Would it surprise you to learn that many highly successful and profitable ebay sellers actually purchase their merchandise and goods at on-site or offline auctions? Well it's true.

1. Make sure that you always get to on-site auctions on time so that you have a chance to check out what is to be sold... and decide what you are going to bid on. While looking over the goods that are to be sold, take note of others looking over the goods that you want because they will be the ones that will be bidding against you.

2. Make every effort to introduce yourself to the auctioneer, and tell him what you are interested in. Many times he may state what he thinks it will go for, or the restricted price that the owner may have reserved for it. Some auctioneers like to start their own bids. They make you think they have a bid for a certain amount, when they really do not have a thing.

The first bid is the auctioneer's own. When this is obvious, he can be stopped by no one bidding at all. There are some auctioneers like this... who always grab a truck load of goods they bought themselves. An auctioneer may also be stopped by bidding just a quarter over his starting bid. If no one else bids against you, you will get the goods for the starting bid of a quarter... unless only dollar bids are accepted.

Many times an auctioneer will quickly change his tactics when he sees the crowd is on to him. He will simply add another item, and ask for a buck over the last bid. If no one bids, he will throw both items on a pile to be sold later. Surprisingly, that whole pile may go for less than the last bid asked, and you can grab a bunch of valuable goods for your ebay online auction... if you are the bidder.

3. While you should be comfortable at an on-site auction, you should not place yourself in an obvious position where you can be easily seen. Bid cautiously, raising your hand to your chest, extending one or more fingers according to your bid, or raise your card if you have the numbered system. To bid half, raise your hand with the palm down. Never raise your arm full length and wave because you will certainly be outbidden. If you are not certain your bid has been accepted, point one finger at yourself so the auctioneer sees you, and he will nod yes or no.

4. When the numbering system is used at an auction, you must register, and keep your card in view of the auctioneer. Be sure to hand in, or destroy the card when leaving because thieves may pick it up to use it to charge merchandise to you. The card may also be used at another sale to avoid paying for goods... until the auctioneer or clerk realizes there are two of the same numbers.

Use the back of your card to keep a tally of the prices and purchases as you buy. Where cards are not used, keep a book because many dishonest clerks rake money off the top by overcharging, and adding items you did not buy.

5. Talk to the auctioneer, but do not annoy the customers with senseless talk. A friendly auctioneer can be worth a pot of gold. Help the auctioneer along by starting bids on slow objects you do not intend to buy... but have a starting and stopping place so you do not get stuck with them.

6. Beware of bystanders who purposely engage you in conversation all the time, bidding behind your back on goods they know you want. Look out for the person who thinks you know all the good items, watches you closely, and bids just over you... because they think whatever you bid, it's really worth more. Get rid of them by bidding the items much over their worth, quit suddenly, and let them make the final bid. If they bite, they will be stuck with it.

There are those that will bid any price until they get what they want... whether it's worth it or not. These people get stuck most of the time, but they do get what they want. When there are several of this type present... you may as well go home, for all you will get is the junk.

Last, but not least. Mistakes can easily be made at auctions. If you have concerns about the amount you are expected to pay... you need to go over the items one by one with the clerk to make the corrections. It pays to be careful.

Follow these simple tips, and you should always end up with plenty of goods at below bargain prices that you can resell on ebay for a small fortune.

One of the most common mistakes people make is to go to a search engine and search for wholesale suppliers online. Unfortunately, search engines are NOT a good way to find legitimate wholesaler suppliers. Real wholesalers will most likely not be going to be found via a search engine. What they will find is that 99% of the time the if you found a wholesaler supplier though a search engine, it will be a scam artist.

They set themselves up with a real wholesale supplier and then promote themselves as a supplier. They raise the prices of the goods and simply pass on any orders they get to the real wholesaler. The prices are so high that is will be impossible to make any money with them. Some, if not most, will charge a monthly fee to use their service and they will tell you that you do not need a reseller's license to set up an account with them.

