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We are not nearly as recession proof as I’d like to be. Ebay is definitely part of the plan, though. Hard to know for sure but I’d speculate we’d see more competition from sellers as well as more buyers in a downturn. Hard to know whether the two cancel each other out or not.
I had a good week for sales.
Sales: CAD$1765, 12 items, COGS: $365 –> Item profit: $1101
Expenditures: $430 –> Cashflow: $1035
Listed: $1070, 10 items
Hours: 7, $92/hr after tax
Notable sales: Drader plastic welder, $300 –> $750 within a day or two. Bit risky for a return but fingers crossed!Other stuff is… interesting, lately. I got a promotion and significant (25%) raise, which was a pleasant surprise. I also am getting kicked out of my airport storage unit by the new owners, who are attempting to quadruple the rent starting in April. I intend to just move before April and not pay them a cent, but I’m curious to see if I have legal remedy. I just don’t like being pushed around. My lease agreement was written up by the previous owner like a residential tenancy, so it only references the landlord/tenant act for rent increases & notices of eviction (3 months notice) and doesn’t specify them directly. Regardless of whether the act should have applied to a commercial lease, I would think that by specifically referencing it, it becomes relevant to expectations of the contract (certainly that’s how I originally read it). Also not sure if, by vacating before April, I forgo any legal standing anyway. Or whether I really want the hassle. But, feeling very vindictive at the moment. Running residential rentals, I find this behaviour kind of shocking. Generally I only raise rent in between tenants.
I was sore tempted to build a storage unit at our house – we have space – but alas, the money is not there right now and I don’t want more debt. So, it’ll be a storage locker (for $215/mo instead of $100/mo). Sigh. I’m going to rent a u-haul this weekend and blitz it. May purge some of the junkier stuff at the same time. And I’ll try to organize the new unit better.
Good podcast! I know jealousy can be a good motivator sometimes too, but has to be kept in check since in degenerate form it becomes demotivating instead.
Regarding your real estate adventures. If I had multiple investment properties in the same area, I’d be worried about correlated risk. I.e., if one fails (due to either difficulty renting or poor housing prices or both), chances are they all fail. Do you guys worry about that? It’s part of the reason I got out of one of our two rental properties.
One other thing: your forum is a breath of fresh air as far as relative freedom from (a) shilling, (b) politics. Really, it’s incredible because that stuff is constant everywhere else. That being said, you guys do an awful lot for us for free and speaking for myself, I would certainly not mind a LITTLE bit of shilling if it makes you some cash.
This was a solid week for sales, not spectacular but not bad.
Sales: CAD$1102, 9 items, COGS: $134 –> Gross profit: $805
Expenditures: $170 –> Cashflow: $769
Hours: 7, $69/hr after tax
Listed: $845, 5 items
Notable sales: Best was a timer controller for $250 (paid $5). Mostly did OK on volume this week.
Buys: bought a drawer warmer for a restaurant for $50. I regret this buy as it’s absolutely huge but what’s done is done. Hoping for $500 out of it.03/11/2019 at 2:59 pm in reply to: Scavenger Life Episode 402: Can You Build An eBay Business On Repeat Buyers? #58483I wish I understood better how to evaluate land & home prices. We live in a semi-rural area (~40 min from a large city) and when we look anywhere within 100-200km of us it doesn’t seem like there is that much of a rural discount relative to the city – maybe like 20% tops? At least to my untrained eye. Perhaps a function of the regional economy being pretty strong?
03/11/2019 at 8:48 am in reply to: Scavenger Life Episode 402: Can You Build An eBay Business On Repeat Buyers? #58424Now that’s an item!
03/11/2019 at 8:45 am in reply to: Scavenger Life Episode 402: Can You Build An eBay Business On Repeat Buyers? #58423Interesting to hear you’ve got another property! Remarkable that you have been able to bootstrap your way into being regional land barons from selling old shoes online.
Another fair to middling week.
Sales: CAD$820, 4 items, COGS: $38 –> Gross profit: $636
Expenditures: $747 –> Cashflow: -$73
Notable sales: broken SO2 gas analyzer $386.
