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Making
the occasional sale on eBay doesn't require any particular
long-range planning or structure to your activities. Each sale is an
activity in itself; it starts when you decide you want to sell the
item, lasts for as long as you've still got it, and then ends when
the customer has the item and you've got your payment.
If
you're going to be selling on a larger scale, however, it will
quickly become inefficient and confusing to treat each sale in
isolation. You'll want to create an organized system for handling
inventory, sales, and money – in short, a business. A business
doesn't necessarily have to be a full-time endeavor, it can still
remain just a hobby or past time, but it provides structure that
will help you keep track of everything you need to keep track of.
Your
eBay business will start out small, but it is a business nonetheless
and there are many principles that are common to all businesses. If
you're conducting your business as a hobby you may not need to
adhere closely to all of them, but in general it's good to at least
know what to expect.
Firstly,
given the vastness and diversity of the online business world, in
all probability you're not alone in whatever it is you're doing.
There will be competitors out there who are buying and selling the
same sorts of things you are. It's important to keep an eye on your
competition; they can take business away from you and you can take
business away from them. They may have ideas you can use for
yourself, and they may have made mistakes that you can take
advantage of to draw more customers for yourself.
Secondly,
it costs money to make money. Running a business will entail a
variety of expenses. Even if you've got no employees and are running
your business out of your home, there are still many little fees and
costs for supplies that will add up to a significant sum. Be
prepared to spend money up front for things that will prove useful
over the long run.
Finally,
the goal is profits but you'll sometimes take losses. Losses are a
routine part of business and shouldn't spook you too badly. Take
risks and accept the occasional loss as just another cost of doing
business. That's not to say that one shouldn't pay attention to
losses or keep track of them; if you continue to take losses in the
long run then there's likely something more than just bad luck at
work. You may need to reconsider your way of doing business or even
your overall business plan if it turns out that you can't make a net
profit doing what you're currently doing. Be prepared to change your
mind.
Create
a business-only email address – this both helps you keep track of
customer correspondence more easily and keeps it from intruding on
your personal life when you want to be “off the clock”. Also you
will need a separate bank account – A separate repository for your
eBay earnings can make it much easier to keep track of them. Also,
your bank may offer business-related services that will be of use,
such as foreign currency balances. And finally you will need a
separate credit card – Similarly, this will help you keep track of
business expenses more easily, as well as preventing personal credit
issues from intruding on your business' operation.
If
you're operating your business out of your home, you will probably
also want to create a business-only space within your home (a home
office) in order to help segregate your business and personal life.
If possible you could even keep to a consistent schedule for working
on your eBay business, segregating your business and personal time.
In
addition to various registrations to be made online, there are other
legal issues to address when setting up a small business. You should
visit your local license and registration office to find out more.
Things you may need to do include: 1) Applying for a business
license, 2) Filing for a GST Number (needed for sales tax), and 3)
Registering your copyrights, trademarks, and patents. For most
businesses this will simply mean registering the business' name and
logo as trademarks.
You
likely won't need to do all of these things right away, since it's
perfectly legal for private citizens to buy and sell items in an
impromptu manner within reasonable limits. You may wish to “test
the waters” by getting started on eBay before you've completed all
of this paperwork. However, don't put it off for long. Having a
properly licensed and registered business opens up many advantageous
tax opportunities, such as writing off business-related expenses.
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