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There's a lot of posts on FWF that allude to various buy/resell consumer goods. Perhaps there's a good deal on Hot Deals and you can buy them 30%+ below market value and resell on eBay and profit even after fees. Perhaps you have some unique way to interpret information such as knowing a certain event will lead to a shortage of a certain product that you can profit from.

I'm not looking to discuss specific items to buy for resell, or even how we determine these things. If we share the information, then any profit we make will be arbitraged away by others.

Instead, what we can and should discuss is how to run this "business" in the most efficient way possible. For example, perhaps you can dedicate a certain room in your home to storage of your inventory. Then perhaps you may be able to deduct that space off your earnings.

Perhaps you deduct your smart phone against your business because you use email to respond to eBay buyers.

Perhaps you also eBay sell some personal possessions that you no longer use, and declare the cost basis of those items at the full retail price you initially paid several years back. Then you have a "loss" on those items that you use against the "gains" of your profit items.

Then again, perhaps you don't pay taxes at all because Paypal only sends a 1099 if you do over $20k AND over 200 transactions in one calender year.

On the non-tax front, is there any other value you can gain from this kind of activity? I have a few possibilities:

1) You can hedge your personal expenses on things you personally use. For example, suppose you're able to buy "X" in bulk at a great discount due to a deal. You can resell X at a profit. However you also personally use X. You're able to subsidize your personal use of X by buying it more cheaply in bulk, as a bonus to your profit seeking activity with X.

2) You can store X for survival scenario purposes. Suppose an extended natural disaster occurred. By having a storage of X, it may be something you can use as barter material in the disaster. Typically, if a "survivalist"/"prepper" were to store materials for barter purposes, they run a cost of depreciation and storage. However, if you churn X as part of a business activity, then you get the possible benefit from a disaster scenario at near zero cost.

3) You may be able to leverage your high eBay rating to sell personal items at a higher price. In theory, if you're selling your old crap on eBay, like a laptop computer, if you have a low rating, then people are less likely to bid it up. However if you have a high rating, even though it's from your side business, you're looked upon more favorably when selling personal items.

4) You may be able to create the eBay Account with an EIN of an LLC, build up a high rating, and then sell the shell LLC that is both aged by a few years and has "street cred" of the eBay ranking.

5) You may be able to gain access to certain conferences, private forums, etc. by being an "industry professional". I can't think of any specifics that are worthwhile but suppose you buy and resell consumer electronics, you may be able to register for the Consumer Electronics Trade show that is not open to the public. Then again, you can probably lie and get in too, and from what I hear it's very unworthwhile to go. Perhaps though, there may be some worthwhile trade show in some field, and you might get free schwag, that you can then resell as well.

6) Possibly building business credit and churning business checking account opening rewards. Although you don't "need" an actual business to do it, you could sole prop it, or make something up, it might add some street cred to the bank issuing credit/checking accounts.

7) UPS and FedEx offers discounted shipping rates to higher volume shippers. Thus, if you're selling stuff (your old crap in addition to the specific items you are buying with the express purpose to resell) personally, or shipping gifts to relatives, you're able to take advantage of the lower rate for yourself.

8) You can show higher house hold income for purposes of applying for personal credit cards and getting higher credit lines, which you may eventually be able to BT and make a profit off that when interest rates rise.

I'm curious to hear what other benefits one might get as a byproduct of their buying and reselling business.

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I don't care what anybody says, this story (and that TV commercial you linked to) made this whole thread worth it. Than... (more)

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I used to do this a ton.

I have the Amazon Visa and they used to send 20% off a certain category each month. I'd find the... (more)

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I would like to hear ideas for getting access to better UPS/FedEx rates. Large businesses get a massive discount over the small guys (literally about 20-25% of what the retail price is). That makes a huge difference in profitability for online sales. I was wondering if we could have some sort of shared account to get the bulk purchasing up.

