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Taxes for eBay & Amazon Sellers

The Online Seller's News, January 23, 2014, Volume 14, Issue No. 2

Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers
by: Skip McGrath

In This Issue:

Musings from eBay, Amazon and The World Wide Web

  1. Taxes for eBay & Amazon Sellers
  2. Why Lowering Your Price to Win the Buy Box May Be Bad Strategy
  3. Private Niche Group for Online Gourmet and Grocery Sellers
  4. How To Beat Amazon at Their Own Game
  5. Setting Yourself Up For Success
  6. New Wholesale Sources For eBay and Amazon Sellers

"Winning isn't everything--but wanting to win is." ~ Vince Lombardi


Musings from eBay, Amazon, and beyond

I want to apologize to those of you who joined our online coaching program, www.OnlineSellingCoach.com to get your free copy of 50 Shades of eBay. We had a small glitch and it took us about a week to get the book uploaded, but it is there now. Also all OSC members will also get a free copy of the book I mentioned above about selling gourmet foods on eBay and Amazon. This is still a couple weeks away, but check in and look for it.

One more thing about www.OnlineSellingCoach.com I want to mention, is that we have done away with the forum and replaced it with a private Facebook group where members can ask questions of our coaches and experts and get help from other members. The group has been a lot more interactive than the forum it replaced so we have high hopes we can really use it to help folks out with your business.


One of the free bonuses when you buy either The Complete Amazon Marketing System or eBay to Amazon is a report about Selling Locally Sourced Gourmet Food items. The entire gourmet food category has been so profitable for us this past year, that I have expanded that report into a 25-page eBook that will replace the report.

I also wanted to remind everyone, when you buy any of my eBooks, you are entitled to lifetime updates. As for my printed books, I usually do an electronic update whenever eBay or Amazon changes policies and those are also always available on the page where you downloaded your purchase.

Whenever you buy one of my books, there is always a statement at the top of the page where you download the book that says Bookmark this page (Add to favorites). You want to do that so when I come out with revisions, updates or new bonus items, you can always get them there for free.


I sometimes get questions from readers about the risk of shipping goods from Amazon FBA to their eBay customers –They worry that the customer could leave negative feedback when their item comes in an Amazon box. First of all, let me say that we have been using Amazon FBA to fulfill eBay and website orders for the past two years, and only one person even questioned us about this, and no one has left a negative feedback because of this. So in all honesty, I do not think this is a serious problem. But if it worries you, Amazon does offer a Brand Neutral program. Here are the details from Amazon:

Brand Neutral Box

You may choose to have each eligible Multi-Channel Fulfillment shipment packaged in non-branded boxes by enabling the Brand Neutral service:

  • With this service, you are requesting to have your eligible Multi-Channel Fulfillment shipments packaged in non-branded boxes.

  • Each eligible Multi-Channel Fulfillment shipment will be charged an additional fee of $1.00 per shipment for this service, which will be added to your per-order fulfillment fees. Any Amazon.com Fulfillment shipments and related FBA fees will not be impacted in anyway.

  • Your existing FBA inventory in fulfillment centers that support the Brand Neutral service will be shipped in non-branded boxes. Your existing inventory in non-supported fulfillment centers will be shipped in Amazon-branded boxes.

  • We will, in our sole discretion, determine which of your Units and shipments qualify for the Brand Neutral service.

  • Once enabled, your eligible inbound shipments will be directed to fulfillment centers that support the Brand Neutral service.

  • If your product is restricted to a fulfillment center that does not support the Brand Neutral service, you will be notified during the inbound shipment creation process.

  • You have the option to disable the Brand Neutral service at any time.

  • We may discontinue this feature and ship all products in Amazon-branded boxes at any time.

  • The Brand-Neutral service applies only to new inbound inventory. Your existing inventory within Amazon fulfillment centers may not be eligible for this service.

  • Currently, there is no option for brand neutral gift wrap or gift messaging. All gift options come with Amazon branding.

To enable or disable this service, go to the Multi-Channel Fulfillment Settings section on your Fulfillment by Amazon Settings page.

If the cost was only 25¢ or so, I might be interested, but at a buck an item, unless your average selling price on eBay is pretty high, that would be a real margin killer.