A real wholesaler will require that you provide proof that you are a legitimate business. This generally includes a business license and a sales tax permit. The actual name of the needed documents vary by state. These documents are absolutely vital in order to deal with real wholesalers. Don't let this detail scare you! These are really not that hard to get and unless you incorporate, will not require a lawyer. These can be obtained at your county courthouse and they will guide you in any other documents you need.

To summarize, a real wholesaler will:

1. Not be found on the internet with a search engine.
2. Require some form of proof that you are a real business.
3. Will not charge a set-up fee or a monthly access fee.

If you find a wholesaler that does not fit these criteria, then you may have found a scam artist posing as a wholesaler.

First of all, it should be duly noted that eBay is an online market/transaction facilitator. It merely becomes a means for the buyer and the seller to meet.

When eBay connects buyer and seller, the transactions truly begin…as well as the headaches.

Even with the automated nature of most of today’s transactions, eBay is still built on the basic foundation of trading: trust.

A good deal of trust is involved in eBay trading. The buyer has to trust that the seller is listing a legitimate item, and that he or she will deliver that item when paid. The seller, on the other hand, has to trust the buyer to pay fully and without any hidden catches.

Here are a few of the problems one may encounter when using eBay.

- Seller does not deliver product

This is a buyer’s biggest fear. However, it is also one of the most common snags buyers encounter. Usually, when closing a deal, the seller will email purchase instructions to the buyer. This will usually include instructions for payment. The seller will then promise to have the item delivered upon receipt of payment.

If the buyer, after fulfilling his or her part, does not receive the item within the agreed upon date, he or she should immediately try contacting the seller. If this proves to be fruitless, he or she should file a complaint with eBay for assistance regarding the transaction.

- Seller delivers a different/defective product

Sometimes the trading is smooth. Everything goes according to schedule. However, upon receipt of the item, the buyer finds out that the item is significantly different from its description on eBay.

What should the buyer do about this?

Good communication between the buyer and seller usually brings about a speedy and satisfying end to any trading dispute. This should always be the first step when handling a dispute.

- Seller cannot be contacted for questions when closing deal

Most disputes come about due to miscommunication between seller and buyer. But if the seller can not be contacted, that presents a bigger problem for the buyer – especially if that person has already fulfilled payment of the item. Contacting eBay may help to resolve this problem and they are sometimes willing to supply further information about the seller.

Another point to consider when you search the ebay motorcycle section is to specify the location that you want the motorcycle to be near. Any eBay motorcycle that you are interested in should be close to your home address so that you can go and see the motorcycle before placing a bid. This also makes collecting the motorcycle much easier. The search function allows you to specify that you want the eBay motorcycle to be within a certain radius of a town or zip or postal code.

The eBay motorcycle section is sub-divided into brands so it is a good idea to browse the appropriate category as you may find an item that you have never thought of. For example, if you look in "Honda" within the eBay motorcycle section you may well come across a framed print that would look great on your bedroom wall or a Honda team cap that you can wear when you take your motorcycle helmet off.

Most importantly, you need to be particularly cautious when you are searching for an item in the eBay motorcycle section to prevent you from being ripped off by unscrupulous con artists. On no account should you send an advance payment for any item in eBay motorcycle section. It is important to do your research and check the vendor's details and verify that the time for sale in the marketplace is legitimate.

Have you found out everything you possibly could about your items? Try typing their names into a search engine – you might find out something you didn’t know. If someone else is selling the same thing as you, then always try to provide more information about it than they do.

Have you got pictures of the items? It’s worth taking the time to photograph your items, especially if you have a digital camera. If you get serious about eBay but don’t have a camera, then you will probably want to invest in one at some point.

Are you emailing your sellers? It’s worth sending a brief email when transactions go through: something like a simple “Thank you for buying my item, please let me know when you have sent the payment”. Follow this up with “Thanks for your payment, I have posted your [item name] today”. You will be surprised how many problems you will avoid just by communicating this way.

Also, are you checking your emails? Remember that potential buyers can send you email about anything at any time, and not answering these emails will just make them go somewhere else instead of buying from you.

