Do eBay Sellers Have to Pay Taxes on Income from Sales?

I have received this question from several sellers this week, so here is an article to help you better understand the issue of reporting income from eBay sales. Disclaimer: I am not an accountant or tax expert. This is just some general information to help you understand how the IRS sees proceeds from online auctions.

The rule of thumb: If you are selling your own personal items, that have been in your possession for a period of time and were originally purchased for your own use, the answer is no. This would be the same situation as if you had a garage sale to sell your own personal items.

If you have purchased items specifically to resell them on eBay, then yes, you do have to report the income from those sales. Many sellers think that selling on eBay is just a fun hobby, and the money generated is not reportable as income. The IRS disagrees.

It is better to be safe than sorry in this situation (especially when dealing with the IRS). In other words, if you are calling yourself an eBay seller, and regularly sell items on eBay for profit, you are responsible for reporting that income.

This page on IRS.gov outlines the online auction situation. Please consult with your accountant for more information regarding your specific situation.

Reporting the income from your eBay sales isn't all bad. You are also entitled to report your expenses as a small business owner and deduct your expenses from internet fees to shipping materials.

eBay Not Working for You? List of eBay Alternatives

This is a public service announcement for those eBay sellers who are repeatedly expressing their discontent on the eBay forums and discussion groups. (Chronic whiners.) If you're not happy on eBay, please, by all means, explore other options!

Amazon.com. Users report higher fees, less control over shipping rates, and there is no auction platform. You can take advantage of Amazon's advertising and traffic.

Etsy.com - Marketplace for handmade and craft items. Very economical to list. 20 cent fee for each item, listing has 4 month duration. Commission is 3.5% of the sale price (charged post-transactionally). Handmade, homemade items can be anything from jewerly, personalized items, even computers.

Bidville.com - Free to list. Final value fees 5% of sale price less than $25.

ePier.com - You pay nothing until your item sells.

Onlineauction.com - 5 styles of different auction formats. Free to list your item. No commission or final fee. One monthly membership fee to participate.

Overstockauctions.com - "charges insertion, upgrade (if applicable), reserve price, and closing fees. If an auction closes with a winning bid, the reserve price fee is refunded. Fees are based on a percentage of the selling price. Overstock.com's fees are 33-50% cheaper than our major competitor's."

eCrater.com - Every member gets a free store. You can pay extra for ads place in premium locations.

iOffer - Free to list your items. Final value fee can be anywhere between 50 cents and $5, depending on the final sale price.

Feel free to post this link on your eBay groups and forums. The whining about eBay is getting rather annoying. If people aren't happy, by all means, let's encourage them to find alternatives!

Happy selling-

Suzanne Wells

How to Get Traffic to Your eBay Store

The photo above is a screen shot taken on 9/25/07 of my eBay page views report. As you can see, my store receives approx 650 page views a day. (Click on the report to get a closer look.) I do alot of things on the internet to drive traffic to my store. All of these things are FREE and you can do them, too.

As many of you may know, I also write for another blog called Moms in Business. I recently wrote a post about generating traffic to your blog. These techniques can also be use to drive traffic to your eBay store - just leave your store or eBay home page link when applying these techniques on the internet. All of these techniques are free, and they all work. The key is to do these things frequently and consistenly. Click here to read the complete list.

Thanks to everyone for participating in the $20 holiday tips contest. All the entries were great and it was very hard to choose a winner. I think everyone enjoyed reading all of the entries and we are all getting geared up for the holiday selling season.

The winner is April, of You are Loved Children's Resale. April entered 3 tips, but the winning tip was this one:

Slip a Christmas or Holiday card with a nice greeting in with the invoice to your customer. It will make their day! Or better yet attach a packet of hot cocoa to it. Thanks again to everyone who parcipated - and stay tuned for another contest in October with anohter fun prize.

Have a good week, and if you haven't joined us over at the eBay Coach Forum, come check it out - it is free to join. Unlike other forums, we have a "you will not be ignored policy" - everyone is there to help!

Regards,

Suzanne Wells
The eBay Coach

What to Sell on eBay - Mens Blazers and Sport Coats

Mens blazers and sport coats are a wardrobe essential. Men wear them to work, for business casual days at work, out on the town, or even casually with jeans. A new designer blazer or sport coat can cost up to $400 or more. There is a huge market for blazers on eBay since buyers can find these items so inexpensively. Selling mens blazers and sport coats is easy, fast, and profitable once you know what to look for and use a few simple tricks.

As with all types of clothing on eBay, you will want to stick with designer brands. Tried and true brands that have been around for years, such as Ralph Lauren, Burberry, and Hickey Freeman always do well. You can count on these types of blazers selling in the range of $25 - $60, even used. (I routinely find them at thrift stores for $4-$5.) I have sold some Ralph Lauren blazers for over $100. Used blazers do incredibly well if you find the right size, color, style, and fabric combinations. See a complete list of my top selling brands of mens blazers at the eBay Coach VIP Library.

As for fabrics, you will want to select wool, wool and cashmere blend, camel hair, and silk and wool blends. Make sure that the jacket has a full lining on the inside. You will see some blazers with a half lining – avoid those as they are usually low quality. Also, turn the blazer inside out and inspect the lining to make sure there are no rips or stains.



You will notice that solid color blazers and sport coats are typically seen in 3 colors: black, navy blue, and camel. These are the colors I look for when shopping at thrift stores and garage sales. I have sold some plaid styles, but I have a short cut for selling the solid colored blazers. It is just easier to sell the same type of item over and over again because you can use the same pictures. And we all know that preparing the item, photographing the item, and editing photos can be time consuming.

I have created my own library of stock photos to use for many items that I routinely sell on eBay. In the mens blazer category, I have photos for black, navy blue, and camel blazers in both single and double breasted styles with different button styles – black, gold tone crested buttons, or neutral colored buttons. These pretty much all look the same so you can just use the same photos over and over again.

Now for the good news! You can use these photos, too. Ok, wait – why would you want to use my photos? I have acquired this collection of photos over several years of selling the same styles and colors of blazers and sport coats on eBay. My photos, like the ones shown in this blog post, are taken with the blazers on a mannequin and with a contrasting tie. (Yes, I took these actual photos.) I have done all the work for you. Fitting the blazer to the mannequin, cropping and editing the photo, offering several color and style selections, and adding a handsome tie. So all you have to do is pick up mens blazers when you are out shopping, come home, write up your listing, choose a photo, and wait for the money to come in. Well, you'll have to ship the item when it sells - but think of all the time you will save using stock photos.

You can access this collection of photos at the eBay Coach VIP Library. Membership is $5.95 a month, however, think of all the time you will save in the future! Visit the library to see a wealth of information in addition to a large selection of stock photos in many categories.

Be sure to listen to my podcast for more information about selling mens blazers including what sizes to look for, how to measure blazers for your listings, and other key information.

Happy selling!

Suzanne Wells
The eBay Coach