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Coin dealing from an Ebay specific angle
coin22lover
Posts: 3,542 ✭✭✭
I am considering setting aside about 10 grand and trying my hand at the old Ebay game. I have sold roughly 300 coins worth $1 up to $500 or so since I first signed up on there 12 years ago and everything has been flawless. Even though I've always been a light/hobby seller who never made a profit overall, I'm quite familiar with all the functions and tricks surrounding the Bay and Paypal.
I was thinking that I could base the whole operation primarily off Ebay, buying my coins in large quantity in the $25-$250 range or so from occasional sellers with perhaps bad pictures and with no loyal buyers, while at the same time providing great pictures, consistent weekly auctions, and a very buyer friendly experience--and those 3 things would be my selling points, not so much the coins. I think this approach could be highly successful based on watching other sellers.
There are a few questions on my mind, and probably some that I can't think of to ask right now. How would things work with taxes if I'm buying 100 items a week and then selling 100 items the next week, every week? Would I just be going over 3 figures---gross sales minus cost, minus expenses?
Thoughts on this method of becoming a dealer?
I was thinking that I could base the whole operation primarily off Ebay, buying my coins in large quantity in the $25-$250 range or so from occasional sellers with perhaps bad pictures and with no loyal buyers, while at the same time providing great pictures, consistent weekly auctions, and a very buyer friendly experience--and those 3 things would be my selling points, not so much the coins. I think this approach could be highly successful based on watching other sellers.
There are a few questions on my mind, and probably some that I can't think of to ask right now. How would things work with taxes if I'm buying 100 items a week and then selling 100 items the next week, every week? Would I just be going over 3 figures---gross sales minus cost, minus expenses?
Thoughts on this method of becoming a dealer?
0
Comments
<< <i>Thoughts on this method of becoming a dealer? >>
Sounds more like a hobbyist than a dealer.
<< <i>I am considering setting aside about 10 grand and trying my hand at the old Ebay game. I have sold roughly 300 coins worth $1 up to $500 or so since I first signed up on there 12 years ago and everything has been flawless. Even though I've always been a light/hobby seller who never made a profit overall, I'm quite familiar with all the functions and tricks surrounding the Bay and Paypal.
I was thinking that I could base the whole operation primarily off Ebay, buying my coins in large quantity in the $25-$250 range or so from occasional sellers with perhaps bad pictures and with no loyal buyers, while at the same time providing great pictures, consistent weekly auctions, and a very buyer friendly experience--and those 3 things would be my selling points, not so much the coins. I think this approach could be highly successful based on watching other sellers.
There are a few questions on my mind, and probably some that I can't think of to ask right now. How would things work with taxes if I'm buying 100 items a week and then selling 100 items the next week, every week? Would I just be going over 3 figures---gross sales minus cost, minus expenses?
Thoughts on this method of becoming a dealer? >>
I wouldn't necessarily figure it as being a dealer. I'd look at it as hoping to get lucky.
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<< <i>Thoughts on this method of becoming a dealer? >>
Sounds more like a hobbyist than a dealer. >>
Selling 100 coins a week for profit = hobbyist?
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<< <i>Thoughts on this method of becoming a dealer? >>
Sounds more like a hobbyist than a dealer. >>
Selling 100 coins a week for profit = hobbyist? >>
Absolutely! If you can't/aren't making a living at it; to me it's a hobby. If you do it for love... hobby. If you do it for profit and aren't making any money... still a hobby!
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<< <i>Thoughts on this method of becoming a dealer? >>
Sounds more like a hobbyist than a dealer. >>
Selling 100 coins a week for profit = hobbyist? >>
Absolutely! If you can't/aren't making a living at it; to me it's a hobby. If you do it for love... hobby. If you do it for profit and aren't making any money... still a hobby!
Right, I agree. I do the ebay thing and rarely do I ever score something profitable. I've had a few good scores in the past, but as of recently...yeah, good luck! Cleaned coins are rampant in the "getting lucky" department and you either have to eat your costs with those with no return policy who don't know what they're talking about (ethics here) or you can be the pain in the behind type who complains because he didn't make 3k off 30 dollars. I eat my costs when I gamble and quite frankly, I've accumulated a box of saflips containing lots of cleaned coins. Honestly, good luck. Really. I don't think it's worthy titling yourself a dealer. Hobbyist at best as per our llafoe's comments.
coin22lover: it sounds like a great and fun usage of your time. I am absolutely in favor of you doing this! And when you do so, please give us some results from time to time as I am definitely rooting for you making it into a nice side income and even perhaps more!
Also one extension to your eBay selling arm should be the BST. You can simultaneously offer them here for a bit less and avoid the paypal/ebay fees.
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<< <i>Thoughts on this method of becoming a dealer? >>
Sounds more like a hobbyist than a dealer. >>
Selling 100 coins a week for profit = hobbyist? >>
Absolutely! If you can't/aren't making a living at it; to me it's a hobby. If you do it for love... hobby. If you do it for profit and aren't making any money... still a hobby!
It's not what you think, it is what the IRS thinks. I haven't been involved in tax preparation in a long time now but there use to be the 3 out of 5 year rule. Basically, you have to make a profit 3 out of 5 years and had an accumulative profit over the 5 years for it to be considered not a hobby. You can have 10 small businesses and make a living but not off any single one.
I would reach the IRS site or seek advice from a tax expert in your area. For a small fee, he can tell you the rules very quickly.
Have fun and make some money.
Andrew
Please visit my website Millcitynumismatics.com
<< <i>So what are the pros and cons of being a hobbyist -vs- a dealer? Are there real world implications or is that just something to say. >>
eBay is a very expensive method for building a "dealership" as for every good fortune story related on these forums, there are literally hundreds of misfortune stories that are untold.
eBay is a Hobbyists venue and not really a Coin Dealers venue.
