You Know You Have an eBay Business When...
If you're not sure whether your eBay "obsession" is now a full-fledged business, take this quick 20-point test to find out.
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"I've been selling stuff on eBay on and off for afew years now. When do I know if I have a 'real' businessgoing?"
You'd be amazed how often this question arises in the eBaycommunity. A lot of people--roughly 750,000 at last count--aremaking either a full- or part-time living selling stuff on eBay.Many of these folks started out selling things on eBay as a fun"hobby," and they're shocked--shocked!--when theylearn that someone (like the IRS) sees them as more than that.
To help you out, here are 20 signs, David Letterman-style, thatyour eBay selling activities are getting a wee bit beyond the"hobby" stage:
20. You've run out of things in your attic and basement tosell on eBay, but you're continuing to sell stuff from . . .somewhere.
19. After putting your garbage out by the curb on pickup day,you drive around the neighborhood to see if anybody is throwingaway anything interesting.
18. You've taken out classified ads in the local newspapersoffering to help other people clean out their attics and basementson eBay--for a fee, of course.
17. You begin haunting local funeral parlors, like Paul Newmanin The Verdict, offering your eBay selling services tobereaved relatives who just can't bear the thought of cleaningout Mom's house.
16. You're personally acquainted with every estate, divorceand bankruptcy attorney in your community.
15. A hedge fund wants to invest in what you're doing.
14. You consider building out the shed in your backyard, oradding a third story to your center-hall colonial, so you'llhave more room to store your inventory.
13. You keep your Chihuahua chained to your eBay inventory atnight so you can deduct him as a "guard dog." (Note: Youcan deduct the expenses of maintaining a guard dog--such asfood--but not the dog itself, which has to be depreciated over hisor her "useful life.")
12. The first things you read in the newspaper every morning arethe liquidation and creditors' notices in the classifiedsection.
11. You carry rolls of hundred dollar bills to garage sales,arriving just as the homeowners are putting out their stuff, andoffer to buy everything they have, sight unseen.
10. You own the complete works of Janelle Elms, Marsha Collier,Joseph Sinclair and Jim "Uncle Griff" Griffith [leadingauthors of eBay guidebooks].
9. You're on a first-name basis with every employee of yourtown dump, the head of the local trucker's union, and everyfreight liquidator, customs broker and factory outlet within a50-mile radius.
8. You arrive at 6 a.m. for your local library's annual booksale with 36 empty liquor boxes and three day laborers to help youpack up your truck.
7. You have so many student interns helping you create eBayauction pages the local community college has named a faculty chairafter you.
6. You know exactly where you can find motor vehicles that were"formerly owned by drug dealers".
5. You know which brands of perfume, housewares and otherconsumer goods are being discontinued by their manufacturers withinthe next six months--and which distributors are likely to haveoverstocks of these items.
4. The talk show hosts on eBay Radiohave your home phone number on speed-dial.
3. The local kids can't play basketball in the streetanymore because they're too busy dodging UPS trucks going toand from your home office.
2. Your kids show up in your home office at dinnertime wearingstraw hats and start singing "Do You Know the Way to GoeBay?" (to the tune of Burt Bacharach's "Do You Knowthe Way to San José?") as a way of telling you theyhaven't been fed in days.
And last but not least . . .
1. You make at least one penny in profit each year from youreBay selling activities. If you make money selling on eBay, the IRSreally doesn't care if you're a "business" or a"hobby"--they want you to report your income (i.e.profits) from whatever it is you're doing on your tax returnand pay taxes on it.
Since you're going to have to pay taxes on your eBay sellingeventually, why not take the steps necessary to treat it as a"real" business? That way, you can deduct lots of stuffthat people with hobbies simply can't do, and you'll havean incentive to look for even more creative ways to make a ton ofmoney on eBay.
Cliff Ennico is a syndicated columnist, author and host ofthe PBS television series MoneyHunt. His latest book isSmall Business Survival Guide (Adams Media).This column is no substitute for legal, tax or financial advice,which can be furnished only by a qualified professional licensed inyour state. Copyright 2005 Clifford R. Ennico. Distributed byCreatorsSyndicate Inc.