Selling Thrift on eBay
One man’s trash is another man’s treasure. That time-worn idiom is perfectly personified every single day on eBay, which has made a science out of buying and selling other people’s stuff. For more than two decades, the San Jose, California-based company has cultivated an ecosystem that feeds on supply and demand. From top earners making hundreds of thousands a year to those just supplementing their income, eBay is saturated with sellers of all stripes catering to buyers.
Why People Sell Second-Hand Stuff on eBay
At the risk of overgeneralizing, eBay merchants are all essentially the same, regardless of the revenue they generate. They all likely stalk the same places to get their goods—basically anywhere other folks see fit to shed themselves of the superfluous stuff taking up space in their lives—and their common motivator is making money. Beyond that, however, each individual seller is bound to have a different answer if you ask them why they spend time seeking out and selling second-hand stuff.
Some see selling on eBay as merely a hobby, something they embark on to make a few extra bucks, while others sell stuff to make a living. And then there are those who are in it more for the thrill of the hunt. Take Gary Vaynerchuk, for instance. Known better online by his legion of fans and followers as Gary Vee, the renown motivational speaker, and self-made mogul spends many of his free Saturday afternoons scavenging for stuff he can flip (the increasingly popular term for buying and reselling second-hand items for profit) on eBay.
If you check out his "Trash Talk" episodes on his YouTube channel, you’ll find clips of him crisscrossing suburban neighborhoods in New Jersey, scurrying from garage sale to garage sale, rummaging through boxes of old stuff and haggling with homeowners trying to get great deals.
Vaynerchuk is an equal opportunity ogler. He’s down to buy anything, whether it’s action figures, Hot Wheels cars, board games, comic books, baseball cards, or mugs—he loves mugs. That’s his go-to. Every time he buys a mug for a few bucks that he knows he can turn around and flip for way more than that amount, the multi-millionaire gazes into the camera giddily and utters his catchphrase, “Mug life!”
With an estimated worth of at least $50 million, Vaynerchuk clearly isn’t relying on eBay sales to make a living. Just the same, you should see how jazzed the guy gets when he shares how much money he made.
At the end of each segment, he recaps what he picked up that day and what he later sold for on eBay. A serial entrepreneur, Vaynerchuk gets a charge out of the challenge of making money, and he’s eager to share his wealth of knowledge with anyone who will listen.
In 2017, he created the “Flip Challenge,” in which he encouraged his followers to cash in on eBay with whatever castoffs they could find with a goal of earning $20,170 in a year. His challenge launched a league of new resellers.
Real Life Reselling Success Stories
One of the resellers inspired by Vaynerchuk is Mike Langer, a music producer who made $20,000 in 2017 after taking the flip challenge. Langer says he started off selling items from around his house because he couldn't afford to spend money on sourcing. By the end of the year, after continually reinvesting his profits, he reached his goal.
As Langer proved, you can start small and scale-up. And once you’ve got money to work with, you can make a respectable living—and much more, depending on how much of an investment you want to make and how hard you want to work.
Take sellers like Ryan and Allison Roots, for instance. The Florida-based couple, who share their eBay-selling insights on their Ralli Roots YouTube channel, started their eBay business with $200 and grew their sales into more than $300,000 per year.
As they take viewers along with them while they scour the aisles of various thrift store searching for scores, the two energetic millenials make flipping seem like an easy endeavor. It’s genuinely hard to think of reasons why you wouldn’t want to get in on the action.
The thing is that while you get to see the serendipitous satisfaction of the pair finding items they can flip, you don’t necessarily get to see all the sweat equity it takes behind the scenes to be successful. It takes a lot of work to sell, and it isn’t as easy and straightforward as it seems.
The Challenges and Benefits of Doing Business on eBay
There are plenty of hurdles eBay sellers face when getting started. Perhaps the biggest one out of the gate is the competition you face when it comes to sourcing.
Thanks to the evangelizing of people like Vaynerchuk and the rising popularity of Netflix programs like “Slobby’s World,” in which Robert Hall, a Phoenix-based vintage clothing and memorabilia collector, shows how much money there is to be made selling second-hand stuff, more and more people are getting hip to the flip.
And so are thrift stores, which have gotten much savvier over the years when it comes to pricing. An item you used to be able to steal for a song now comes closer to costing what you’d pay retail. Some thrift stores are even more shrewd and list the more sought-after items on their own websites for auction. As a result, you’ve got to dig deeper to hit paydirt.
Likewise, if you want to make significant strides selling on eBay, you have to be dedicated and work diligently, almost like it’s a part-time job. Once you start scaling up, it can become a bonafide business, and you have to treat it that way. This can be quite time-consuming, especially if it’s just you running the business.
When you start selling on eBay, you’re in charge of the entire process from beginning to end. That means you’re tasked with purchasing, managing inventory, creating listings, taking photos, keeping records, handling fulfillment, and dealing with any disputes that may arise.
On top of all that, you have to keep close tabs on how much you’re selling because you’re responsible for paying taxes. Even if you hire somebody to help you with your finances, they’re going to need an accurate record of transactions and expenses so they can help you with your deductions.
