Bookkeeping and You

Much of my time in the past month or so has been taking up with sorting through piles of paper and doing taxes. Something I'm sure we all love to do. I got behind this year due to my poor health, but I decided that I'm not going in the direction any more. Losing and not tracking receipts can cost you money by making your income from being self-employed higher than it really was. Every year I try to find better ways of dealing with the paperwork involved with running 2 businesses that my husband has. It is tough. There is a lot to keep track of of the rules are ever changing.

When it comes to selling on line, or having your own business of any kind there are many things that you need to be aware of from the point of your own business being an idea in your head so that you can track expenses and then as you start selling, your income. While you may want an accountant or tax preparer to do your taxes, YOU need to be aware of the government rules  so that you save the proper paperwork to give to your tax person. They can't take a deduction for you is they don't have any paperwork showing that you paid for something.

Over the years on many forums I have seen many people that don't want to be bothered with tracking income and expenses because they don't think they are in a business, this is just a 'hobby' to them. However, what happens when that 'hobby' begins to take up 40 hours a week? It has gone past the point of a hobby and into the realm of being a job or your own business. Treating your hobby as a business from the beginning can help you keep more of your income because there are more deductions available to a business than to hobby income. The best thing to get is a current copy of IRS Publication 334 Read it. Don't understand it? Read it again. I have done my family's taxes for my entire adult life and I still have to read up on the rules and any changes. And yes, it is confusing but it doesn't mean you get a 'get out of jail free card' just because you don't understand the rules. The IRS doesn't care if you don't understand something, they expect you to follow the rules anyhow.

I'm not suggesting that you become an IRS expert, but that you understand the basics, such as what is considered an expense, what is income, and those sorts of things. Read through the Publication 334 paying special attention to chapters 6-8. Copy those pages out and go through them with a highlighter. Many rules are there for multi-million dollar companies and most of us who are making some money on line aren't probably going to get there, but we don't want to miss those deductions that we can take.

Now I'm taking my own advice and going back to my tax forms with 334 to be sure I did everything correctly.

Where Should I Sell On-Line?

Where you decide to sell on line can make a huge difference whether you make money or not. Some selling venues are much bigger than others and get more profit. If those sites charge you so much in fees, especially listing fees, you might end up working a long time before you receive any profit. I doubt anyone wants to learn the ins and outs of selling on-line only to pay out any funds received and walk away with nothing. Thus, it is VERY important that you research what type of venue might be the best for what you want to sell.

I strongly suggest that before signing up with any venue that you take the time to really study each one thoroughly. Read ALL the rules as you don't want to be suspended right out of the gate for trying to sell something that you shouldn't be. Just because one site allows a product, doesn't mean all sites permit it. Prior to signing up for eCRATER, I spent two weeks, reading their rules, reading their FAQ (Frequently Asked Questions), and reading the forums that they have. On the forums, are pretty much all the other sellers grumpy and complaining or do they have a positive mindset? This can tell you a lot about a site. Are you seeing a lot of complaints about slow sales? See what the others are saying is the cause and try to figure out if those with the reasons for slow sales are correct. For those that are reporting good sales, they are the sellers that you want to go to their sites to see what they are doing differently than the other sellers. How come they are selling when nobody else apparently is?

Why is it so important to spend so much time in research? So you know what you are doing when you sign up and start your initial listing. Don't be the newbie I saw once that after signing up on eCRATER asked, "Who provided the product to sell and who did the shipping?" I may repeat this example frequently in this blog as that is the most extreme example of someone without a clue. Many others I have seen over the years come on board to sites and then ask questions that they should have known about before signing up such as fees. A selling venues fees can make or break a seller if they don't account for them in their pricing and if there are listing fees (fees charged on a monthly basis just to have items listed for sale on the site whether they sell or not) on top of FVF (Final Value Fees - usually based on a percentage of the selling price). When you add those to the fees from the payment processors like PayPal  and fees charged by e/postage sites such as Endicia or PayPal, you may be paying out much more than you bargained for. So be sure in your research that you know the fees. You also want to know what you get for those fees.

