A Guide to Working from Home: eBay Auctions
The home computing revolution
and the advent of the Internet has made the dream of “Working from Home”
a very real and lucrative possibility for millions of Americans. And
this does not only apply to those who have found they can now
"Telecommute" in their chosen professions. Many have been bitten by the
next wave of entrepreneurial spirit that is sweeping the nation, and are
actually leaving their jobs to start their own home based businesses.
But choosing the right home based business can be a challenge.
In the “Old Days” if times got
tough and you needed a little extra cash, you looked around the house
and the attic and had a “garage sale”. eBay Auctions are the
ultimate on-line garage sale, and certainly you can turn you unwanted
stuff into cash, but beyond that hundreds of thousands of people have
learned how to use eBay Auctions as a very profitable, even
multi-million dollar business.
AT A GLANCE
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Expected Hourly
Income |
Six Figure Annual
Potential |
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Start-Up Costs
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High,
Moderate, Low
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Start Up Degree of
Difficulty |
Easy,
Moderate, Difficult, Very Difficult |
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Potential Problems |
Scams & Suspension of
Accounts |
Getting Started
Using eBay Auctions to start a
lucrative home-based business basically means you will become a retailer
without a “brick and mortar” store, and will be entering the world of
e-commerce. The wonderful thing about eBay is that you will be
leveraging an infrastructure that is already in place, and when used
right with the right product, can set you up for life. Now remember in
this guide we are talking about helping you set up profitable, lucrative
and legitimate businesses. Many people think that because you are
working form home, and there isn’t a storefront that you open for
business every morning the same “rules” do not apply. E-commerce is not
a free for all, and indeed in order to have a successful home based
retail business using eBay the right way you need to follow certain
steps to insure that you are protected from all legal and tax issues.
First choose a name for you business, and make sure that you are free to
use it. You can check with the US Patent and Trademark Office to see if
anyone has trademarked that particular name. You should then file a
domain name for a Web address using that name, there are several sites
that will quickly search and let you register domain names such as
register.com. Check with your Secretary of States office to make sure no
one has incorporated under that name. Also you should check with your
local County Clerk to make sure no one has filed a Sole Proprietorship
DBA (doing business as) trade name of the same name. You should then
resgister the name for yourself. Most importantly do not use “eBay” as
any part of your business’ name. Depending on what you are selling you
may need a license. If you take goods on consignment or are purchasing
large quantities of inexpensive goods to resell you may need to acquire
an auctioneers license form your state. See the resource links at the
end of this article for more information on licenses. Make sure what you
are selling you can legally sell on eBay you can see a
comprehensive list of what can and cannot be sold at
http://pages.ebay.com/help/sell/item_allowed.html.
While it may not be necessary to
set up a corporation initially as you start your eBay Business you
should at least follow this checklist to protect yourself and start off
on the right foot as a true business entity.
- Open a private mailbox at a
local “mail store” or post office and use that instead of your home
address as your business address.
-
Register your business name or DBA with your town clerk or county
clerk's office.
- Obtain
a federal tax ID number for your business from www.irs.gov--don't
use your Social Security number.
- Think
about hiring a good accountant, a business lawyer and an insurance
agent.
-
Register for all state and local taxes--especially sales and use
taxes--that apply to your business.
What to Sell
Remember the “garage sale”?
While you will not become a millionaire selling your own unwanted stuff
– think about your neighbors, and your neighbor’s neighbors. Your church
group or other organization – set yourself up as your neighborhoods
clearing house for unwanted stuff. List it all for sale on eBay and
offer percentages back to those you sell for – have them cover the costs
of the ads though. While there are hundreds of websites out there
promising quick profits selling various gimmicky items on eBay, truth is
there is no “magic” product that “sells it self” how many “over-night
millionaires” have you actually met? Like we said upfront this is a
business and selling isn't easy – so after testing the waters with your
neighborhoods “stuff” sell something you know. Think of your favorite
hobbies, what business did you come from? – and sell products that you
know about and believe in.
Start-up costs
Since starting a home based
business using eBay equates to starting an actual retail business, there
are some start up costs, but these are certainly far less then opening a
“Brick and Mortar” store. To get started the way we have described you
could expect to lay out about $2500.00 in start up costs. This should
cover the name searches, registrations, licenses, incorporation fees if
you choose that route, and the cost of a mail drop address and box. In
addition if you do not already have a digital camera; you should
consider purchasing one to take quality photos of the items you will be
selling. Easy to use high quality digital cameras can be purchased for
about 300.00. Of course you should have a computer with a high-speed
Internet connection and a website. While the total start up costs for
an eBay Auctions business are higher then some other simpler Home Based
Businesses – they are still significantly less then starting a similar
“real world” retail business or purchasing a franchise. As in any Home
Based Business – if you have left work to pursue eBay Auctions as a full
time income, and do not have access to health benefits through a spouse,
you need to include the cost of health benefits in your monthly budget.
More information on Insurance for the Self-Employed can be found at
www.insurancebudget.com or
http://www.nase.org/
Hours and Income
As we have been saying, starting
an eBay Auction Home Business is much like starting a retail business.
Expect to put in full-time hours, and expect to reap fulltime rewards.
Following the suggestions made here and at the links provided, you can
build a primary income stream with eBay auctions that can result in six
figure or greater profits.
Potential Problems
The greatest pitfalls with eBay
Auctions occur with those looking for the “short cut” or trying to buck
the system. Do not try to defraud the state in terms of Taxes. Any
profits you make from eBay Auctions must be reported as income. Do not
even think of trying to play games with eBay. Do not falsify any
claims in your listings – and forget about getting a “shill” to falsely
pump up your auction prices, not only will it likely result in your
permanent suspension form eBay- you may face criminal charges.
Other Resources
http://pages.ebay.com/marketplace_research/ - Help on becoming a
more effective eBay reseller from eBay itself.
www.web.com - low cost website creation and domain name registration
http://www.entrepreneur.com/management/leadership/advicefromcliffennico/article76374.html
- Do I Need a License?
Conclusion
eBay Auctions is a great way for someone with little or no experince and
a modest amount of start-up capital to enter the multi-million dollar
market of e-commerce and Internet retailing.
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Fed
up with the rat race?