Episode 164 || We Answer Your Questions

[podcast_team]

This week is dedicated to your questions. No guests, no special topics. Just you! Rebecca is back and helps answer questions on Best Match, how to keep shipped items from freezing in transit, stock photos, changes to the Seller Invoice, how much to spend on promotions, 1099-K forms and sales taxes, and USPS Parcel Select.

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Episode (Show) Links:
New Features Now Live for eBay Stores
eBay and 1099k
Advertising Dashboard (Seller Hub - requires sign in)
Cost Of Good Sold (Wikipedia)

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Rebecca: This week on the eBay for Business Podcast:

Rebecca: It's a n all questions episode and I'm Rebecca.

Griff: I'm Griff. And this is the eBay for Business Podcast, your weekly source for the information and inspiration, you need to start, run and grow your business on the world's most powerful marketplace. And this is episode 164. First, welcome back Rebecca.

Rebecca: I am so glad to be back here Griff. Did you guys miss me?

Griff: Are you kidding? I think I've made it clear to the audience. I hate doing this show alone. Hate it.

Rebecca: Well. I'm really glad to be back and it looks like we have a really interesting show this week.

Griff: And the last two weeks, I haven't really been covering questions and we had a lot of them and I put out a call for some interesting questions and got some, and I thought, here's what we're going to try. In episode 164 , It's all about questions. There's no other guests. It's me and you, we’re reading the questions that came in and hopefully we'll get to all of them.

Rebecca: I love this and listeners, if you like this format, let us know by reviewing us on the iTunes store, dropping an email, you know maybe we'll mix up the format a little more often.

Griff: I love mixing up things, you know I get bored otherwise. Hey, is there any news this week?

Rebecca: There is. There's one news item and it's a good one. So with the Holidays, just around the corner, we're excited to announce some recently launched features to help you get the most out of your store this season. In the Fall Seller Update, we let everyone know about upcoming features, including a dedicated Seller Hub Store Tab, and a new About Tab. Those new features are now live and they're ready to help you use your store to tell your story, to drive traffic and to showcase your inventory over the Holidays. Good stuff. So eBay stores now have an About Tab where you can tell buyers who you are and what you do. Tell your story in that new About Tab. There's also inventory strips where sellers can choose which items their buyers see first, by adding up to four inventory strips, each of those up to six items, that's a lot of real estate. Sellers can choose from topics such as Featured Items, Just In, Holiday Collection and more.

Griff: I hope there is a topic that says getting rid of this dead merch.

Rebecca: If not, we'll pass that suggestion along. Then also there's visual categories where you can add up to six categories each with its own custom image and a individual shop by category section, and there's even marketing banners where you can grab your buyer's attention and hotline products, sales, or promotions with clickable marketing banners. Wow, great stuff.

Griff: Well, and I got a question about those and I we're going to do a short segment maybe with some visuals about how to make banners.

Rebecca: That that would be, that would be really great information to give to sellers who don't know how to.

Griff: It's on my list.

Rebecca: Make a note of that.

Griff: Yes. I have.

Rebecca: So in addition to all of the great enhancements, I just mentioned, we've also upgraded the entire in-store search experience. The store search now is going to show all of the same filters and search tools available on eBays general search, which is going to make inventory easier find when buyers are searching directly within your store.

Griff: I love this.

Rebecca: You'll see more updates and enhancements to stores over the coming weeks and months, including the ability to add a video to your About Tab, telling buyers more about you and your business.

Griff: I can do one of me tap dancing!

Rebecca: All right. That's a bet.

Griff: Should I accept that bet, that's the question?

Rebecca: If that happens, we'll be here to tell you. Anyway, so visit the Seller Hub Stores Tab to see what's new and to set up your storefront.

Griff: That's a lot.

Rebecca: And all in time for the Holiday.

Griff: While we were talking, I went and visited cause I haven't done this recently. And it was always hard to find a place where you manage your store and now it's where it should be as a tab right there in Seller Hub. It's fantastic. I got to change my banner, It's about nine years old.

Rebecca: No time like the present.

Griff: I will do that for the Holidays. This week's episode is devoted entirely to your questions. So let's try this, Rebecca, you read the questions, I'll make up the answers and hope they're accurate and we'll see how that goes.

Rebecca: I have been trusting that you have accurate answers all the time. Do you have something to tell me Griff?