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1. Taxes for eBay & Amazon Sellers

Tax time will be upon us shortly. I always get a lot of email this time of year with tax questions, so I thought I would give those of you who are not sure how business taxes work, a little overview. Before I get started, let me point out that I am not a CPA, Tax Attorney or any kind of tax expert. But I have been dealing with business tax issues for many years. So this advice falls under the heading of “general advice,” not “tax advice.” For that, I strongly suggest you consult a Certified Public Accountant (CPA).

Yes, a CPA will charge more than a local tax service such as H&R Block, and although many of those firms do an excellent job, statistically IRS returns that are signed by a CPA are far less likely to be audited. The other reason is that licensed CPAs have continuing education requirements, so they are usually more up to date on tax laws –and believe me, tax laws change all the time.( I have a good friend who works for H&R Block and I would trust her because I know how serious she is and how much she studies and keeps up with tax law, but my experience over the years has shown me that not everyone working for a tax preparation firm is that good).

Before I get into taxes, let me say a word about ObamaCare as it has some tax implications for sellers. Over the years I have received email from folks who quit their jobs and had trouble finding health insurance. Well that problem is now solved. Anyone can get health insurance under ObamaCare.

But when you see the costs, you may want to forgo it. In our case, our premiums increased $240 per month and our deductible was raised to $5,250 a year.

Now here is the tax issue. Under ObamaCare: If you are self-employed, in 2014 and if you elect not to enroll, you will be subject to a penalty of $90 or 1% of your taxable income whichever is larger. However, my understanding is the only way the IRS has to enforce that penalty is to take it out of any refund you have coming. So if you don’t have a refund coming, they don’t have any system set up to collect the penalty (yet). In future years that penalty will increase and I am sure they will set up a different way to collect penalties.

As I said above, I am not a professional, but my insurance broker explained it to me that way. In our case it doesn’t matter, because at our age we need the health insurance so I will be paying the higher premiums. But if you are not otherwise covered by health insurance and elect not to take it, I would definitely talk to your CPA and get his or her advice before you make that decision. (Also, if you are worried about the security on the State or ObamaCare website, in most states you can still buy ObamaCare-compliant policies from insurance brokers).

Now lets look at business taxes for eBay and Amazon sellers.

Some sellers elect to incorporate or form an LLC. Those of you who do that will have to file two tax returns –one for the corporation or LLC and a personal tax return. If you elect to file as an S-Corporation (which you should always do in 90% of the cases), then the corporation or LLC does not pay any taxes when you file. Any profits or losses from the corporation are carried over and filed as part of your personal return. Here is an example:

Lets say you work and have W2 earnings of $44,000 from your job. But your part-time eBay and/or Amazon business LLC earned $20,000 in profits. That $20,000 is added to your personal return so your starting point is $64,000 in income. From that you get to take all the normal exemptions and deductions such as mortgage, charitable contributions, energy tax credits and so on.

If you do not incorporate, then you are known as a Sole Proprietor. You only have to file one tax return –your personal return, but as part of that, you file what is called a Schedule C (Form 1040), Profit or Loss From Business. Before I get into that, let me talk a bit about the Form 1099 that PayPal and Amazon send to the IRS.

If the income paid into your PayPal account exceeded $20,000 in Calendar year 2013, then PayPal will file a 1099 and send it to the IRS. ( Click here for an explanation of the different kinds of 1099 forms and how to deal with them).

You are required to also send the IRS your copy of the 1099 with your tax return when you file it. Neither PayPal nor Amazon will mail you a 1099. You get them by going online anytime after January 30th and downloading the report from PayPal amd/or Amazon. Just print out a copy and include it with your tax return.

A lot of folks mistakenly think that if PayPal sends them a 1099 for $35,000 that they owe taxes on that $35,000. This is not the case, so don’t panic when you see your 1099 –it’s not that bad.

At this point we need to get back to the Schedule C (Form 1040), Profit or Loss From Business. The Schedule C is a form you can download from www.IRS.Gov where you list your income, product costs and expenses and determine what your taxable profit (or loss) is.

Here is how it works:

First list the gross income from your 1099s. Let’s say you made $12,000 on eBay and $36,000 on Amazon. That’s a total of $48,000. Now from that you subtract the cost of your products. Don’t forget to include the inbound shipping to get your total cost. So let’s assume your cost was about ½ of your income –or $24,000. Subtract that from $48,000 and your gross profit before expenses was $24,000.

