Need accounting help re consignment
cardpool
Posts: 199
I'm just about finished selling off a vintage card collection for a distant relative.
We're splitting the profits down the middle.
But what about the fees (listing, final value, PSA fees, paypal, postage, bubble mailers)? All of these fees have gone to my cc and paypal account. Am I to take out 50% of those fees from his 50%?
I calculated his 50% simply by subtracting all costs from gross and dividing in half.
Am I missing something here?
(Math has never been my forte)
We're splitting the profits down the middle.
But what about the fees (listing, final value, PSA fees, paypal, postage, bubble mailers)? All of these fees have gone to my cc and paypal account. Am I to take out 50% of those fees from his 50%?
I calculated his 50% simply by subtracting all costs from gross and dividing in half.
Am I missing something here?
(Math has never been my forte)
Take the plunge into my ebay store
0
Comments
However, an argument could be made you should get reimbursed for all of your costs first and then split the rest. I have posted two examples
Split profits
Selling price of cards 100
Listing costs (5)
packaging costs (10)
Mailing costs (10)
Profit 75
Split 37.50 to each
Reimburse your expenses first
Selling price of cards 100
Listing costs (5)
packaging costs (10)
Mailing costs (10)
Profit 75
Reimburse your costs (25)
Remaining to split 50
Split $25 to each
You would end up with $50 in this example and $37.50 above.
In the end, it is really what you and distant relative decided on as fair.
Collecting Tony Perez PSA and Rookie Baseball PSA
Credit that amount to your side of the sheet.
The pot will be right.
<< <i>Your original post indicated you are splitting the "profits" 50/50 and not the "proceeds" which would imply you should determine total selling price and then back out the cost to list, cost to mail, cost of packaging, etc. Then that would give you the net number to then split.
However, an argument could be made you should get reimbursed for all of your costs first and then split the rest. I have posted two examples
Split profits
Selling price of cards 100
Listing costs (5)
packaging costs (10)
Mailing costs (10)
Profit 75
Split 37.50 to each
Reimburse your expenses first
Selling price of cards 100
Listing costs (5)
packaging costs (10)
Mailing costs (10)
Profit 75
Reimburse your costs (25)
Remaining to split 50
Split $25 to each
You would end up with $50 in this example and $37.50 above.
In the end, it is really what you and distant relative decided on as fair. >>
I certainly want to be fair and don't want to get on the short side of the stick by mistake here.
He's not paying for any costs ahead of time. I would take all of his costs out of his profit in the end to make things simple (for him!)
<< <i>Deduct 50% of the "costs of sale" from your relative's share.
Credit that amount to your side of the sheet.
The pot will be right. >>
To be clear, with the example being used here in this thread, the second example is correct by mcholke?
Regardless of the split, you need to calculate all of your total out of pocket expenses (ie grading, eBay, shipping).
1) You can tell him to reimburse 100% of your expenses and then split the total sales.
2) Get reimbursed 50% of your expenses and then split the sales
3) Eat the expenses and split the sales.
Depending on your relationship and his cost basis, a fair deal would be #2.
However, if your return (percentage gained on out of pocket expense and value of your time) is HUGE, the "right" thing to do is option 3.
Having said that, if it was a major hassle and prevented you from doing other things, I would suggest #1
Profit (after fees): $135.50 /2 = 67.75
Total Fees: 28.45 /2 = 14.23
My share = 67.75
His share = 53.52 (67.75 - 14.23)
Correct?
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You each pay 50% of the "costs of sale."
Deduct his half of those costs from his 50/50 share of the gross proceeds.
Credit that amount to your side of the sheet; you will then have each paid
50% of the "costs of sale."
I think there maybe some overthinking going on here. If gross sales are $100 and costs are $25, the total profit is $75. Give your relative half the profit $37.50, keep $63.50 for yourself which covers the $25 costs you've paid as well as your half of the profit.
<< <i>Stown, rather than get reimbursed, I think I would just cut him a check after taking 50% of the total expenses out of his profit share. Isn't it the same as your #2? >>
Edited: NO, it's not. I'll elaborate now..
Say you sold a total of $1,000 and your expenses were $500.
If you just split it off the gross, you net $0 while he nets $500 (assuming he has $0 basis).
Same scenario:
You take $250 off the gross (1/2 of your expenses) and then cut the remaining $750 in 1/2 which is $375 each.
<< <i>I'm just about finished selling off a vintage card collection for a distant relative.
We're splitting the profits down the middle.
But what about the fees (listing, final value, PSA fees, paypal, postage, bubble mailers)? All of these fees have gone to my cc and paypal account. Am I to take out 50% of those fees from his 50%?
I calculated his 50% simply by subtracting all costs from gross and dividing in half.
Am I missing something here?
