selling for others - how much to charge

[kmg191]

Surely this topic has been covered but a quick search didn't turn up much for me.  Here's my situation.

I have been buying and selling for the past 18 years with the past 5+ as an ebay store. 3 of those years I have been selling for a friend at a 30% commission on the sale price.  Sometimes, with all the fees etc, it hardly seems worth it.  Now, some other people are interested in me selling for them.  Im not opposed to adding  more "clients" but I feel like I need a better fee rate than just a flat 30%.  Was actually considering raising it to 40%.  As you are all surely aware, the process of listing, managing and shipping items is time consuming.  I want to make it worthwhile for us both and be charge a reasonable, fair rate for my service.  Appreciate any insight.  

[mirror-in-the-attic]

I agree with the 50/50 AFTER fees and expenses.  

Most people do not understand the amount of time and effort that goes into doing this.  They also do not get the risks or the myriad of issues that can arise selling here.

They are using all of your knowledge and expertise along with your feedback scores and your store to sell an item that they would likely be unable to do so on their own.

It is more than just your time but all of your qualities to be factored in.   SO, I agree with Mr. Lincoln, 50/50 AFTER all other expenses and fees removed.

[fern*wood]

How do yo handle income taxes when selling for others?  Do you deduct the profit that you pay them as an expense?

[sin-n-dex]

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@fern*woodwrote:

How do yo handle income taxes when selling for others?  Do you deduct the profit that you pay them as an expense?

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I'm in Canada. I declare all eBay income including shipping received as income at the current exchange rate (into Canadian dollars). I fill out what I think you guys call a Schedule C to keep track of expenses (eBay/Paypal fees, shipping costs, subscription services) to get net income. Because it's allowed in Canada, I can deduct 25% of my household expenses (heat, hydro, rent, etc), among other deductions like Internet, cell phone (for mobile eBay usage), etc.

I also deduct all the payments made by cheque to the person I sold for (I don't pay anyone in cash). I keep bank records and cancelled cheques, these get filed under "cost of goods sold".

After  I get my net income once all that is done, I pay a whopping 29% income tax on what remains (due to my tax bracket before I sold on eBay).

I run a similar filing for my consulting and other businesses.

Cheers, C.

[tofu107]

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@fern*woodwrote:

How do yo handle income taxes when selling for others?  Do you deduct the profit that you pay them as an expense?

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no,you do not account for the sales,it is not yours,you just record the earnings you received,it is your paycheck

[fern*wood]

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@tofu107wrote:

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@fern*woodwrote:

How do yo handle income taxes when selling for others?  Do you deduct the profit that you pay them as an expense?

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no,you do not account for the sales,it is not yours,you just record the earnings you received,it is your paycheck

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Wouldn't the full payment show up in my records and 1099k and need to be dealt with?

[mr_lincoln]

@fern*wood

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@fern*woodwrote:

How do yo handle income taxes when selling for others?  Do you deduct the profit that you pay them as an expense?

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I figure in around 10% of the total item and shipping cost for expenses and tax purposes ... so adding all eBay-PayPa fees to that the net net is about 25% right off the top before any 50/50 split occurs.  I also try to sell as much Auction style as possible which can increase $$ for all concerned ... even eBay & PayPal cuts.  

So in basic terms ... if a sale plus shipping is $ 100 take $ 25 off right away and split the $ 75 = $ 37.50 Profit to me and that much to the person I am selling for.

[sam9876]

"Wouldn't the full payment show up in my records and 1099k and need to be dealt with?"

Yes.

[kathieskorner]

I charge 30% for family and 40% for elderly friends - I pay all fees out of that.      I only sell for those incapable of doing so themselves. 

[sin-n-dex]

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@fern*woodwrote:

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@tofu107wrote:

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@fern*woodwrote:

How do yo handle income taxes when selling for others?  Do you deduct the profit that you pay them as an expense?

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no,you do not account for the sales,it is not yours,you just record the earnings you received,it is your paycheck

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Wouldn't the full payment show up in my records and 1099k and need to be dealt with?

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Yes it would. If the money is received by you, you need to report it and deduct what you pay the owner of the item from the total on the appropriate schedule. The sales are gross income, what you pay tax on is the net income.

Cheers, C.

[monster-deals]

I charge all fees and take 20% of what it sells for whether auction or BIN.

I also choose the pieces that I want to spend time on.

I also offer to outright buy pieces too.

[duggmills]

Take twenty minutes to search the web looking for all those franchise eBay Selling Stores that were a flash in the pan some years back. They're all gone.

I'm sure hundreds of people around the country lost thousands on franchises that had all the potential for success as the Titanic did about ten minutes before hitting the iceberg.

When you act as an agent for someone else you are suddenly acting alone when the ship hits an iceberg. 

Anyone who has to ask about expenses shouldn't be offering services to someone else.

[plumbingspecials]

If you do not know what "expenses" are, I advise not to sell anything on eBay for yourself or for anyone.

[nc-daydreamer]

In addition to the other responders, I'd ask you to consider the value of you relationship to the owner of the items. Noting can cause hurt feelings faster than money.

Now, what is your policy if the item does not sell - or within a certain expected time?  Does all of the effort you've invested get paid for - or did you do all of that work for free - and end up resenting it?

Also consider the returns. A buyer has 6 months to file a claim with payPal and/or a chargeback on their credit card. Even if the ad states no-returns.  Who will pay for this? 

Just be sure to get all details in writing.

I charge a flat non-refundable 10$ for the listing time involved and 25-35% plus expenses - when I do it at all. And any problems later - they pay for the refund - all of it.

Good luck to you.

[sin-n-dex]

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@nc-daydreamerwrote:

In addition to the other responders, I'd ask you to consider the value of you relationship to the owner of the items. Noting can cause hurt feelings faster than money.

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I do have to weigh in on this... I do sell for my friends (and some of them are very close friends), but these friends and I had a previously established business relationship before we became friends. I also had a deal with a girl from work to sell her jewellery at the local market. We discussed everything, expenses, how much she expects for her items, how much I intend to sell them for and how much I intend to keep, etc etc etc.

Now when it comes to family, that's probably not so great. For one, family will try to take advantage of you and become upset when you don't want to do what they ask.

When I first signed up for eBay, my mom wanted me to buy her a plate. I had a US bank account since I lived in the US, and could write a cheque (appropriate for that time). She asked up front if there was any hidden fees, or was the $19.95 for the plate plus the shipping all she would need to pay. I forgot to tell her I needed to mail the cheque, so 37 cents for a stamp. She threw a fit over the 37 cents, told me since I didn't state up front the cheque had to be mailed, I should pay for the stamp myself. I said "you knew if I was writing a cheque it has to actually get to the seller right?" She said OK, she'll give me 37 cents, but that will be "the last time I do this" and next time "you'd better remember everything before I agree to buy the item."

Well we were living 3000 miles away. The plate showed up, I held it for a few months and took it back to Canada. I wasn't planning on returning to the US. My mom pays me the $25 US in a whole bunch of change that I can't get rid of (her left over travel money), and I ended up spending it in Canada at 60 cents on the dollar.

The next time she wanted to do "business" with me, she was trying to sell me left over US cash at the price I would pay the bank so she didn't have to pay the 5% difference in the exchange to sell it back. I refused, she got mad. Then I said "stop trying to do business with me, it's ruining our relationship."

No more business with family for me.

Cheers, C.

[carolynnq]

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@retrose1wrote:

I sell on consignment for a few and charge a flat 50% and I pay the fees.

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That's what I charge.  Having expenses built into a flat charge saves having to look up and keep track of all the various fees for each sale.