Do your item description pages have everything that buyers need to know? If you’re planning to offer international delivery, then it’s good to make a list of the charges to different counties and display it on each auction. If you have any special terms and conditions (for example, if you will give a refund on any item as long as it hasn’t been opened), then you should make sure these are displayed too.

Have you been wrapping your items correctly? Your wrapping should be professional for the best impression: use appropriately sized envelopes or parcels, wrap the item in bubble wrap to stop it from getting damaged, and print labels instead of hand-writing addresses. Oh, and always use first class post – don’t be cheap.

Do you follow up? It is worth sending out an email a few days after you post an item, saying “Is everything alright with your purchase? I hope you received it and it was as you expected.” This might sound like giving the customer an opportunity to complain, but you should be trying to help your customers, not take their money and run.

Being a really good eBay seller, more than anything else, is about providing genuinely good and honest customer service. That’s the only foolproof way to protect your reputation. Of course, you might be wondering by now whether it’s really worth all the hassle to get a good reputation on eBay. Won’t people buy from you anyway, and couldn’t you just open a new account if it really comes down to that? Our next email will set you straight.

The bad news is that there’s only one way to beat the sniper – and that’s to become the sniper. The good news, though, is that once you understand sniping you can use it to win auctions at a far lower price than you would otherwise.

Manual sniping isn’t that hard, if you have a lot of time to spare and a reasonably fast Internet connection. Write down when each auction that are bidding on ends, and then make sure that you’re sitting there in front of the page for that vital last minute. You can then outbid the current winning bidder, or defend your own winning bid.

The only tip you really need to remember for manual sniping is to make sure that you set your maximum bid quite high – otherwise you might be automatically outbid, and the auction will have ended before you can bid again.

Also, it’s not worth your time to compete against someone who is using an automated sniping service – if it’s any good, then they will always manage to outbid you. In the sniping arms race, you need to find a sniper of your own.

Automatic Sniping.

If you type ‘ebay sniping’ into your favourite search engine, you’ll come up with plenty of online services that will snipe on your behalf for a small fee. They usually let you have a free trial, so give it a go.

If you don’t want to pay each time for an online service, then you might be better off getting a piece of software like iSnipeIt (www.isnipeit.com) or SnipeRight (www.sniperight.com). You can pay for these once and use them for as long as you want. Once you’ve installed the software on your computer, you tell it which auctions you want sniped and the maximum amount you’re willing to pay. The software will then place the bid with only a few seconds left. The only disadvantage is that you need to be able to leave your computer on nearly all the time, or you might miss the end of some auctions.

A Sniping Alternative.

If this all sounds a bit too much like playing dirty for you, there is another, more low-tech way to get around sniping. You can just email the seller and say that you were sniped at the last minute but would really like the item. If they have another to sell, the chances are they’ll agree to sell it to you for the price the auction closed at.

Of course, there’s more to eBay than just bidding – the site offers a whole set of tools to help you manage your auctions.

Andale offer lots of small products instead of one solution that does everything: you can take your pick from a lister, image hosting, counters, analysers, a gallery, a checkout and an email manager. The price plans are a bit of a maze, but quite reasonable as long as you don’t go and use everything.

Andale’s real claim to fame is that they’ve been doing it for so long – they’re not some fly-by-night organisation, and many eBay sellers have been using their free counters for absolutely years. They also have a reputation for being very responsive to customers, and will often talk to you directly on their forums and implement any suggestions you might have for improving their software.

Vendio (www.vendio.com).

Vendio offer two editions of their software, Sales Manager: a Merchandising edition and an Inventory edition. The difference between the two is that the Merchandising edition is designed to make it easier to list individual auctions, while the Inventory edition is for sellers who sell many of the same item. They offer a pay-as-you go price of 10c per auction.

They also offer software called Tickets Manager, special software for people who sell lots of tickets on eBay – an odd product to have, but useful if you happen to sell tickets. Other services offered by Vendio include web and image hosting, fancy Flash galleries of your products for your listings, and stores.

ChannelAdvisor (www.channeladvisor.com).

