Can no longer afford to sell on Ebay

[0426sheila]

I just finished my taxes and did the the way the IRS will require us all to do them next year. Was not much of a pain (although I have not seen next year's form, but what I did see was I can no longer afford to sell on Ebay. Between rising--ever rising--shipping costs and the bite Ebay is taking I worked my fingers to the bone all year only to see that Ebay, its fees, supplies, receiving my products-- and those increasing costs-- have left me about 48 percent of total sales. I started this 15 years ago as a way to increase our income. Frankly, now at 71 years old, the work involved to remain a top seller--a power seller (whatever that meant anyway) it is no longer worth it. It would be more profitable to be a greeter at Wally world--but I can't stand in a cold door way smiling for five hours a day. I will come up with a different gig--but not with a "partner" who is a bot and takes so much from me. It is a shame. I hope Congress and the IRS are satisfied with all their rules. Finally, I will not invest in Ebay stock as I see a dimmer future for the entire company after many of us leave. Sheila at Kate N Kozy Vintage

[0426sheila]

Of course we pay our taxes. It is not business as usual if you are selling your great aunt's porcelain doll and now they want to know what you paid for it. This may work for seller who is not selling antiques, but for those who are prices rise and fall quickly. If you believe their proposed changes are business as usual you are in for  big surprise. If not why would Ebay, Etsy, Ruby Lane and all the others spending huge amounts lobbying against this?

[0426sheila]

48 percent of my profits. The highest commission auction houses take is 15-21 percent. Thanks. sheila

[0426sheila]

Finally, a voice of reason. Have a good year. sheila

[0426sheila]

Thanks, because I am old and disabled I buy most of my items from auctions around the world. Although I deduct this cost it still eats away. I envy the younger people who can go to thrift shops, auctions, even dumpster diving--but this is where I am at. I have read many posts and maybe I am wrong. Maybe my profits are in the ball park. My family keeps telling me I am not making enough. There's an idea! I can say, you are all correct. I am now moving in with you. All the best, sheila

[onefootflipper]

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@0426sheila wrote:

Thanks, because I am old and disabled I buy most of my items from auctions around the world. Although I deduct this cost it still eats away. I envy the younger people who can go to thrift shops, auctions, even dumpster diving--but this is where I am at. I have read many posts and maybe I am wrong. Maybe my profits are in the ball park. My family keeps telling me I am not making enough. There's an idea! I can say, you are all correct. I am now moving in with you. All the best, sheila

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How disabled are you? I have a prosthetic leg that I only wear outside the house and do the whole business in the house from a wheelchair, and I am doing way better than I would as a Walmart greeter. I even have a youtube channel about it. 

I was actually quite in favor of the lowering of reporting requirements, those masses of part timers who quit over that means much less competition for the rest of us.

[pls-consignments]

I completely understand your concerns. At 71, the effort needed to stay not only profitable but also current with eBay's changes is far more time-consuming than it was 15 yrs ago.

However, I think the real question is... 48% of what? The "what" is your barometer 😉

[dryophelia]

@0426sheila 

No act of congress can hold us back from making poor business decisions. 

When sorting your current 37 listings by price, only about 12 will show any profit. The other 25 I wouldn’t waste my time listing. 

The dog ornament for $12.50 has a shipping cost listed. 
The brushes that attach to a drill are probably in a bigger package but they’re $11 with free shipping. 

A store subscription is probably not necessary if all you have listed is a few dozen items. 

[joliztoyco]

That's just great for Kroger. They sold 148 BILLION dollars of stuff in 2022.
I'm not Kroger.
I'm a Ebay seller.
Well actually I "list" stuff on Ebay .
Doesn't mean I sell stuff anymore.
My sales have literally vanished.

[joliztoyco]

Apples and oranges.
Ebay sellers are hardly Target, Kroger or Walmart. You do know the difference between volume selling and Ebay selling right? Because it is night and day....

[inhawaii]

The B&M store i work for generally makes a 33% markup on the merchandise.

A $100 item sells for $133.

Then there are the expenses like rent/salary/insurance/utilities/supplies.

So your 48% is pretty darn good.

Good luck to you Sheila!

[dbfolks166mt]

Apples and oranges.
Ebay sellers are hardly Target, Kroger or Walmart. You do know the difference between volume selling and Ebay selling right? Because it is night and day....

     Tend to agree that there is a difference between companies and individuals but no so much from a volume selling perspective. For publically traded companies their focus is maximizing their value to their shareholders and their ROI's generally range between 7-20%. For an individual there really is no identifiable range but  it's a matter of a personal perspective on what an acceptable ROI is for the amount of effort they put forth. 

     For those that are selling on eBay as their only source of income that ROI may be considerably different than what it is for an individual that is just selling to make a few extra dollars or simply to give them something to do with their spare time. I fall into the later category and over the past few years my after tax ROI has been around 30% which I find acceptable given there are few other places at the moment that I can invest $ and make a greater ROI. 

     The average ROI from the stock markets over the last year has been about 3% and historically on average has only been about 10%. Interest on CD's, savings and checking account, T-bills, bonds run across a broad range but historically most have not exceeded 10-15%. Of course most of those investments require little effort and consumption of time. 

[deltilogical]

You should probably be writing to your congress critters and let them know their tax policies make it impossible for you to conduct business and you will now devote 100% of your time to working for the opposition because they have personally attacked you with their tax policies.   These tax policies are acts of violence - just watch what happens if you don't obey. 

[lonebuck-books]

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@0426sheila wrote:

I just finished my taxes and did the the way the IRS will require us all to do them next year. Was not much of a pain (although I have not seen next year's form, but what I did see was I can no longer afford to sell on Ebay. Between rising--ever rising--shipping costs and the bite Ebay is taking I worked my fingers to the bone all year only to see that Ebay, its fees, supplies, receiving my products-- and those increasing costs-- have left me about 48 percent of total sales.  

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As others have already said, the 1099K $600 rule has nothing to do with your income reporting responsibilities.  If you make a profit, you have always been required to report it.  The only change is now eBay (and other sites) are required to send a 1099K form showing your total sales which the IRS also gets.  Makes it harder to hide income.  

48% profit is an amazing profit margin.  When grocery stores survive on a 1%-3% profit margin, I would bet they would kill to get a 48% margin.  Retail in general runs on under 10% profit margins.  

[0426sheila]

Almost another year has gone by since I posted about ebay fees and shipping eating away my profits. My tax person told me that even if I wanted to stop my shop--which I don't--my costs for the shop keep me in a lower tax catagory. And thanks to replies and the tax person I have continued.

I am glad I did because I keep learning and although I have made a couple mistakes (losers0 I have garnered more repeat buyers and take a risk on buying more expensive items-which in turn have increased sales and my profit.

Still love the research and hate the shipping though. 🙂

[0426sheila]

Thanks. A great reply. My biggest problem is not having capital and the stress of buying and need to sell fast and more buying to sell is my biggest challenge. At 72 everything is a bigger challenge. My credit is not good enough to get one of these loans that Ebay keeps prompting me to get.  So I come close to maxing out my credit card each month to buy and sell. You mentioned retail at 10 percent--that is what brought me to vintage items in the first place. If one can buy an item at Target or Amazon I don't want to sell it.