Pics..or GTFO

kloakndaggers said:   Pics..or GTFO

I see what you did there. This could be one of my very few worthwhile threads. Let's not sidetrack it too much.

ubermichaelthomas - the new bbb, with lousy ideas.

walletfart said:   I would like to hear ideas for getting access to better UPS/FedEx rates. Large businesses get a massive discount over the small guys (literally about 20-25% of what the retail price is). That makes a huge difference in profitability for online sales. I was wondering if we could have some sort of shared account to get the bulk purchasing up.

American Express Open Savings can get you 26% off of Federal Express.

A lot of people shipping on sites are drop shipping, so shipping is cheaper for them. If I drop ship from a distributor it costs $5, and it would cost me $15 to get the same item a few states away.

Here's a new one I thought of:

Buying things to resell, using your credit card, may push you into a higher tiered reward for your personal purchases (such as some AMEX where the first $*** per year gets a lower rate, but the next $*** above it gets a higher reward rate, or give you bonus rewards on cards such as "spend $*** within the first 3 months to get a bonus".

You're probably not the only guy out there reselling FW deals. This means when some crazy deal lets you buy a $200 item (that normally sells on eBay for $150) for $100 so are a number of other people. You may find that when it comes time to sell that the item is now going for $125 on eBay due to increased supply on the site. Your previous "worthwhile" deal now becomes a break-even proposition unless you're willing to sit on the item for a while and the sales volume is high enough that the price eventually recovers. Of course, you now have to create an auction listing (or copy/paste someone else's), get paid by the buyer, properly ship the item, and hope that the buyer doesn't try to scam you or that something else goes wrong along the way (e.g. buyer wants to return or item arrives broken) just to get your money back or make a minimal profit.

When the rare deal comes around where you truly are getting an in-demand item for half-price or less then profit potential exist, but for most hot deals this isn't going to be the case. 5 to 10 years ago the FW community was much smaller and such opportunities frequently arose, but this isn't going to commonly be the case today. I'd say the true turning point was when online shopping went from being something you did and your friends were skeptical of to being commonplace in mainstream America.

Your tax strategies all seem to be variants on the classic: cheat.

mjoply said:   walletfart said:   I would like to hear ideas for getting access to better UPS/FedEx rates. Large businesses get a massive discount over the small guys (literally about 20-25% of what the retail price is). That makes a huge difference in profitability for online sales. I was wondering if we could have some sort of shared account to get the bulk purchasing up.

American Express Open Savings can get you 26% off of Federal Express.

A lot of people shipping on sites are drop shipping, so shipping is cheaper for them. If I drop ship from a distributor it costs $5, and it would cost me $15 to get the same item a few states away.


FedEx personal shipping through USAA - save up to 28%.
FedEx business shipping through USAA - save up to 40%.
Stack with AMEX Open Savings credit card for additional 5% off.

https://www.usaa.com/inet/pages/shipping_main_public
https://www.americanexpress.com/us/small-business/opensavings/op...

tolamapS said:   ubermichaelthomas - the new bbb, with even lousier ideas.


Fixed that for you!

Mailman said:   You're probably not the only guy out there reselling FW deals.

That's the example I gave. I won't be reselling FW deals. However, I would be buying and reselling things in such a way that strategies that work for the FW Deals resellers would work for mine. I won't go into specifics, but as an example, suppose I was in the business of buying/reselling, then I'd be the first one to clear the shelves of Twinkees to resell.

I'd have interpreted the information before everyone else, and been first to score them.

There were some "items" that have become pretty rare due to an import ban by the pres-o-dent last term. Small, high value. They are currently selling for 4x what they were selling for 4 years ago. That's a pretty good return and I could have bought a bunch of them. I didn't think in terms of doing this at the time.

UMT:

All that you've said are what I would consider to be "fringe benefits" of running a business. However, none of them are what I would actively seek out. For example, I will only attend CES if I actually had a business need to. I wouldn't go there just for fun even if I lived in the same city and had no travel expenses. You also have to be careful about taking inventory for personal use - you need to reimburse the business for the cost and keep an accurate record of it. An online business typically shoots for an average net margin of about 8-15% on the low end (large businesses), and 15-30% on the high end (mid to small businesses). At these rates, the owner's time is better spent expanding the business rather than actively pursuing fringe benefits.

