eBay Wholesale, what do I need?

[Sandman]

I'm looking to buy electronics wholesale prices, and resell on eBay, but on a very small scale. I'm also going to resell the same items on a website, also on a small scale.

Now from what I understand, I definitely need a business license.
I live in NY, and I found this application . Can anyone please confirm that it's the one I need?

A while back a friend recommended to me Ma Labs. I looked into their application to join as a member, and it asks for "a valid seller's permit #" . How do I obtain that?


Also, I read somewhere that I'm going to need to fill out the SS-4 application to get a Federal Tax ID / EIN. Would I need it for this?


I'm new to all this so please do correct me
Thx for all your help

[taj79]

1) First off make a list of all the manufacturers that you want to sell. You will contact them individually and ask for their regional sales rep in your area.

2) Selling on eBay and selling on a website are 2 completly different worlds. Do not enter the website section until you have some capital developed from eBay advertising, trust me you will need it!

3) Go down to your city chamber of commerce and tell them you are starting a business and that you need a business licensce. There should be a small fee.

4) Do not try to buy and resell from anyone who sells a product specifically to sell on eBay, also you will not find a stocking distributor simply by looking online. It is not the nature of their business to do so.

5) You will not really need a Fed tax ID until you have employees, just use you social security number for now.

6) Choose a business name and go down to your local registrars office and see if it is available and purchase the name. There should be a small fee for this.

7) Then go down to you local franchise tax board and get a resellers permit. There may or may not be a fee involved for this. This allows you to buy product without having to pay tax on it. But remember any sales that you do in your state must be taxed and paid to the tax board.

8) make sure you have a sellers account on eBay, a paypal account, and if you are going to list more than 10 auctions per week, I would recommend using andale. Their automation is superb!

9) A merchant account would be a good idea to get as well so that you can accept visa, mastercard, discover and Amex. But be very causious of the fee's don't pay more the 2.3% discount and make sure they set you up properly for ecommerce or else you will pay an additional 2% in downgrades. Which means you will pay about 4% to take a credit card. I started out just using paypal untill I started seeing a higher demand for credit card, which will come very fast if you are regualarly selling.

10) Make sure you have a small accounting software to keep track of everything. Quickbooks Pro is a good start and will maintain things until you get to big for it, which by that time you should be making a decent living and have the ability to invest in something new.



Well those are the 10 steps to getting started on eBay. Starting up you own business is a big step and will take alot of determination, sacrafice and most of all disapline. There is usually only 1 reason why someone cannot be self employeed and that's disapline. If you cannot force yourself to be motivated and excited every single day for 60 hours a week and have a clear vision of what you are working at you will FAIL! Many people have asked for my help in starting a business online and honestly to say not 1 has made it close.

It is going to be alot of hard work, do not beleive the fancy living portrayed by hollywood because it is not their. I work 60 - 80 hours per week sometimes and keeping myself and others who work around me is also a full time job. But over all it is well worth it, I make enough to support me, my wife, my future child, my household, and 2 employees. That is a the true good feeling of being your own BOSS!

[Sandman]

Thanks a million for this info. This is exactly the stuff I was trying to find. If you don't mind there's a few things I need to ask

1) Would I be required to buy in bulk from these manufacturers? Also, wouldn't it be easier to just deal with a wholesaler?

3) Are they going to ask me what type of business I'm going to open? If so, what should I tell them? I'm not sure of the proper name for this type of business.

4) What is the proper place to look for a stock distributor?

7) How would the tax board know about the sales? Since they're all being done on ebay, nothing is recorded. So would I still have to pay taxes?

Thanks for the incentive!

[taj79]

This is what happens,

1) You contact the manufacturer and ask for the regional rep in your area, they should give you a name and phone number. Usually they don't ask very many questions. Just make sure they understand that you are a reseller and not a consumer otherwise they might direct you to a electronics retail store.

2) You call the regional rep and tell them you are looking to sell their products and if they can give you the phone numbers of their most well stocked distributors. There should be anywhere from 1 - 10 distributors. Do not explain to them that you are an internet business because that may turn them away. Just state that you are a business looking to sell.