ChannelAdvisor offer their software in three versions: Enterprise, Merchant and Pro. Enterprise and Merchant are both designed for very big businesses, though, and the chances are that the Pro version does everything you’d want. ChannelAdvisor is popular among sellers who want a solution that they know is used and trusted on a very large scale by enterprise-level customers.

It offers all the standard bulk listing and inventory features, as well as the unique feature of being able to create auctions from an Excel spreadsheet of your inventory. The cost is high, though, at $29.95 per month.

And Many, Many More…

eBay maintain a comprehensive directory of third-party software, which you can browse through anytime you have a few days to kill. You can look either for complete solutions or for each part of what you want individually – the choice is so daunting that there’s bound to be something out there for you. You can look at their directory at http://cgi6.ebay.com/ws/eBayISAPI.dll?SolutionsDirectory.

Once your items have sold and you’re about to ship them, you might be a little nervous about whether you can trust your buyer. Our next email will give you a few tips for spotting problem buyers before you send them anything.

Each time you buy or sell something on eBay, people can leave feedback for you, and you can leave feedback for them. This feedback can be positive, negative, or neutral, along with a comment. Your feedback rating, then, is worked out using a very simple sum: the number of positive feedback comments people have left for you, minus the number of negative ones. This means that someone with a feedback rating of 28, for example, might have 30 positive ratings and 2 negative ones.

Always leave feedback for others: People will feel an obligation to leave feedback for you if you leave it for them (eBay will send you an email after each transaction to offer you the opportunity). Take the time to write a positive comment about sellers who do what they should and the chances are they’ll do the same for you.

Pay promptly: Sellers love nothing more than to be paid promptly – paying as soon as the auction ends saves the seller all sorts of worry, especially if you pay by credit card or another electronic method. You will often find that your positive feedback appears within a few minutes of you paying if you pay as soon as the auction ends.

Don’t be a difficult customer: Understand that your seller might take a day or so to respond to you, and perhaps a few days to send your item – harassing them is nasty and unnecessary, and won’t get you good feedback.

Build relationships: If a seller sells a lot of a certain kind of thing you like, buy from them a few more times. They will be very happy to find a regular customer, and will go out of their way to leave positive feedback like ‘a joy to deal with as ever’. Also, they might offer you a few special deals!

Sellers won’t generally be reluctant to sell to buyers without much of a reputation, simply because it is the buyer who takes most of the risk in a transaction. It is worth remembering, however, that transactions where you are the seller and where you are the buyer are counted towards the same feedback total – so if you ever want to start selling, being a good buyer is especially worthwhile.

On eBay, people pay far more attention to sellers’ ratings than they do to buyers’ – most sellers can’t be bothered to check their buyers’ feedback, while bad feedback on a seller can (and should) be a dealbreaker. When you are buying, then, you need to worry more about the seller’s reputation than you do about your own, and that’s why the next email will be all about sellers’ feedback ratings.

This only goes to show that most good marketing ideas can be adopted for the internet. Instead of cutting coupons out from newspapers or carton boxes, eBay gives out electronic copies of coupons to purchase merchandise. The coupons are fast and easy to use.

Coupons are routinely sent by eBay to members who then use them to pay for items through PayPal. The coupons signify specific discounts that can be applied to the purchase of items.

To use an eBay Coupon one must buy an item where the seller accepts PayPal as a payment method. Upon payment of the item using PayPal, an opportunity will be given to the buyer to enter a coupon redemption code and receive the discount.

Sharing Coupons

Some coupons from eBay can be shared with other people while some can only be used by the owner. If the coupon indicates that only a specific email address may use the coupon, it may not be shared.

Coupons and Your eBay and PayPal Accounts

To use the coupons the owner must have a PayPay and an eBay account. If the owner does not have these accounts, he or she must sign up for them to avail of the discounts. PayPal lets you pay securely over the Internet using a credit card, checking account, or a PayPal account balance.

Important Restrictions

Upon winning an eBay auction, the bidder is required to purchase the item even if the coupons they are holding turn out to be invalid for the auction.

Also, coupons can only be used one-at-a-time. This means that Gift Certificates, single coupons, or eBay Anything Points are valid for only one auction and only one type can be used each time.