The next part of the form is where you list your expenses. This is far from a complete list but these are some of the expenses you incur that you subtract from your gross profit:

  • PayPal, eBay and Amazon fees
  • Shipping boxes and supplies
  • Shipping costs (postage, UPS, etc.)
  • Office supplies (ink cartridges, toner, paper, paper clips, labels, etc.)
  • Your monthly ISP cost
  • Telephone bills
  • Mileage deduction (56.5 cents per mile for business miles driven) *
  • Office in the home deduction ( click here for how to do that)
  • Business travel (trade shows, visiting wholesale vendors, eBay conferences, etc.)
  • Advertising (example – buying Google keyword ads or costs to use Facebook to promote your business.
  • Training materials (If you bought one of my eBay or Amazon training books, that cost is an educational expense)
  • Miscellaneous expenses

* If you deduct business miles driven the IRS expects you to keep a log, which you will need in the event you are audited, but you do not have to submit the log with your taxes.

As I said above, this is far from a complete list, which is another reason you want to speak with a CPA who can show you many more expenses that you are entitled to deduct. Basically any money you spend that is directly related to your business is an expense.

So, let’s assume that all these expenses added up to $10,000. You subtract that from the $24,000 gross profit and you are left with a business profit of $14,000. That is the amount you add to the first page of your personal tax return where you list your income. Although the two 1099s you got totaled $48,000, you only owe taxes on $14,000 that was profit.

Note: this is a very simplified explanation of what is on a Schedule C and how it works. There is a bit more to it than that, which is another reason you want a CPA. And, depending on what state you live in, you will also have state taxes, but most states base those on your personal taxes –although there are a few states that require their own form of Schedule C. For example, I live in Washington State. We do not have a state income tax, but all businesses must pay what is called a Business & Occupation tax, which is based on your sales rather than your profits. So you can even have a situation where you lost money, but still had to pay taxes to the state.

The other issue you want to be aware of is estimated tax payments. When you earn income from a job, your employer withholds taxes from your paycheck and sends the money to the IRS throughout the year. But when you earn money from a business, the IRS expects you to estimate your income quarterly and send them what you estimate your taxes for that quarter may be.

So if you expect your sales to be $80,000 next year and your profits on that to be $40,000, that means your taxes on those profits would be in the neighborhood of 25% after deductions. Twenty five percent of $40,000 is $10,000, so dividing that by four – you would want to send the IRS $2,500 each quarter as an estimated tax payment. If you do not do this then the IRS will add a penalty to your tax bill at the end of the year.

One last thought. If you are going to make even as little as $12,000 to $15,000 per year, I strongly recommend you incorporate or form an LLC. There are two good reasons to do this:

  1. Liability protection – If someone sues you for anything related to your business and win, they can only attach the assets of the business. They would not be able to go after your personal assets such as your home and your savings.

  2. Tax advantages – I don’t have room to list them here, but there are significant tax advantages to incorporating. Below $12,000 to $15,000 per year it’s not worth that much because the additional cost of preparing corporate tax returns offsets the savings. But, once you get above that there are some really big savings.

You can do that quickly, cheaply and easily through My Corporation.com and January is the best month to do it because you get the full year benefit. If you do incorporate, be sure and go into your eBay, PayPal and Amazon account and set the corporation up as the account holder. Remove your social security number from your account and replace it with the taxpayer ID number that you get with your corporation.

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2. Why Lowering Your Price to Win the Buy Box May Be Bad Strategy

Amazon awards the Buy Box (the first listing that comes up when someone clicks on an item in search) to the seller with the lowest price and whose account is in good standing. However, there are some exceptions – the biggest one being for FBA sellers (those who send their goods into Amazon for fulfillment).

(Note: In the non-media category, over 75% of all sales on Amazon takes place from the buy box. In media it’s closer to 50/50. This is why it’s so important to be in it).

Amazon has two programs that offer free shipping: Super Saver shipping on all qualifying orders that total $35.00 and Amazon Prime. Amazon Prime is a membership service whereby Prime members get free 2nd-day shipping on all qualified products.

