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The EBay Business Answer Book - Cliff Ennico


Year 2008

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AcknowledgmentsIntroductionQuestions? You Have Questions?Why a Book, When I Can Get All the Answers I Need on the eBay Site?Where the Questions (and Answers) in This Book Came FromHow to Use This BookA Word About Legal and Tax InformationA Final Word Before We Launch1. Do I Really Have a Business Here?Are You Really in Business When You Sell on eBay? Business Versus HobbyQ: "I started selling on eBay last year and have made about $50,000 so far. At what point do I have a real business on eBay?"Q: "At what point will the IRS consider me as having a business when I'm selling on eBay?"Q: "Who decides whether my selling on eBay is a business or a hobby—me or the IRS?"Q: "Even if I made money selling on eBay last year, can I still treat my eBay selling as a hobby?"Q: "Do I have to pay taxes on the money I make on eBay if it's just a hobby?"Do You Need a Legal Entity to Be in Business on eBay?Q: "Do I have to have a corporation or legal entity to be a business on eBay?"Reporting Your eBay Income and Paying TaxesQ: "Is there a certain amount of money I have to make on eBay before I have to start paying income taxes on it?"Q: "Where do I report the income from my eBay selling?"Q: "If I have different product lines and am willing to take the time to set them up as different businesses with different tax IDs, can I deduct the ones that didn't make money and report the ones that did, rather than have my successful lines have to pay for my failures?"Q: "How do you start being a business after having operated as a hobby for several years? How does inventory already in-house get reflected?"Q: "I am fairly new to eBay and just started selling used items from around the house. I am making good money—nothing in comparison to what I paid retail for these items, of course, but still good. Do I claim my earnings next year as income for selling these used items? What part of the 1040 form do I use? I don't consider this activity a business. Do I claim it as a hobby, then?"Taxes Due from Prior YearsQ: "I've been selling on eBay for a couple of years and just recently realized I should have paid taxes on the money I made. I will report the income I made this year on Schedule C when I file my tax return next April 15. But how should I report the money I made in previous years?"2. How Do I Start Selling Professionally on eBay?Your eBay User IDQ: "I have been buying on eBay for some time and now want to start selling. Should I use the same eBay registered ID I have been using for some time, or should I have a separate user ID for my eBay selling?"Q: "I have a brick-and-mortar store that sells a lot of new, high-quality merchandise. I want to sell on eBay to help get rid of some of my lesser-quality inventory, but I don't want to get the reputation of being a liquidator. Should I list my eBay user ID under my real store name, or should I use a fake name or pseudonym to keep my store's reputation?"Q: "Can I use a brand name as part of my eBay user ID—for example, 'best BarbiedollsoneBayi23'?"Q: "If I have a user ID with built-up feedback and I want to change it because I've found a much better name that will help me 'brand' it, can I change the name without losing my feedback score?"Q: "Can I use my website URL as my eBay user ID?"Naming Your BusinessQ: "Are there any rules for naming your business when you sell on eBay?"Q: "What type of name should I give my eBay Store?"Building Credibility as a New SellerQ: "I have just started selling on eBay, but no one will buy from me because my feedback score is zero. How can I get my feedback score up to 20 so that people will begin buying from me?"Q: "How can I quickly establish credibility as an eBay seller?"Getting Business LicensesQ: "Do I need a retail business license to sell on eBay?"Q: "Do I need any sort of license to sell stuff on eBay?"Q: "Do I need a motor vehicle dealer's license to sell cars, boats, and other vehicles on eBay?"Forming a Legal EntityQ: "Do I need to form a legal entity, such as a corporation or limited liability company (LLC), to sell on eBay?"Q: "How do I pick the right legal entity for my eBay selling business?"Q: "Should I incorporate in Delaware or Nevada? I've heard you can save money on taxes there."Registering for Federal and State Taxes, and Tax ID NumbersQ: "Do I need a federal tax ID number to sell on eBay?"Q: "What's the biggest mistake eBay sellers make when they set up their businesses?"Q: "Are there any other state and local taxes eBay sellers have to worry about?"3. Where Do I Find Stuff to Sell on eBay?Finding the "Right Stuff" to Sell and Identifying NichesQ: What should I be selling on eBay?Researching Your MarketQ: A lot of the categories on eBay are saturated with sellers right now. What's a good way to find profitable niches where there isn't as much competition?Q: I'm selling antiques and collectibles on eBay. While HammerTap and Terapeak are great, they only provide data for eBay listings that have closed in the last thirty to ninety days. That's great for people selling laptops that are always available on eBay, but for some of the stuff I'm selling, I would have to go back years to find eBay listings for the same item. Are there any online databases that go back that far?Q: What if I do my research on eBay, and there's nobody selling the same stuff I'm selling?Buying from WholesalersQ: If I'm selling on eBay, will real wholesalers work with me? When should I tell a supplier that I sell on eBay? Should I tell them at all?Q: What are the differences between the various methods of product sourcing (drop ship, light bulk, large-volume wholesale, liquidation, and importing)?Q: What do I need in order to work with a wholesaler? How do I get them to give me an account? What can I do to increase my odds that a wholesaler will work with me? What can I do to make them take me seriously?Q: What exactly is a middleman, and what are the pros and cons of doing business with one?Manufacturer sells to Wholesaler sells to Retailer sells to ConsumerManufacturer sells to Wholesaler sells to MIDDLEMAN sells to Retailer sells to ConsumerQ: Why are my wholesale prices for an item higher than what I see other sellers retailing that same item for? How are they making a profit?Q: Other suppliers are beating my prices. Do I have to drop my prices to compete?Sourcing Product from China and ImportingQ: I would love to be able to order products directly from the overseas manufacturers, especially in China, but I'm afraid I don't have the skills to handle the negotiations myself. Is there any place that can help me make contact with manufacturers and help put the deals together?Q: What if I want to get a product manufactured for me, rather than buying already manufactured products?Drop ShippingQ: What exactly is drop shipping and how does it work?Q: Can I really make money with drop shipping?Q: How can you tell if you're dealing with a good drop shipper?Q: I'm doing business with a drop shipper. What happens if I sell something for them on eBay and they no longer have the item in stock?Q: What things should you include in a drop-shipping contract?Consignment Sales, Taking Consignments, and eBay Trading AssistantsQ: Is there any real difference between drop shipping and taking consignments of inventory?Q: Do you have to be an eBay Consignment Shop or an eBay Trading Assistant to take consignments of inventory to sell on eBay?Q: What are the biggest mistakes people make when taking consignments from people to sell on eBay?Q: If I'm already taking consignments from people to sell on eBay, what are the advantages of becoming an eBay Trading Assistant?4. Is It Okay to Sell This Stuff on eBay?Animal Pelts, Skins, and FursQ: "I have a leather and fur vest that I bought at a high-end designer boutique in New York City last fall. The tag says that it's Lippi fur (sometimes spelled 'Lipi,' also known as the Chinese leopard cat). From what I've researched about it, it's not an endangered species, or illegal, which I originally assumed anyway because it's widely used in the fashion industry, and the brand is well known. I want to sell it on eBay, but there's an eBay policy that states 'No sales of any item that contains cat or dog fur will be allowed.' Why is that, and will this policy prevent me from selling the vest on eBay?"Antiquities, Historical Artifacts, and Native American ItemsQ: "On a recent field trip to a Civil War battlefield with my kids, I found an old musket ball. Can I sell this on eBay?"Q: "I have an old Native American ceramic jug that was handed down to me by my grandfather, who lived in the southwestern United States. I would like to sell this item on eBay but am