Griff: Um, well no. Not really.

Rebecca: Alright, well, let's dive in. First up. We have a request and a wish from eBay seller. Andrew who sells ink cartridges, Andrew lives in and ships from Poland. Wow! All the way from Poland. Andrew sent the following question to podcast@ebay.com. "I wish I could ask one of your callers, how to ship 100 ink cartridges to a buyer in Alaska in the middle of January so that the cartridges don't freeze in transit." Wow. I mean, frozen ink cartridge is definitely not a good thing. Andrew also went on to say," I wish I could ship all of my ink cartridges to an eBay fulfillment center in the USA. As far as I know such a thing doesn't exist."

Griff: I don't know if you remember Andrew, but he sent us a few emails about ink cartridges that we answered in the past. It may have been Brian who was on the show then, but he's since kept up a correspondence with me. And I think it's interesting to have an eBay seller in Poland who's sending in these questions. It's a great opportunity to highlight the different challenges that sellers outside of the U S face when selling into the U S and I'm not an expert with any experience of shipping items that need to stay either cold or warm during their transit. But as a buyer, I've purchased a lot of products online, like, well food, for example, and salmon, I found this place for smoked salmon that's fantastic. I don't know. Maybe there's a type of styrofoam packing, or maybe it's double boxing, or I've seen that you can sometimes get items that need to stay cold in aluminum faced bubble wrap. Any of these might work. I'm going to ask our audience. If you have any advice for Andrew, you can send it into us at podcast@ebay.com or you can call it in (888) 723-4630 and we will share it with Andrew and all of you in an upcoming episode. Now he asks about eBay fulfillment services and Andrew you're correct. eBay doesn't have fulfillment centers, but I have done a quick Google search and there are quite a few options for fulfillment services for online merchants and one of them might work for you. So search for fulfillment services and browse through the options and see what you get.

Rebecca: Great. So again, if you have a suggestion for Andrew, email us@podcastcitybay.com or call it in to (888)723-4630, Next up eBay seller Gary sent the following also to podcast@ebay.com. "Does the eBay 1099 K include sales tax in the monthly sales amounts? I've never been able to get anyone at eBay to answer this question. Thanks from Gary Funmerica Comics is his store name and his username is GardouComics. That's G A R D O U C O M I C S.

Griff: That question comes up a lot. Is sellers just sort of freak out about this form and I have no idea why. You know about this, right?

Rebecca: I guess I could learn again. (laughter)

Griff: Okay. I guess I'll answer this one. So the form 1099, K it's an IRS information return. It includes the gross amount of all reportable payment transactions within a calendar year. Now the IRS doesn't have this information, but payment processors do. And the 1099 K is specifically for payment processors. This could be your credit card. This could be PayPal, If you're a merchant outside of eBay and you use PayPal for all of your payment processing. If you're on eBay, now, it would be eBay through their payment processor. We are required to send this data for all sellers who meet a certain eligibility to those sellers. When this first started a few years ago, sellers just started freaking out and I never could figure out why, because we, it was pretty clear. This is just an information return. It has nothing to do with auditing you and the figures don't even have to reconcile. Now to answer Gary's question. Unlike other payment processors, when it comes to 10 99, Ks eBay actually does not report sales tax. It collects from buyers on your behalf. So that figure, that gross figure is not included in the gross that's shown on your 10 99. K. However, if you need to determine the amount of sales tax that eBay has collected on your behalf, then there is good news. eBay has a reporting feature that shows the amount of sales tax that eBay collects from every payment. When it's sales tax, you know, most, every payment now is going to have sales tax. Unless the buyer is in a state like New Hampshire, where there is no state sales tax, but all that information is available to you as a seller. You can find the reporting feature on Seller Hub, under the Payments Tab, just click the reports link. And from there you select a date range and you add which types of transactions you want to include. I suggest by the way, include them all. Don't leave any of them out. And then click Create Report. Once the report is created, downloaded it to open it's formatted as a Comma Separated Value file. That's a CSV which will open in any spreadsheet application. If you don't have a Microsoft Excel or on a Mac, you don't have Numbers. You can always open it in Google Sheets, which is like Google docs and it's free. Now the column in the spreadsheet you want to see for sales tax is column Z. And it's titled at the top eBay Collected Tax. This will show all the sales tax amounts per transaction that eBay collected and submitted to each state on your behalf. Keep in mind, you should talk to a tax advisor and don't just take my word for it. That everything depends on how you file taxes. If you use the amount of money from your accounts, the money you actually received as your gross income, then it's more than likely you shouldn't deduct sales tax collected as an expense since you never had those funds sent to your accounts to begin with. I hope that makes sense. Anyway, the things that sellers say to me, when I start telling them this is but then the amounts won't reconcile with the gross amounts shown in my 1 99. K. And I'm going to go to jail. No! Remember what Barbara Weltman said two episodes ago, or last episode, you don't have to reconcile your figures with a 1099. K. I'm going to say this one more time. A 1099 K provides the IRS with a reasonable snapshot of your total gross income. And the form is a heads up and requires no action on the part of you, the eBay seller.

