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I’d love to hear how other scavengers answer this question.
Our eBay profits goes into a big pot.
We take money out for living expenses, but our first instinct is to not spend money.
We take money out if we need to by inventory.
We take money out to pay taxes.
Then we use our eBay profits to work on our other business (rental property).
eBay has been our cash engine for the last five years. -
I basically pay myself a salary. I transfer the same amount every Sunday from PayPal into my personal checking account. I make sure I can pay my eBay fees (just keep reminding myself that the higher the number means the more stuff i sold). After that everything else goes back into the business for both supplies and inventory. I find it really important to budget how much i spend in inventory every week. Its ok to break it every once in a while; but, it is generally a helpful guideline.
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I do things similar to trextradingco, I pay myself a fixed amount every week which I transfer from my PayPal account to my personal checking account. I make sure the money that is left in PayPal is enough to be used for eBay fees, new inventory and other business related expenses.
As far as how much to hold back for new inventory, that’s going to be very different from one person to the next. If you are trying to grow your inventory you might need to set aside more money but if you have lots of stuff to list you might not be buying a lot and don’t need to set aside as much money. For me, I usually take $100 cash with me each weekend when I go to garage sales, I might not spend it all but I make sure I have enough in PayPal to cover me taking cash out each Friday for garage sales.
One thing that is not an issue for me yet but I’d imagine in the future I’ll start to build up a large balance in my PayPal account. I’m not sure I feel comfortable having more than a couple thousand in my PayPal account at any one time. I’ve heard stories of PayPal freezing an account if there is some sort of issue and I’d hate to have all my operating cash locked up while I wait for PayPal to sort through some sort of issue.
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I feel the same way about paypal. Once paypal account starts to get up to a certain point I’ll make a withdrawal to my bank. Between $2-3k is my tipping point on paypal balance. I try to make $1k my minimum paypal balance.
I just don’t feel like paypal would have my back if a hacker came along and wiped me out.
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I saved all my ebay money for 6 months while working my other job. Once I hit 5k I was able to quit and do ebay full time. I started out paying myself 350 a week for about 6 months. After that I gave myself a little raise and continually bumped it up as my sales increased. I now pay myself 575 every friday. Anything extra stays in my business checking for taxes and inventory purchases. I “pretend” the only money I have is my weekly “paychecks” Its been working out for about 1.5 years so far. Up to about 17k in checking right now but with my tax payment due in a couple weeks, Im glad I have this system in place. Almost 5k in taxes this quarter…its so hard to give that up but glad its there when the time comes.
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I’m still in growth mode so except for the few items bought from eBay using my PayPal account, most of my earnings have gone back into the business for inventory and supplies. I think I am now at the tipping point where I’ll be earning more than I spend on inventory and supplies so I’ll make a PayPal transfer at the end of the month leaving enough to cover fees and potential returns (highest item price for the month). I have a full time job so this is extra money that will be used to pay off debt and invest so I don’t need it right away or on a consistent basis.
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I have two Paypal accounts. Anything I buy to sell gets listed under my main Paypal account and that all goes to pay general bills, taxes and new inventory. Anything I get for free or if it is something of my own I sell, goes to a Paypal account that is dedicated to vacations/ fun money. Sometimes when I really don’t feel like listing, I will allow myself a day of “anything listed goes to the vacation account.” My vacation account currently has about $5K in it!
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Hi,
I don’t trust PayPal as bank account. As a previous person commented, they probably wouldn’t have your back if a hacker got into your account and emptied it.
I’m not big fan of banks/credit unions either, but they do pay some minuscule amounts of interest and there is FDIC insurance on amounts of $250K and under.
Tracy
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