concerned that it may have been illegally looted from a Native American grave site. My grandfather died long ago, so I can't ask him how he came across this object. Is there any reliable way to find out if this item is legal?"Brand-Name Merchandise, Trademarks, Copyrights, and Selling KnockoffsQ: "What are the rules when it comes to selling trademarked or branded items, such as Gucci handbags or Tiffany jewelry, on eBay?"Q: "I sell mostly golf clothes, most of them Nike. I have recently started more auctions than I used to, and I just received the following notice as I tried to list: 'Attention Seller: In order to maintain a safe trading environment, selling limits are occasionally placed on accounts listing items that are reportedly favored by counterfeiters. At this time, you are limited in the number of items you can list (or revise) in any 7 day period. If you have any additional questions about this subject, email us at Customer Support. We sincerely value you as a member of our trading community and look forward to a continued successful relationship.' What's this all about? I'm a seller in good standing, with a terrific feedback score and rating."Q: "As part of an estate consignment, I received several brand-name apparel items. The estate was extremely well-to-do, and I can't imagine these people would have purchased knockoffs. Should I list these items as genuine and describe the circumstances under which I acquired them? If not, where can I get information that would tell me whether these items are genuine or not?"Q: "We have genuine Prada and Carlo Mancini handbags that we want to sell on eBay. They are 100 percent authentic. They have original tags, and we have the receipts from the purchase. My concern is that someone might purchase one of the bags, then switch it for a knockoff and claim that we sent them a phony bag. Any suggestions as to how to protect against this happening?"Q: "While cleaning out my house, I found an empty Tiffany box from when I bought my ex-wife her engagement ring. I was going to throw it out, but then I thought, 'Hey, why don't I sell it on eBay?' There may be somebody out there who bought something from Tiffany's but lost the box." Will I get in trouble if I sell this on eBay?"Items Incorporating Celebrity Likenesses or ImagesQ: "I took some great photos of a famous celebrity during this year's eBay Live! show. Because I'm such a fan of this guy, and I know a lot of people in the eBay community are, I've made up key chains and other body jewelry items featuring these photos. I know he won't mind—he's crazy about eBay, I understand—but will eBay pull my listings if I put these up for sale there?"Drug ParaphernaliaQ: "On a recent visit to China, I visited an old antiques store and picked up what appears to be an authentic 1800s pipe for smoking opium. It's made of ivory, is carved with all sorts of figures, and is absolutely gorgeous. Is there any problem selling something like this on eBay?"Event TicketsQ: "I live in Connecticut and bought some tickets to a Broadway show in New York City a while back. Because of a family emergency, I will not be able to attend the show. I don't have time to find a buyer for these tickets in my neighborhood. Can I put these up for sale on eBay?"Information ProductsQ: "I am self-publishing an e-book on how to get better results when bidding on eBay and beat the snipers. Is this something I could sell on eBay?"Offensive MaterialsQ: "In searching randomly on eBay, I find lots of neo-Nazi and Aryan Nation items. Why is it that these items do not violate eBay's Offensive Items Policy?"Q: "Does antique artwork that depicts rooster fighting (commonly known as 'cock fighting') violate eBay's policy against listing items that actively promote and/or glorify violent crime?"Real EstateQ: "What are the rules about selling real estate on eBay? Must I be a licensed real estate broker?"Everything Else: Researching Prohibited ItemsQ: "Where can I get a comprehensive list of items that cannot be sold on eBay?"5. I'm Trying to Sell Something on eBay, but I'm Not Sure How to Describe ItFraud, "Buyer Beware," and Disclosing Flaws in ItemsQ: "I'm selling antiques and collectibles on eBay. Most of the items I'm selling have flaws of some kind—some are obvious when you look at the item, but some aren't. How much information am I supposed to give in my listing description about these flaws? Doesn't the rule of 'buyer beware' apply on eBay as it does everywhere else?"Q: "Is it possible to be sued for fraud on eBay even though you honestly didn't know about flaws in your merchandise before you listed them?"Disclaiming Warranties, Breach of Warranty, Implied Warranties, and "As Is" SalesQ: "I'm selling something that I think is a genuine antique, but I'm not sure because I'm really not an expert in these things. Is it okay to list the item "as is," say that I don't know anything about the item, and ask the buyer to rely on the photos to determine if it's real or not?"Q: "If I am handling an estate sale and I get a handbag with a Gucci label that doesn't look like a knockoff, how do I describe this item when listing it on eBay?"Q: "I buy a lot of tag sale and estate items in bulk and frequently don't examine them very carefully before I post them on eBay. What I do instead is photograph the box and state clearly in the description that I haven't examined the condition of the item and that the sale is 'as is.' Still, a buyer complained that the box didn't include all the parts. Do I have to give him his money back?"Q: "I sold an antique on eBay last week and the buyer called me to say the thing didn't work. I don't know much about these things, and I didn't say in my description that the item was in 'good working condition.' Do I have to give this buyer his money back?"Q: "I recently sold an antique toy from the 1800s on eBay for quite a bit of money. The buyer complained that the toy was painted with lead paint and wanted her money back because she wouldn't allow her child to play with anything that had lead paint on it. Having children of my own, I sympathize completely, but I don't think I should give her money back because this was clearly an antique that children shouldn't be allowed to play with. Scraping off the paint would reduce the value of the toy significantly. Am I in the right here?"Comparison Listings and Keyword SpammingQ: "I am listing a handbag for sale on eBay that is definitely not a Gucci handbag and definitely not a knockoff, but it does resemble a Gucci handbag in some ways. As long as I clearly state that the item is not a Gucci handbag, can I say in the listing title or description that the item is 'like a Gucci handbag' or 'resembles in some ways a Gucci handbag'?"Q: "I want to sell an old jewelry box on eBay. It's the same robin's egg blue that Tiffany uses on its boxes, but it is clearly not a Tiffany box—the Tiffany logo doesn't appear anywhere on the thing. To be safe, should I state in my item description that this is 'absolutely, positively not a Tiffany box'?""New”, "Like New," and "Used"Q: "I sell clothing from my own (quite large) closet that has been worn only a couple of times. Can I describe the item in my eBay listing as 'like new' or 'almost new'?"Q: "I sell children's clothing and underwear on eBay. I sell a lot of clothing, and it is mostly new and always in good condition. Clothing is always washed prior to shipment. Most items have never been worn, and most have tags. There are, on occasion, a few items that have been worn for a few hours or a few times, and that is all. Of course, if there's any chance that it has been worn numerous times, I would definitely say that the item is used. But when it comes to items that have been worn for a few hours or a few times, I usually say these items are new. If they are new with the original tags still on them, I say 'new with tags,' but if not, I just say 'new.' Is this going to get me intro trouble on eBay?"Condition: GradingQ: "I sell rare coins on eBay. Recently I sold a coin and described it as I saw it. I looked at my description and close-up photos and compared them with other, similar coins on eBay. It matched up with Very Fine (VF). Now, I'm not a professional coin grader, but I have been collecting them for ten years, and I believe that my description was correct. Plus, there were pictures showing the coin. The buyer wants a refund because he says the coin is only in Fine Plus (F+) condition, which is slightly below Very Fine. Do I have to give him his money back?"ColorsQ: "I sell clothing and ladies' fashion accessories on eBay. Recently I sold an orange jersey on eBay, but the buyer wants his money back, claiming that the jersey was not the same shade of orange as the photo on my eBay listing depicted. My sales Terms and Conditions state clearly