Notice the words qualifying and qualified in the above paragraph. What that refers to is for an item to qualify for either program, it must be in an Amazon warehouse. If you are a merchant fulfilled seller, then your items do not qualify for either program.

Now here is where it gets interesting. Let’s say that you and I are selling the identical product. You are merchant fulfilling and charging 42.95 + $6.90 shipping. I am charging $48.95, but when Amazon sees this, I win the buy box. “Why is that?” you say. “My product is $6.00 cheaper.”

Well, since my products are in FBA and yours are not, Amazon assumes that my buyers will get free shipping. So when they compare two sellers they compare your price with shipping to my price without shipping and I win every time. You would have to lower your price by a couple of dollars to win the buy box. Why that much? Because if prices are close, Amazon still gives preference to FBA sellers.

But lets take the case where both of us are in FBA and both of us are selling at the same price of $48.95. If our prices are really close (usually within 1% of each other) Amazon will rotate each of us into and out of the buy box. Sometimes they do this across the whole platform and sometimes they do it based on warehouse location. If your item is in a warehouse in Indiana and mine is in Tennessee, when someone in say, Nebraska hits our item, Amazon may put you in the buy box because they don’t have to ship it as far. Same goes for me. If someone in North Carolina sees our item, Amazon will probably show him or her my listing, because I am closer to North Carolina than you are. But if one of us was substantially cheaper, Amazon would give that person the buy box regardless of location.

Now, let’s take another scenario. We are both in the buy box at the same price and you decide to win the buy box by lowering your price. So one day I look at my item and see that you are in the buy box because you dropped your price by a dollar to $47.95. Now I have a decision to make. Do I cut my price or do I just wait for you to run out of product and then I will be back in the buy box. It turns out that is a pretty complicated decision for several reasons.

Whenever an item is low in stock at FBA, Amazon will usually put the quantity remaining. Here is an example:

I don’t have any of this product at Amazon at the moment, but when I have it I sell it at $21.95. As you can see Amazon says this seller only has 4 left in stock. So I could either lower my price, but since this product has a really high sales rank, I know it sells quickly. So I can just leave my price and wait a few days until the other seller runs out and then I will be back in the buy box at my higher price.

On the other hand, if the product I am selling is a somewhat slow seller, and the other seller has plenty on hand –then I have a decision to make. I can lower my price to win back the buy box. However, that runs the risk of the other seller doing the same thing and we both start a race to the bottom where eventually neither of us is making any money. That does not sound like a great strategy to me. So I usually find another way to solve the problem.

Lets take this product, Trader Joes Cookie Butter. Like me, the other seller is selling a two-pack for $19.99. Once I sell out of inventory in FBA, I can cancel that listing and create a new listing for a 3-pack, or I could create a listing for that product and a different product, say cookie butter and a bottle of jam. Of course that strategy can be copied and probably would be, but that is OK. I am used to it. Selling on Amazon can be like shooting at moving targets, so it’s just something you have to get used to.

There is another behavior I have seen on Amazon that is really stupid and I don’t know why some sellers do it. I have a product selling for $24.95 and another seller will come in and lower their price to a ridiculous level such as $16.95. Of course they win the buy box and they are correct that I am not going to match that price. But since we both buy from the same supplier at the same price –and we both know what the fees are, I know that he is only making about a dollar on that sale.

Had he started lowering prices slowly, we may have battled it out for a week –both of us making more money along the way. I think those sellers strategy is to hope I will get disgusted and drop the product thereby eliminating a competitor –but that can also come back to bite you if your competitor is the type of person who doesn’t like to get pushed around. So when someone does this to me I say “OK – I’ll meet your price.” When they see that I am not going to be pushed around they either drop the product or raise the price back to a higher level where we can both make some money.

So to summarize:

  • The lowest price including shipping generally wins the buy box (Amazon also looks at your account standing, feedback and other factors, but price is the main driver).

  • Equal sellers at the same price will share the buy box. (I have one product that sells for $21.95 and there are five other FBA sellers at that same price. Amazon seems to give me the buy box for about two days every couple of weeks). Depending on some factors you may rotate in and out on a geographic basis or across the whole site. The fewer the number of sellers at the same price, the longer you will remain in the buy box during each rotation. (Whenever I start getting sales of a product that has not sold in a while, I know that I was most likely just rotated into the buy box).