Scavenging: pipe thawing machine for $400, should be worth $1100. A couple of fancy plumbing fixtures for about $50, should bring a few hundred.03/04/2019 at 10:03 pm in reply to: Scavenger Life Episode 401: You Don’t Have To Quit Your Job To Sell On eBay #58125Sorry to hear about your coffee maker parts. I don’t think it goes with the territory selling parts (perhaps used parts?). Probably just bad luck with your particular coffee maker. I sell all manner of parts all day long and the return rate is typically extremely low.
03/04/2019 at 9:50 pm in reply to: Scavenger Life Episode 401: You Don’t Have To Quit Your Job To Sell On eBay #58124Hi guys, hope you’re having a good week! I’m on another 3-day business trip to the middle of nowhere, in my hotel room.
Had a so-so week on eBay. Been a while since my last home run.
Sales: CAD$669, 7 items
COGS: $45 –> Gross profit: $518
Expenditures: $369 –> Cashflow: $194
Hours: 6, $2/hr after tax
Notable sales: 10 fridge water filters, $24–>$300.
Notable scavenging: bought a huge lot of chemical testing kits as an experiment for $150. Got them home and realized, it’s a failed experiment. I should make a little money, maybe double, but it wasn’t worth it at all.I like the update to the condition possibilities with new open box/missing box. That is legit helpful to me, a lot of my business & industrial stuff is NOB or no box.
03/01/2019 at 10:26 am in reply to: Scavenger Life Episode 400: Tax Season Advice for Newbies from Strangers On The Internet #57914@Retro – I mostly agree, and didn’t mean to sound too negative. Obviously big profit margins are a great problem to have! and spending *merely* to reduce your tax bill is completely idiotic.
What I am pointing out however is that capital and labour substitute for each other but labour is not deductible (assuming you’re not in an LLC).
A typical scavenger tradeoff is something like “do I buy a single $100 item for $20 or spend 4 hours scavenging & selling 5 items I got for free, for the same $100 in sales?” Everybody has to answer that question for themselves, but one factor to bear in mind is that the $20 purchase is actually ~$15 because it’s deductible, whereas your labour isn’t.
You can apply a similar logic to hiring employees.
02/26/2019 at 3:12 pm in reply to: Scavenger Life Episode 400: Tax Season Advice for Newbies from Strangers On The Internet #57724Regarding LLCs, I was reading this today & found it helpful. It applies to Canada but I suspect it’d be similar for USA.
Jumping from Sole Proprietorship/Partnership to Corporation in Canada
Regarding taxes, the idea in essence is just that the small business tax rate is lower than the personal income tax rate. Whether this justifies the extra hassle involved and the whole new level of bookkeeping is another story. I’m going to be talking to an accountant about this I think.
As far as liability goes, I agree with you Jay that the legal liability risk from ebay selling is minimal.
02/25/2019 at 10:10 am in reply to: Scavenger Life Episode 400: Tax Season Advice for Newbies from Strangers On The Internet #57587Yep absolutely, I think of it as more like a discount. Anything deductible comes at a 26% (or whatever) discount.
02/25/2019 at 9:57 am in reply to: Scavenger Life Episode 400: Tax Season Advice for Newbies from Strangers On The Internet #57585And yes, paragraph 4. Cost of goods sold only includes the cost of goods… SOLD. Not every dollar you spent on inventory. (Which is why you need to track every single item.)
02/25/2019 at 9:44 am in reply to: Scavenger Life Episode 400: Tax Season Advice for Newbies from Strangers On The Internet #57584Yes, 100%. This is great, I am posting it below so nobody misses it!
What I learned or made mistakes on:
1. I should have a spreadsheet with every single solitary item I purchase listed on it individually. What I spent, how much it sold for, how much it was shipped for, fees incurred, etc. I have to admit that I still don’t do this, I’m sorry but this is RIDICULOUS. For the most part eBay tracks this information in it’s seller reports anyway (other than of course the price I paid for the item).
