Newbie Wanting to Start an eBay Business!

LDardyMate on 17/04/2018 - 16:57
Last edited 17/04/2018 - 17:55 by 2 other users

Hey guys,

I am seeking for general advice regarding start a small business via eBay using PayPal as for payment in order to make ends meet while at uni. I have a few questions that I have current have in mind which I will break down, however, if any of you has anything more that I needed to know, please tell me!

1) Making a PayPal business account.

When having this, am I able to trade under a "trading name" without my personal details involved to trade with? Cause I've noticed some sellers on ebay have purchased to has their own name attached and other has a trading name. Do I have the power to choose what I want to display on PayPal?

2) eBay selling

Looking at wholesale items sold by sellers on eBay, say a wireless charger for the price of AU$14.98 incl shipping fee.

A wireless charger is bought whole sale for AU$5/piece
and seller offers free shipping which costs a minimum of AU$7.50
PayPal fee 2.9% + 0.30 = AU$0.28 + AU$0.39 = $0.67
eBay fees of I'm not sure how much.

Like how would sellers even breakeven or make profit out of it? Not sure if I make sense but please enlighten me.

3) Paying for tax and import customs

On top of all those payments, having needed to register for ABN entitles to pay tax.
Also, import customs where we have to pay if order value is over $1k+

Education & Work

Comments

  • Detective Pikachu on 17/04/2018 - 17:21
    +2

    For point two, I suspect some are drop shippers or directly an agent of the wholesaler.

  • White-knights on 17/04/2018 - 17:22
    +1

    1) you will need an ABN before you can sign up for a business PayPal account, but you will be able to set up the account with your trading name.

    2) think about what your planning on selling -dont try import items and complete with the Chinese sellers who get cheaper postage rates, they can send items untracked and absorb the costs when buyers claim "not received".

    eBay fee's can be found here -https://sellercentre.ebay.com.au/store-packages-pricing

    And final value fees are 10.9% and go down if you purchase a store package starting at $24.95 a month. Also the final value fees also include the amount the buyer pays for postage aswell.

    3) you won't need to collect GST if your under the $75k threshold, and import fees will be checked when items go through customs and if over $1000 you will be required to pay the GST and the collection fee aswell.

    • DardyMate on 17/04/2018 - 18:18

      But it seems like most chinese sellers dominate ebay. I'm looking onto aliexpress or alibaba which most ebay products are there.

      • tighttighttight1 on 17/04/2018 - 18:31

        You need to find an item(s) not so saturated in the market.

        Most electronics on eBay are so saturated. The only way people will see your listing is if you making it super expensive (which no one will buy) or super cheap (where you'll be operating at a loss) - people can arrange items according to most highest price or lowest price.

        Drop shipping is definitely an option and will keep your cost down, however, when someone decides to purchase from an Australian seller the main reason behind it is the relatively quick delivery time. People are willing to pay a bit of a premium for that quick turn around time, otherwise, they will purchase off a Chinese seller and wait.
        Using Aliexpress or Alibaba as drop shippers have very long delivery time and if you wanted quicker delivery time for your customers be prepared to pay $$$$$$ and again operate at a loss.

        eBay fees can vary on the type of account subscription you have and the types of items you sell as well.
        See here

        With your question about import taxes - there are ways to get around it…as I've heard from a friend…

        • DardyMate on 18/04/2018 - 14:04

          Thanks mate! Any chance to share that "ways to get around"

        • tighttighttight1 on 18/04/2018 - 20:02

          @mcdev: if you find an experienced wholesaler, I'm sure they will do it automatically without you telling them, otherwise PM me

  • Ughhh on 17/04/2018 - 17:30

    If you click on the sellers name to view their profile, you'll see this "
    Based in China, daybreak_mi has been an eBay member since 13 Jul, 2017"

    • DardyMate on 17/04/2018 - 18:17

      Okay so I saw his name, however, the item specified on my post is located at riverwood, nsw.

      Would that mean they have a warehouse there and themselves are direct sellers?

      • Clear on 17/04/2018 - 22:36

        They can put anything they like in the item location. Some sellers might have a warehouse, but most don't.

    • DardyMate on 17/04/2018 - 18:20

      Yes I saw these too. Even had a quote from Alibaba which prices are cheaper for more orders.

  • Ocker on 17/04/2018 - 18:09
    +1

    There is no advantage in having a business account or an ABN

    • ronnknee on 17/04/2018 - 19:17

      While having an ABN may not be an advantage, not sure anyone wants to be hunted by the ATO for tax non-compliance if they make a turnover of $75000 per year.

      • AlienC on 17/04/2018 - 22:07

        So if I make under $75000 from eBay selling or gardening or other air tasker jobs or whatnot then I don't need to register it under an ABN? Hmm today I learnt.

        • D C on 18/04/2018 - 00:36

          I don't need to register it under an ABN?

          Correct.

          You still need to pay tax (how that is done I'll leave it for you to discover, or wait long enough and the ATO will sort it out for you) and you can't claim GST on 'business' related stuff.

        • thargelios on 18/04/2018 - 16:30

          @D C:

          Not 100% true from what I know.

          If it's your primary or a major source of income and you are running it 'as a business', then you'd need to register a business (ie an ABN as a sole trader).

          If it's a part time thing, ie you have a full time job, so it's more a 'hobby' side business, then it's more a grey area. Hobby income you also don't have to declare the income on your tax return.

