questions about setting up an ebay business

superspurs18

i work full time at the minute but i'm considering setting up an eBay business in my spare time buying and selling computer games.

it's more of a hobby really, but i've roughly worked out i could make £200 profit a month. i don't know the first thing about stuff like this and looking for general advise on:-

a) whether it is worth the hassle of actually doing at all for that amount profit VS tax id have to pay etc
b) whether i would need an accountant of whether i could just keep spreadsheets myself
c) whether self assessment tax forms are easily completable

thanks.

londonTiger

you pay tax on your profit. So tax will always be a proportion of your profit. That should not be a reason to avoid doing this.

But I think you're going after the wrong market. Big sellers have 0p listings and skim 20p profits of each sale on ebay. You're not going to find it viable to sell video games like this - the best way to do it is have a large warehouse operation. So 20p-£80p profit per game will add up if you shift 10s of thousands.

Ebay, paypal, royal mail will each make more profit than you.

I'm surprised the competition comossion hasn't made a case against ebay for them practically forcing sellers to take payment via paypal which charge 3%.

A proper merchant would only charge a flat 30p per debit card transaction.

Aquamania

superspurs18 wrote: »

i work full time at the minute but i'm considering setting up an eBay business in my spare time buying and selling computer games.

it's more of a hobby really, but i've roughly worked out i could make £200 profit a month. i don't know the first thing about stuff like this and looking for general advise on:-

a) whether it is worth the hassle of actually doing at all for that amount profit VS tax id have to pay etc
b) whether i would need an accountant of whether i could just keep spreadsheets myself
c) whether self assessment tax forms are easily completable

thanks.

(a) Only you can answer that one
(b) Probably yes to both
(c) Yes, but if you do have difficulty, you can get your accountant to complete them

HTH.

Percy1983

Only you can say if its worth the hassle, it depends how much time you put in for how much money, but also think longer term as this may be the start of something bigger and more profitable.

Keeping spreadsheets and doing your self assessment isn't too hard but if in doubt get an accountant to have a look.

In your case the early days should be easy to record so give it a go.

Of course with any business just be sure you can make a profit, are you thinking new releases or older games or a mix of the 2?

motorguy

superspurs18 wrote: »

i work full time at the minute but i'm considering setting up an eBay business in my spare time buying and selling computer games.

it's more of a hobby really, but i've roughly worked out i could make £200 profit a month. i don't know the first thing about stuff like this and looking for general advise on:-

a) whether it is worth the hassle of actually doing at all for that amount profit VS tax id have to pay etc
b) whether i would need an accountant of whether i could just keep spreadsheets myself
c) whether self assessment tax forms are easily completable

thanks.

I'm surprised you're seeing profits of £200 a month running a part time business selling games on ebay.

As others have said, you're up against massive sellers who are selling thousands per month and taking the tiniest of margins. How are you hoping to undercut them?

Plus the market moves very rapidly on ebay - you could see an opportunity for profit today and by the time you get that specific stock in you're actually looking at a loss per item.

PLUS game stock has a short shelf life - it depreciates daily, so that game you're giving £14 for today, might have a retail price of £7 in a month.

Very very hard market

superspurs18

basically what i would do is buy preowned lots/bundles from eBay and then sell them on separately individually, its something ive done once of twice a while ago and it was more of a hobby to be honest - but it is more effective than you would think.

i understand this might seen trivial for the values involved, but i appreciate where a profit is being made then obviously the tax deductions would have to be made - so just wondering the best way forward really?

Mistral001

superspurs18 wrote: »

basically what i would do is buy preowned lots/bundles from eBay and then sell them on separately individually, its something ive done once of twice a while ago and it was more of a hobby to be honest - but it is more effective than you would think.

I understand this might seen trivial for the values involved, but i appreciate where a profit is being made then obviously the tax deductions would have to be made - so just wondering the best way forward really?

If you can make a profit by buying wholesale on ebay and then selling on ebay you are doing well. Two lots (yours and the wholesalers) of fees and postage charges need to be covered in the price you charge remember.


PS. Ebay has changed in recent years. It has become a buyers market now and if you made a profit a few years ago, it does not mean that you will now.

motorguy

Mistral001 wrote: »

If you can make a profit by buying wholesale on ebay and then selling on ebay you are doing well. Two lots (yours and the wholesalers) of fees and postage charges need to be covered in the price you charge remember.

Indeed

Although the good thing is, the business has a low cost of entry, so the O/P can have a good with little risk.

The downside of a low cost of entry is that every tom !!!!!! and harry will be doing it and you end up in a race to the bottom on price.

AND your profit ends up being in the last handful of duff games you need to sell from the batch.

londonTiger

superspurs18 wrote: »

basically what i would do is buy preowned lots/bundles from eBay and then sell them on separately individually, its something ive done once of twice a while ago and it was more of a hobby to be honest - but it is more effective than you would think.

i understand this might seen trivial for the values involved, but i appreciate where a profit is being made then obviously the tax deductions would have to be made - so just wondering the best way forward really?

In that case you would not need an accountant. You will need to submit declaration of self employment to HMRC and do your self assessment once a year.

You dont really need accurate records for small businesses like this. Just keep a spreadsheet of all your sales & expenses. Just a matter of subtracting all your costs from your revenue and that is your profit. Then declare that to HMRC and then HMRC will ask for their percentage based on your current tax bracket.

You dont need line by line entries of transactions, just a p&l will suffice. But in case of an inspection it's advisable to grab all the invoices and keep them in a file for 7 years.

Ebay does not allow you to access records after 3 months, so make sure you grab them all.

pinkpansies

I sell on ebay as a self employed sole trader. It is very difficult these days to make money on there but it is possible. As someone mentioned above, ebay, royal mail and paypal make more profit than I do.

I used to keep spreadsheets but it was too time consuming. Now I find printing out just the ebay invoice and monthly paypal download along with a couple of other reports is all that you need as well as bank statements. I started off at first with an accountant who showed me how to keep accounts but I was told I didn't need an accountant as it was easy enough for me to do my accounts myself as my business is very tiny! I find it easy enough, even the dreaded tax return once a year but it is also very tedious and time consuming to work everything out.

I used to buy from wholesalers til I found out prices on ebay were cheaper than the wholesalers (I sell in a different category to what you were planning on selling in) and now I buy all my stock off ebay in job lots and resell them on there individually

superspurs18

londonTiger wrote: »

In that case you would not need an accountant. You will need to submit declaration of self employment to HMRC and do your self assessment once a year.

You dont really need accurate records for small businesses like this. Just keep a spreadsheet of all your sales & expenses. Just a matter of subtracting all your costs from your revenue and that is your profit. Then declare that to HMRC and then HMRC will ask for their percentage based on your current tax bracket.

You dont need line by line entries of transactions, just a p&l will suffice. But in case of an inspection it's advisable to grab all the invoices and keep them in a file for 7 years.

Ebay does not allow you to access records after 3 months, so make sure you grab them all.

thanks for that