2. You really do need receipts for everything- he went through them with a fine toothed comb and compared them to my bookkeeping
3. You need to keep more than receipts for gas- they want us keeping a log of where we went and the vehicle’s starting and stopping mileage if you’re going to use gas as an expenditure
4. You can’t include the cost of goods as a deduction for items that haven’t sold as of 12/31 – in other words, you can’t include their cost until they have sold, which of course is a complete nightmare. So the cost of items that sit for a year or two can’t be deducted until they’re sold. I told him this was extremely difficult and he really didn’t care. I was deducting inventory expenses right up until the last day of the year but in actuality you have to analyze your inventory and add the cost of all unsold items back in (or remove their deductions). This is quite a feat.
5. Doing a “home office” deduction is a red flag in most cases. It’s nearly impossible to claim (if you’re audited). You have to provide pictures of it and prove that 100% of the space is used for business purposes. For instance, a computer in your home office used for family purposes negates the ability to claim this space as a home office.Hope that gives everyone an idea of what they’re looking for -atleast according to the IRS auditor I worked with. And of course he found honest mistakes and I owed the government an additional several thousand dollars (there are also auditing fees, penalties, interest, blah blah blah- as if I asked for the audit). Feel free to ask questions if I missed something!
The key thing here, which I suspect a few people in this forum are still hazy on, is YOU NEED TO TRACK EVERY SINGLE ITEM FROM CRADLE TO GRAVE including at least COGS (c/w receipt), date of sale, sale price, shipping income, and shipping cost.
02/25/2019 at 9:33 am in reply to: Scavenger Life Episode 400: Tax Season Advice for Newbies from Strangers On The Internet #57582Incidentally, the “problem” of high taxable profits is also a good reason in favour of quick sales, and in favour of paying higher COGS rather than spending tons of time to save COGS.
02/25/2019 at 9:24 am in reply to: Scavenger Life Episode 400: Tax Season Advice for Newbies from Strangers On The Internet #57580400 episodes, holy moly. You guys have some follow through! No wonder you’ve done well in real estate.
True that employer remits some money on your paycheque such as (in my country) pension etc., however it’s somewhat illusory in that the *incidence* generally falls on the party with the weaker negotiating position, usually the employee. I.e., the employer *remits* it but ultimately they pass that cost on to you in reduced salary.
Strikes me that a big drawback of ebay is the lousy tax implications of ostensibly HUGE profit margins on paper without commensurate expenses. Your expenses are primarily your time – which is not deductible! This is one reason why hiring employees is appealing – suddenly all that labour cost becomes deductible. J&R, were the tax implications of hiring a helper a significant part of what attracted you to that path? Myself, I would if I could but listing and shipping is not a big bottleneck for me so it makes little sense.
I have always done my own taxes and it works fine for me. One hitch is, I would really like to speak to somebody about whether I’d save money by going from a sole proprietorship to an LLC.
Jay, you mentioned you wish you had a spreadsheet of all the items you bought at auction and what they sold for. Once again I’m confused on this… don’t you HAVE to have that already if you’re tracking COGS for tax purposes?
Pretty pathetic week for both sales and scavenging. Only saving grace is I didn’t put many hours or dollars into it either.
Sales: CAD$440, 4 items
COGS: $12 –> Gross profit: $353
Expenditures: $21 –> Cashflow: $345
Hours: 4, rate: $55/hr after tax
Listed: $0, 2 items (both are longshots)
Notable sales: Best sale this week was a box of hospital sharps containers for $150.Obviously, feedback on buyers is meaningless in ebay’s current model.
Feedback on sellers continues to be moderately useful. Of course, a single negative feedback on a seller could be just bad luck. Iterated bad feedback is a big red flag for a seller and since ebay basically shuts you down at – what – 90%? it’s really only the final digit of it that matters.
It does seem like some types of items tend towards bad feedback more than others. I still haven’t had a negative and have had 1 neutral in 2 years; I suspect this’d be different if I were selling clothing.
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