  • Don’ t be in a hurry to lower your price. Consider all the factors and when you do, lower it in small increments. Many sellers use a repricing service that does this automatically. When you are up against one of these, any decrease you do will be spotted and you will be undercut usually within a matter of hours. But plenty of sellers do not use those programs, and you can often get away with a small price decrease for as long as a week or more before the other seller notices it.

So there you have it. The lesson here is don’t be in a rush to lower prices. And try and find and/or create products that have less competition.

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3. Private Niche Group for Online Gourmet and Grocery Sellers

In the last issue I told you about Jenni Hunt’s private niche group for Toy Sellers and several of you joined. The rest of you are probably wondering, “What is a private niche group?”

It is a private Facebook group that consists of 3 experts who will answer questions and the group is limited to 100 sellers in the same niche. Well this week, Jenni launched her second Private Niche Group and this one is for the Gourmet Food Category.

The group is intentionally limited to 100 and the purpose of the group is to help each other out, exchange ideas and get training from the experts

Here is some of what you can expect:

  • Private Facebook group dedicated to selling grocery and gourmet foods online
  • Hot tips about what food items are selling well and where you can buy them
  • Regular alerts suggesting new products and where you can find them
  • Tips for listing, posting and selling online from a team of experts
  • Small, safe community for sharing your own finds and asking questions
  • Benefits of being a part of a small community of like-minded sellers

Those of you who have purchased my Complete Amazon Marketing System or my eBook, eBay to Amazon know that one of the free bonuses was a short report on how to sell locally sourced gourmet foods on Amazon and eBay. Well I took that report and expanded it into a 25-page eBook that every member of the niche group will receive.

Jenni had no trouble filling up the Private Niche Group for Toy Sellers and this one will go fast also. Remember it is limited to just 100 members.

The group runs for 3 months and then everyone in it will have a chance to renew before they open it up again to new members.

I will not be one of the full-time experts, but I will be dropping in from time to time to answer questions, give advice and help out. (I would love to do it full time, but just have too many time and travel constraints). But one of the experts in the group is a fellow who sells over $1 Million per year in the category, which is a lot more than I do.

If you are wondering if this niche is worthwhile, between eBay and Amazon, Karen and I sold over 400 gourmet food items for a total of $9,464 from November 15th through the end of December. And out profit margins averaged 32% after eBay, PayPal and Amazon fees. I started this niche last year with only 20 SKUs and have now grown it to over 90 SKUs and hope to double that this year. And the best thing about this niche is that you can start with only a couple hundred dollars. So just click here to learn more about the group.

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4. How To Beat Amazon at Their Own Game

It’s no secret that Amazon competes with their sellers. This happens in two ways. One way is when you find a product you can buy at a good price, you check to see if its selling on Amazon and you see that Amazon is already selling it. The second way this happens is somewhat nefarious on Amazon’s part.

You find a product that is not currently on Amazon, you buy it and it starts selling. After a while the product is selling really-really well, when all of a sudden your sales slow down. You look at the listing and, Darn! Amazon is now selling the product and they are way under pricing you.

What happened is one of two things. If you can find a wholesale supplier for a product then so can Amazon. They may be buying from the same supplier you are. And, since Amazon does not have the costs you have, they can easily undersell you. But what is more likely is that Amazon contacted the manufacturer of the product directly (cutting out the rep or distributor you buy from) and cut a deal for them to sell direct to Amazon. And they are getting a lower price than you can get from the distributor.

So how do you fight this? Well it turns out there are several ways. Lets take the first scenario first – where you find a product that is already selling on Amazon.

My strategy when I run into this is to create a unique product. You do this by bundling. If you have read my book, The Complete Amazon Marketing System, it goes into great detail on how to do this. Basically all it takes is a little imagination. Here is a product that is sold by Amazon where I just created a unique product by adding something to it.

Amazon sells the same set of salt and pepper mills, so all I did was add a tin of sea salt and Tellicherry pepper to create a different product. (The reason it shows as “currently unavailable” is that we sold out over Christmas. I just received a new shipment a few days ago and they are on their way to Amazon FBA).

