Advice for eBay Business - Book Keeping, etc.

[airjoedan]

Hello,

First time poster but frequent lurker :-)

I have been an eBayer for years but strictly a hobbyist. I have sold many things over the years and am very experienced with how eBay works, I just never approached eBay as a business - never looking for profit. Generally as a hobby buyer/seller, I lose money selling as I buy items that interest me instead of looking for any potential return on the money spent. That being said, I know how to eBay.

I believe that if I set my hobby aside, I have the ability to make money with a niche inventory and would like to try this as a very small side job. I would like to start 2017 with this idea. Here are my goals:

1. I will keep track of everything I buy (receipts, travel, etc.)
2. I will keep track of everything I sell (shipping, eBay fees, PayPal fees - I know eBay offers a detailed breakdown upon request)
3. I want to separate this from my personal/regular work finances
4. I want this to have a business name and would potentially explore making this an LLC vs a sole proprietorship
5. I will have some minimal startup costs that I would like to try to deduct

My question for the experienced individuals on this message board is in regard to the tax information and how I should approach this from the business side. If I would expect $25K in sales at best with a 30% profit margin in the first year and I want this separate from my personal return, do you have an opinion on that? Any advice? I would expect business to grow after the first year but would not expect to ever employ anyone.

Any advice is appreciated and I apologize if anything I said above sounds stupid, please feel free to set me straight :-)

 

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[vpnavy]

I noticed this was your very first post airjoedan - so, Welcome Aboard! You didn't list your state (or country) in your profile. So, you might consider jumping over to Sub-Forums: Select Your Area.... and selecting location information (i.e., clubs, hunts, finds, legends, maps, etc.) directly related to your state (or country).

 

[cyberdan]

Why did you have to ask this question right now?

Just one hour ago I told my wife I am going to start my business bookkeeping for 2016. I have been putting it off by checking all my t-net forums. I guess I will start after this post to you.

This is what I did years ago and it has worked just fine. I have a local business license (no need for LLC) my company name has my last name in it. I took my business license to a local bank that I did not have any accounts with and opened up a small business checking account. (free at a credit union) I also have a paypal account under the same name. I linked both together. All sales on ebay go through paypal. After $$ add up I transfer to bank. I need supplies I use paypal debit card. All purchases on paypal I get sent an email receipt and I print it out for tax time. I never mix family and business money.

During the year when I buy I record everything on a spreadsheet I wrote. one page for buys, one page for sales and one page for miles driven.

With EVERY sale on ebay I get an email of the transaction, I print it out and attach a label I have pre printed.
(I now have a box full of these ebay sales transactions. That is what I was going to do until I saw your post.)

On this label is printed:
Item Cost
Ebay fee
Ship fee
Paypal fee
USPS cost
CA Tax
TOTAL (this is total cost to customer, just subtract all the above costs to figure profit/loss)
Profit
Loss

During the year I fill in the item cost only. Now I need to fill in all the rest from the records I print out during the year. ;( to see what kind of profit this end of my business made. I also buy/sell gold and silver and do electronic recycling. It is like three separate businesses for bookkeeping but for taxes I bring the bottom line on each together to see what I did.

I hope I did not scare you away because of the boring paperwork that needs to be done, but as a business it needs to be done and accurately. Before I retired a few months ago I was a number cruncher and I still am.