that I do not accept returns on clothing items, for fear they may have been worn by the buyer or removed from their original packaging. Do I have to refund this buyer's money?"Copying Other Sellers' DescriptionsQ: "I sell a lot of different items on eBay, and it takes up way too much time for me to write descriptions of each item from scratch. If I see somebody else selling a similar item on eBay, can I simply cut and paste the person's description into my listing and perhaps edit it a little bit so it describes the exact item I'm selling?"Your Selling Terms and ConditionsQ: "I would like to put Selling Terms and Conditions on my eBay listings so buyers won't be confused as to when I will and won't accept returns of items. I have looked at the Terms and Conditions on other eBay sellers' listings, and I think they're very forbidding and off-putting, having been obviously drafted by lawyers. Do you know where I can find some more user-friendly forms that will protect me but not scare my buyers off?"Q: "What should I include in my listing Terms and Conditions to avoid being cheated by unscrupulous buyers on eBay?"6. I'm Listing Stuff on eBay, but I Need to Sell a Lot More to Make a LivingGrowing an eBay Selling BusinessQ: "I'm listing stuff on eBay and I'm making money, but the returns so far aren't exactly spectacular. What are some of the things I can do to grow this business?"Why Stuff Doesn't Sell on eBayQ: "I've put a lot of things up for sale on eBay, and only a few have actually sold to buyers. What am I doing wrong?"Dealing with Competing SellersQ: "With so many people selling the same item, how do I get people to buy my item?"Automating Your eBay Selling BusinessQ: "What will using Turbo Lister 2 do for me?"Q: "I'm thinking about using an auction management software tool to help manage my business on eBay. Where can I find good information about the pros and cons of the software that's currently available?"Q: "I'm starting to build a serious business on eBay, and I am thinking about buying an auction management software tool to help me keep track of my listings and costs. I know eBay has two products—Selling Manager Pro and Blackthorne Pro—but I can't decide which is right for my business. Do you have any suggestions?"Hiring Employees, Consultants, and Student InternsQ: "Should I hire a Web designer to create my e-commerce website and my eBay Store, or should I try to do as much of this myself as possible?"Q: "Should I hire student interns to help with the more mundane aspects of selling on eBay, such as listings and answering buyer e-mails?"7. My Winning Bidder Is a Jerk. What Do I Do Now?Seller-Buyer Disputes, in GeneralQ: "I've got this bad/crazy/evil buyer, and..."1. Unpaid Item (UPI) Disputes2. Item Not Received (INR) Disputes3. Item Significantly Not As Described (SNAD) Disputes4. "Item Lost, Damaged, or Destroyed in Transit" Disputes5. You Agree to a Refund, and the Buyer Returns the Wrong Item6. The Buyer Leaves Negative FeedbackAvoiding Bad BuyersQ: "I'm just starting out selling on eBay, and I don't want to deal with any bad buyers. How can I keep from dealing with them?"Finding Information About a BuyerQ: "I'm involved in a dispute with an eBay buyer and want to get their mailing address so I can pursue legal action outside of eBay. The buyer's contact information on eBay gives only his city and state. How can I get eBay to give me more detailed information about the buyer without violating any of their privacy policies?"When Buyers Have to PayQ: "I sold something on eBay, and the buyer hasn't paid yet. It's been several days, and he won't respond to my e-mails. At what point should I freak out and file an Unpaid Item dispute with eBay?"Seeking Help from eBay and PayPal: Online Dispute ResolutionQ: "Will eBay or PayPal take my side if I get into a dispute with a buyer?"Q: "I'm in a dispute with a buyer right now; both of us want to do the right thing, but neither of us knows how to get this resolved and behind us. Do you have any suggestions?"Q: "I've been in a dispute with a buyer for several months now. I have used both eBay's and PayPal's online mediation services, and we still can't get to a resolution. Where can I go from here to get justice?"Reporting Bad Buyers to eBayQ: "There's a buyer who has been playing games with several eBay sellers and violating eBay policies for some time now. I have reported him to eBay, but they haven't done anything. What can I do to get eBay's attention so we can stop this person once and for all?"Q: I always try to diligently report problems with bad eBay buyers whenever I see them, but I get frustrated sometimes that people on eBay get away with murder. It seems that in almost every dispute between sellers and buyers on eBay, PayPal and eBay take the word of the buyer. If the buyer claims an item is not as listed, or not received (if tracking is not available), PayPal reverses the transaction. I am concerned with eBay's policy on seller performance, since all of the negative feedback I have gotten is from customers who had no reason to leave negative feedback but just left it maliciously after they received refunds from me, or even if they never even asked for one. How can I be held accountable for these people? It seems that both eBay and PayPal take the position that the customer is always right, and, of course, I agree with that. But I have noticed an increase in dishonest buyers taking full advantage of this policy, just as they do at big stores like Lowe's and Nordstrom, where they can easily return items after they have been worn or used for a time, or even return items that they bought somewhere else or just decided they do not want anymore. This eBay policy does not allow me to set up any policies and do business in a fair and balanced way. I am not a large corporation that can absorb the costs of dishonest buyers who make false claims. What exactly are the eBay policies designed to protect sellers from malicious buyers?8. I'm Having Trouble Packing and Shipping This StuffWhen Do You Ship?Q: "I sold something on eBay last week while I was away on vacation. When I came back, there were several e-mails from the buyer screaming at me for not shipping the item, and demanding his money back! Do I have to do that, as I was away for only a few days?"Q: "How long after receiving payment must a seller ship the item to the buyer?"Problems with Buyer's AddressQ: "Is it okay to ship to a buyer who does not have a confirmed address with PayPal?"Q: "I sold an item in an auction that was set up to ship only within the United States, but the winning bidder lives in Belgium! The shipping listed only domestic services and I made sure to mark that I shipped only within the states in the options feature when I first put it up for sale. However, I did just discover that I hadn't blocked bidders who were outside of my shipping area in my seller preferences. I changed my eBay seller preferences right away, but I'm still new to selling, so I'm not sure how I should handle this. What do I do?"Shipping Charges and Shipping and Handling FeesQ: "Can I post an eBay listing asking buyers to calculate their own shipping fees?"Q: "I sold something on eBay and discovered later that I had miscalculated the shipping amount. Can I e-mail the buyer after the auction closes and ask him to pay the corrected amount?"Q: "Do my shipping charges on eBay have to reflect 100 percent the actual amount I have paid for postage on each item I sell? Or can I estimate shipping charges to save time?"Q: "What do I do if the eBay Shipping Calculator shows one amount for USPS, but when I go to the post office they charge a higher amount?"Q: "Can I charge my buyers a handling fee on top of my shipping charges?"Q: "Must I specify in my eBay listings how much is a shipping charge and how much is a handling charge?"Shipping Large ItemsQ: "Up to now I've dealt with mostly small items on eBay, but now I have an extremely large item that I want to sell. How do I deal with shipping for this extremely large item?"Pickup by BuyerQ: "I listed a cell phone that someone bid on and then sent me a message saying that they live in the same city I do and would like to meet in person instead of having me ship it to them. I have mixed feelings about this; it would definitely save a few dollars in shipping costs, but I'm not completely comfortable with the idea of meeting someone and I really don't want them to come to my house. Also, I would have no way to prove that they received the item or that I delivered it."Items Lost or Damaged in TransitQ: "I mailed a buyer an item and when the package arrived at the buyer's home he said that it was "received without contents." I can assure you the package was mailed with the contents, and I show it as being delivered via USPS without