When you start sorting through the different on-line venues, note what each one emphasizes as important to a seller, such as how many photos are allowed. When I was looking for a new venue, I was impressed with eCRATER allowing 10 free photos compared to where I had been where only one photo was free and if you wanted more you had to pay more which is yet another way to nickel and dime you to death. One very big help in deciding where you might want to start researching first is on ecommercebytes, an on-line newsletter that reports daily what is going on in the world of on-line selling. One of the things that they do each year is a survey of sellers for the best venues. You can see the results of 2014's survey here. This is not an exclusive list of selling venues, but the top venues that are being used. If a site that you have found seems interesting and just right for you, don't despair that it isn't a good site; it just might not have gotten a head of steam yet to blow the other sites off the tracks. What is important is that you choose a site that you are comfortable with and seems to have what you need for the product that you have chosen to sell.

For some reason this year included Pinterest and Facebook as selling sites. I know that somehow Facebook can have a merchant component which I could never figure out, but I know for sure as a heavy Pinterest user, that you can't technically buy or sell there. You can only present your goods there and hope that buyers will click through to your store. I have had sales directly attributed to Pinterest so I urge sellers to use it. Facebook is another story for me as I find it gets clunky to use so except for keeping track of friends and family I don't do much with it. That doesn't mean you shouldn't. I live with a chronic health problem that saps my energy and I can only do so much. But if you have the time and energy, go for promoting your goods on all social media that you can find.

 

What to Sell On-Line

What to Sell????

 

What to sell is hopefully a question you have asked and thought about before jumping into the ocean of on-line selling. I have seen newbies signing up for stores and then coming to the forum to ask what will they sell, who will get them the products to sell and who will ship them. Obviously, they aren’t ready to sell themselves. Selling on-line involves YOU sourcing products to selling, YOU listing them, and if they sell, YOU packaging them and sending them on their way. I have heard of some sellers only having 1-2 items for sale but a vast supply of them and that is how they earn their living, but those are rare cases. You also have to be aware that if you have a goal of selling 60 items a month, you need more than 40 items in your inventory even if you have some multiple quantities of goods. I would estimate that even with the best goods at decent prices, to have 60 orders per month you will need between 600-6000 items inventory if not more. It depends highly on where you are selling and the kind of promoting of your goods that you are doing.

Some sellers open their stores with 2-10 items to ‘see’ how they do before ‘wasting’ time listing more. On the eCRATER forum when use the analogy of the internet being a large ocean and your store and the amount goods in them as a drop of water if not less than a drop of water. If you want to sell on line, you have to be found and with only a couple items for the search engines to find, you are going to be practically invisible. When I first started selling on eCRATER, as I worked towards listing my first thousand items I got a sale every couple of weeks and as I passed 2000, 3000, 4000 items in inventory, etc. my sales got more and more consistent as I was being found by way of searches and other promoting I was doing. I also was selling a product that people wanted. That is what you want and need to do. You may want to sell worn out kids t-shirts for rags, but you will need some kind of hook to get interest and you shouldn’t expect too much in sales.

So think hard about what you want to sell. This should be something that you know you about and can find good quantities of, something that people will want or that they need, and something with a decent price that will make you a profit. You shouldn’t really be going to all this work just to make a $1. Minimal profits shouldn’t be your goal at least not in my opinion because it is possible to make much bigger amounts than that.

In an effort to promote eCRATER and bring in more sales, I have been pinning items for sale on eCRATER (https://www.pinterest.com/gailetesews/for-sale-at-ecratercom/) from sellers other than myself on an eCRATER board. As I do this I have become amazed at the many different things that people will attempt to sell on-line. Those items that I have pinned all have sellers behind them that have sold items on eCRATER. Checking out this board will hopefully give you an idea of the vast amount of items that can be sold.