Does this work? Well it must. I have been selling this same set for the past 3 years. I order them 12 at a time and send them into Amazon and reorder when I get down to 3 units left. Last year I reordered these six times including a large order for 48 sets right before Christmas that entirely sold out.

There is another advantage to doing this and that is that you make more money. I am selling the set for $89.97. Amazon sells the set for just under $60. The salt and pepper costs me about $7, but I am selling my sets $29.97 more than Amazon.

You can do this with just about anything. I have another product is a range bag for shooters to carry their guns, ear muffs, eye protection and so on to the gun range. I found a great bag that I was buying for about $28 and selling for $69.95. Not only did Amazon find the same bag from my supplier, so did three or four other competitors. Pretty soon they were selling for $49, which was still profitable, but I sold fewer and made less money on each sale. So I lowered the price on the few I had left and sold them out. When I reordered I also ordered a Paracord survival bracelet and a Velcro American Flag badge. I put the flag on my units and included the Paracord bracelet as part of the listing and raised my price back up to $69. The Velcro flag costs me about $1.00 and the bracelets are just under a dollar each in quantity. So by adding two dollars worth of merchandise, I created a new product that I can sell for an additional $20. And my sales rank on that product is really close to the one that Amazon is selling.

Now lets deal with the second scenario. I have written before about how I like to negotiate exclusives so I am the only eBay or Amazon seller. (How to do this is also covered in The Complete Amazon Marketing System). If you have an exclusive arrangement with a manufacturer and Amazon contacts them about buying directly and knocking you out, the manufacturer will most likely contact you before making the agreement. It turns out there are some good arguments you can use.

When I get a call like this I explain how Amazon works. I first explain that the market for any given product on Amazon is only so many sales a day, week or month. It doesn’t matter if Amazon is selling it or five other sellers. That is not going to change the demand for the product. Then I explain that Amazon will beat them down on prices so they will still sell the same amount of product, just not getting as good a price as I am paying. Then I follow that up with the following arguments:

  • I tell them that Amazon rarely honors pricing agreements. They feel they have the power to lower prices and they do not care if the retail stores the manufacturer sells to complain. Also once Amazon is selling it, they won’t be exclusive. Any other seller can also start selling the product and they are all going to start cutting prices. This will further anger your brick and mortar retailers.

  • I explain that Amazon usually demands a generous return policy whereby they can return stock that doesn’t sell. This can be very costly for a manufacturer.

  • And then there is the issue of contacting Amazon. If the manufacturer has an issue with Amazon, they can always open a support ticket, whereas with me they can just email me or pick up the phone and get immediate and personal service.

  • There is also the fact that I am selling their products on several channels – not just Amazon. If they drop my exclusive and sell direct then I will most likely drop their products on all my channels so they will actually lose sales.

  • Lastly I promise all my exclusive wholesale suppliers that I will protect their brand. I watch reviews for incorrect or dishonest product information, I watch the web to see if anyone else is selling and what they are saying about the product. I give my exclusive suppliers the right to approve my photos and product descriptions to make sure their product is being represented accurately.

Wholesale suppliers are business people and when presented with all of these arguments there is a good chance you can save the account.

Lastly, I want to talk about a way to totally protect yourself. This may seem like a stretch but its not really that difficult. The secret: make and brand your own product. It is not as hard as you think.

First go to a website that lists overseas manufacturers such as AliExpress, Alibaba or Global Sources. Spend some time doing research and find a product with a good sales rank on Amazon. Now what you do is create a brand, buy the product, buy a unique UPC code and have a box designed. I had this done for the following product:

Notice the brand name is The Smart Kitchen. Several sellers on Amazon are selling this identical product for lower prices than mine. Yet I sell plenty of them at this price. The main photo only shows the product, but one of the other photos shows my box.

So if someone tried to list against me, they cannot because they don’t have exactly the same product, I own the brand and all I have to do when someone lists against me is tell Amazon and they remove the offending lister.

The company in Hong Kong that I bought the product from designed and printed the box for me. The one time design cost was around $300 and they charge me about 20¢ a unit to make a box and put them in. My landed cost including shipping by sea and customs duty is $5.60 each and that includes the box. I have to order 200 at a time, but I sold almost 100 of these just during the month of December and last year I got them in right before Mother’s day and sold about 50 at that time.