insurance. Should I refund the buyer the selling price of the item or the full cost to include the shipping that I had to spend? Should I refund at all?"Q: "I shipped an item to a buyer that was totally trashed in transit. This person has bought from me before, so I know he's not playing games. I offer all my buyers the opportunity to buy insurance, but this one didn't. The item was unique, and I can't replace it. I want to do the right thing here, but I really don't think this is my fault. What should I do?"Packaging and Packaging MaterialsQ: "Can I ship an item in a box that has somebody else's logo or graphics on it?"Q: "I'm new to selling on eBay, and would like advice on keeping my costs down; specifically, where can I get good, low-priced packing materials such as bubble wrap , plastic packing peanuts, and boxes?"Q: What are the different types of low-cost packing material, and how can I figure out which one is right for different types of merchandise?Learning More About Packing and ShippingQ: "There's a lot to learn about packing boxes and all the different shipping rates when you're selling on eBay. Are there any good ways to learn about these things before you start selling lots of stuff?"9. Will eBay Kick Me off the Site If I…?Shill BiddingQ: "I have a few items up for sale on eBay. I've received a couple of bids but nothing close to what the item is worth. Can I ask a friend to bid on these items to get some action going and possibly stimulate some interest in them?"Q: "I've been selling real estate on eBay for a while. Whenever I put up a listing I ask one or two of my friends to submit starter bids just to get the action going. Once real bidders start piling on, my friends back off and let the auction happen. Am I at risk for having my eBay listings taken down because of this?"Q: "I have an item up for auction on eBay, and there's a lot of spirited competition for this item from several bidders. One of the bidders has been e-mailing me daily with questions about the item, and I've been answering his e-mails promptly. Is there any way I can get into trouble by doing this? Should I be sharing this information with some or all of the other bidders?"Vigilantes on eBay and Bid RiggingQ: "There's a seller on eBay who's clearly offering bogus merchandise and is making those of us who sell the same legitimate merchandise look bad. We've reported him to eBay several times, but nothing happens. What if several of us banded together and bid aggressively on his items until his prices were so high that no legitimate bidder would consider buying from him? Of course, we wouldn't pay for the items—we'll use new user IDs so the negative feedback won't affect our selling accounts. Sooner or later, he would have to stop selling on eBay. Can we get into trouble doing this?"Copying Other Sellers' Listings, Photos, and Item DescriptionsQ: "It's such a hassle to have to write new item descriptions and take photos for each item I sell on eBay. Is it okay to copy descriptions from other people's listings and cut and paste photos if I'm reasonably sure they're of the exact same make and model I'm selling?"Selling Off of eBay and Communicating with BuyersQ: "I recently closed an auction listing on eBay, but the buyer never paid for the item. Instead of relisting the item, can I e-mail the underbidders in the auction and offer the item directly to them?"Q: "I have posted a reserve auction listing on eBay (a listing with a reserve price below which the seller is not obligated to sell); the reserve has not yet been broken, although the bidders are very close to doing so. Because he really wants this item, one of the bidders has e-mailed me and offered me twice whatever my reserve amount is if I will terminate the listing and sell to him privately. The offer is very attractive, as I don't think I will get twice my reserve price if the auction goes to closing. Can I take him up on his offer?"Q: "I recently put an item up for sale on eBay in a reserve auction. While the listing was pending, I received an e-mail from an eBay member offering to purchase the item for a specified price off of eBay if the item did not sell because the reserve wasn't broken. Is this acceptable? Should I report this to eBay?"Q: "I received an e-mail from a past eBay buyer offering to buy outside of eBay if I had more of the same items to sell in the future. Is this type of solicitation okay?"Q: "I have a fixed-price listing with less than twelve hours to go. A buyer has contacted me via e-mail offering a lower amount. Can I consider this offer, or should I ignore it?"Q: "I'm selling a certain type of antique on eBay, and I noticed that another seller is selling similar merchandise but there are many mistakes in his item description that are clearly intended to mislead buyers. Should I send e-mails to his buyers notifying them of these errors? Sellers like this guy make all of us sellers on eBay look bad!"Excessive Shipping, Handling, and Insurance FeesQ: "I offer my buyers U.S. Postal Service insurance on all shipments, but I recently found out where I can get shipping insurance at a lower rate than USPS offers. Since eBay does not have an option for me to charge insurance at the lower rate, can I still quote USPS insurance rates on my eBay listings and pocket the difference?"Q: "Can I self-insure when I sell on eBay?"Q: "I have a couple of employees who help me pack and ship my eBay items. Can I add a few bucks to the handling charge I include in all my eBay listings to help cover their expenses?"Q: "I sell a lot of stuff on eBay. Do my shipping charges have to reflect my actual cost of shipping, to the absolute penny, or can I average the charges over multiple items to save time?"Choice ListingsQ: "Can I take a photo of several items and list each of them separately on eBay with a photo of all items together?"Q: "Can I post a Buy It Now! listing on eBay showing several items and offer my buyers the opportunity to pick the one they like?"Sales TaxesQ: "I just sold something on eBay. The bidder paid, but when I went to ship the item I saw that he is a resident of my state and I realized I should have charged sales tax. My auction listing didn't say anything about sales tax. Can I go back to the buyer and ask him to add sales tax to his winning bid at this point?"Forced SalesQ: "I just sold something on eBay and realized after the fact that I made a terrible mistake in the item description. I have apologized, explained the mistake to the buyer, and offered him a full refund of the purchase price plus shipping charges, but the buyer is furious and says I must go through with the transaction. Can eBay force me to sell this item? Can I be kicked off eBay if I refuse?"10. I Made a Mistake and Need to Cancel This AuctionWithdrawal of Listing by SellerQ: "I put something up for sale on eBay last week and then discovered it had a flaw. Can I pull the listing?"Q: "I posted something for sale on eBay last week and there are less than twelve hours remaining. I just realized I made a mistake in the item description. Can I terminate the listing now and make apologies to my buyers?"Q: "I put something up for sale on eBay last week. Several bids were placed on the item, but then I received an e-mail from a buyer offering me twice the highest bid amount if I pull the auction and sell to him off of eBay. Can I do that?"Q: "I put something up for sale on eBay last week. Several bids were placed on the item, but they're not very exciting. I received an e-mail message from someone wanting to pay a reasonable price for the item. I'm not sure I want to sell to him off of eBay, so I'm thinking I should terminate the auction, relist the item as a Buy It Now!, and notify the buyer promptly so he can snap it up. Will that get me into trouble?"Q: "I purchased and immediately paid for a lot of three items last week for my son's second birthday. This morning, my PayPal funds were returned by the seller with a message saying his kids won't let him sell their toys. While I empathize with the seller, what are my options in terms of enforcing the valid contract I believe we entered into? If buyers are given a 'this is a valid/binding contract' warning upon bidding, shouldn't this work both ways? I have tried to find the same items in other auctions, but they are not all being offered."Q: "I sold something on eBay last week, but then discovered to my horror that I totally screwed up on the shipping fees. Can I ask the winning bidder to pay the actual shipping amount, or do I have to eat this? Can I simply undo the transaction and send the bidder her money back?"Q: "I have just listed an item in an auction-format listing. The buyer wants me to add a Buy It Now! option so she can purchase this item. She has made me a nice offer—apparently, I don't know what