Rebecca: Okay. Let me see. Since I was asking you to remind me how this all worked, let me see if I understood. The 1099 K is really meant to be like the overview snapshot, here is basically everything that happened. Hey, IRS, here's everything. And then you do sellers, we do them the magic of figuring out the various deductions and business expenses, the magic words of tax preparer, or your tax professional and figure out what you actually owe. And it is okay if that 1099 K, and what you actually owe are different. In fact, it might almost be different by design because there's the everything and then there's what actually needs to be taxed.

Griff: Exactly. And don't try to reconcile it. In fact, if you're doing your taxes correctly, when you get your 1099 K, look at it and say, well, isn't this nice. And then put it in a drawer somewhere and forget about it. You don't have to file a 1099 K with your returns. It's just for your information. It's a way for the IRS to say, well, we happen to know that you processed this number of payments. So keep that in mind. You know, we just happen to know it. It's we know it now and then ignore it. And unless you're really under reporting, or you're not reporting at all, you have nothing to worry about. This is just to get people who are selling on places like eBay, who do not file income tax, the IRS knows if you're not and you risk the consequences. That's basically all it is.

Rebecca: Right. 1099 is where the mass starts. Not where it finishes. I think I get it now.

Griff: Ooh, that could be on a t-shirt. I love it.

Rebecca: Okay. Ready for the next question? That was a doozy.

Griff: Let me take a sip of coffee and go ahead.

Rebecca: Like taxes are always complicated, right?

Griff: Yeah. That's why I have someone. I pay someone else to do them.

Rebecca: Yes. The magic words again. Tax professional. Okay. So this next question was posted by Kurt Phillip Wazowski. Kurt asks "eBay advertising promotions like Promoted Listings would be a good topic to talk about on the podcast. You can only advertise so much. For example, people think of the Geico lizard as a has been. We do?

Griff: I've never gotten tired of him.

Rebecca: Oh my gosh. But when it comes to using Promoted Listings on eBay, at what cost, where do you draw the line? It would be helpful for people to have a better idea of how much to spend on advertising. There's a definite curve of diminishing returns, but how do you find the knee, which is the sweet spot? You know, that's a fair question. That's a fair question. What do you think Griff?

Griff: Well, it's actually not on only fair. It's really difficult to answer with any specifics. And before I go there, first, I got to talk about the Geico gecko. Kurt. You may find them to be a has-been, but I guarantee you that the Martin Agency, and that's the advertising from behind the character and the campaign since 1994, they wouldn't retain that Cockney speaking gecko, if it wasn't working. And it is! Geico is the second largest television advertiser in the United States, after Procter and Gamble. And they advertise many more consumer products from its various brands compared to a single product, which is all Geico has, insurance. And the result, the gecko has helped make Geico the second largest auto insurer in the United States. Let's not trash talk the gecko. He's good.

Rebecca: I got to say not to throw Kurt here under the bus, but he wouldn't have used it as an immediately universally recognized symbol of an advertising campaign, f it didn't stick. Which is the goal of advertising, to stick and then to convert.

Griff: And remember the minute it doesn't work, they get rid of it. I know this is not eBay related. You can think of a Geico campaign that actually didn't work. It was funny at first, but then it kind of jumped the shark?

Rebecca: The caveman.

