It’s been some time since our last Questions & Answers blog post so there are a lot of topics for us to cover today:
- Can I Still Make Money on eBay?
- Will PayPal Ban Me for This?
- Selling Used Goods on eBay to Supplement My Trading Income
- Do I Need to Register With HMRC?
- Product Storage
- Too Much Tax!
- Can You Help Make Sure I’m Not Scammed on Alibaba?
- eBay Sellers Ignoring EU Law
- Closing the Deal with Suppliers from Alibaba
Let’s get started!
Selling on eBay has become so competitive and very hard due to eBay taking so much in fees. I feel it is mainly for buyers rather than sellers nowadays… it seems like I am too late and the money making days are gone?
Making 10p on an item is not really worth the time surely?
I would really like to get your view on this. I do run an online business but again it’s new and I feel like eBay is a great place for potential customers, I’m just not seeing enough profit there.
Also what is your opinion on PayPal taking a fee from your postage?
As if postage is costing me £3.90 I charge £3.90 yet PayPal then take their fee and I’m left with less than the actual postage cost. It seems a bit unfair to me?
The money making days on eBay are definitely NOT gone! If that was the case, there wouldn’t be so many sellers on eBay. Yes, competition has increased dramatically over the last decade but so has the demand and number of products being sold on eBay.
The two biggest problems most people (sellers) face are:
- Lack of buying power;
- Getting enough sales in.
I will quickly cover each in detail.
Buying power – you really need to buy in true bulk volume to make a profit on eBay. Buying in small quantities from local wholesalers just won’t work anymore. In many cases the same wholesalers that you’re buying from are also selling on eBay and if not; their prices simply aren’t competitive enough anyway.
The solution to this is to start importing products in bulk from China or another country where manufacturers are located. This is what most successful eBay sellers do to compete and it’s the model I’ve personally been following for years now.
If you do have a very small budget, do whatever it takes to raise it to the minimum needed to start importing. This can be done via several ways like:
However you manage it, get your budget up to at least the £1k mark so you can start importing small, cheap items directly from China.
As for getting enough views and sales on your listings – it’s actually a rather mathematical formula that you need to follow. First of all, you need to achieve Top Rated Seller status on eBay ASAP. It can be done in 30-60 days and there are simply no excuses not to do it.
Next is getting your listings ranked high enough in search results. Again, just use my step by step strategy for this.
It also goes without saying that doing proper Terapeak research BEFORE you buy any products is a must! You also want to avoid products with super high competition on eBay and concentrate on products with decent demand and medium to low competition that are suitable for your buying power.
Lastly, you also want to switch your mind frame from the lowest price approach to something more creative and smart. I have created several guides on how to create unique products, how to brand products and how to bundle products to create unique offers. When you do this, you’re not directly competing with other eBay sellers and can charge higher prices for your products, avoiding un-necessary price wars.
Hope this helps Mark!
I stumbled upon your site this morning looking for some answers about PayPal.
I’ve had a PayPal account since I was 14 or 15 years old, but I can’t remember if I used my social security number or my mother’s, because of my age. I am assuming I used hers because I still have the account and it is now a business account since I sell handmade goods online (it is definitely not a student account). The account is under my name, her social security number, and our shared bank account and I’ve never had any problems with it until today.
I tried signing up for PayPal Here (so I could use it at art fairs) using my own information first and it wouldn’t let me because I am only 17, though very soon to be 18 (so I don’t understand why they wouldn’t let me get it). Since that didn’t work, my mom suggested I try signing up for it using her information since her name is somewhere in my account.
It worked, but now PayPal is asking for ID, confirmation of SSN and a copy of a bill with my name and current address, etc.
I am not sure what to do. If I send them my information, I feel like the account would be frozen until I am 18 or even terminated.
If I send my mom’s information, I feel like they will consider it fraud, even though the bank account that I have linked to PayPal is in both of our names.
I have sent whatever money was in my account to my bank, just in case they do finally get back to the several emails I sent them trying to fix this problem.
Would my best option be to terminate this account when the money has been transferred and have my mom make her own account that I could use, and then make my own account when I am 18 in a couple of months? It has to be a business account since I sell on sites that require your PayPal to be a business account.
I have also read that PayPal will only allow you to have one business account (found that on your website). If I were to terminate this account, would I not be able to make a new business account with my mom’s information?
If you need anymore information, please let me know. I would just really like to figure out what to do. I sell my handmade goods frequently and this kind of mess up on my end is really hindering my progress.
Thank you for your time.