I have. I would love to work with her, but someone else has already bid the minimum. What are my options?"Q: "I have just listed my first items for sale and I think I made a mistake. I listed them as auction listings with a Buy It Now! option. I'm afraid now that my items are going to sell at a huge loss. Can I cancel these listings even though there are bids on them? If not, I guess this is just a learning curve thing I'll have to eat."Q: "I canceled an auction that had twenty-two people watching it. Will they be notified or will they just be left hanging?"Retractions of Bids by BuyersQ: "I put something up for sale on eBay last week. I've had several bidders, but the high bidder just e-mailed me and asked if he could retract his bid because he lost his job. Is this guy a crook? Should I agree to his request?"Q: "I just recently (last night) won a bid on an item. This item cost almost $2,000. The seller was selling an item for which he said he was an authorized dealer. I called the company that makes the item he sold to me and asked if he was an authorized dealer. His company name did not show up on their list. Also, I was told by this company that if I buy it through eBay, or pay through PayPal, the factory warranty is void; in essence, I will have paid $2,000 for this item and it will have absolutely no warranty with it at all. How do I deal with the seller without getting some kind of bad feedback? I don't want something new without a warranty."Q: "I have a truck listed for auction. The high bidder has sent me an e-mail challenging me to prove that when we primered the truck, we didn't cover up rust, and if we have, then we're in violation of eBay policy, etc.—a whole paragraph of vitriol. A very unpleasant e-mail. I'm not sure how to respond to such a buyer."11. I'm Using PayPal (or Want to), and I Can't Figure Out...Should You Use PayPal?Q: "Should I use PayPal to process payments for the merchandise I sell on eBay?"PayPal Definitions and Types of PayPal AccountsQ: "What's the difference between a confirmed and an unconfirmed address in the PayPal system?"Q: "What's the difference between a verified and an unverified account in the PayPal system?"Q: "What is the difference between a Premier and a Business account on PayPal? What type of account do I need to have to sell on eBay?"Your PayPal Account: How It WorksQ: "Somebody paid me via PayPal a month ago, but the amount hasn't yet shown up in my bank checking account. Can I report this to eBay as an unpaid item dispute?"Q: "What happens if PayPal debits my account and there are insufficient funds in the account? Can PayPal automatically charge my bank checking account?"Using PayPal Off of eBayQ: "If I have multiple business channels, can I use PayPal outside of eBay?"PayPal's Seller Protection PolicyQ: "How do I know if a transaction on eBay qualifies for PayPal's Seller Protection Policy?"Using PayPal When Selling OverseasQ: "How do I accept payments in different currencies when I sell internationally?"Q: "I understand PayPal accepts only certain currencies. What if I wish to do business in another currency?"Q: "I understand that you have to have a U.S. bank account to use PayPal. Is that true?"Q: "I have a business with operations in several different countries. I want to use PayPal for all my eBay selling worldwide, but I understand PayPal has certain restrictions on what you can and cannot do on PayPal in each country. Where can I find out more about that?"Resolving Seller-Buyer Disputes on PayPalQ: "I'm currently in a dispute with a buyer. I want to submit the dispute to PayPal's online mediation service, but I've been told not to bother because PayPal always takes the buyer's side. Is this true?"Q: "I have a buyer who wants me to ship goods and services to him first before he will pay for them. My eBay listing requires payment via PayPal, but he does not want to pay me through PayPal. Instead, he prefers to use Western Union, only when he receives the goods and inspects them. Should I go along with this?"Q: "I have several eBay listings up right now that require payment via PayPal, but I've just received notice that my PayPal account has been suspended. I think I can solve the problem with PayPal but not before several of these auctions close. What should I do?"Q: "I sold an item on eBay a couple of months ago. The buyer paid with PayPal and left positive feedback. Now, more than two months later, I have received a notice from PayPal saying this buyer has charged back the transaction on her credit card, and PayPal wants a refund. Do I have to give it after all this time?"12. When Do I Pay Income Taxes?"Aw, Do I Really Hafta Pay Taxes When I Sell on eBay?"Q: "I sold a lot of stuff on eBay last year. Do I really have to pay taxes on the money I made?"Should You Treat Your eBay Selling as a Business or a Hobby?Q: "Even if I made money selling on eBay last year, can I treat my eBay sales as a hobby rather than a business?"Q: "How can I be sure the IRS will agree with my treating my eBay selling as a business rather than a hobby?"Q: "How do you record sales you make on eBay outside of your eBay business, such as personal items?"Income Taxes Due for Prior YearsQ: "I started selling on eBay two years ago but just realized this year that I have to pay taxes. I will be filing Schedule C for my eBay business this year, but what about those sales from prior years? Will the IRS come back to me about those?"Q: "I am confused and sick in the stomach about the issue of selling on eBay and dealing with the IRS. I have things around my home that I have been saving and collecting for many years. My daughter is now twenty-two, and I have saved much of her childhood stuff also. Not to mention that I have always loved shopping at yard sales and thrift stores, which has caused my home to be very cluttered. I have made myself stop because I end up buying things I do not need. I also became addicted to eBay a few years back, and for about three years got caught up in buying way too many things— mostly dolls, teddy bears, and old toys—mementoes of my childhood. I have them all over the house. Some of them I have donated to thrift stores and some I have been selling on eBay. Much of the stuff I list on eBay does not even sell and when I pay eBay's fees I suffer a loss, but some things I have gained on. I do not count on this for my income and never considered it a business. The thought of having to go back over the past few years and amend our tax returns because I may have made a profit selling something on eBay or in my local pennysaver paper makes me feel ill from the stress. I take medication to deal with the problems of excessive worrying, depression, and anxiety, and this kind of situation could trigger them again, which scares me. Thanks so much for any help."Income Taxes and Self-Employment Taxes (FICA and Medicare)Q: "What is the minimum limit for filing income taxes when you sell on eBay?"Q: "Do I really have to pay self-employment taxes such as Social Security when I sell on eBay?"Estimated TaxesQ: "When do I have to pay estimated taxes?"Income Taxes in Multiple StatesQ: "If I move to another state, do I have to report the income I made from eBay sales in both states?"Determining the Cost of Your eBay Inventory for Tax PurposesQ: "If I sell something that was worth $10 about fifty years ago for $200, do I have to pay tax on the full $190 difference? Is there any adjustment for inflation?"Q: "If I'm selling stuff from people's estates, how do I go about determining the cost for purposes of figuring out my profit and taxable income?"Q: "If I'm selling something I've had around for a long time and I can't remember what I paid for it, how do I determine its cost?"Calculating Your Cost of Goods Sold (COGS)Q: "When I determine how much money I made on eBay, do I simply subtract the eBay and PayPal fees from the winning bid amount?"Partnership Tax IssuesQ: "I have been selling on eBay for the past few months. My spouse helps me out a little bit by keeping the books and occasionally driving packages to the UPS Store, but I don't pay her anything for it. Obviously, everything we make goes into our joint bank account. Do we have to file our taxes as a partnership, or can I just file a Schedule C?"eBay Certified Education Specialists and eBay Certified Business ConsultantsQ: "I am an eBay Certified Education Specialist and teach eBay classes at local colleges and adult education programs. What kind of tax form do I need to fill out for this? How do I pay taxes on revenue I generate through teaching, lectures, and private training sessions?"Consignment Sales and Drop ShippingQ: "If I am taking goods for sale on consignment (for example, as an eBay Trading Assistant), do I have to pay taxes on the full value or on just the portion that I