I’m no expert on where people get their inventory, but I know some get it from yard/garage sales, thrift stores, want ads, store markdowns, wholesalers and many other places. I would caution you that it is considered bad form to ask others where they get their products. That is like asking someone to give away their trade secrets so someone else can make the money instead of them. The important thing is, until you are actively selling and seeing how well you are doing, you don’t want to dump a bundle of money on stuff that won’t sell. I started out small with my own items being sold and as I made money I increased my inventory of goods to sell so that currently I have close to 75-100 boxes of inventory. I can coast for years without buying another bit of inventory since I have such a backlog of product. There are some consequences of having so much inventory, which is why many stores having inventory reduction sales near tax time. But for me, I’m disabled and it is hard for me to get out and source goods, so knowing I have a backlog is money in the bank for me.

So what are your interests and what do you want to sell? Is anyone else selling it? Do they seem to be doing well? How are the prices? Do you think you could sell the same thing only better? Think about and research where you can find sources and what it will cost you. Hopefully you can find something to sell that interests you and you already know about. I sell sewing patterns and I see many others selling sewing patterns but at least half of them don’t have a clue what they are doing.  Till next time, put that thinking cap on and do some research.

Why Do You Want to Sell On-Line? Part 2



??  WHY Sell On-Line ??

Last week we discussed the main reason that many want to sell on line and it is money. However, there are many intangible reasons for selling on line. Perhaps you have always wanted your own business to fulfill a need within you, and that is a great reason. I know that was true with me. I read many books on starting a small business long before I was able to do anything about it. Many of us are tied down to jobs with paychecks since we need to keep a roof over our heads and food on the table, so you can’t generally just quit your job to start a business of your own. If you get laid off, sidelined due to disability, become a stay at home mom or dad once children come and you want to help bring in some more money, are all good, legitimate times to go ahead and plunge into starting your business. I actually fell into my on-line selling business, and several things I would have done much differently if I had known then what I know now. Or you can learn all you can and then dip your toes in the water and start selling and doing the business start up work on your evenings off and weekends. However you do it, starting an on-line business can proceed slowly and you can be accomplishing a dream.

Another reason that you may want a business is to prove that you aren’t that chump who will never amount to anything according to your family and/or friends. With thoughtful research, planning, diligence and execution you can surprise them all.

I have heard of many crafters that love crafting but after a while they don’t have the funds to buy what they need to continue crafting, so they start selling their handcrafts to support their crafting habit. This can apply to any collector as well; they sell their items with less value so they can afford the items with more value and thus have a much nicer and valuable collection. Perhaps you can no longer be as active in a hobby like you would like to be so you keep in touch via selling the supplies that other collector or crafters need. This has an added benefit of keeping you participating in something you love and many of the things you need for keeping up with your niche becomes tax deductible (please check with your accountant or IRS publications on this).

There are lots of reason that you may want to sell on-line including small cumulative reasons such as; no need for an alarm clock, ability to work at home in your pajamas if you choose, no driving through blizzards for an hour or two to get to a work site or even the need to clean snow off the car for days at a time, no boss above you squelching your ideas since this is your business and not anyone else’s. There is also the freedom to set your own working time to coincide to when you are at your best for working. For many, myself included, these are some of the best reason to work from home and selling on-line is one way to achieve your goals of this sort of job freedom.

One big reason to sell on-line is that you may have ‘wanderlust’ or ‘itchy feet’ with no job keeping you happy for long. I used to be a nurse and had 7 different nursing jobs in 14 years because after a while I just couldn’t stand working at those facilities. Yet with what I do to sell on-line now, I’ve been doing it for over 12 years and still love doing it even though my health doesn’t allow me to work ‘full-time’. That is what I call a successful business. Doing what you love and making money while doing it!

Tip of the Day. What is your main reason for wanting to be a stay at home business person running an on-line business? What are some of the smaller reasons that you want to do this?  What are your goals and thoughts on why you want to start selling on-line? What do you hope to accomplish financially and emotionally from selling on-line?  Write these things down for when the going gets tough, and it will, so you can read them again and remember why you are doing this. Also as you go through your beginning thought process you may discover that selling on-line is the LAST thing you want to do. Better to find out sooner that later.