But alas, when it comes to flipping stuff on eBay, the baby is worth the labor. If you persevere, you can profit. And the good news is getting into the game, you can set your own pace. You can grow the business gradually when you have free time, or you can go great guns and fully immerse yourself in the business. It’s up to you. It also doesn’t take a huge cash investment to start earning.
You can build up your resources by selling stuff you don’t use anymore. Then take that money and stock up on something inexpensive like coffee mugs, which you pick up fairly cheap from pretty much anywhere. And finally, use that profit and reinvest it in other stuff and keep repeating the cycle until you’ve built up an inventory.
What You Need to Get Started
So now that you know what you’re in for, here are the immediate things that you need to do to get started, assuming you’re starting from scratch.
Setting Up an eBay Account
With eBay, you can set up a personal account, a business account, or you can sign up for a store subscription. A personal account, which is ideal for a seller who is just starting out, allows you to buy and sell on eBay. Initially, the listings are limited with a free insertion rate for up to 50 items.
Once you're selling larger volumes, you can transition over to a business account or set up an eBay store by purchasing a monthly subscription. A business account allows you to send invoices and other communications with your business name and lets you include additional information to your listings, while a store gives you the opportunity to list more items and pay lower fees. Here is a breakdown of the different store account options.
- Starter: 100 fixed-price listings per month with no insertion fee ($.30 for additional listings), along with a final value fee of 10% with $750 maximum. This subscription is $4.95 per month with an annual subscription.
- Basic: 250 fixed-price or auction listings per month with no insertion fee ($.25 for additional listings), along with a final value fee of 4.915% with $350 maximum. This subscription is $21.95 per month with an annual subscription.
- Premium: 1000 fixed-price and 500 auction listings per month with no insertion fee ($.10 for additional listings), along with a final value fee of 4.915% with $350 maximum. This subscription is $59.95 per month with an annual subscription.
- Anchor: 10,000 fixed-price and 1000 auction listings per month with no insertion fee ($.05 for additional listings), along with a final value fee of 4.915% with $250 maximum. This subscription is $299.95 per month with an annual subscription.
- Enterprise: 100,000 fixed-price and 2500 auction listings per month with no insertion fee ($.05 for additional listings), along with a final value fee of 4.915% with $250 maximum. This subscription is $2,999.95 per month with an annual subscription.
Setting Up a PayPal Account
PayPal is the standard service used to accept and process payments on eBay. In order to sell on eBay, sellers need to set up a basic account, which allows sellers to accept payments from buyers directly.
Setting up a PayPal account is as simple as visiting the company's website and providing your name and email address. From there, you can add your credit, debit, or bank account info, and you're ready to go.
With the option of linking directly with your bank account, it makes the process of getting paid pretty seamless. Although a basic account is suitable for almost all buyers, there is a business option available that provide multiple logins and access for employees.
An important note: When you're first starting out as a seller, PayPal may hold onto payments for up to 21 days until you've established a history. The preliminary holds are generally relaxed 90 days after a seller has successfully completed a transaction or if you have made more than 25 sales or earned at least $250.
Dealing with Taxes
While it’s always best to consult an accountant with specific questions with regards to your taxes, the basic information that you need to know if that if you are selling anything on eBay for profit, you are responsible for reporting your income. This is true whether you consider your eBay endeavors to be a hobby or a legitimate business.
There are only two instances where this directive does not apply. If you’re someone who is only occasionally selling items around the house, say, clearing out the clutter from your crawlspace, or you’re selling things you own for less than you paid for them. That’s it. For every other scenario, you liable to report any money you make as income to the Internal Revenue Service (IRS).
Really, the only distinction the IRS is concerned with when it comes to distinguishing between a hobbyist who works part-time and someone who makes thousands of dollars a year as a business is which form they use to report income.
If how much you’ve sold, how much you’ve earned, and how much time you’ve spent selling is minimal, you probably fit into the former category and can simply report the additional income on your standard 1040 form.
If you’re doing higher volume and specifically finding items to flip for a profit, you fit into the latter category and need to file a schedule C, which means that you’re eligible to claim standard small business deductions.
If you’re doing a high volume of business—that is, earning more than $20,000 annually with more than 200 transactions—PayPal (who handles all financial transactions, as opposed to eBay, and reports your earnings to the IRS if it exceeds that threshold) will send you a 1099-K form letting you know how much you made and how much you’ll need to report.
It’s important to note that you will only get this form from PayPal if your earnings exceed the $20,000/200 threshold. Otherwise, you’ll need to track and report your income yourself. The way PayPal tallies income is by combining total gross profit with fees, which is a good benchmark to follow if you’re keeping track of your own earnings. If you live in Vermont or Massachusetts and sell on eBay, the threshold for PayPal to report earnings to the IRS is $600.
There are other distinctions to know about when it comes to filing your taxes, such as the rules for filing your taxes if you’re running a business with your spouse. In that case, you’ll generally use a 1065 form, unless you can be considered a Qualified Joint Venture or a sole proprietor. If that scenario applies to you, it’s best to ask an accountant to spell out the finite details.