Here is another product I am doing this with.

Notice that this product is also branded The Smart Kitchen. I also did a unique box for this. As you can see, I only have one left. We sold over 200 of these on Amazon and about 40 on eBay between September, when I first got them in, until now. I just placed a new order for another 250. I should have ordered them sooner but they went so fast before Christmas that it just got by me.

So there you have it. Don’t be upset if Amazon (or anyone for that matter) wants to compete against you, just find clever ways to fight back.

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5. Setting Yourself Up For Success

This is something I have wanted to get off my chest for a while. So please forgive me if this sounds like a rant –I don’t mean it to be.

Have you ever seen a forum post that went something like this: “eBay and PayPal are just out to screw us. They are the only ones who are making money from this,” or “Amazon FBA fees are so high it’s a rip off and no one makes any money except Amazon.”

If you spend any time in forums or message boards you will come across comments like this fairly often. Don’t get me wrong –there have been instances where eBay, PayPal or Amazon, or a buyer from one of these, has screwed over a seller. It does happen –but it is usually the exception –not the rule. That is not to say that both eBay and Amazon have policies that sellers don’t like –they do. But what can you do about it? They own and control the platform. If you want to sell you have to do it by their rules.

If you want to be successful at any aspect of online commerce be it eBay, Amazon, Blogging, affiliate marketing or what ever, the first thing you have to do is take ownership and responsibility for it. And then you have to treat it like a business.

It doesn’t matter if you are full-time or part time, if you approach what you are doing with anything less than 100% commitment and 100% focus, then you are treating your business like a hobby.

If you are going to sell online, the first rule you have to learn is that eBay, Amazon, and the other selling platforms, make the rules. They are all profit-making businesses and run their business from that perspective –not yours or mine. You may not agree with their many of their policies and strategies (I know I surely don’t), but spending time grousing about it is a complete waste of time.

The idea that only eBay or Amazon is making money is just silly. There are over 400,000 sellers who make a full time living on one or both of those platforms and many thousands more who make a part-time income. And that also goes for Etsy, Rakuten and the other sites. In the case of eBay, if sellers aren’t making any money they leave (and, many have). Unlike Amazon, eBay sells nothing themselves, so fees from successful sellers are their only source of income.

So, having got that off my chest, here are some of the thoughts, actions and traits I think sellers have to employ if you are going to be successful.

Attitude – A positive, can-do attitude is essential to succeed in any business. If you think the deck is stacked against you, or you blame others for any lack of success on your part, then you are wasting time and energy on unproductive thoughts. And that is a sure way to lose money because it leads to bad decisions. When you sell on a platform like eBay or Amazon you have to follow their rules –it’s as simple as that. So rather than trying to find clever ways around them, embrace them and make them work in your favor.

Here is a real example. I have two cousins who recently retired. They are both about the same age, had the same parents and had similar educations. One of them is the type who thinks everything in the world is rigged against the little guy and the other one had pretty much a positive attitude and just worked as hard as he could. One of them retired with an excellent retirement income and over a million dollars in savings. The other one is trying to live on about $1800 a month social security. I think you can guess which one is just surviving on social security.

Focus - Do one thing at a time until you do it well enough that you can move on to something else. You will inevitably make mistakes –I have been doing this for 14 years and I still make them. As long as you learn from them that’s OK, just keep focusing on your goals and your business (or your niche) until it is successful.

Don’t try and do several businesses at once. If you are well on your way to learning how to sell on eBay or Amazon, stick with that until you are consistently profitable month after month. Just because I come out with a new book about blogging or affiliate marketing, doesn’t mean you have to try and do that also. Wait until you master what you are doing now, then come back and buy my book later.

Risk - This brings me to the concept of managing risk. Nearly every decision you make involves some level or risk. If you try and avoid risk, there is just no path to success. The key is learning to take a lot of small and manageable risks. Some will pay off while others will not. But you learn from both. When a scientific experiment doesn’t get the result the scientist hoped for, he or she considers that a successful experiment because they learned what doesn’t work.