One more restriction is that the coupons cannot be used for Half.com purchases.

Items must also meet all coupon requirements and must be paid for in ten days from the closing of the auction on eBay.

Coupons have expiry dates. Coupon holders should take note of the expiry dates noted on the coupons.

Sellers may also configure their listings to accept coupons. To accomplish this, the seller must accept PayPal as a payment mode. If a coupon is used in the purchase of one of the seller’s items, the value of the coupon is forwarded to the seller as it's equivalent in regular currency.

Use a good light source and check the item out very carefully, noting the name, identification marks, and any copyright marks. Also, check for any imperfections, tears, scratches, color imperfections, mars, stains, etc.

Many dolls are collected with the box intact. An intact box can raise the value of an item a great deal. Some are worthless if the box is damaged badly or missing.

Remove the doll from the box for inspection. Look for forums, discussion boards, or news groups where similar collectors gather online. You can also check on eBay (or other online auctions) to see what similar items are selling for and what their condition was at the time of sale. Compare the prices with, and without a box to see the difference.

To find your item on eBay:

1. Find the category on eBay where your item would most likely be listed. (Dolls, bears, trains, Disney collectable would be likely categories.

2. If using Dolls, use the [check only in Dolls box] in the search.

3. Use your keyword to search, such as "Barbie doll". This will bring up the current auctions window.

4. Now, check the completed auctions box, to check out the prices and descriptions on the sold items.

5. When you click on the individual auctions, you can see the price the item sold for, the condition of the item and whether it had a box. Look for terms such as NRFB (Never Removed From Box) or MIB (Mint In Box).

Note that the price on eBay is not the best price for your item. Usually, the price could be more if sold locally because the online auction buyer cannot actually handle the item and examine it in person.

Other places to find information about your item (doll) would be websites selling your item (doll), antique or boutique shops, toy or hobby shops, and resell shops. Also, check out the resource books at the public library.

Popular collectibles might have a price book that is printed for collectors. You can also use a collection of hobby magazines to price items or to locate the year the item was made.

If you have done all of the above and still cannot find the information that you need about your item, check out some local hobby clubs in your area. Most hobby enthusiasts will be willing to help you find the information you need and are eager to talk about their hobby. You might even find an expert on your items, or a buyer!!

Before you begin you’ll need some basic equipment: Computer, Internet access, digital camera, and some space to put your stuff. That’s really all you’ll need to get started. You’ll also need shipping and packing supplies but that is addressed later.

Next you’ll need to learn how to list auctions. Go to the eBay sellers overview: http://pages.ebay.com/education/sellingtips/index.html. This will be your lifeline. There is a plethora of information there on everything you always wanted to know and more. Don’t be overwhelmed; just take it one step at a time. You’ll see there is information on listings, on bidding, on photos, on feedback – it’s all there.

Although you need experience, you don’t want to list something that isn’t likely to sell. Do your research first before you invest the time in putting together a listing. An easy method to use is do a “search” on eBay, then look up COMPLETED ITEMS, then sort by HIGHEST price. Then you’ll see if your Tommy Bahama shirt is really worth anything. Or you’ll see that your old baseball cards had 23 listings and not one of them sold.

Pricing is another challenge. Again, you’ll need to do your research. See what they’re going for. Don’t have overly high expectations. You know how you feel when you go to a garage sale and you see a pair of jeans for $15 or books for $4 each. Many people come to eBay to look for a bargain. Consider how much you have into the item. If you have an item from around the house, you may consider that something is better than nothing, so you may be inclined to start the bidding quite low. If you bought it with the specific intention to resell, you will, at the very minimum, want to break even, so take the price you paid for it and consider other costs, i.e. listing fees, final value fees (all explained in your lifeline – eBay seller overview above). People are much more apt to bid if the bidding starts LOW. Sometimes though, you will have collectibles that are worth a chunk of money. Don’t give away that vintage postcard that is worth $56! Do your homework.

The next big question is how do you get paid? You determine what you would accept. Online payments such as PayPal (paypal.com) are very convenient. You can also decide that you’ll accept money orders or personal checks. The more options you leave your buyers, the more likelihood you’ll get more bids.