First of all, you can actually have as many Business PayPal accounts as you want, as long as each account is a separate business entity (i.e. registered company). You can’t have multiple PayPal accounts for the same company.
In your case, I think it would probably be better just to leave it as it is now and open a new account when you reach 18 in a few months’ time.
Sending your moms details definitely won’t help as in essence the account is in your name.
Your mom could also open an account for now, while you wait to make your own.
The only thing that worries me is how PayPal will react if you don’t send in the documents that they’re requesting. Chances are they’ll ban you if ignore them but then if you do send in the documents, you’ll most likely be suspended until you’re 18. I would hope so anyway, based on what I’ve heard in such cases previously, however the worry is always there that they ban you completely…
Unfortunately it’s very hard for me to give you specific advice as it’s such a special case, and it’s just really hard to predict how eBay/PayPal will handle it on this occasion.
Sorry I know that’s not what you want to hear, but I don’t want to tell you something definite when I’d just be guessing myself.
I have been reading your blog which I found to be very interesting and beneficial. I am a Forex investor but I am looking for another source of income to cover my expenses so I don’t have to withdraw from my trading account, as this affects my annual percentage return.
I am keen to start selling on eBay, probably using the used goods method you have on your blog. I need to make about £20-£50 per day. I would highly appreciate any items you can suggest for me to look into that would allow me to make this amount or any other suggestions you might have.
Yes, getting into 2nd hand goods is a great way to create a side income business on eBay. If you really want to make the most out of it, follow these two guidelines:
1) Stay away from the most obvious items. Most people will stick with video games and Blu-ray movies, but these niches are hugely competitive. Smart sellers will instead look for different, less well known niches and products where a higher level of profit can be made.
Just to give you a few examples:
- Baby strollers
- Electronic paper cutters (craft niche)
- Sports equipment (golf, football etc.)
I hope you see where I’m coming from! Just think outside the box and look for niches and products with less competition and higher margins than DVDs or video games.
2) Start buying locally! If at all possible, try sourcing products locally! eBay is great and easy to use for this process BUT you’ll get much better (lower) prices when you buy things personally, in your local area. So start using Gumtree and similar sites to search for local deals for used goods and don’t forget to also share your business cards with sellers to get extra future business in.
Just wanted to get your opinion about something, I have recently been making about £900-1,000 per month in turnover on eBay and my partner is scaring me with stories about HMRC tracking eBay sellers down and giving them hefty fines.
But I also read on your blog about not registering for VAT until you are over the threshold of something around £70,000.
This sounds very high, do you think I need to start worrying and register myself as a business now? Do you know if eBay and PayPal do report people?
Any advice would be great as there is so much conflicting information about this online it’s hard to know what to believe!
If you’re making £1000 per month in sales on eBay, you definitely need to register with HMRC.
Usually registering as a Sole Trader works best in the beginning but you can read my full guide on Business Registration for eBay sellers here.
Business registration and VAT are two different things though. While you need to register as a business with HMRC, you DON’T want to register for VAT, as explained in my eBay VAT guide here.
As for eBay/PayPal reporting people to HMRC — I don’t think anyone really knows the answer to this question.
I personally don’t think they do it or if they do, only for the biggest sellers on eBay. PayPal already verifies all business sellers so they do their homework, whether that business pays tax or not is probably not their concern as it’s HMRC’s responsibility.
I’m from France and wanted to get some advice from you about starting an eBay business selling wallets and cases for mobile phones.
Specifically, I need some help with the storage. For each mobile, I have a variety of cases and many colors.
The cheapest way would be to simply use cardboard boxes for each item you have. Get a cheap shelving unit (cheap because these are not heavy items so you don’t need extra durable metal) and just use your supplier’s cardboard boxes or buy cardboard boxes locally to store each item.
All other options will be too expensive and complicated for you and there’s no real point in doing it anyway while you’re a one man band type of business!
For more tips & tricks on warehousing system, labeling and barcodes check out my warehouse guide for eBay sellers: Complete Warehousing Guide for eBay Sellers.
Hope this helps!
I have a question about paying tax:
How is a person, who is paying 20% or 8% as final fees on eBay, supposed to make profit, when at the end of the year they are liable to pay more tax to HMRC?
Would it be possible to apply for a tax return, if your income was sufficiently low?
Thank you in advance.
I think you’re mixing up two things here – the tax you pay to HMRC will be calculated on your PROFIT and not turnover. So if you’re not making much profit on eBay or operating at a loss, you won’t have to pay income tax to HMRC at all (or it will be very small).
All you need to do is register as sole trader with HMRC and you’ll be able to do yearly tax returns where all business expenses will be deducted from your taxable profit.