Risk management is about making small mistakes that don’t knock you out of the game. For instance, we had a coaching student a couple of years ago who was actually doing well. She was growing slowly, but she was growing and making money. And then she took a big risk and bought over $5000 worth of a liquidation product that turned out to be all junk. That was just too big a loss for her to sustain and she had to go back to work to recover from it. Had she made a $1000 mistake she might have survived it.

Avoid negative influences - One thing I see all the time are sellers who allow themselves to be discouraged by other people. If you want to be successful, you must learn to completely ignore what Spiro Agnew (remember him?) called the “nattering nabobs of negativism.”

You can’t always avoid them –sometimes they are even in your family. And you don’t want to argue with them. The best thing you can do is listening politely and let the words run into one ear and out the other. Instead of giving these negative folks the time of day, seek out other people who are positive and successful. Surround yourselves with those folks and listen to what they have to say.

Money management - More businesses fail because they did not understand their costs and how to control their cash flow. This is a subject that really deserves your time and attention. You should know where every dollar is coming from and where (and when) it’s going. Evaluate every expense with an eye to cutting it, but don’t cut the things that are important like research or services that save you time.

Be judicious in your cost cutting. Let me give you an example. I have never been a fan of Skype. For some reason, I prefer to have a phone in my hand and I like to walk around when I am on the phone. Skype ties me to my computer. But I started looking at my phone bills and they were getting out of hand, so now I am using Skype more often and I am looking at those XBLUE Skype phones so I can still walk around while I talk.

When you look at an expense it should do one of two things; Save you time that you could use to do something more profitable, or it should have an ROI –return on investment. Look at each expense and ask yourself “What would be the effect on my business if I lowered or dropped this expense?” Then evaluate your answer and make a decision.

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6. New Wholesale Sources For eBay and Amazon Sellers

I am doing something new with this issue that I plan to do a couple of times a year. In this issue I am only featuring wholesale sources that make their products in the USA. There are many folks who prefer to buy Made in USA products, so when I have one of those I always put that in the listing title. And both Amazon and eBay have a feature where you can enter the country of origin. I also read somewhere that Etsy was planning a Made in USA category. I don’t know if they have done that yet, but if so that is another selling venue to look at. Remember –a lot of these websites are retail sites, so when you run into that, just use the contact form to ask for wholesale information.

QMT Windchimes is the premier domestic manufacturer of Corinthian Bells and other high quality, hand-tuned wind chimes. Their handmade wind chimes ship from our factory in Manassas Park, Virginia.

KC Creations Inc. sells over 100 different Dog Breed Crossing signs and other dog and cat products. They also make dog and cat leash/key ring holders. All products are made in the USA!

EcoSmart Designs, Inc. is a U.S.-based manufacturer of jewelry and gift products offering a variety of designs, thousands of parts, and a custom production division.

Touchstone Pottery is a small company based in DeWitt, Michigan. They hand-make jewelry made of porcelain clay. The processes they use is unique and is the only place in the world producing items this way. They produce four lines of porcelain jewelry: Celtic, Pathfinder Wildlife, Arthurian Legends, Patron Saints.

Sock Wholesalers offers a full line of MADE IN THE USA socks including crew, tube, quarter, low-cut, dress, diabetic, designer and more! *1-800-597-3886

Detti Originals Crystal jewelry - hand crafted in the USA & guaranteed. Personalized names, sayings, designs. SPEC pins for eyeglasses.

Otto Step Inc. is the developer of the Otto Step Pet step...portable plastic platform that simply inserts into a 2" standard trailer hitch receiver. They are a family owned business and all made in the USA.

Arrowcopter Inc. sells the world's highest-flying toy with unique space age action. Made in the United States, the original Arrowcopter Toy is attractively packaged in clear bubble pack, easy to ship.

Corn Bag Critter Co. offers a "natural" alternative for children and adults of all ages to help soothe earaches, toothaches, backaches, cramps, growing pains and more. Corn Bag Critters can also be used as a "bed buddy" to help warm up those cold nights.

USA Flag Depot sells American flags, flag window clings, bumper stickers, flag decals and antenna flags --all made in the USA.

Lockum sells locking license plate frames and registration tag security frames. All Lockum frames are made in the USA of lightweight long-lasting aluminum.

That’s it for now – see you in early February.

Skip McGrath
The Online Seller's News

P.S. If you missed the last issue, click here to read it.








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