keep?"Q: "How do you handle income taxes when you are dealing with a drop shipper on eBay?"Will eBay or PayPal Rat You Out to the IRS?Q: "Does eBay report member sales or earnings to the IRS?"13. When Do I Charge Sales Taxes?Registering for Sales Taxes When You Sell on eBayQ: "If someone has been selling on eBay as a hobby and wants to get a sales tax number to sell as a business with a new name, should the person first take all their auctions off eBay, and if so, for how long? In my state, the rules for applying for a resale license say that you should not be conducting business for twenty days prior to applying for the resale license, and they warn that you could be fined up to $10,000 if you engage in business before you get the license, which takes approximately twenty days. I imagine a lot of people in this situation would just apply for the resale license and leave their eBay auctions going, but I'm wondering if there's a better answer about what to do."Sales Taxes: Seller and Buyer in the Same StateQ: "When do I charge sales tax for selling stuff on eBay?"Q: "Can I add the sales tax to the winning bidder's bid amount, or do I have to absorb the sales tax?"Q: "I know I have to charge sales tax on the purchase price when I sell on eBay. Do I have to charge sales tax on the shipping and handling as well?"Sales Taxes: Seller and Buyer in Different StatesQ: "Do I have to charge sales tax if the winning bidder lives in a different state than I do?"When Do You Charge Another State's Sales Tax?Q: "My sister and I are selling on eBay as a partnership. She lives in Texas, and I live in New York. Which state's sales tax do we charge?"Q: "If I am taking consignments of goods for sale on eBay, when do I charge sales tax to the winning bidders?"Q: "If I am selling stuff on eBay for a drop shipper, when do I charge sales tax, or is this the drop shipper's responsibility?"Q: "When I collect sales tax for a state other than my own, what do I do with it once I get it?"Paying Sales Taxes on the Stuff You BuyQ: "When I buy inventory for resale on eBay, the vendor sometimes insists that I pay sales taxes. Are they right to do that?"Q: "I often buy things at retail, and pay the sales tax, because I find I can resell them on eBay and make even more money. Amazing, but true. How do I account for the sales tax I pay to the vendors when I buy these items?"Use TaxesQ: "What exactly is a use tax? I see this listed on my state sales tax return, and I'm not sure whether I have to charge it, collect it, or pay it."14. What Can I Deduct on My Tax Return?Auto Expenses and Mileage DeductionsQ: "Can I deduct trips to the post office or to the UPS Store to pick up items I've ordered?"Compensation to OwnerQ: "In my eBay selling business, I sometimes take money out of the business checking account to pay my personal bills. How do I deduct these withdrawals for tax purposes?"Computer Equipment and SoftwareQ: "Can I deduct the cost of a laptop computer I use in my home-based eBay selling business?"Q: "Can I deduct software fees?"Cost of Goods SoldQ: "Can I deduct the cost of my inventory directly against the winning bid amount?"Q: "I have started selling toys on eBay. How do I handle the toys I have been collecting and storing for many years and want to put up for sale now? How do I handle starting inventory for tax purposes? Many of the things I bought several years ago are highly collectible now."eBay and PayPal FeesQ: "How do I deduct the various eBay and PayPal fees on my tax return?"Design Services for Website or eBay StoreQ: "Can I deduct the cost of having my auction pages custom designed?"InsuranceQ: "Can I deduct insurance I provide for myself and other family members?"Net Operating LossesQ: "Please address the issue of net operating loss (NOL) for business. Can bad years be safely woven in with better ones? Is this a red flag? Should losses be carried forward?"PostageQ: "Should the cost of postage be deducted, or should it be incorporated into the item cost for cost of goods sold?"Sales TaxesQ: "If I pay sales taxes to buy goods at retail and then resell them on eBay for an even higher price, can I deduct the sales taxes I pay as a business expense?"Shipping and Handling FeesQ: "If I charge my buyers shipping and handling fees, how do I account for that on Schedule C?"Q: "If I charge more for shipping than it actually cost me, how do I report this on my tax return?"Shipping and Packaging MaterialsQ: "Should the cost of shipping materials (such as plastic peanuts and duct tape) be deducted, or should it be incorporated into the item cost for cost of goods sold?"Start-up ExpensesQ: "What expenses qualify as business start-up costs?"Time Spent on eBay Selling ActivitiesQ: "Can I deduct my time, such as the time spent traveling to the post office or preparing my tax return?"Travel, Meal, and Entertainment Expenses and Education ExpensesQ: "Can I deduct trips to conventions, such as eBay Live!?"Q: "I want to improve my understanding of import and export laws and rules. The university in my town has a great class. There is also a very good class in Tampa, Florida, about forty miles from my favorite vacation islands (Sanibel and Captiva). Can I take the Florida class and still deduct the cost of the air tickets, the class, the hotel, and meals?"More Information About DeductionsQ: "Where can I get more information about deductions for eBay sellers?"15. Should I Set Up an eBay Store?Should You Have an eBay Store?Q: "What is an eBay Store?"Q: "Why should every business (online and brick-and-mortar) consider an eBay Store in their business/marketing plan?"Q: "Why should I open an eBay Store?"Q: "How will having an eBay Store help me sell more on eBay?"Types (Levels) of eBay StoresQ: "What are the three levels of eBay Stores and which one should I choose?"Your eBay Store InventoryQ: "Is an eBay Store just for fixed-price items, or can I put my eBay auction listings there as well?"Q: "Should I offer the same things in my auction listings and eBay Store or is there an advantage in keeping my store inventory separate from my auction stuff?"Optimizing eBay Stores for Search EnginesQ: "What are the top three areas of an eBay Store that a new owner should pay attention to?"Q: "I have heard eBay experts say that 99 percent of eBay Stores are set up wrong. What do they mean by that?"Designing Your eBay StoreQ: "Should I have a designer create my eBay Store, or should I use one of eBay's custom templates for an eBay Store?"Q: "Where can I find a Web designer who knows how to put together an eBay Store?"Linking Your eBay Store to Other E-Commerce SitesQ: "Can I link my eBay Store to my website and other e-commerce venues?"Finding Information About eBay StoresQ: "eBay is constantly changing and updating its offerings for eBay Stores. How can I get the latest information so I can keep my eBay Store up to date?"16. How Can I Use My Website and My eBay Store to Market My Product?Online Marketing, in GeneralQ: "What do people look for when they search for stuff on eBay?"Q: "How can I increase my Internet exposure and buzzworthiness?"Q: "What is a niche market?"Your E-Commerce WebsiteQ: "I'm planning to set up an eBay Store. Do I also need a website of my own? I know eBay has a rule that prohibits people from directing buyers to sites off of eBay, and I don't want to get into trouble there. But I've got some really great stuff that I'm not sure will sell on eBay."Q: "Can I use my website URL as my eBay user ID?"Q: "Can I use my website URL as part of a trademarked logo and use the logo as my eBay Store name?"ProStoresQ: "What are ProStores, and do I need one?"Marketing Your eBay StoreQ: "What are some of the more powerful marketing tools you can use to market your eBay Store?"Q: "I offer a variety of merchandise on both my website and my eBay Store. I have a number of things I would like to put up on my website but don't know how much legal trouble I will get into. Three things in particular I would like to post on my website: testimonials from satisfied customers— basically letters and e-mails they have written me; an e-mail from an organization thanking me for speaking at their monthly meeting; and an e-mail from a prominent celebrity offering to tell my customers and patients how really great I am in exchange for a link to his website."Q: "What are some things I can do offline to get people into my eBay Store?"Linking StrategiesQ: "How can I get other websites to link to my eBay Store?"Search Engine Optimization and Search Engine AdvertisingQ: "Are search engine optimization (SEO) and search engine advertising (SEA) the same thing?"Q: "Will eBay help me optimize my eBay Store for search engines, such as suggested appropriate keywords?"Q: "What are some tips for optimizing an eBay Store for search engines?"Q: "What areas of