I have contacted numerous factories from Alibaba’s website as I am about to order 80 chairs for my restaurant and would like to know the safest way to go about this, without being scammed.
Could you give me some information, or introduce me to someone who can help with this?
You want to be sure the supplier you plan on dealing with looks good and passes all of my filters, at least on paper.
Next step would be to get an inspector to visit the supplier and do an extensive report for you. You can hire such inspectors from Alibaba’s inspection website for as little as $100-$150.
If the report looks all good, you probably want to order one sample chair to see the quality of it before making the final order of 80 chairs. If the chair is disassembled, you can probably get it delivered by a courier company. You’ll have to pay the sample cost and courier fees.
If everything is fine with the sample, you can then place the final order with your supplier. Try sticking with safe payment methods, such as PayPal or Escrow and if the value of your order is at least a few thousand dollars, it’s worth doing another pre-shipment inspection before you pay the remaining balance and the chairs are dispatched to you.
I was searching the Internet about importing cosmetics from abroad and came across one of your articles but you don’t really mention what regulations I would need to comply with.
I’m just wondering if you know much about importing skincare/beauty products and the paperwork around it?
I’ve done some research and the EU Cosmetics Regulation requires every product to be registered via the “portal” and have a Product Information File held. I’m just wondering if I’m dwelling on this too much or not but a lot of people seem to be importing beauty products without having this concern around the EU compliance.
If you can shed some light on this I’d really appreciate it. If not point me in the right direction?
I look forward to hearing from you.
What you’re saying is absolutely true. While there is this EU Cosmetics directive, very few sellers (if any?) are actually following it, especially on eBay.
Chances are that people are simply not informed about this enough and some fault should be taken by Customs too as they shouldn’t let any cosmetics into the EU without these certificates being present.
But it is what it is.
There are two options for you really:
1) Just do what everyone else does and hope you won’t get into trouble;
2) Order products from an EU based manufacturer who will have the proper documentation in place.
Sorry, but that’s pretty much all I can advise with this.
I am new to Alibaba and international shipping in general but have been trying to read up as much as I can. I have managed to get as far as three potential orders but am a little worried or unsure about a few things:
1. The first item has quite a specific design – they are these small metal containers. I made contact and the supplier was very helpful and I am sure this company is legit (with help from your guide) so all seems fine but I have placed the order after agreeing total costs and shipping and haven’t heard back from them for days. I haven’t exchanged any money but I wondered if this was normal?
2. I looked into hdmi cables which sell quite well. I asked a seller for a quote and maybe some samples. He was very friendly, I checked the company and again everything seemed ok apart from not accepting escrow but PayPal was fine. The problem here was the person has been very pushy, constantly sending messages and instant messages via the trade manager. He really really wants my business but I am only ordering 5 items. As he didn’t seem very professional, I am very reluctant here. He did send a quote on an excel sheet but the prices seemed to have risen. Is this one a no-no in your experience?
3. Hdmi cables again, I checked out a different company and they seemed much more professional, sent a quote straight away, and offered free samples. I could tell just by the correspondence and company checks this one seemed good. The thing is they are asking for my Express account, which I now know is my shipping account (I am in the process of setting one up with FedEx).
My question here is how does this work? And is this commonplace? Do they use my account and charge me for shipping costs? I’m just a bit confused about how this works as in my first question the seller quoted me a total price, including the cost of the items and shipping, that I would pay them, just leaving the taxes for me to take care of…
I hope my queries haven’t been too vague, I have been trying to do as much research as possible but it’s the finer details that are unclear to me.
Thanks again for taking the time to reply, your info on the net has been very useful to me so far.
Thanks for your questions; I will reply to them one by one.
1) It depends on the supplier really. Maybe they’re simply at a trade show or something so just send them a reminder email and see how it goes. You can also try contacting them on Alibaba’s live chat system. If you don’t hear back from them after a week or two, it’s probably not worth continuing with this as you don’t want to work with a company with such poor communication.
2) This is very typical with Chinese sales people. Again, it depends on the company but sometimes they can be particularly annoying, lol, yes! Excel for quotes is totally normal. And if they take PayPal, it should be ok.
3) Yes, if you have a courier account, the courier company will simply charge you for the shipment.
But it’s not mandatory, not at all! You really don’t need a courier account as you can simply ask the supplier to organise shipping and just pay them directly. This is also often cheaper than dealing with the courier company yourself, so it’s what I’d suggest you do.
Hope this helps Peter!
That’s it for today.
If you have any questions you would like answered by me, get in touch via this contact form!