Griff: Exactly. It was funny, but then it wasn't so funny and they did, they started a TV series about it and then that really killed it. So I think my point here and eBay included, by the way, every big company has an advertising team that is so data driven, everything is tracked. Everything is traced and every single dollar that's budgeted to a company's advertising team and canned business, all those campaigns, they are so track that if something doesn't work, they stop it. It's really important to understand that companies like Geico, Procter Gamble, eBay, they don't throw advertising dollars around. I can attest to that. And there's so much work and research that goes into how those dollars are spent.

Rebecca: Okay. So Griff, if we're talking about really testing and being data driven, okay, big, huge companies can do that, but you know what? Sellers, especially sellers that are running a business need to learn their way into this sort of thing too. And take inspiration from that data driven point of view that large companies and advertisers take. How does someone translate the idea of being data driven and testing into their eBay business.

Griff: Well, up until recently, eBay did not provide a lot of data for sellers to do this successfully, but now it's all there. You probably heard me say this a few times, how important it is for sellers to test track and record sales data. And there is so much data available to you now in Seller Hub. So if you're going to, for example, try a Promoted Listings Campaign, you can track it in Seller Hub on your advertising dashboard, and you can see how the campaign's going. And if it's not working for you and Promoted Listings, by the way, at least standard is really easy because you're not going to pay anything for the campaign, unless you make sales. You as the seller set the ad rate, and you only pay if an item sells. So, you know, your margins, you know, the rate of sales you need, you can look at the data while you're tracking it over time and say, Hey, this is worth my, while. I'm seeing a rise in sales and consequently arise in my profit margins, that's really healthy for my business or, you know what, I'm promoting these and I'm not seeing really any activity. I think I'm just going to try a different way of promoting them. And in the meantime, if you don't sell, if you're Promoted Listing Standard Campaign, isn't successful, it doesn't cost you anything.

Rebecca: Know Griff. The other thing that I would add is there isn't really a formula that we can say apply to all sellers, all products. There's no A plus B equals C in terms of that sweet spot that Kurt was asking about. And again, if we look at big companies, different products need different advertising strategies, some more on radio, some more on television, some more online or on social. And so again, a seller needs to look at their business, their business goals, their product mix, and do that testing and learning to find their own sweet spot.

Griff: Yeah, it's the same thing we talked about with our building, a social media campaign series with Audrey Tracy, which is, you know, track. That was the last part of the series track test, track tests, record, rinse, and repeat, rinse, and repeat. You have to find your own sweet spot.

Rebecca: Absolutely. To find more about Promoted Listings sellers can visit Seller Center and then click on the link for Listing and Marketing. And then you can select Promoted Listings. Also look at the advertising dashboard in Seller Hub. It's under the Marketing Tab. It'll show you the data for all of your existing campaigns, including Promoted Listings. Alright, upward and onward to the next question, which comes from seller, Wes. "Please address the issues with USPS Parcel Select Ground once again. You know, when you offer to buyers as one of the shipping options in the listing and lo and behold, it's not an option when it comes time to ship. I have read two instances of eBay leadership hinting that it is being slowly phased out. I wonder, where. Can we know more? I don't think a lot of sellers are getting the word on this and it's troublesome when it's not available come shipping label time."

Griff: This question required a little research on my part in order to find the answer. One of the things that can be a timing issue. First off, I've got to reveal something and I kind of cleared it with the Shipping Team. And hopefully we'll be more transparent about this, USPS Parcel Select is not necessarily going away. It has been a tricky option because a lot of times USPS Priority in parcel Select pricing is so close that it's actually better to select the Priority option, but that's still a seller option except that USPS Parcel Select as a option in eBay Labels is only available if you're a Top Rated Seller and there could always be a timing issue. If you happen to go in and out of the Top Rated Seller Program, there is the possibility that you're in the program. You are top rated. You list an item you add USPS Parcel Select as an option. And then weeks or months later, when the item sells, it happens at a time when maybe you're not Top Rated anymore. And that option isn't available for printing that can happen in a sellers case. But in the meantime, all those questions about USPS Parcel Select going away, I don't think it's going away. In fact, that's not what I was told. I was just told that it's kind of a benefit for Top Rated Sellers only.

Rebecca: You know, in an ideal world, if you moved out of Top Rated Seller, then that option wouldn't show any more, even if you listed the item months before. So I think we should provide that feedback too.