You also need to decide how you want to ship your items to the winners. Many sellers use USPS, others prefer UPS. If you use USPS and ship via Priority Mail, you can get your envelopes and boxes free from USPS. If you ship First Class or Parcel Post or UPS, you’ll have to shop around for deals on boxes or envelopes and bubble wrap or packing peanuts.

Overwhelmed yet? Yes there is a lot to learn, but it’s not nuclear science. Just take it one step at a time. It’s a learning process. Some yahoo groups (or MSN or AOL, or whatever your preference) are great sources for support and camaraderie with others who are doing the same.

So in summary, if you want to just “start pushing buttons” and learn on your own, YOU CAN DO IT. If you do better chatting with others, those resources are available too. Use what is available.

Up to this point we have educated you on a few basic important tips when it comes to keeping good records of your ebay selling business and a detailed journal of your expenses and receipts. You were also given the basics on learning what a balance sheet and an income statement is in relation to your ebay selling business, as well as understanding gross profit and your gross profit margin.

By now you are probably asking yourself, "Is there a simple way for me to keep track of everything pertaining to my ebay selling business?" The answer is yes, there is. In fact you are encouraged to read the following information and advice about how to create a system for keeping track of your sales and expenses.

You need a bookkeeping system!

Before you read on it is important to understand that there is no single system that is better than another when keeping records of your ebay selling business. Amazingly, some people can do well enough with just a pencil and a set of legal pads. But for the majority of us we need a little more help then just pen and a blank sheet of paper.

If you are like me, then you need all the help you can get to better organize your ebay seller business. And although I will give you some basic advice on some helpful tools, you will ultimately have to form the paperwork habits then best suites your needs. You may use whatever methods that best keeps you on top of your numbers and properly report the transactions of your ebay seller business.

As a general rule of thumb, you will need the following parts of a bookkeeping system:

1. You will need to keep track of your ebay seller business's list of accounts or categories that you will record in a general ledger. This is called a Chart of Accounts. Some examples of "accounts" would be your rent, utility bills, insurance, advertising costs, Internet and home office costs, etc.

2. Your ebay seller business bookkeeping system should have a detailed record of your business's income and expenses, your assets and liabilities, and of course the owner's equity. You can easily keep track of these items with a General Ledger.

3. Any office store will be able to provide you with an Accounts Receivable Statement. This record-keeping tool will help you keep track of any amount of payments that are owed to your ebay seller business for amounts uncollected.

4. No ebay seller business, or any other business for that matter, can be properly tracked without an Inventory Listing. An inventory listing is just a matter of easily keeping track of the items that you have for sale to your ebay customers.

Any of the above types or record keeping tools can just be created with a blank sheet of paper and pencil but it is wise to just invest in the office supplies that are already made for such records. In general, all you want to do is create a system that is easy to use and will make both your life and your ebay seller business as simple as possible. The easiest way to keep track of your sales is to list your totals for each day. Then you will be able to total sales for each month and set goals of your ebay seller business grand total for the year.

=========================================
Jason James is a 10 year Internet marketing veteran and an eBay Power Seller of 4 years. His website "The Auction Resource Network" reveals his inside secrets, tips, and sources that help him pocket over $10,000 per month on eBay. His proven step-by-step system shows even users with little or no business experience how they too can make huge profits selling products at online auctions.
=========================================

Also in part one, we then closed the end of the ebay home business article by explaining the definitions of gross profit and gross profit margin. These two categories of incoming profits are important to help you understand what you are earning and which direction you want those earnings to go in.

Ok, back to business. In today's article we are going to help you understand your tax responsibilities. If you were like me at the beginning of my ebay home business, then you probably can find any reason possible NOT to go through the trouble of keeping formal bookkeeping records of your ebay business. Unfortunately for us small business people, the IRS tax law overrules whatever reason we have to justify not keeping the books up do date for our ebay home business. The law states that you must keep very detailed records of your ebay income, your ebay expenses, your assets, and even your liabilities.