Years before I ever had my own business, I read many books by Paul and Sarah Edwards that gave me knowledge for when I did start my own business. I realize that some of their advice may be a bit dated, especially when it comes to hardware, internet and venues to sell on, however, the thought process behind starting your own business was always spot on. You might want to read some of their books either bought via Amazon or borrowed from your public library. Paul and Sarah Edwards

Why Do you want to sell on-line? - Part One

 

??  WHY Sell On-Line ??

 

One of your first steps prior to selling on-line is to ask yourself, “WHY do I want to do this?” While you may have heard that selling on-line is easy, not much work and that you can make a lot of money doing it, that isn’t necessarily so. Selling on-line requires patience, perseverance, time and effort. If you aren’t prepared to spend the time and effort to do this, then you might want to look into finding a different way to make money. This is not said with any kind of condemnation. If you need to earn extra cash, and who doesn’t these days, at least find a way to do it that you will enjoy.

 

As you start asking yourself the question of Why do I want to Sell On-line, some of the things that you need to think about is how much money do you need to make or want to make. The need to make a certain amount is how much isn’t being covered currently by your paycheck job. The want to make is because you want to save to go on a great vacation, eat out more often, buy more clothes, and things like. In other words the things you could live without if you don’t make the money. The money you need to make is a whole different story if every month the gap between your paycheck and the utility bills gets ever wider; you are using credit cards to buy your groceries, etc. I believe strongly in living a frugal life, but I also understand shortfalls in income versus expenses.  So write down that figure that you want to make as a bare minimum on a monthly basis and you have your first goal set. Then figure out how much more it would take to give you a more comfortable life style on a routine basis. That is your goal to push towards once you are consistently making the minimum goal. Having that minimum goal keeps you focused during the month and gives you a kick in the backside if you aren’t anywhere near that goal and it is the 25th of the month. Then you ask yourself where you went wrong, too much TV, not enough promoting, lousy inventory, poorly written descriptions and titles and poor photography?

 

Along with how much money you want to make, decide if you really want to have a small business or just a hobby to make a little money. Be honest with yourself. If you don’t think you can be a success and just figure that you will try to make some money out of a hobby, you won’t be making much. You won’t get the full tax benefits and write offs that the IRS allows. But if you say you want a business and treat it like a hobby then you are a hobby seller. To be frank, this blog is being written to benefit those that actually want to start an on-line business.

 

If the thought of having your own business, scares you silly, that is okay. I felt the same way. You may need to find a mentor that will encourage you to take the chance. More about mentors later in another post, but a good idea now is to be looking for one that won’t tell you all your ideas are marvelous even if they aren’t nor do you want one that will put down everything you say.

 

Are you desperate for money so see selling on-line as a quick and easy way to round up money? Sorry, but for the most part that isn’t going to work very well for most people unless they are about to lose their home that is filled with expensive stuff that you might be able to raise needed funds by selling off all your excess stuff. Otherwise, the people that I see that jump into selling on-line through sheer desperation have multiple problems getting a store started. The money won’t come in like you want and think it should. Depending on the selling venue, some sellers don’t get their first sale for a month or more.

 

Until my next post, write down why you want to sell on-line and figure out your sales goals of the minimum you want to make monthly once your venue is up and running well. Also, how much do you really want to make to give yourself a more comfortable life.

 

Tip of the Day: Talk to as many people as possible that sell on line to find out what they sell; how their sales doing, why they are selling on line, what lead them into it and ask them if they sell in a niche and why. Keep your ears open and you can learn so much. Of the people that you talk to, think are any of them good mentor material?


 

Begin How You Plan to End

Begin How You Plan to End. What does this mean? It is simple. If you want a great ongoing success as an online seller you need to start out with that thought already in your head. It means you do the research ahead of time so that you are knowledgeable about what on line selling is all about, what a particular venue may require of you, having a firm knowledge of where you will source your inventory from, and be willing to charge the prices that make you a profit. By the way, profit (in my opinion) is not clearing $0.25 when all is said and done.