To make the filing process easier for yourself or to assist an accountant if you hire somebody to help with your finances, here are some practical things you can do in your day-to-day business to ensure you're submitting accurate information:
- Log Your Purchases: Log every purchase you make along with the amount paid and a brief description that differentiates it from the rest of your stock.
- Keep Track of What You’ve Sold: Tally this ledger or spreadsheet often and use it to track net profits and the success (or failure) of different types of goods.
Finding Places to Source
Now comes the fun part—finding stuff to sell. The primary sources for scoring second-hand stuff are thrift stores, yard sales, garage sales, flea markets, swap meets, pawnshops, antique stores, and estate sales.
And while there are several helpful apps that can help point you in the right direction such as Yard Sale Treasure Map and EstateSales.net, the best way to pinpoint the places to source near you is to consult Yelp or search any of those options on Google Maps, Apple Maps, or even the Waze app. That will tell you what’s in your area and provide directions.
Beyond that, there are several alternative sources that you can search from the comfort of a cozy chair at your house, including the Letgo and OfferUp apps, Facebook Marketplace, and the less vetted but old faithful standby, Craigslist. The deals you’ll find may or may not be on par with what you’d get by grinding it out on the primary source trail, but the search is a little more targeted with these options.
Considerations When You’re Ready to Start Sourcing
Before you start pounding the pavement, there is one parameter you need to establish to avoid spinning your wheels with fruitless searches, and that’s what profit margin is palatable to you. Some people are content making a few extra bucks buying and then selling something, while others won’t bother unless they’re making $15 to $20 profit on each item they source.
Once you nail down what that figure, you can then you can assess each item that you find and determine if it’s worth buying. There are a few ways to do this. If you download the eBay app, you can use the search function to see what the item is selling for by other sellers. Then use the search filter to narrow down the results to see the price of the sold items and contrast that with the current asking prices to get an average market value.
If the item has a bar code, you can save yourself some typing and just scan the code in the app. This valuation is even easier if you visit Checkaflip.com. If you type in the item you’re looking for, it will return both results side-by-side, so you can see exactly what the averages are for both sold and active listings.
Armed with that information, you can weigh your total investment, including fees and shipping (which can range from $4 to $20, depending on the weight and dimensions) versus the cost of the item and make an informed purchasing decision.
The Listing Process
After an afternoon of sourcing when you return home with all of your fresh finds, the first things you’ll want to do is sort through everything and see what needs to be cleaned, washed, or pressed. If you haven’t already, now is a good time to test everything electronic or mechanical and to remove any stickers and residue or take off any tags.
Inspecting Your Items and Taking Notes
Once you’ve done that, you should take some time to examine everything you bought individually. Hold the items up in good light and make note of any deficiencies—dents, scratches, dings, chips, stains, holes, tears, blemishes, fading paint or discoloration—or any other signs of wear and tear.
Be sure to disclose all of that information when you write up your listing and bolster that with close-up images of whatever flaws you happen to notice. After you’ve done all that, figure out a way to organize everything so you can find it easily after it’s listed. To help with that:
- Attach Item Numbers to Items: The moment you list an item, affix a sticker or post-it note to it with the listing number in question.
- Keep Track of What You’re Selling: Maintain a ledger or spreadsheet that lists at the very least an item number, brief description, what you paid, what it sells for, whether or not you've shipped it yet, whether you received feedback yet, and whether you've left feedback yet.
Writing the Title and Item Description
Next, you’re ready to write up your title and listings. Be as accurate as possible. With the title, you want to be sure to include the name of the item, the brand, and any applicable sizes or model numbers.
With the listing, be as thorough as possible with your description, pointing out everything there is to know about the item you’re listing: Note whether it’s new or used, what the looks like, how big it is, what shape it’s in, what brand it is, if it has any removable parts (and if they are all intact), and anything else you can think of to disclose. Make sure you pick the right category when you list and feel free to use similar listings as a reference if you need to.
When you take pictures, you want to convey the same elements but with images. eBay suggests using a tripod to take high-resolution photos on a plain background, being careful to include shots from every possible angle to show any deficiencies you noticed when you inspected the item. Consider the competition when you’re putting together your presentation. Anything you can do to stand out from all the other listings of other sellers selling similar or identical goods will make a buyer more apt to buy from you.
This part of the process is just as important as preparing your listings. When it comes time to ship an item after you’ve sold, take care to make sure you’re packing the product nicely and securely to ensure you’re providing a good presentation when your buyer opens the package and getting a good impression of you and that it arrives in one piece.
For packaging purposes, it’s worth investing in large colored tissue paper and twine, packing peanuts, bubble wrap, tape or a tape dispenser and Sharpie markers to write on the box or envelope. If you haven’t already, invest in a scale and tape measure, so you can enter in the weight and dimensions of your item on the eBay shipping calculator to find out how much it’s going to cost you to ship the item.
Once everything is ready to send, print out the order form to include in the package, tape everything up, slap on a label and take it to the post office (or reach out to a delivery service to arrange pick up) and provide a tracking number to your buyer. Follow up a few days later when the item is received to thank the buyer for their purchase and let them know that their feedback is appreciated.