FSBox said:   UMT:

All that you've said are what I would consider to be "fringe benefits" of running a business. However, none of them are what I would actively seek out. For example, I will only attend CES if I actually had a business need to. I wouldn't go there just for fun even if I lived in the same city and had no travel expenses. You also have to be careful about taking inventory for personal use - you need to reimburse the business for the cost and keep an accurate record of it. An online business typically shoots for an average net margin of about 8-15% on the low end (large businesses), and 15-30% on the high end (mid to small businesses). At these rates, the owner's time is better spent expanding the business rather than actively pursuing fringe benefits.


My point is that I am not currently in a buy/resell business. It's not worth my time on the surface. However, if I get a bunch of fringe benefits, that are essentially tax-free, then it makes the idea more beneficial to me.

Mailman said:   You're probably not the only guy out there reselling FW deals. This means when some crazy deal lets you buy a $200 item (that normally sells on eBay for $150) for $100 so are a number of other people. You may find that when it comes time to sell that the item is now going for $125 on eBay due to increased supply on the site. Your previous "worthwhile" deal now becomes a break-even proposition unless you're willing to sit on the item for a while and the sales volume is high enough that the price eventually recovers. Of course, you now have to create an auction listing (or copy/paste someone else's), get paid by the buyer, properly ship the item, and hope that the buyer doesn't try to scam you or that something else goes wrong along the way (e.g. buyer wants to return or item arrives broken) just to get your money back or make a minimal profit.

When the rare deal comes around where you truly are getting an in-demand item for half-price or less then profit potential exist, but for most hot deals this isn't going to be the case. 5 to 10 years ago the FW community was much smaller and such opportunities frequently arose, but this isn't going to commonly be the case today. I'd say the true turning point was when online shopping went from being something you did and your friends were skeptical of to being commonplace in mainstream America.


I only sell on eBay if I get the item close to free, or at most 25% - 50% of price selling on eBay. To much hassle and time involved. Of course I also sell vehicles from time to time, which does fall into Ops suggestion of increasing sells price for personal items. (I find that once you get to 20-100 feedback increasing it doesn't impact final amounts much)

If you turn it into an actual business you may have to pay taxes (That you're supposed to pay anyways), However you may be able to increase your margins by getting a resell certificate, and not have to pay sales tax on the items you buy for resell. (This varies by state, but at least in KY you can both avoid paying sales tax, even when you don't charge it (Shipping out of state). - However you would be responsible for collecting sales tax for any sale in your home state.

ubermichaelthomas said:   2) You can store X for survival scenario purposes. Suppose an extended natural disaster occurred. By having a storage of X, it may be something you can use as barter material in the disaster. Typically, if a "survivalist"/"prepper" were to store materials for barter purposes, they run a cost of depreciation and storage. However, if you churn X as part of a business activity, then you get the possible benefit from a disaster scenario at near zero cost.

UMT, I recommend you invest in a very large supply of baseball bats, machetes, axes, and zombie-proof doors and windows. Once the apocalyptic event occurs, you'll make a proverbial killing.

ubermichaelthomas said:   FSBox said:   UMT:

All that you've said are what I would consider to be "fringe benefits" of running a business. However, none of them are what I would actively seek out. For example, I will only attend CES if I actually had a business need to. I wouldn't go there just for fun even if I lived in the same city and had no travel expenses. You also have to be careful about taking inventory for personal use - you need to reimburse the business for the cost and keep an accurate record of it. An online business typically shoots for an average net margin of about 8-15% on the low end (large businesses), and 15-30% on the high end (mid to small businesses). At these rates, the owner's time is better spent expanding the business rather than actively pursuing fringe benefits.


My point is that I am not currently in a buy/resell business. It's not worth my time on the surface. However, if I get a bunch of fringe benefits, that are essentially tax-free, then it makes the idea more beneficial to me.


