A friend offered to let me sell his products on Ebay and split the profits 70%/30% in his favor. Would you take this offer? Are there any tax issues to consider?
I would pass on his offer. It’s not just selling and shipping. You are running a business. You should be getting at least 50% of the profit.
Just remember, all your sales are recorded and taxed. Most likely he pays income tax on a small portion of his sales if any. Real quick that 30 an hour turns into 15-25 an hour depending on what your tax bracket is. Not to mention overhead costs like an accountant, storage, ect. Everyone’s situation is different. I imagine he buys pallets of crap, so how do you determine his initial cost for an item, so you can actually figure out the profit.
High dollar items add up quick. Nobody is in a 0% tax bracket. If you are not reporting Ebay income, you are technically breaking the law.
if you want to sell full time online, I have to recommend Amazon. Ebay is slowly dying. I have been selling on Ebay for a couple decades on and off. Amazon about 3 years now. Last year we started selling on Walmart as well. Just trying to help, it’s really up to you.
I have bought lots of liquidation over the years, make sure you test everything and make sure all the parts are in the boxes before listing.
The tax issues are only if you send your items in to amazon. Otherwise, it’s the same as selling on Ebay. The higher prices and sales volume more than make up for the fees. Most amazon fees for seller fulfilled is 15%. Ebay is 10 plus Paypal. The restrictions are a pain, but after you sell for a while, you can get auto-ungated in most of them. A friend of mine came across a vcr still sealed in a box recently and sold it for like $150 listed as used like new.
Tom Miller is the co owner of RASTA DOG, selling hemp and Bamboo products for Dogs and their People.