3) You contact the distributor and explain to them that you are looking for a stock distributor that can UPS or Fedex the orders directly to your customers. You may explain to them you are an internet business. If you know the volum of sales that you can do this might help you get extra discounts. Suppliers love volume and if they are paid in less then 30 days they are usually more than willing to extend additional discounts plus 2% terms, which means they get a check with 10 days of being invoiced. Take advantage of this!

Not all suppliers are the best and some will not meet your needs.

1) Make sure they can UPS or FedEx at a good price. Small items $5 - $10, Large oversized items no more than $25.

2) make sure they have email, their is nothing worse than having to be on the phone all day with your supplier. For simple tasks just drop them an email.

3) Make sure they can get you tracking in less then 48 hours, anything longer and it's going to look bad on your customer service. Customers want tracking the second the order is placed.

4) Make sure they are giving you the best discount. Suppliers work off number like 50% off or 50 and a 10 which means 50% off then 10% off the smaller number. This creates a multiplier. 50/10 = .45. The lower the number the more you save. Here is the long math for you.

50/10 is computer like this. 50% of 100 = 50 and 10% of 50 = 5, so 50 plus 5 is 55. Minus 55 from 100 is 45, so that equals a .45 multiplier.

If you are going to operate a business legally you need to pay taxes on anyone who buys from your state. If you do not report it all it takes is an audit to find out that you never paid. Then the hefty fines or jail time comes along. Play it safe, stay out of jail.


Lastly don't forget income tax. If you sell 100k of product this year and after your expenses you have 20K left, expect to give up about 30% of that to Uncle Sam. Create many write offs but don't over spend. You want to make sure their is still enough for income tax. Remember you not only have to pay income tax but now you have to pay self employment tax which doubles your tax liability. Usually you don't see this as a regular employee working for somone else, and if you are single, no house and no kids you get hit the worst!

[moolahfinda]

Absolutely, do not try to play the HOW WILL THEY KNOW game with sales tax!

To work with reps, distributers and B2B vendors (at least in my business) you need a reseller's permit/number. They write it down when they make sales, and they report it to the state, if they are in the same state you are in. Once they have told the state that you have purchased $XXX worth of merchandise from them, the state is expecting its cut. From what I hear, people are getting caught -- it's not if, it's when. California, for one, is really cracking down, but friends/associates tell me other states are too.

Why risk it? It's a little bit more paper work, but if you get in the habit from the very first sale, it becomes part of the routine and you don't even notice it. Weekly/bi-weekly/monthly -- whatever works for you -- deposit your sales tax and estimated state and federal taxes into an interest bearing account so they don't sneak up on you later, and you will find that they are not as much of a hassle as they might otherwise be.

Good luck!

[webmark]

RobDogg:

You seem very knowledgable about this whole process. Any chance you could email me? I need to get a certain number of specifics that I don't feel are completely covered by this thread. I allow users to email me through the forum.

[tono_]

I'm curious as to your angle in selling electronics on Ebay, will you be at retail prices? or below? In other words-why would I buy your items?

[taj79]

Originally Posted by TomT64

RobDogg:

You seem very knowledgable about this whole process. Any chance you could email me? I need to get a certain number of specifics that I don't feel are completely covered by this thread. I allow users to email me through the forum.

What questions did you have?

[Sandman]

I obtained a copy of the business certificate, filled it out, and gave it in to obtain the business license. They haven't yet replied, but I'm trying to figure out the next major step..

You said I need to go to my local franchise tax board and get a resellers permit.
Is there another name for the 'local franchise tax board'? because I've had trouble locating it.
And the same question for the 'resellers permit', is there another name that's it's known by?


Thx, and sorry for all the trouble.
-Stanley

[taj79]

Originally Posted by StanleyS

I obtained a copy of the business certificate, filled it out, and gave it in to obtain the business license. They haven't yet replied, but I'm trying to figure out the next major step..

You said I need to go to my local franchise tax board and get a resellers permit.
Is there another name for the 'local franchise tax board'? because I've had trouble locating it.
And the same question for the 'resellers permit', is there another name that's it's known by?


Thx, and sorry for all the trouble.
-Stanley

Where did you get the business license at? You should have got it at your city chamber of commerce.

You can also call the chamber of commerce and ask them where to get a resellers permit. If they don't know what that means just spell it out.

You want to buy goods and not pay the tax on them and that you are reselling these goods and will be collecting tax and you need to pay that to someone, what department is that?

They should give you an answer!