(Math has never been my forte)
This should all have been ironed out before selling or listing a single card.....
<< <i>
<< <i>I'm just about finished selling off a vintage card collection for a distant relative.
We're splitting the profits down the middle.
But what about the fees (listing, final value, PSA fees, paypal, postage, bubble mailers)? All of these fees have gone to my cc and paypal account. Am I to take out 50% of those fees from his 50%?
I calculated his 50% simply by subtracting all costs from gross and dividing in half.
Am I missing something here?
(Math has never been my forte)
This should all have been ironed out before selling or listing a single card..... >>
I know
Sales $100
collected shipping/handling $25
total collected $125
ebay fees $15
paypal fees $5
shipping costs including postage $15
total expenses $35
net profit $90
his share $45
You can't deduct shipping costs you paid out and not include shipping money you received if you're splitting profit 50/50
<< <i>Here's a real life example of one set of cards:
Profit (after fees): $135.50 /2 = 67.75
Total Fees: 28.45 /2 = 14.23
My share = 67.75
His share = 53.52 (67.75 - 14.23)
Correct? >>
That is correct.
Figure out what his share is in your expenses. Take whatever number that is off the top of your GROSS sales and then split the remaining pot.
<< <i>Don't forget to add in what you collected for shipping and handling to the gross sales.
Sales $100
collected shipping/handling $25
total collected $125
ebay fees $15
paypal fees $5
shipping costs including postage $15
total expenses $35
net profit $90
his share $45
You can't deduct shipping costs you paid out and not include shipping money you received if you're splitting profit 50/50 >>
I've covered this: I call my gross your "total collected."
And I've adjusted shipping to be included the way you stated it.
<< <i>Having said that, you need to calculate your shipping and grading fees as well.
Figure out what his share is in your expenses. Take whatever number that is off the top of your GROSS sales and then split the remaining pot. >>
I have taken grading fees into account as well.
<< <i>I think there maybe some overthinking going on here. If gross sales are $100 and costs are $25, the total profit is $75. Give your relative half the profit $37.50, keep $63.50 for yourself which covers the $25 costs you've paid as well as your half of the profit. >>
Problem with this is I'm not getting $63.50. Ebay and paypal are getting part of it. Wouldn't it be fair for my relative to share part of what I'm not seeing in fees?
That's a dilly of a pickle and I'm not eloquent enough to explain how to do it
<< <i>Um, no. >>
Yeah, I realized afterwards that wouldn't work, hence the edit
You have to calculate what your listing fees will be prior to splitting the pot.
Or you could just be a nice relative and eat the fees
Let me try to water this down:
Split the profit 50/50 after all costs and fees.
Divide all the fees in half and deduct this half from the 50% profit share going to my relative and I get the rest.
Comprende?
<< <i>I think you should tell the relative that after all the fees other expenses, that you actually lost money--therefore he owes you 50% of the loss.
LOL...I wish.
Split the profit 50/50 after all costs and fees.
Divide all the fees in half and deduct this half from the 50% profit share going to my relative and I get the rest.
Comprende?
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No.
If you want to split the fees with your relative.............................
1. Put all the money you collected in the pot. (Gross Proceeds)
2. Split the pot 50/50; half to you, half to the relative.
3. Calculate the total costs of sale. Deduct 50% of that amount
from your relative's pot and put it in your pot.
You will have each paid half the costs of sale, and each received half of the NET PROCEEDS.
Very Simple.
I think the problem here is in your use of the word "profit."
Profit is what is remaining after paying all expenses. If you paid money to Ebay/Paypal/PSA/USPS those amounts are added up and the total is subtracted from all monies collected (Gross Receipts - Expenses) to equal "Profit" or net profit.
It sounds like you agreed to split the profit, so the literal interpitation is to first remove expenses and split what is left.
The way you are using "profit" above one would suggest you mean gross recpeipts and therefor are splitting the monies collected yet you are to cover all expenses....
If we understand your use of the word "profit" when you made the agreement you will have your answer. It really could go either way. I suggest you politely ask the person who you made the agreement with, without discussing any sales or expense numbers, if he/she expected you to pay all of the expenses. That way you know what they expect and meeting expectations is the key to making the deal fair for both parties.
Mike
Kirby Puckett Master Set
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BEFORE you sold the stuff, that would have been a fine inquiry.
Now, it will make you look like a goofey-cheapskate, and your
relative will be offended; even if they do not tell you so.
If the fees are not a large percentage of the gross, consider eating them.
Shows good will and avoids possible conflicts.
/ $0.02
http://www.unisquare.com/store/brick/
Ralph
Just wanted to do the right thing and not screw up the math.
as long as you are charging reasonable shipping fees do not factor those in - you keep the shipping money and you incur the shipping expense