Why You Can’t Sell Somethings On Amazon Ever For A Profit: The Lowballer Groups

There are three types of sellers who make it nearly impossible for others to profitably sell products on Amazon. Let me break down these three groups for you.

The first group consists of credit card sellers, who I didn’t know much about until I attended an Amazon Seller conference. At the conference, I learned that these sellers were buying and selling extremely low sales rank items without making a profit, just so they could accumulate credit card points to travel. They were selling hundreds of units a day, without worrying about profit. While I believe they were likely showing a small amount of profit on their tax returns so they could claim expenses and deductions on their taxes, they were not concerned with making any real profit on Amazon. This made it difficult for other sellers to compete with them on certain listings, as they were not concerned with making money. If you are on a listing and can’t figure out how the other sellers are making money, this might be the reason especially if it has a very low sales rank.

The second group is couponers.

Many couponers have a very low cost of goods, as they are often able to get products for free or at a steep discount. They are also taught to sell products at half of retail price, which is great for local sales, but not on Amazon. Amazon has fees and shipping costs that must be considered, making it difficult for sellers who purchase products at retail price to compete with couponers. While couponers may make a small amount of profit, other sellers will struggle to compete with them and may not be able to sell the product at a profit. If you see products in couponer groups, you should avoid getting on those listings.

The third group consists of new sellers.

When starting out, many new sellers are afraid that their products won’t sell, and they may read blog posts or watch videos that tell them they won’t be able to sell as a new seller. They may also have family members who are critical of what they’re doing, which adds to their fear. In an attempt to sell quickly and avoid losses, many new sellers sell products at a break-even point or even at a loss. This may be encouraged by gurus who suggest selling at a loss initially to get feedback and be able to sell in the future. This can lead to an oversaturation of certain products, making it difficult for any seller to make a profit. If you see bolos posted in beginner groups, avoid getting on those listings.

My Worst Sourcing Mistake In 9 Years Of Selling Online: I Got Greedy And Lost $20k

Looking back at my 9 years of selling online, I want to share my worst sourcing mistake. While this mistake didn’t cost me money, it cost me the potential of making money. You see, there was a product called blister stick, which I believe was by Band-Aid. It could be used to keep from getting blisters from shoes. Later, I found out it was widely used by large women to rub on their thighs to reduce friction. This product was discontinued and was selling for about $35 on eBay. You could sell it on Amazon too.

I found at a local flea market, and the lady there was buying skids of liquidation and putting them on the shelves. I kept finding these packs of blister sticks, but generally, they were pretty beat up because they were shelf pulls and weren’t in the condition that I could sell them on Amazon. But I could easily sell them on eBay, and every time I listed them, they would sell very quickly. I would go to the store and find four or five, and then the next time I went, I’d find more. I kept doing that for quite a while.

Then one day, I asked the lady if she had more. As a background, I sort of knew who she was because she was the wife of a physical therapist my wife had gone to after her stroke. She told me she had probably over a thousand of those in the back. This is where I made my mistake. I was very excited and told her I would buy them all. I was very excited about buying them and she hemmed and hawed about it, telling me she didn’t have time that day to go find them and to come back the next week.

I showed up before the next week and asked her if she had found them, and she got rather upset with me. I showed up on the day she told me to do it, and she gave me the story that she hadn’t had time to go find them. What I actually think happened was that I clued her into the fact that they were worth a lot of money by being so excited about buying them. I don’t believe that she had a thousand back there. That would be a lot of product. She probably did have a lot back there, but I don’t know how much.

I think that she looked them up and found out how valuable they were and decided not to put them out on the shelf and sell them herself. To this day, I still go there and look to see if some show up on the shelf in the rare chance that she was telling the truth and just never found them and put them out there. But I believe she sold them herself on eBay.