Griff: Yeah, that's a good option. My word of advice, I would never offer USPS Parcel Select ever and I'll tell you why. I've done the work. Whenever I have an item that weighs more than a couple pounds, the cheapest method for me, where I live here in the San Jose, in the bay area is UPS Ground. There's a center right downtown. I just take my boxes in there and drop them off. Usually a lot cheaper. I've started using more UPS Ground. I never use USPS Parcel Select. It's just, I don't know. I just wouldn't use it. If I was selling an Oriental rug and it weighed like 50 pounds, I'm going to send it UPS Ground. It's going to be the cheapest option.

Rebecca: This next question is from an eBay seller, Saul and Saul asks "when making a listing for some items eBay includes a nice stock photo. When I add my own photos, that one stock photo disappears. Is there a way to keep that one stock photo in the listing while also adding my own photos? "

Griff: Yeah. I've noticed that too. Short answer Saul is no. For a product that's in the catalog with a stock image. If you're going to add your own photo, the stock image is going to go away. I'll explain why. The stock photo assumes that what you're selling is a brand new in package example of that item. And if you add your own photo, we make the assumption that the item may not be new in package. By default, the stock photo will go away. That's not a bad thing, by the way, it's to keep your buyers from being confused. They'll see the stock photo, and then they're going to see your photos. And they're going to wonder which one it is. So it's a way of keeping buyers from being confused about what it is they're looking at and what they're buying. Nice stock photo. Yeah. You can't keep it ifs you add photos, that's just how the system set up. So that's the answer to that.

Rebecca: Okay. Short and sweet. Up next is an interesting question posed by eBay seller and Nancy, who asks, if you have an auto accept amount and, or an auto decline amount on an item, but at some point, make an offer to a watcher for less than that amount. Can they still accept your offer? I had a buyer claiming not to be able to accept an offer. And that's the only reason I can think of that would have been an issue.

Griff: You know, Nancy, eBay's a complicated site. This is the first I'd ever thought of this. I'd never heard of it before. And I didn't know the answer. So I had to go like I have to, dig for the answer. It wasn't that hard to find. But what I uncovered is this, that any prior auto decline or auto accept amounts do not apply in situations where that same item you send an offer to a buyer or buyers where that's the action you sent the offer. The team responsible for Best Offers has confirmed this. They've also confirmed that there'll be updating all the onsite documentation for Best Offers to reflect this fact. So I have to thank you Nancy, for asking it. Your question is going to help make some changes to weigh the Best Offer documentation, what the information it has. So there it is. Curious though, I'd like to know why the buyer wasn't able to accept the offer?

Rebecca: It's hard to say.

Griff: If that happens again, let us know.

Rebecca: Next step, eBay seller, Donna asked the following, "We're wanting to print out order details, but we don't see that that's available anymore. We used to be able to print an invoice showing all of the details, but that's no longer there. We are wanting to print out a seller invoice for our records, showing what our shipping cost was, and it should be shown in the Order Details Section. But the new options don't show what the seller shipping cost was. Please help. Thank you."

Griff: What Donna is talking about is up until within the last year. I can't remember when we changed it. There was an option on the orders page, the sold items page, where for every listing, there was a dropdown menu. And there was one that said print invoice for sellers records or something like that. I used to use that a lot. And what you could do with that is it would be a printout, a page of the item, order details. And it would include the amount that you as a seller may have paid for a label. That feature is pretty much still there, the seller invoice. And in many ways it's been greatly improved on the orders page. You can click the link next to Sell Similar, and then you can select Print Packing Slip And More. I love that and more! And then when that page comes up, you check the box for Order Receipt instead of the Packing Slip, and then click the customize link for that. And you can check the boxes for each piece of information you want to include on that receipt. What I used to do, and I would still do it today is print off that order receipt page as a PDF and save it as a soft copy. But some people like hard copies, you know, old school and Donna is correct. The shipping amount paid by the seller, which used to be shown in the old order receipt is not shown in the new order receipt. I don't know why. And upon learning this, I thought, you know what? We're going to have to suggest to the team that they include it because it's a good bit of information, but for now you may want to use the Order Report. And the Order Reports feature has all the data that's on an Order receipt except a photo. And it's for that sold listing. And it includes amounts paid for shipping. I actually use that instead of the old form more often, it's much easier to manipulate a spreadsheet when you have to add up columns and it takes up less space. My suggestion is consider using that Orders Report in Seller Hub, just go to Seller Hub it's on the Orders Tab. You can select a date range at the top of that page for the amount of information you want. And then you can download a report of all your orders transactions in that range. Donna also asked me outside of this question, if there was a tutorial or YouTube video that shows how to use a spreadsheet of her seller sales data. And I couldn't find one, but you know what Rebecca? I think that means we should create one.

