abby on Mon, Nov 2, 2009, at 7:15 PM
  • Thanks you guys, I did wonder how the Shipping & Handling process actually took place. Was the seller paying it when he sends/ships it off, and recoups it through the buyers payment, or was the buyer actually paying seller and shiping provider both when he makes the payment arrangements, via credit card, pay pal etc. I believe it is best for me to talk to the IRS or the company that is on Bethany Lane street where you file a application for the Sales Tax Id, to see what they say about me needing the sales tax on my Ebay sales, should I become an actual seller.

    I do not like to take chances with not knowing for sure, better safe than sorry. I will study the other ebayers stores to see what is popular selling, and of course talk with the post office on shipping different weights and sized products and the best way for me to fiqure out the shipping charges to charge for. Does Ebay charge a fee to use their website? If so How much? How much does paypal and/or others charge to do transanctions for your sales too?

    -- Posted by Momof3&3step&1gran on Mon, Nov 2, 2009, at 11:23 PM
  • No fee to sign up, but the fees come from when you list an item and when it sells.

    PayPal likewise does not charge to sign up but you need a Premier account to accept payments. The fees come from when they handle money for you and if you have foreign exchange changed into U.S.

    Fees for both services vary by what services you used and the value of the item (eBay) or transaction (PayPal).

    Sorry it is a short answer but I have a meeting.

    -- Posted by stevemills on Tue, Nov 3, 2009, at 10:56 AM
  • Quite alright, Steve. Thanks. for all your help.

    -- Posted by Momof3&3step&1gran on Tue, Nov 3, 2009, at 6:24 PM
  • I am glad to hear about the advertising. My sales are lower than they have ever been. I am at just less than 50% last month, and that is with a serious reduction in prices over the past few months. It could be that I need to re-examine my selling strategies and work a little harder though. I hope others are doing better than I am.

    The changes I was so worried about last year have not affected me much. I do resent the free shipping added visibility and the removal of the insurance option. It seems as though ebay wants a cut of every single aspect of the transaction. I just hope they understand that without the buyers, the sellers cannot pay the fees.

    Momof3&3step&1gran, I hope you do try selling and are very successful at your endeavor. I imagine Mr. Mills can help you out a lot, both here on his blogs and in person, if you decide to go that route. Maybe he could even provide a significant discount for his dedicated readers? ;)

    -- Posted by memyselfi on Mon, Nov 9, 2009, at 1:40 AM
  • Your last "hint" is something I would love to explore publicly, BUT the T-G (understandably)does not want their blog to be used in that fashion.

    It might be fair to explain what a person does to become an eBay Education Specialist and what other similar seminar folk might go through to bring the public their message. I will start a new blog on that.

    There are many who offer classes on varied subjects and it would be wise for any prospective student to research what they are getting and what experience or education the teacher has in their subject.

    I am attending a class in early December for developing a safe Document Selection, Security, Retention and Destruction program. Before I plunked down my money I wanted to know who was teaching it and what experience and training they had in this field.

    I have since done some research on them and feel comfortable that they have something to offer me.

    -- Posted by stevemills on Mon, Nov 9, 2009, at 7:39 AM
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