Well, if it wasn't worth it to enter a business based on profits alone, the fringe benefits wouldn't make it worth it. I guess the only exception is if you derived personal pleasure from it and the income aspect is mostly irrelevant. For example if you genuinely enjoyed collecting stamps, you could go into the business of buying/selling stamps even if it didn't make a healthy profit margin. You just have to be careful that you are actually making money and not using the business as an excuse to spend an ungodly amount of money on a hobby.

Not a buying and reselling business, but you can buy a rental property in an area you like to vacation and then write off the cost of your visits there due to the fact that you are visiting your investment property.

Mailman said:   You're probably not the only guy out there reselling FW deals. This means when some crazy deal lets you buy a $200 item (that normally sells on eBay for $150) for $100 so are a number of other people. You may find that when it comes time to sell that the item is now going for $125 on eBay due to increased supply on the site. Your previous "worthwhile" deal now becomes a break-even proposition unless you're willing to sit on the item for a while and the sales volume is high enough that the price eventually recovers. Of course, you now have to create an auction listing (or copy/paste someone else's), get paid by the buyer, properly ship the item, and hope that the buyer doesn't try to scam you or that something else goes wrong along the way (e.g. buyer wants to return or item arrives broken) just to get your money back or make a minimal profit.

When the rare deal comes around where you truly are getting an in-demand item for half-price or less then profit potential exist, but for most hot deals this isn't going to be the case. 5 to 10 years ago the FW community was much smaller and such opportunities frequently arose, but this isn't going to commonly be the case today. I'd say the true turning point was when online shopping went from being something you did and your friends were skeptical of to being commonplace in mainstream America.



I agree, FW Deals were much better and easier to get just a few years ago, and now, real deals sell out quickly, and places like Woot, onesaleaday and such, usually get to the really hot items before I have a chance to get them.

For me to really consider FW Deal for resale, it would have to sell on eBay for 2x the deal price, for me to make money worth making the effort.

I do have an advantage over other sellers, as I can use corporate UPS discount (large Fortune 300 company) for personal use, (please don't ask, I will not share, as I don't want to be fired for sharing the account with a stranger). So, most of my UPS ground shipments from NY to CA are $5, unless it is a bulky item.

But, the items to buy are really hard to find these days.

I actually find that I do better re-selling locally through Craigslist. It's cash, andI don't have to ship.

I did roughly what you're proposing 12 years ago with a particular video game soundtrack. An unexpected item, but pure dumb luck led me to discover that I could buy them in bulk for $10 to $12 from a company that was importing them directly from some country on the other side of the planet. On eBay they typically sold for $25 to $50 each (I want to say this was back before "Buy It Now" was an option so everything was auction format). Couldn't sell more than one or two a day without flooding the market, but I was a college student at the time and it was a neat minimal-effort way to make a few extra bucks. Since then increased fees and increased competition killed the golden goose for me.

If you're able to find an item that other sellers have missed or have some other exclusive element that locks others out of the market you might be able to do okay with it. With that said, you really should repost your question in a few different threads across a few different FW forums:
You might post (or search) in the Online Auctions forum for info on minimizing shipping costs and maximizing the efficiency of your process. There may be some crossover, but most Finance members aren't going know the best eBay selling systems.

For the Finance crowd you might do better minimizing the specifics of your business and focusing more on soliciting general tax avoidance strategies and popular deductions other small business owners are using. Also, it helps if you demonstrate that you've done a little legwork yourself. For example, when you ask whether a smartphone might be deductible (which is a question that shouldn't be too hard to answer through a quick Internet search), we may make certain assumptions about you. If instead you write a posting that demonstrates you've done some research and offers some useful information related to that we're more likely to pitch in as well.

I think you're bringing up a good topics for discussion here, as I'm sure the question of whether or not someone could make a living reselling "hot deals" pops into many of our heads from time to time.