Rebecca: I think that's a great suggestion. I'll pass it along.

Griff: So Donna, I hope that answers your question.

Rebecca: Cynthia posted this question. What are the factors that help an item rank higher in Best Match does Free Shipping still make a difference?

Griff: The perennial question. And I thought about, should we include this one, but I think it's worth revisiting. But the first thing I want to clear up Cynthia is free shipping is not a single factor in Best Match, but reasonable shipping is a factor, but even then shipping is just one of several factors. Our Best Match algorithm, that's the formula eBay uses to sort listings and Best Match. It considers a number of different factors. And these include things like how closely the listing matches the buyer search term. That's called relevance. That's the king. Relevance is the most important thing, but there's other things like what's the price of the item? You know, the better the price, the higher it is in best match usually. What's the quality of your listing? Descriptions, photos and so on. Those have to be the best quality possible and how complete the listing is. And that means did you fill out as many Item Specifics as possible, and then your listing terms of service, for example, your return policy and handling time. And I'm going to tell you, there is the possibility that an item that says no returns may not rank as high in Best Matches those listings that do. And if your handling time is pretty long, like a week, that can have a negative impact in ranking. And then finally, and this is really important. What's your track record as a seller? If you've got a good track record with eBay, eBay Top Rated, no outstanding account issues, all of the things being considered equal in a Best Match search, you will rank higher than sellers who may not have as stellar a track record as you.

Rebecca: There's really no secret to improving your position in the Best Match sort, order sellers who follow the best listing and selling practices will see their items appear higher in the search results.

Griff: Those listings that you create should be complete and accurate. The more we know about your item, the better we can match it to what a buyer is looking for.

Rebecca: Then be sure that you are writing a clear and concise title with correct spelling and no more than 80 characters. No unusual characters, no emojis. Can we use emojis anymore? I don't know.

Griff: Well, I still see them pop up and I think, well, you're very clever, but I can tell you one thing, not only is it going to hurt your best match ranking, your item's going to get blocked out of Google Shopping by Google.

Rebecca: Absolutely. So clear, concise titles, and then always use high quality photos. Take them from every angle, show any flaws or scratches. If you want to show up on Google Shopping again, use that white background and remember that you can include up to 12 pictures for free.

Griff: Yeah. It's not like you're going to waste film or space. If you can, if there's 12 different aspects of an item, take 12 pictures.

Rebecca: And then next up, make sure that you, if you have multiple items that you can group into a multi quantity or multi variation listing, go ahead and do that.

Griff: Yeah. I've seen too many people that have like, they'll have different t-shirts and the only difference is the color and they'll put individual listings up. And that just doesn't make sense because one of the factors in Best Match for multi quantity listings is how many sales and impressions you've had. And if you get sales from one listing, the more sales, the more that's going to rank higher. If you put all of those t-shirts in one listing and just have color variations and even size variations for each, then what you're going to find is that listing is going to be more prominent over time and best match than if you had lots of single quantity listings or single listings for each of the variations, like each color, each size, it's just not an effective way to gain position and best match. So that's really important about that multi variation.

Rebecca: That's a pretty good overview about everything you need to do to optimize your position in Best Match. Keep in mind that you won't always show up at the very top of every Best Match sort, but showing up on the first page anywhere is really powerful for sales.

Griff: And if you follow those steps, you have the best chance of doing so.

Rebecca: So now onto the last and final question for today, which is not actually a question, but as a comment from Kurt who wrote .. " it amazes me that some people write off their inventory as an expense, as soon as they buy it. And before they sell it."

Griff: When I read this post, I thought, yikes, what a topic we really should talk about this on a future episode. I certainly hope he doesn't personally know any seller who's writing off inventory purchased as an expense before it sells. Cause that's definitely a no-no. I don't know if you know why. Do you know?

Rebecca: No. They explained it to me. I mean, I understand the concept of write-offs, but again, this, it goes back into sort of the taxes territory, which is complicated.