My failure was that I should have just kept buying four or five at a time. I got greedy and approached her about it. I should have just kept buying them like I was doing and possibly caused myself maybe $20,000. The moral of this story is sometimes don’t show your hand when you’re sourcing. You might want to leave some on the shelf. You might just want to buy at random times. You might want to figure out a different strategy on how to get the product without drawing a lot of attention because every time you feel like carting up a product, you’re going to draw attention to other customers, the owners, or the staff. If they know about online selling, they may just take and look it up themselves and keep you from buying them and profit themselves from it.

Stop Paying Income Taxes On Sales Tax Collected By Amazon : Some Amazon FBA Sellers Are Really Messing Up

Although I am not a tax expert, I want to discuss a potential issue that many Amazon sellers may face. In the past, Amazon did not collect sales tax for items sold unless the seller’s account was set up to do so, which meant that the seller had to submit the sales tax for each state themselves. However, after facing legal challenges, Amazon eventually started collecting sales tax on behalf of sellers. This was a positive development for sellers as it was previously costly and time-consuming to submit taxes to each state. However, there is a potential problem when it comes to paying income taxes on the sales tax collected by Amazon.

When you receive your 1099 from Amazon, it includes the gross sales amount, which also includes the sales tax that Amazon collected on your behalf. If you use this number as your gross sales, you will end up paying income tax on the sales tax collected by Amazon. This is not ideal, and it’s important to adjust this number by subtracting the sales tax collected by Amazon. You can find this number easily using software such as Inventory Labs, but if you’re just using the number listed as Gross Amount ( box 1a) on your 1099, it can cause problems.

On the second page of your 1099, there is a section that shows the sales tax collected by Amazon. This number must be taken off the gross sales amount when calculating your taxes. It’s essential to bring this to your accountant’s attention because this could result in significant savings. If you sell on other sites such as eBay or Etsy, it’s important to note that they do not include sales tax collected in your gross sales amount, so your accountant needs to be aware of this too.

It’s worth noting that if you haven’t adjusted for this in the past, you may be able to amend your tax returns. However, this may not be worth the effort if you’re a small seller. Still, it’s crucial to make these adjustments going forward to avoid paying taxes on income you did not receive. In conclusion, while Amazon has made progress in collecting sales tax, sellers need to be aware of the potential tax implications and adjust their gross sales accordingly to avoid paying taxes on sales tax collected by Amazon.

You Don’t Pay Income Taxes On eBay Fees

First, let me give you the normal “I am not an accountant, this is not tax advice” speech, but look, that said, I was sitting on a cruise about a month back at breakfast and got to talking to the lady next to me. She asked what I did for a living, and I told her I was an online seller that sold on Amazon and eBay. She said she was an accountant and did taxes for a lot of people that sold online. She quickly asked me if I was paying taxes on eBay fees. I know that eBay fees are tax-deductible, but apparently, many of her clients didn’t.

The first thing is just basic business math. You have your costs of goods, which is the amount you pay for a product. If you sell a product for $20 but you paid $10 to get it, you can take the $10 off of the number that eBay gives you on the 1099 to get your income for the year. If you’re not doing that, you’re way overpaying your income taxes. People also didn’t realize that the selling fees they were paying on eBay also come off of that. It’s also part of your cost of goods; it’s not income that you’re making, it’s actually eBay’s income. Shipping also applies. If you paid to ship the item, that can come off, but if you’re charging for shipping, and it cost you $10, and you charge $15, the $5 difference would be income to you.

The eBay fees, typically 15%, and if you’re advertising, say, at 5%, so there’s 20% of that sale. If you sold an item for $20, and your cost of goods is technically $14, your income on that would be $6 and not $10. This is not a big deal on one item, but if you add this up over the course of the year, it becomes a rather large number. People may have been smaller sellers and eventually got bigger, and maybe it was the first time they got a 1099 for it. (You are required to pay taxes even if you don’t get a 1099.)

