Is there an easy way to calculate my total profit ?

soolin

Savvy_amateur wrote: »

This is all sounding very complicated. So far I have sold items from my wardrobe and only spent £29 actually buying anything from the charity shop to sell on. I have not yet listed the items that I have purchased as they are in the process of being washed and ironed. that is why I have asked the question about trying to see if I am making any profit and if it is worth continuing. I understand from your replies that it is a business whether it makes a profit or not. I really need to look into this further as I am unsure what to do with a tax return. I have so many questions that I need to ask.....

Honestly it is very simple, I'm the worse person in the world at explaining things- so bear with me!

You spend say £50 at a charity shop to buy 50 items and list them all and in the first month you sell 30 at £10 each including postage. Your basic accounts just for that month would show

Income £300
less expenses (which includes your £50 costs, listing fees, postage, cost of bags and wrapping materials, parking at post office ebay and paypal FVFs etc) £150

so net profit £150 and you still have 20 items in hand (with simple accounts you don't need to stocktake)

You just do that for the year and assuming you have told HMRC that you have a small business they send a tax return or you can register and do it online once a year. If all your taxable income is below your allowances then HMRC will say thanks you and you won't pay anything. The only thing you might become liable for is National Insurance if you choose not to take an exemption.

seriously this saves a lot of hassle in the long run, I used to volunteer at a local service and would see several people a month that were caught , most of them were clothes sellers and most were actually caught by DWP (just our client base). Obviously if your household claims no benefits then you are at no risk from DWP, but you do still have HMRC to worry about and whilst you may well not be liable to tax, you may find getting caught when they assume tax is due is much more complicated than simply declaring it in the first place.

soolin

sorry , one final thing- clothes selling is a difficult area so try looking for a forum or groups - possibly on facebook, that is purely for clothes resellers. Use search terms like thrift or resellers - there are a few out there. I joined loads of groups a while ago and it was fascinating, but I left the clothes only ones purely because it isn't a market I am comfortable with due to the number of returns and buyer issues.

The groups though will be very helpful, the ones I joined had something they called BOLO - can't remember exactly what is stood for but it was something like 'buy or look out' - where people would post up suddenly popular brands that were selling. They also posted photographing techniques etc, you may find them helpful.

Most of the forums though will be US based and whilst they might be useful for photographing advice their whole business model is different so watch out for that. I was surprised for instance that buyers don't automatically get refunds if they receive damaged or broken goods, and that sellers can choose whether or not to register as a business. Also a lot of states require sellers to have buying licenses if they use goodwill stores (sort of our charity shops) which of course ours don't.

Well worth a read though for general advice.

zerog

Savvy_amateur wrote: »

. I also sometimes do a discounted or free postage so the buyer does not always cover the postage.

Postage is always paid by the seller, although there are some silly buyers who can't add

Savvy_amateur

Thank you. I will have a think about if its worth doing. I will sell off the rest of my long owned items and make a decision then .

mrcol1000

Just to add that should you decide to carry on that a simple spreadsheet with a running total is all you need. I use Excel. However free Google Sheets works the same. There is plenty of help online about simple formula to automate everything.

Brywalker

I bet she wishes she'd never asked now.

martindow

I wouldn't be at all surprised that once you add up all of the costs (postage, fees, mileage to the PO, etc.) your profit will be minimal or possibly non-existent.

COOLTRIKERCHICK

I use the fee calculator site that was mentioned in a previous most this give me a rough guide on how much I will potentially make 'if' the item sells before I buy the item.

Please be aware not all the items you buy will sell. So you got to factor all this in.

Savvy_amateur

Brywalker wrote: »

I bet she wishes she'd never asked now.

Lol. I did not realise it would all be quite so complicated. I've only been doing it for 2 weeks selling items I already have in my wardrobe and have just bought a few extra because my own items seem to go quite well. I am not a taxpayer, I work part time and earn less than 7k per year My husband is retired and neither of us claim benefits and never have done. I just assumed that I would not have to get in touch with HMRC unless I was earning over the tax threshold. I was quite enjoying the eBay but to be honest it seems like it's more trouble than it's worth potentially

Sarastro

I didn't realise you were buying the clothes in order to sell them - yes, that's trading and HMRC will consider you to be self-employed doing that. You will need to complete a self-assessment tax return, although the amount you are earning will probably mean you don't exceed your personal allowance anyway so I doubt you will have to pay any income tax - although you may have to pay some national insurance contributions.