You list a lot of benefits from these activities and I would challenge you on how much capital they allow you to devote. Maybe these activities are worth tying up $2,000 for in inventory, time for cash to transfer from online accounts to your checking, and so on, however the returns after that may be incremental. When you look to deploy $50,000, these same tactics might not be nearly as lucrative. Your head is in the right place, just make sure it's going to use your full potential in the future and not just look good for the next year or two.

Mailman said:   I did roughly what you're proposing 12 years ago with a particular video game soundtrack. An unexpected item, but pure dumb luck led me to discover that I could buy them in bulk for $10 to $12 from a company that was importing them directly from some country on the other side of the planet. On eBay they typically sold for $25 to $50 each (I want to say this was back before "Buy It Now" was an option so everything was auction format). Couldn't sell more than one or two a day without flooding the market, but I was a college student at the time and it was a neat minimal-effort way to make a few extra bucks. Since then increased fees and increased competition killed the golden goose for me.

Wow! Me too! Chrono Trigger Soundtrack! I did nearly the exact same thing, every single detail. And we happened to meet on this forum, coincidentally, a decade later. Makes me think ideas like these aren't quite as unique as one would expect, but several of the OP's ideas/strategies still interest me and could apply to other small businesses in general.


Mailman said:   You're probably not the only guy out there reselling FW deals. This means when some crazy deal lets you buy a $200 item (that normally sells on eBay for $150) for $100 so are a number of other people. You may find that when it comes time to sell that the item is now going for $125 on eBay due to increased supply on the site. Your previous "worthwhile" deal now becomes a break-even proposition unless you're willing to sit on the item for a while and the sales volume is high enough that the price eventually recovers. Of course, you now have to create an auction listing (or copy/paste someone else's), get paid by the buyer, properly ship the item, and hope that the buyer doesn't try to scam you or that something else goes wrong along the way (e.g. buyer wants to return or item arrives broken) just to get your money back or make a minimal profit.

When the rare deal comes around where you truly are getting an in-demand item for half-price or less then profit potential exist, but for most hot deals this isn't going to be the case. 5 to 10 years ago the FW community was much smaller and such opportunities frequently arose, but this isn't going to commonly be the case today. I'd say the true turning point was when online shopping went from being something you did and your friends were skeptical of to being commonplace in mainstream America.


Yep, it isn't worth it unless have volume, and many deals you find on FW aren't the ones that let you get that effect (so if you make a little on each sale, with enough volume, it becomes worth it). I stopped actively selling a few years ago because all my efforts were chasing very few $'s. However, a few benefits arose, such as business checking accounts (nice bonuses), business CC (with night % back / bonuses). I still have that business checking account at chase since it is free and gets me premier personal checking account free by linking them.

However, if anyone is interested now, I'd say there is too much competition. Find some niche market that has high profit margins (such as selling Halloween cereal, before the WSJ article exposed, or currently, Twinkies before Hostess goes under <- though that's unlikely)

Three bees? Is that how you earned the name CRAZYtree?

http://www.fatwallet.com/forums/finance/902561/

TripleB said:
I generate so many useless threads that statistically speaking 1 in 1000 will strike gold

Technologist said:
Can you skip the next 990 or so, and do something useful?

Have you seen Magin Call?
first, smart or cheat.

Some FWs made a lot of money 7-8 years back. Its not that attractive anymore.

When the zombie apocalypse comes, ammo=currency.

futhey said:   Wow! Me too! Chrono Trigger Soundtrack! I did nearly the exact same thing, every single detail. And we happened to meet on this forum, coincidentally, a decade later. Makes me think ideas like these aren't quite as unique as one would expect, but several of the OP's ideas/strategies still interest me and could apply to other small businesses in general.In my case it was Final Fantasy VIII Soundtracks, but pretty close. In 1999 I was in the market for a deal on a Sony Playstation. I figured if the "new economy" could get me half-price DVD players and other insane deals that were common then, why not a cheap Playstation? Along comes a deal for a Playstation + FF8 game + FF8 soundtrack through some outfit called ActionAce for just a hair more than a Playstation normally sold for. I suspect I found it on Anandtech (back before Tim had even started up Fatwallet this used to be the deal site of choice), but can't seem to turn up the original posting...