By keeping these ebay home business records accurately recorded, you will be enabled to properly report on your tax return every bit of income that comes in from that ebay home business. You will also then be able to claim any and all write-offs that are connected to your business.

What are "Write-offs"? They are deductions that you can subtract when having the tax paperwork completed for your ebay home business. Let me give you an example:

Let's say that you sell Antique products as your main source of income for your ebay home business. Each day you get in your car and drive around town and visit flee markets, swap meets, and yard sales to find hot deals on Antiques. You will then turn around and resell these same Antiques on Ebay for big time profits. Your tax responsibility here is to keep track of the exact mileage you used up in your vehicle. This information can be used as a tax write-off. And of course don't forget to save your gas receipts for extra tax benefits!

Next I'm going to bring up an ugly word that give many ebay home business owners the chills. The "audit". If you are unfamiliar with the term audit or have never experienced getting audited then allow me to explain it to you.

As much as you may not like their reach of power, the IRS has the legal right to view all of your ebay home business records if they should ask. This is not an assumption, it is the truth. Should this happen, then you will be what is called "audited". And if you are one of those unlucky ones that are audited then you had better be prepared with detailed, complete, and truthful business records. You do not want to have missed important tax claims or filed inaccurate reports in the past because if an audit should happen then those negative actions could jeopardize your ebay home business.

Last but not least, we are going to leave you with understanding what financial type records that you will need to show to a bank if you are applying for a loan to help expand and grow your ebay home business. The first one is called a balance sheet. The second is called an income statement.

Income Statement: An income statement consists of a list of your assets, liabilities and what you have invested into your business. And by the way, any amount of funding that you "invested" into your ebay home business is called equity.

Income Statement: This statement is simply a list showing all of the income and all of the expenses of your ebay home business within a specified period of time. This "specified period of time" is usually quarterly or yearly, depending on how often you attend to your taxes.

=========================================
Jason James is a 10 year Internet marketing veteran and an eBay Power Seller of 4 years. His website "The Auction Resource Network" reveals his inside secrets, tips, and sources that help him pocket over $10,000 per month on eBay. His proven step-by-step system shows even users with little or no business experience how they too can make huge profits selling products at online auctions.
=========================================

Good... Now that I have your attention I want to be honest with you. Today's article does not really have any well kept "secrets" or magic wands with bells and whistles that will make you a rich ebay seller overnight. Instead, we are going to discuss the importance of keeping a proper paperwork train moving along so that your ebay business can stay strong and thrive based around good record-keeping.

I realize that this topic is a dry one but trust me, keeping good records of your ebay seller business can make or break you in the long run. As boring as it is, the advice you are about to be given is rock solid for anyone like you who wants to become wealthy as an ebay seller. It only takes one time to get audited by the IRS before everything can come crashing down on you and your business as an ebay seller. In addition to the tax law, without proper paperwork tracking, your business has no direction and will ultimately fail.

1. Without keeping records of everything pertaining to being an ebay seller and the sales you have made then how else will you be able to gouge your progress? A detailed paperwork trail will show you how well or how poorly your business is doing. If becoming an ebay seller full time is your goal, then keeping good records is key.

2. Second, the tax law requires you to keep records of your business. Unfortunately the law is the law and there is no choice in the matter, even if you are just a small-time ebay seller trying to make it big.

3. You may need a business loan or other type of loan from a financial institution someday. Many power ebay sellers jump-started their ebay business by obtaining a loan from the bank and you can too, provided you have kept good records as an ebay seller. Most loan applications require a ton of paperwork and all of the details and history of your business.

Tracking your Ebay business is not just for the IRS:

If I were to ask you today how your business is doing as an ebay seller, what would your answer be and what would determine that opinion? It's not enough just to say that you are doing good in your business. Instead, your answer should be calculated from your paperwork records, by tracking specific items.

In other words, keeping detailed records of your ebay seller business is not only for the purpose of the IRS but also to help you create a profitable business plan based on actual facts. For example, do you know which ads are pulling in the most sales? Do you have the history of testing and tracking on the ads that are not pulling in sales? Are your profit margins high enough to cover your business expenses? What percentage is profit?

