Things That Newbies Forget About eBay

Things That Newbies Forget About eBay
By Kerri Van Veenendaal

I have been involved with ecommerce for over 10 years and have for the last couple of years been working with businesses that are starting out on the long trek of on line retail.

The very first place many of them head is to eBay. Especially for Australian businesses this is basically the only major market place that they can try out. When I sit down with a business I ask some general housekeeping issues regarding their listings.

1. What is the cost of your listing? In other words have you factored in the listing fee plus the final value fee? Many times they have not actually calculated the full cost. They have not added the gallery fee, or the final value fee.

2. Have you ever read your eBay invoice? The answer is usually, 'well I got an email and I haven't actually opened the invoice and gone through it'. So I ask you all, how many times have you gone into a shop and paid for a service without checking the bill or actually adding up the tab? So why do so many business people just not even go through their eBay invoice. The answer is, eBay deliberately make the bill hidden. It is just there, and it is confusing, long, complicated and takes hours to reconcile. But, you must go through it. eBay are not without mistakes and they happen. If you don't find them you simply pay more.

3. Where is your money sitting that you have earned from the sales? A lot of newbies have their money sitting in PayPal. This is another problem. Like any business, your PayPal account needs to be reconciled. You need to set a particular time every day or every week when you transfer your money from your PayPal account to your business account. Then you need to reconcile this with the sales that have taken place. This is no different to reconciling your cash register in a store. It must be done for accounting and tax purposes.

4. What end margin after the fees and the time are you making with the eBay sales. Some business that I work with work on very small margins. They may only be making a 25% margin on a product. Be careful, once your eBay fees come out, and the PayPal fees, this can gobble up more than 12% of your margin. In some cases I have actually seen new e-tailers only making 2% margin which then does not even cover their cost of labour, packing and rent.

5. Hidden extras. Like all businesses the eBay model likes to upsell you. Be careful if your margins are small. Adding a sub-heading may help you product sell, but what is the point if you don't make any money. Then there is the fee for your eBay store each month, fees to schedule your item, template fees, extra photos. All of these eat into your costs. eBay recently sent out to new sellers an 'improve your performance or else' email. This was a fear mongering email that eBay sends out to start you thinking that you need to add more of these on your listing. Beware is it a clever marketing trick to make you buy these hidden extras. One of my clients actually had a 100% perfect feedback score and got an email from eBay telling them that they had to improve their performance. If you get this please realise that eBay is in the business of making money.

In all eBay has an excellent place in the online retail arena, but it is not the place to only sell your products. Remember don't put all your eggs in one basket and certainly remember that eBay can easily pull the plug on your business without your consent. So please spread your product around and be aware of your costs.

Kerri Van Veenendaal has been an expert in online retailing for over 10 years. She has consulted to many companies and is now sharing her thoughts through this article.

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EBay Bookkeeping Made Quick & Easy

EBay Bookkeeping Made Quick & Easy
By Janean Wilson
If you plan on selling items on eBay as a business, you will need to keep track of your income and expenses.
1. Save your Receipts.
When you buy inventory items to sell on eBay, always save your receipts.
You will need to record the cost of an item as a business expense.
2. Use Inventory Sheets.
An Inventory Sheet is a fill in the blank form for recording income and expenses for an item.
Begin each eBay seller transaction with a new Inventory Sheet.
Inventory Sheets are used to keep a permanent record of your sales transactions.
3. Accounting Software.
I began using Quicken to keep track of my eBay income and expenses.
After payment as been made, I use my Inventory Sheet to gather the information needed to make a record of income and expenses in my Quicken Register.
Use the date paid for your entry date.
Use your item number for the check number.
Each sale will require two register entries.
The first entry will show the total amount of money paid to you from the buyer.
This money will be recorded as a deposit.
For the Payee use "eBay item Sold", use this payee name for all sold item income entries.
Quicken allows your to split this money into different categories.
Make two categories called "Sold Price" and "Shipping and Handling".
For the memo, use eBay's item number and a brief description of the item.
The second entry will show the total expenses for the item being sold.
Use the date of payment for this entry.
Call this payee "Expenses" and record this as a payment.
Split your total expenses for this item into different categories as shown on the Inventory Sheet.
The running balance will be your net profit.
If you purchase office supplies make a separate entry and record this as a payment.
Supplies can also be split up into different categories.
This is as simple as it gets.
The Inventory Sheet is the key to making eBay bookkeeping quick and easy!

Why Is Accounting Important To Your eBay Business?

EBay accounting and why it's important to your eBay business

Author: Craig Cosford

As an eBay seller you should understand that keeping records of your finances is very important, this article will briefly discuss eBay Accounting and why ot's important to your business. Many sellers start off on eBay without giving a thought to keeping accurate records and this usually results in a massive headache at a later date. Each and every transaction in and out of your business needs to be recorded to keep track of how much profit you are making but more importantly for your tax records. It doesn't really matter which method you use to log your transaction history as long as you can provide this information to the appropriate people at the end of the financial year. For example if you live in the UK you would be required to complete a tax return and submit it to HM Revenue & Customs.

Selling on eBay you will most likely take payments via PayPal. This is a good advantage as PayPal will allow you to download all your sales history (go to history > download history) to a CSV format which can be opened in Excel. The report will show all sales, purchases, refunds, etc. Setting up a spreadsheet to log your sales is probably the easiest solution for most people as it doesn't cost anything however as your business grows you may find that you need something a little more advanced. There are many options available these days and my advice is to just trial them until you find something you are happy using. There are also online accountancy/book-keeping packages you may wish to consider such as http://hubpages.com/hub/kashflow-review">Kashflow which can completely automate your record keeping process saving your hours if not days of your time.

Accounting & book-keeping is also necessary to find out how well (or not) your business is doing. By recording your business transactions you will be able to product a profit and loss report each month which will detail exactly how things are going allowing you to make crucial business decisions moving forward. Seeing money coming into your business it's very easy to assume that things are going great when in reality after all expenses are taken away you are losing money. Having accurate book-keeping will allow you to analyse your business finances and establish areas that can be improved.

Article Source: http://www.articlesbase.com/accounting-articles/ebay-accounting-and-why-its-important-to-your-ebay-business-4173812.html

About the Author

Automated online accounting software can really help organise your financial records and save you the headaches. You may wish to take a read of my Kashflow Review to read more about the benefits.