Anyhow, they were selling the soundtrack on their site for $15 to anybody who wanted it. Meanwhile eBay auctions were closing for $25 to $50 for the very same item. How ActionAce made it as far as setting up their own import business, ecommerce site, and bizarre television commercial, yet never thought to list their items on eBay I have to wonder!
To sweeten the deal even more, this was back when PayPal was offering $10 free to anybody who signed up (not to mention the $10 they'd pay me for everybody I got to sign up via my auctions).

Great information dude. It will definitely help me in future.

These are not fringe benefits but straight cheating. It's one thing to be ignorant of tax laws but outright navigation to circumvent will not be looked upon favorably or with mercy.

Buying coffee at Starbucks and writing it off as business supplies
Buying toilet paper at Office Depot and calling it office expenses
Buying food at Staples and calling it business supplies
Buying gas, vanilla, and other gift cards at Office Max and calling it an office expense
Setting up a consultant business and expensing all your meals to client meetings

Remember they want receipts for all these deductions during an audit

sun818 said:   These are not fringe benefits but straight cheating. It's one thing to be ignorant of tax laws but outright navigation to circumvent will not be looked upon favorably or with mercy.

Buying coffee at Starbucks and writing it off as business supplies
Buying toilet paper at Office Depot and calling it office expenses
Buying food at Staples and calling it business supplies
Buying gas, vanilla, and other gift cards at Office Max and calling it an office expense
Setting up a consultant business and expensing all your meals to client meetings

Remember they want receipts for all these deductions during an audit


As long as any of the above are bona-fide business expenses, such as you have a office and buy toliet paper for maintaining it, or providing food for employees, etc, then that's fine. It becomes questionable, when your business is solely used to pass through personal expenses against business income.

Just put Zombie Killer on all the survivalist stuff and for some dumb reasons idiots will pay 20% more. I am amused by this tact but I guess if that is what morons want to spend their money on I would take it. My tip/trick there.

Crazytree said:   o

Ahem did someone ask for 3 lbs of bees?
http://www.fatwallet.com/forums/arcmessageview.php?catid=18&thre...

Mailman said:   futhey said:   Wow! Me too! Chrono Trigger Soundtrack! I did nearly the exact same thing, every single detail. And we happened to meet on this forum, coincidentally, a decade later. Makes me think ideas like these aren't quite as unique as one would expect, but several of the OP's ideas/strategies still interest me and could apply to other small businesses in general.In my case it was Final Fantasy VIII Soundtracks, but pretty close. In 1999 I was in the market for a deal on a Sony Playstation. I figured if the "new economy" could get me half-price DVD players and other insane deals that were common then, why not a cheap Playstation? Along comes a deal for a Playstation + FF8 game + FF8 soundtrack through some outfit called ActionAce for just a hair more than a Playstation normally sold for. I suspect I found it on Anandtech (back before Tim had even started up Fatwallet this used to be the deal site of choice), but can't seem to turn up the original posting...

Anyhow, they were selling the soundtrack on their site for $15 to anybody who wanted it. Meanwhile eBay auctions were closing for $25 to $50 for the very same item. How ActionAce made it as far as setting up their own import business, ecommerce site, and bizarre television commercial, yet never thought to list their items on eBay I have to wonder!
To sweeten the deal even more, this was back when PayPal was offering $10 free to anybody who signed up (not to mention the $10 they'd pay me for everybody I got to sign up via my auctions).

I don't care what anybody says, this story (and that TV commercial you linked to) made this whole thread worth it. Thanks Mailman for the details, and thanks UMT!

I used to do this a ton.

I have the Amazon Visa and they used to send 20% off a certain category each month. I'd find the most popular item (i.e.: 20% off Macbooks) put them up for sale at maybe $5+shipping below the retail, and once they sold I would order them with the 20% off, and have them shipped as a gift to the purchaser. I think I made around $5k doing that



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