If you have not been doing this, you need to take some time out and learn how your cost of goods are figured. This is a very basic business thing. Second, you need to be keeping records of this. You can get this from eBay. They give you a monthly invoice of the fees that are charged. You can actually download a more detailed spreadsheet of this. More than anything else, you need to get a tax advisor and have somebody do the taxes for you. It will more than pay for itself because they understand what you can and cannot take off of your taxes. In this case, if you were paying tax on money that you didn’t earn, you’re overpaying your taxes. Running a business is always a learning experience, but you definitely need to understand it if you’ve been making this mistake.

Generally, everything that it costs you to sell an item is going to come off of your gross sales, and what’s left is going to be your profit. As a seller, there are a lot of expenses, such as shipping materials, internet access, and other things that your accountant can help you with. You will be surprised how much it will lower your tax burden each year.

Green and Affordable: Where to Find Free Shipping Materials for eBay Sellers

If you’re an eBay seller, finding affordable and eco-friendly shipping materials can be a challenge. Fortunately, there are several places you can find free or low-cost shipping supplies that are both budget-friendly and environmentally conscious.

  1. USPS The United States Postal Service (USPS) offers a variety of free shipping supplies, including boxes, envelopes, labels, and packing materials. You can order these supplies online or pick them up at your local post office. Not only are these supplies free, but using USPS shipping materials can also save you money on shipping costs, as their flat-rate boxes have a fixed shipping cost regardless of weight.

From an environmental perspective, using USPS shipping supplies can also be a greener option than purchasing new materials. By reusing boxes and envelopes, you’re reducing the demand for new packaging, which saves resources and reduces waste.

  1. Craigslist Another great resource for free shipping materials is Craigslist. Many people give away boxes, bubble wrap, and other shipping supplies after moving or receiving packages. You can often find these items for free on the “Free Stuff” section of Craigslist or by searching for “shipping supplies.”

Not only can using Craigslist save you money, but it can also be an environmentally conscious choice. By reusing boxes and packing materials, you’re reducing the demand for new packaging, which helps conserve resources and reduce waste.

  1. Local Businesses Many local businesses receive shipments in large boxes and packing materials and may be willing to give them away for free. Consider asking your local grocery store, pharmacy, or hardware store if they have any extra boxes or packing materials you could take off their hands.

Not only can you save money by getting free shipping supplies, but you’re also helping to reduce waste by reusing materials that might otherwise end up in the landfill.

  1. Friends and Family Another great option for free shipping materials is to ask friends and family if they have any extra boxes or packing materials they no longer need. This can be a win-win situation, as you get free shipping supplies and they get rid of clutter.

Using shipping materials from friends and family can also be a greener choice than buying new materials. By reusing materials, you’re helping to reduce the demand for new packaging, which saves resources and reduces waste.

  1. Freecycle Freecycle is a nonprofit organization that promotes reuse by connecting people who have unwanted items with those who need them. You can find free shipping supplies on Freecycle by searching for your local group and looking for posts related to boxes or packing materials.

Using Freecycle to find shipping supplies is not only cost-effective but also eco-friendly. By reusing materials, you’re helping to conserve resources and reduce waste.

In addition to these options, there are also several eco-friendly shipping materials you can purchase that are made from recycled or sustainable materials. Some examples include:

  • Recycled bubble wrap
  • Biodegradable packing peanuts
  • Recyclable paper tape
  • Plant-based packing materials

Using eco-friendly shipping materials can help reduce your environmental impact and promote sustainability. By choosing recycled or sustainable materials, you’re helping to conserve resources and reduce waste.

In conclusion, as an eBay seller, finding affordable and eco-friendly shipping materials is possible. Whether you choose to reuse materials from USPS, Craigslist, local businesses, friends and family, or Freecycle, or purchase eco-friendly shipping materials, you can reduce your environmental impact and save money at the same time. By making sustainable choices, you’re helping to conserve resources and reduce waste, which benefits not only the planet but also future generation