It would obviously be impossible to accurately answer these questions unless you were the kind of ebay seller that kept good business records. And if you have not started documenting and saving copies of everything pertaining to your ebay business, then it is never too late to start! With a little commitment and self discipline, you can get into the habit of keeping the books up to date immediately.

Taking that first step:

Getting started with keeping the books up to date with your ebay seller business is kind of like doing that big chore that you have been putting off for a long time. You know you can do it, you know it needs to be done, but getting started just seems like a mountain to climb.

Well let's break that mountain into a molehill today and get started with explaining to you about profits margins and gross profit margins.

1. What is Gross Profit? Gross profit is your starting point in order to determine profitability from being an ebay seller. You simply subtract the total cost of your inventory that you have sold from the total revenue that you earned for the sales.

2. What is a Gross Profit Margin? A gross profit margin is a determination of how profitable you are as an ebay seller. You will know this information by dividing your gross profit by your total revenues. The higher the percentage is, the better off you are as a profitable ebay seller.

=========================================
Jason James is a 10 year Internet marketing veteran and an eBay Power Seller of 4 years. His website "The Auction Resource Network" reveals his inside secrets, tips, and sources that help him pocket over $10,000 per month on eBay. His proven step-by-step system shows even users with little or no business experience how they too can make huge profits selling products at online auctions.
=========================================

In today's article you will learn the importance of tracking your ebay business inventory and how to sell from that inventory, whether as FIFO or LIFO. Running an ebay powerseller business means that you are reaching a great point of success with your business and in order to stay successful you will need to account for your inventory meticulously.

How to figure out your ebay powerseller business inventory

Technically speaking, "inventory" refers to any merchandise that you hold in your home office or your business office that are for sale to your customers. Not only does this include items that you have on hand to sell to your customers but it also includes any supplies that will become part of the item. For example, if you are selling electronic equipment then any spare parts like speakers, knobs, wires, etc. are part of your inventory list.

How to report your inventory at the end of the year for taxes

When it comes time for you to report your income for the tax man, you do not report your ebay powerseller items separately. Instead, everything within your ebay stock should be lumped together under the umbrella of "inventory".

In order to know what income to report, you should have recorded what your ebay inventory was at the beginning of the work year. This is called "opening inventory". Next, you will need to have accurate records of what items that you bought during the year and added to your ebay powerseller inventory. And of course, your "closing inventory" is what is left at the end of the year.

Now that you have all three of the above categories accurately recorded then you will be able to arrive at one key number. This is called "your cost of goods sold". And this number enables you to figure what you made on your sales for the year when submitting this information in for tax purposes.

Understanding LIFO and FIFO

What do these two terms have to do with keeping records and tracking inventory? Let's start with FIFO. This means "first in - first out". In other words, let's say that that you resell books as an ebay powerseller. In January, you purchased a set of wholesale books that cost you $3.00 each. Then in May you purchased another set of books to resell that cost you $5.00 each. If you sold all of the books from the first set before selling the second set, then those were "first in and first out" (FIFO).

Next we have the term LIFO and this stands for "last in - first out". With LIFO, you would sell all of your ebay powerseller book items from the last stock purchase you made, before you resell the first batch.

Which is best for your ebay powerseller business? That is up to you. The one you select will invariably affect your cost of goods sold, which, in turn, will affect your profit for the year. The method you choose will depend on the trend in prices. Simply choose a method that you can live with for years to come and one that fits within the IRS regulations.

When prices are rising, then using LIFO will result in a larger cost of goods sold so that closing inventory will be higher and your reportable profits will be lower. But when prices fall, the opposite result occurs - you'll wind up paying more taxes with LIFO than if you'd used FIFO.

=========================================
Jason James is a 10 year Internet marketing veteran and an eBay Power Seller of 4 years. His website "The Auction Resource Network" reveals his inside secrets, tips, and sources that help him pocket over $10,000 per month on eBay. His proven step-by-step system shows even users with little or no business experience how they too can make huge profits selling products at online auctions.
=========================================