Griff: It is. And you learn this If you have a tax expert or someone doing your taxes, that those inventory purchases are figured out as something called the Cost Of Goods and the cost of goods aren't taken as an expense until those good sell it's called Cost Of Goods Sold. So if you're in a, you go to Goodwill and you spend a hundred dollars on like 10 items and you get home and you write, well, I spent 10, a hundred dollars on 10 items. So that's an expense. If you mark that as an expense for that year, before those items sell you're in violation of the way IRS and accounting methods work, this is such a good topic. We should really hold it off for a few a future episode. And I'll save the details until then, but till then track your Cost Of Goods for all inventory purchased, but never you should, you have to track it, right? And then we'll talk about different ways you can do that, but never, ever, ever deduct the purchase cost of your inventory before that inventory sells, I'm telling you, you could end up in a lot of IRS hot water, if you're ever audited and even a box of donuts won't save you.

Rebecca: If you think about the kind of the logic behind it, you know, I could decide that this coffee mug that I'm drinking out of right now, I'm going to sell it someday in seven years. So why don't I write it off today? Not how this works.

Griff: Um, except that now it gets complicated Rebecca, because when you're using that coffee cup, that could technically be considered an office supply and not inventory. And in that case, it's maybe okay to consider it as a deduction for your office equipment or supplies, but not inventory. If this is a mug that you plan on selling, I'm showing her on Zoom right now, this is a mug I'm not selling. Cause it's, you know.

Rebecca: It's an eBay for Business Podcast mug isn't it.

Rebecca: We would never sell that.

Griff: So let's say that it's a pair of fabulous shoes that I am buying for New Year's Eve. I buy those shoes. I intend to sell them in a couple of years when I'm bored of them, can't write them off now because we can't bet on with the IRS in this case, can't bet on what we hope will happen in the future is that right?

Griff: Now, there are two ways of keeping books and this gets really complicated.

Rebecca: Maybe we shouldn't go down this road. We should bring in an expert.

Griff: Yeah, you're right. Cause you know, I'm not, I know this is the information, but I should not be the font of it. That's your research homework listener, go out and find the two different ways that you can account for your business. They don't apply in the IRS's eyes. They only apply to certain businesses. There's cash and accrual that's as much as I'm going to say,

Rebecca: Oh my gosh, all right, I'm all tied up in IRS knots now. Thanks Griff.

Griff: We will address this on a future episode, you got to hold out some bait to get them to listen again. So that's my bait for this week.

Rebecca: Look at this point, I think we're sunk costs. So should we call it? Is this our show for the week?

Griff: Yeah, that's a great place to end it I think.

Rebecca: Well, listeners, sellers, thank you for bearing with us. I hope that you enjoyed this all questions show. We'd love to hear what you think. Is this something that we should do again every once in a while, let us know. And if you have a question or a comment to share with the rest of our seller audience, why not send it into us at podcastatebay.com or call it in at (888)723-4630.

Griff: I love that. Number (888)723-4630. If it wasn't for the podcast, I'd steal it from my own. I swear. By the way, the good news, your Daily Podcast To Do Checklist is back from its hiatus.

Rebecca: Is there going to be a thermal printer on there?

Griff: I don't know. Rebecca: Well, number one. Make sure on your to-do list, make sure that you check the Announcement Board for Up-to-Date Seller News.

Griff: Good deals to be had right now on rolls of thermal printer labels on eBay. Of course you'll need a thermal printer as well. (laughter)

Rebecca: I knew it! I knew it.

Griff: Sorry. I had to get that in. I got a package this week. It had a paper label on it that was so taped up for protection. I've never seen so much tape on a package and I thought thermal printer label and you wouldn't have to..anyway, that's all I'm going to say about that. What's our third point?

Rebecca: Check out the transcript for this and all episodes so that you can find follow-up on what you've heard and to see the links that we've referenced during the episode.

Griff: On our next episode, episode 165, Brian will be back at the host desk and we'll have shipping updates and we're going to explore business bookkeeping options. That's like software, you know, your paper ledger, double entry. We're going to talk about how you can track your business, the different ways that sellers do it.

Rebecca: I'd like to thank again, all of the sellers who sent in questions for this week's episode. We could not have done it without you.

Griff: I couldn't have done it without you or back. I'm so glad you're back. I'm glad to be back and we'll see you in two weeks. Sounds good.

The eBay for Business Podcast is produced and distributed by Libsyn and podCast411.