Over the years, those of us that have taken some newbies under our wings to help them have tried to get some of them to understand that the prices they are charging isn't going to make them any money at all other than the quarter I mentioned. I've even found sellers that were losing money when all was said and done! That isn't the point of selling on line! The point is to make money! We have frequently been told that they aren't doing this (selling) to make money. It is just a hobby. I can understand crafters that love to craft selling their finished articles to make enough money to finance another project or two. But I have a hard time understanding most of the 'hobby' sellers, selling what they do just as a hobby. I sell sewing patterns on line and have for years, I have run into other pattern sellers that list patterns for a tenth or less of what I sell mine for. Yet again with the excuse that it is only a hobby. I have proved through my sales that people will pay more for a pattern, so why not price them accordingly and make much heftier hobby money instead of pretty much nothing? If you want to sell on line as a hobby and you don't care at all about profit, please be considerate of those that sell on line to keep a roof over their head or food on the table, and don't sell at give away prices.

All this comes back to begin how you plan to end. If you can see yourself, or even if you don't have the self-confidence to see yourself that way yet but are hoping to do well, as a successful seller, think about what you need to do to get there. You need to learn how to take excellent photos of what you have for sell or else learn how to get someone to do it for you. You have to learn how to write good titles and listings, paying attention to spelling and grammar so that your listing looks professional. You have to learn how to write up your Terms of Service (TOS) so that you are fair to both your buyer and yourself, you have to be able to write up an About Us page so that potential buyers will trust you and see the link between who you are and what you are selling. You need to learn to spellcheck, proof read, and throw out the texting dictionary since believe it or not, not everyone has a cell phone and don't understand all those cutesy abbreviation. You want to write everything clearly so that they understand what you are selling even if they can't see the picture, and take your pictures clearly and well enough so that they don't really need to read the listing although you hope they will!

Set up a book keeping plan taking advantage of your computer. When I was first selling on line another seller admitted to keeping track of all her sales in a paper notebook! Use the resources available to you. Think up ways to promote your goods to your world wide market, not just the folks in your town. Think of what truly interests you or what you know a lot about when deciding what to sell, as that makes it much easier than trying to learn and understand a product that you don't understand what it is for and you have to write a convincing listing so that someone will buy it. Don't look at this as an opportunity to get rid of the yard sale leftovers that haven't sold at your last three sales. Unless you have researched the articles and know they should be worth something, don't bother trying to sell trash. Trash belongs in the trash.

We will be talking about all these issues over time, in the meantime put your thinking caps on and think of it this way. If you got hired as a lower level manager with a chance to climb the ranks to eventually be CEO of the company, would you come to work the first day on the job in dirty, holey blue jeans and a ratty T-shirt. If your answer is yes, this blog isn't for you. If your answer is a resounding no, then keep following. I will be posting as time allows since I am busy with my own successful business. 

Thought for the Day: Don't forget that the moment you start your business you have just become a CEO!

Welcome to First Steps to selling On Line

Welcome to First Steps to Selling Online. We are here to help you think through the process of deciding what you need to understand and do before opening a store, running auctions, or any other on line selling activities including your own website.

 

Why this blog?  Over the 12+ years that I have been selling online under the seller name Moonwishes, I have also helped in the different selling forums and non-selling forums to help those who would like to make some extra money, if not a complete living on line. Rather than feel like I am giving and typing the same advice over and over,  I will be putting many of my ideas into a blog where it can be accessed by all at any time.

 

The first thing to think about before even looking for a venue or making any kind of decisions about selling on line, think of this. If you wanted to open a ’brick and mortar’ store (on line speak for a real store you can walk into such as a grocery store) is you wouldn’t  get an idea to start a store and 5 minutes later walk in to a complete functioning store. You need to plan what you want to sell, where you want your building, how much you want to make, decide if you need a start up loan, and most certainly you would need some sort of business plan, and the list goes on. Yet for some reason some, if not many, ’newbies’ who want to be on line sellers start up a store with less thought than to what they dress in that day. What is the chance of becoming a successful on line seller with no thought behind what you are doing? This blog will help you think through the processes of starting up an online store or other selling activity so you have a great chance of becoming successful.

 

Best Wishes for the journey ahead.