eBay have an effect on search engine optimization (SEO)?"Q: "What areas of an eBay Store have an effect on search engine optimization (SEO)?"Q: "Can people get into legal trouble if they choose the wrong keywords when optimizing their eBay Stores or auction listings?"eBay Marketing ToolsQ: "What are the Reviews and Guides on eBay, and how can I use them to sell more?"Q: "What is a MyWorld page, and how can I use it to make more money?"Q: "Should I have an About Me page?"Blogs, Blog Marketing, RSS Feeds, and Squidoo LensesQ: "Does it make sense to have a blog on eBay? Or, indeed, anywhere else?"Q: "What exactly is a Squidoo lens, and should I have one?"Direct-Marketing Your Listings to Other eBay Community MembersQ: "If I am selling something on eBay and I see the same item being offered by someone else, can I contact the bidders in that other auction and tell them about my listing?"Q: "If I am selling something on eBay and I see that an auction for the same item closed recently, can I contact the underbidders in that other auction and tell them about my listing?"Q: "When I ship stuff to winning bidders on eBay, is it okay to include some brochures and price lists for my brick-and-mortar antiques store?"Videos and YouTubeQ: "Should I consider adding videos to my eBay listings? What are some tips for creating eye-catching videos?"Public Relations (PR) StrategiesQ: "How can I get more visibility on the Web for my business?"Finding More Time for MarketingQ: "All this marketing stuff sounds great, but I don't have time to write a blog or a custom page or a Squidoo lens, because I spend all my time listing. Is there any way I can market my eBay Store and auction listings without investing a lot of time?"17. How Do I Keep Track of Everything in My Business?Using an Accountant Versus Accounting SoftwareQ: "I'm just starting an eBay business. Am I better off hiring a bookkeeper or accountant or using a software product such as QuickBooks?"Live Bookkeepers and AccountantsQ: "How do I find an accountant or bookkeeper in my area who understands eBay?"Q: "Is there a difference between an accountant and a bookkeeper, and which is better for an eBay business?"Q: "What is the difference between an accountant and a Certified Public Accountant (CPA)? Which one is best for an eBay selling business?"Q: What is an enrolled agent, and when do you need one?Bookkeeping and Accounting Software SolutionsQ: "What is the best accounting software product for eBay businesses?"Q: Where can I get a chart of accounts and other QuickBooks templates that are specific to eBay businesses?Q: "Is there a software product that will help me determine which of the items I'm selling on eBay are profitable and which aren't?"Keeping Separate Business and Personal Selling AccountsQ: "I have a business selling on eBay, but I also occasionally sell personal items. Do I have to break those out in my records?"Cash Basis Versus Accrual Basis Accounting for InventoryQ: "What is the difference between cash and accrual basis accounting, and why should I care?"Q: "Am I required by the IRS to use accrual basis accounting because I have inventory that I sell on eBay?"Finding and Retaining Your eBay Selling RecordsQ: "I used to download all my eBay history at the end of the year and then do my taxes. To my horror, I find that eBay now allows you to download only the last four months! What can I do to get my history for the past year, including eBay fees?"Q: "I have been keeping copies of purchase receipts from thrift shops, Goodwill, and garage sales for the stuff I sell on eBay. Sometimes I have only one receipt for lots of different items. Do I have to break out the cost of each item?"Q: "Generally, how long should I be keeping records for all my eBay transactions? Or, to put it another way, when can I safely destroy this stuff?"18. I Just Got a Buyer from Timbuktu. What Do I Do Now? Should You Sell Internationally?Q: "Should I offer my eBay listings worldwide?"Q: "The auction on one of the items I was selling just ended, and the winning bidder is from the United Kingdom. I stated clearly in the auction that I would not ship internationally. Am I obligated to sell to this bidder or can I go right into a second chance offer to the next highest U.S. bidder?"Customs Duties and Paperwork—When You ExportQ: "Who is responsible for paying customs duties when I ship internationally to a buyer?"Q: "I just sold an item on eBay to a Canadian buyer. The winning bid amount was over $500. I plan to ship the item via the U.S. Postal Service, but the buyer has asked me to check the 'gift' box on the form and state only a $50 value. When I asked him why, he replied that the Canadian customs duties would 'kill him' financially. He also suggested that I declare the item as a 'used light fixture' having a value of only $20. I am very nervous about doing this—is it legal?"Q: "What are some dos and don'ts for eBay sellers when it comes to customs documents?"Customs Documents and Paperwork—When You ImportQ: "I just ordered $5,000 worth of merchandise from a supplier in China and received a notice last week that the goods are being held up in U.S. customs. What do I do?"Export LicensesQ: "When do you need an export license to sell overseas?"Import LicensesQ: "When do you need an import license to bring stuff into the United States?"Shipping OverseasQ: "A recently shipped package to Brussels, Belgium, was returned to me in the United States due to a failure of the local post office to successfully deliver it. According to the buyer, no one was home when the delivery attempt was made, and no notice was left. The buyer wants me to resend the item, but the U.S. Postal Service is requiring that I pay a second shipping fee. Can I insist that the buyer pay this second fee?"Selling in Different CurrenciesQ: "When selling goods internationally on eBay, is there any advantage to listing the item price in U.S. dollars as opposed to an overseas currency?"Dealing with Foreign Laws and Taxes—When You ExportQ: "When I sell stuff on eBay's overseas auction sites, am I subject to local laws and taxes in that country?"Q: "What exactly is a VAT, and do I have to pay it when I sell on eBay to overseas buyers?"Paying Use Tax on Imported ItemsQ: "Two years ago, I bought something from an antiques dealer in the United Kingdom, which I then resold on eBay. Last week I got a notice from my state tax authority telling me I have to pay use tax on this item. What's up with that?"Foreign Nationals Doing Business on eBay in the United StatesQ: "I am a citizen of Peru. For the past couple of years, my husband and I have been living in the United States on a student visa. We have paid U.S. taxes throughout this time. During our time in America I started selling things on eBay. My husband and I will be returning to Peru in a few months, and I want to keep this business going. I want to take PayPal payments, but the PayPal rules say you must have a bank account in the United States. PayPal currently does not operate in Peru. Is there any way I can operate legally in the United States without actually being a resident or citizen? I am more than willing to pay United States taxes."Q: "I am looking into opening a business on eBay. I am from France, currently doing an internship as part of my education requirements at a university in the United States. I am on an F-1 (student) visa, I have an Individual Tax Identification Number (ITIN), a bank account for four years, and a state driver's license. I looked into applying for an E-1 visa (entrepreneur visa) but I realize that you need $1 million to open one, and I won't be making that kind of money for quite some time. Are there any other kinds of business I can operate legally in the United States while I am here?"Repatriation Laws and Selling Antiquities and Cultural Heritage Items on eBayQ: "I sell ancient Roman coins on eBay. I've been reading about foreign governments suing U.S. museums and auction houses over the sale of items that were illegally looted from archaeological sites and graves in their countries. Is that a risk for eBay sellers? How can I find out if an item I'm selling might be seized by a foreign government?"19. Can I Work Out of My Home?Complying with Local Zoning LawsQ: "I live in a gated community, and the association's rules specifically prohibit doing any sort of business out of your home, including selling on eBay! Is that legal? Can they do that?"Q: "What are some of the things I can do to keep a low profile for my home-based business, so my neighbors don't report me to the local zoning authorities?"Homeowner's Insurance: Will It Cover a Home-Based Business?Q: "I am selling stuff on eBay out of my home. Will my homeowner's insurance policy cover my eBay inventory if the place burns down?"Taking the Home Office DeductionQ: "Is it true that taking the home office deduction will almost always trigger an audit?"Q: "It's very difficult to measure my home office space, because there are pieces of it in several rooms of my house. Can I still take the home office deduction?"Q: "Can you talk about the requirements for the décor of a home office? I've had a home office set up for the past several years. It is decorated to suit my taste in décor and collectibles and also has custom bookcases with books I enjoy. Must I completely remove everything not associated with eBay sales in order to claim it?"Q: "Can I deduct storage space for my eBay inventory as part of my home office deduction?"Q: "When I take the home office deduction, can I deduct all of my home office expenses?"Q: "Where can I find a list of deductions associated with a home office? I am curious whether expenses such as my trash service and my water bill are included. Also, if my Internet service is used 100 percent of the time for conducting business (my husband and I run two separate businesses that require Internet service), can I deduct the entire cost instead of the home office percentage?"Q: "If I take the home office deduction, will I have to pay capital gain taxes on the business portion of my house when I sell it?"Q: "Can you take a home office deduction if you rent rather than own your home?"Q: "I use a portion of my neighbor's basement to store my eBay inventory. Can I take a home office deduction for that portion of her basement I use for storage?"20. How Do I Deal with Employees/ Business Partners/Colleagues?Are We Partners?Q: "My spouse helps me out sometimes with my eBay sales, and I pay him some money. Ultimately, everything, of course, ends up in our joint checking account. Do I have to make him my partner for tax purposes?"Q: "My buddy and I just started out selling on eBay and are doing quite well. But I just realized that everything—bank accounts, eBay user IDs, credit card merchant accounts—is in my name. We split the profits, but the IRS will think that it is all my income unless we form a partnership, right?"Q: "I started selling on eBay last year in partnership with my cousin, but I'm doing all the work and I resent the fact that she's getting 50 percent of all my profits. How can I legally dissolve the partnership?"Employees Versus Independent ContractorsQ: "If I hire people to help me with my eBay business for a few hours each week, can I treat them as independent contractors for tax purposes?"Q: "If someone works for me less than ten hours per week, is he an employee or an independent contractor for tax purposes?"Q: "If I have a written agreement with someone in which he agrees that he is an independent contractor for tax purposes, will the IRS be bound by that?"Q: "If someone working for me has her own corporation or limited liability company (LLC), can I sign a contract with her corporation or LLC rather than with her personally and treat her company as an independent contractor?"Hiring EmployeesQ: "Posting listings on eBay is very time consuming. I would like to hire an employee to help me with that so I can focus on the more fun aspects of the business, like finding good inventory. When should I consider hiring my first employee?"Q: "How do I avoid discriminating when interviewing candidates for a job?"Q: "I recently posted an advertisement for a delivery truck driver. Several individuals responded to the ad, but when I interviewed them I noticed that one of the applicants—a Gulf War veteran—had a prosthetic arm. I believe strongly in hiring veterans, and I realize they've made many technical advances in prosthetic limbs, but I'm really worried about this individual's ability to do the job. I'm also worried that if I hire one of the other qualified individuals, this guy will sue me for discrimination. What can I do?"Employee Rights and Labor LawsQ: "I've just hired my first real employee. Where can I learn more about his rights and my legal responsibilities to him?"Payroll Taxes and Hiring Family MembersQ: "How do I deal with payroll taxes when I hire my first employee?"Q: "Are there any tax advantages to hiring family members to help me with my eBay business?"Firing EmployeesQ: "We hired an employee last year, but he's not working out. How can we fire him without getting sued?"Sending Out Form 1099Q: "When do I have to give people a 1099 form if they help me out with my eBay selling business during the year?"Q: "Do I have to give 1099 forms to drop shippers and people who consign stuff for me to sell on eBay?"Q: "I am a very small sole proprietor and have provided over $600 in services to twelve customers in 2006, but I have received only one 1099 form to date. Am I responsible for the customers who have not mailed me the 1099? Some of my customers have sent me W-9 forms, but I haven't responded because I don't want them to know my Social Security number. My accountant told me I might be penalized for not responding to a request for a W-9 form. I am ready to mail my tax returns, but I don't know if I should mail them in without the 1099 forms from my customers. What should I do?"21. I've Got This Other Business ...Selling on eBay as an Extension of an Existing Brick-and-Mortar BusinessQ: "I have an incorporated brick-and-mortar retail store and only recently began selling on eBay. Does it make sense to have a separate legal entity set up for my eBay business? Should I keep separate accounting and bookkeeping records?"Running Several Different Businesses Simultaneously on eBayQ: "I run several different businesses on eBay. Do I have to file a Schedule C for each one?"Q: "I sell laptops on eBay, and my wife sells children's clothing. We have separate eBay user IDs but have been combining all our sales proceeds in the same checking account. Does it make sense to put these in the same business or eBay Store?"Selling Partnership Assets on eBayQ: "I have a computer repair business with my cousin Joe. Just recently I started selling computer parts on eBay, and I've been doing pretty well. Some of these parts come from the inventory of the repair business. I really don't want to share the money from eBay with Cousin Joe. What can I do?"Selling on eBay for a Family Manufacturing BusinessQ: "My family runs a manufacturing business in the Philippines. My wife and I, who are U.S. citizens, want to sell our family's products on eBay. Do we have to do this as part of the family business, or can it be separate?"Multiple Businesses on eBay, with Different OwnersQ: "I have a corporation that runs my eBay selling business. I've been approached by a leading Web designer in our area, and we're thinking of going into business together to design eBay Stores for people. Should I offer her shares in my corporation, and if things don't work out, how can I legally get rid of her?"Building a Holding Company StructureQ: "My brother and I have been selling merchandise on eBay for the last few months and would like to establish a business formation. Once we have formalized our company, we plan on creating and utilizing our own website. Our website will have items for sale in addition to links to our active eBay auctions. Our auctions have consisted primarily of the resale of women's clothing and accessories (similar to an online consignment, but we are purchasing the items from individuals and then looking to flip them on eBay for a profit.) We hope to expand our sources for merchandise in the future. "We were thinking to establish a parent company, and we would like to have the ability to create subsidiaries that fall under the umbrella of the parent company. For example, we would like our website to have a different, jazzier name than that of the parent company. Our view is that down the line we might want separate entities that will focus on different things. In the future we might look into opening a small storefront or showroom specific to our product lines that will complement the website. Is this the best way to go about setting up our eBay business?"Still Don't Have Your Answer? Business Resources for eBay EntrepreneursBooksVideos, DVDs, and E-CoursesClasses/One-on-One InstructionLawyers, Accountants, and Other ProfessionalsFinding the Answers You Need on the eBay Website: A Step-by-Step TutorialStep 1: Get the Answer on eBay's Seller Central and Help PagesStep 2: Ask the CommunityStep 3: Ask an ExpertTen Things to Do Before You Ask a Question on eBayWhen All Else Fails, You Can Ask Me, but Beware ...The Best Nonbusiness Books for eBay SellersChecklist: Some Expenses an eBay Seller (Usually) Can DeductChecklist: Some Expenses an eBay Seller (Usually) Cannot DeductDemystifying the Business Organization, or How to Select the Right Legal Entity for Your eBay Selling Business
 
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