          It'd be difficult to claim that even doing 20k or 30k per year profit, is a hobby though. It takes nothing to register for an ABN and if you're under the GST threshold (75k), reporting is easy.

          Don't confuse having to register for an ABN (running a business) and registering for GST (the 75k thing). They are different issues.

        • tighttighttight1 on 18/04/2018 - 20:00

          @thargelios: the whole hobby rather than business is not that easy to justify to the ATO when questioned.
          How can you justify selling things such as wireless chargers as a hobby? Things like comic books, sports collectables are definitely believable.

        • thargelios on 18/04/2018 - 23:08

          @tighttighttight1:

          Very true, if it gets big enough.

          However, technically to even qualify to register for an ABN you already need to be running a business (not just thinking of starting one).

          Therego you can start 'trading' without an ABN and once trading register for an ABN. It's an odd thing, but exactly how it's defined.

          I guess it would be easy looking up what the ATO etc deem hobby.

  • MeesusEff on 17/04/2018 - 18:19

    My parents travel very frequently to Malaysia, I have been using Lazada.my and getting it delivered to his office. And its AMAZING. Updates all the way and got my items delivered in a few days - week. Ebay has a fair way to go to reach their standards..

  • whooah1979 on 17/04/2018 - 18:34
    +5

    to make ends meet while at uni

    Ebay isn’t the right platform for casual or hobby sellers.

    Youll make more money getting a part time job at mcd or Hj.

    • Quantumcat on 17/04/2018 - 19:01

      Agree, you'll end up ripped off and making a loss or getting lucky and working for $2 an hour. You also don't want that stress in the middle of a major assignment or studying for exams.

    • DardyMate on 17/04/2018 - 19:31

      I'm actually working full time while studying full time. I was thinking selling items off online while on my free time can supplement myself more income rather than waiting for things to do.

      Edit: I work full time hours while not on clinical placements.

      • Quantumcat on 17/04/2018 - 20:16
        +1

        The stress isn't worth it. If you're just selling your old stuff, sell on Gumtree with pick up only or postage with bank deposit only.

  • TheBilly on 17/04/2018 - 19:04
    +4

    Dont try and compete, its just a race to the bottom that established players will beat you in. Find a niche.

    • DardyMate on 17/04/2018 - 19:32

      Okay thank you!

  • Hithere on 18/04/2018 - 09:01
    +1

    Do you have a proper business plan and a few thousand dollars behind you to purchase stock?

    By the time eBay take out all their fees, Paypal take out their commission, and you allow for scammers who you have to refund money to, plus possible warranty claims you'll end up losing unless you are prepared to go to China and negotiate with the manufacturer for a better price for buying bulk.

    Then you'll have to pay to ship the items to Australia.

    You can't compete against the Chinese sellers and drop shippers, don't even try to.

    • DardyMate on 18/04/2018 - 14:08

      Hey mate,

      Proper business plan no, but slowly experimenting which market is good. However, I'm located in Perth which I think is a disadvantage to the east side as more people will likely to buy there and would prefer 1-2 days faster shipping than buying in WA.

      As for going to China, would that be necessary or would it be the same negotiating via online?

      I tried learning more about the eBay sellers, and most of them are big. Either they own a couple of successful eBay business accounts or have a store itself.

      • White-knights on 18/04/2018 - 17:08
        +1

        Since you can offer a faster postage time to western Australia use this to your advantage, find something that is needed quickly. I send alot of items to WA and it takes a week , I can only imagine what a package takes to come from China.

        I sell spare/upgrade parts on eBay and I get sales based on people not wanting to wait for items to come from china and my closest non Chinese competitor is 3 times the price I'm selling for.

        Also alot of Chinese sellers who list Sydney as the item location, bulk ship into Australia and then break it down into single lots so the postage time is just over a week for eastern states so most buyers think it's coming from an Australian seller -these Chinese sellers know that most buyers are willing to pay more from an Australian seller because they will receive it quicker.

        If I was in your shoes I would avoid anything electronic to sell, based on the amount of warranty it will require and the quality you will get from china.

        • DardyMate on 18/04/2018 - 20:55

          Thanks! If you don't mind, can I ask you more questions via PM?

        • White-knights on 19/04/2018 - 08:49

          @mcdev: Yep

  • Azzy on 19/04/2018 - 15:50
    +2

    In effect, we, Australians subsidise incredibly cheap postage from China.
    We honour a reciprocal mutual delivery agreement, if I want to send a tiny object 2.5cm x 2.5 cm x 2.5 cm anywhere in Australia, it costs me $7.95 plus $4 registration, i.e. $11.95

    Chinese businesses can utilise the same delivery services, same dc centers, same Aust Post vans, trucks, same post men, and deliver it to your door from China for less than 25cents.

    I can actually send a box full of these 'objects' to China, pay an initial postage cost, but then distribute them through China Post to any address in Australia for less than 25 cents each.
    How is this a level playing field?

    Why do we allow Chinese businesses to use 'subsidised' postage services from Australia Post, but as an Australian Business if I want to deliver an unregistered parcel within Australia, I have to pay at least 36 times the cost of a unregistered parcel coming from China?

    The irony is Chinese businesses based in China, can send a parcel for less than 25 cents to any where in Australia, but for me to send to the very next suburb it costs me $7.95 in post.

    Its time, that there was a cost attached to each incoming parcel, to equal the playing field.

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