Over the years, I've sold about $50,000 worth of stuff that probably cost me $55,000 to acquire which simply means I've spent $5,000 to enjoy my Hobby. I don't consider myself a dealer although others might. But then they don;t have all the facts like my tax preparer does.
Occasionally I make a great sale but more often than not I technically lose money on a lot more transactions.
Maybe I should become a full time dealer?
I mean, I could use the weight loss from not eating.
The name is LEE!
<< <i>After you get the IRS sorted out, the real fun begins with state and local taxes/registrations/fees. >>
Isn't that the truth!!!!!!!
Out of every 100 coins, you will break even on around 60. You will lose money on about 20 and you will make money on around 20. The key is to make more money on the winning 20 than you lose on the losing 20. This is just a guestimate based on dabbling in this over the last couple of years. I have used this method to supliment my collection. (taking the profits and buying coins I want)
Good luck, I wouldn't expect to get rich using this model.
Bullion-related items are keeping most small dealers in business, not coins that would interest typical collectors.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
<< <i>If you make a profit it's not a hobby.
coin22lover: it sounds like a great and fun usage of your time. I am absolutely in favor of you doing this! And when you do so, please give us some results from time to time as I am definitely rooting for you making it into a nice side income and even perhaps more!
Also one extension to your eBay selling arm should be the BST. You can simultaneously offer them here for a bit less and avoid the paypal/ebay fees. >>
There's many hobbies that have a definate probability for profit i'd think. A hunter profits with food on the table as does a gardener , fishermen it's the same thing. Video gamers have a sponsered world championships as does snooker , and darts etc .. metal detecting is a hobby that has no other goal but making a profit.From my time on coin forums i sense that most coin collectors main goal is to realise a profit in the future and i'd imagine it goes similar for stamps and baseball cards , it might be fair to say there are few hobbies that don't eventually turn a profit.Even my Sis who knits has a long list of people who pay up front to have a sweater.
Russ, NCNE
Edit to add my eBay fees last year were more than $1500.00.
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<< <i>If you make a profit it's not a hobby.
coin22lover: it sounds like a great and fun usage of your time. I am absolutely in favor of you doing this! And when you do so, please give us some results from time to time as I am definitely rooting for you making it into a nice side income and even perhaps more!
Also one extension to your eBay selling arm should be the BST. You can simultaneously offer them here for a bit less and avoid the paypal/ebay fees. >>
There's many hobbies that have a definate probability for profit i'd think. A hunter profits with food on the table as does a gardener , fishermen it's the same thing. Video gamers have a sponsered world championships as does snooker , and darts etc .. metal detecting is a hobby that has no other goal but making a profit.From my time on coin forums i sense that most coin collectors main goal is to realise a profit in the future and i'd imagine it goes similar for stamps and baseball cards , it might be fair to say there are few hobbies that don't eventually turn a profit.Even my Sis who knits has a long list of people who pay up front to have a sweater. >>
Profitable for *some*. Most of the participants of each of the hobbies you described do NOT turn a profit. Even hunters have to buy a "tag" every year for the chance of getting a buck every so often. Guns and a nice 4-wheeler or other gear more than eat into the profit.
Check out the metal detecting forum and subtract out only the cost of the metal detector and you will see that very few of them make a profit as most find only a few meager items.
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<< <i>If you make a profit it's not a hobby.
coin22lover: it sounds like a great and fun usage of your time. I am absolutely in favor of you doing this! And when you do so, please give us some results from time to time as I am definitely rooting for you making it into a nice side income and even perhaps more!
Also one extension to your eBay selling arm should be the BST. You can simultaneously offer them here for a bit less and avoid the paypal/ebay fees. >>
There's many hobbies that have a definate probability for profit i'd think. A hunter profits with food on the table as does a gardener , fishermen it's the same thing. Video gamers have a sponsered world championships as does snooker , and darts etc .. metal detecting is a hobby that has no other goal but making a profit.From my time on coin forums i sense that most coin collectors main goal is to realise a profit in the future and i'd imagine it goes similar for stamps and baseball cards , it might be fair to say there are few hobbies that don't eventually turn a profit.Even my Sis who knits has a long list of people who pay up front to have a sweater. >>
Profitable for *some*. Most of the participants of each of the hobbies you described do NOT turn a profit. Even hunters have to buy a "tag" every year for the chance of getting a buck every so often. Guns and a nice 4-wheeler or other gear more than eat into the profit.
Check out the metal detecting forum and subtract out only the cost of the metal detector and you will see that very few of them make a profit as most find only a few meager items. >>
Fair enough to a point , a hunter doesnt need a 4 wheeler though nor the fancy como's and bells & Whistles. A rifle and a bullet does the job. Buying a license to hunt is the "entrance fee" to the hobby i suppose.
Ive personally metal detected in 4 different countries over a 30 year span , the most ive ever put out on a machine was around $200. I understand that some of these machines can and do cost much more but like the hunters 4 wheeler and camo hat it's not vital to the hobby to have the best.
It's all about applying oneself , doing the research and putting in the time and effort as to any profit.Currently the detector i have cost me under $50 2nd hand , one of the first coins i found was a CC dime which paid for the machine itself , everything else is profit.
If i go out and pay 900 dollars for a detector it's going to take longer to start showing profit but inthe right hands and the right place it's not a tall order.Otherwise people simply wouldnt be buying them.
<< <i>Fair enough to a point , a hunter doesnt need a 4 wheeler though nor the fancy como's and bells & Whistles. A rifle and a bullet does the job. Buying a license to hunt is the "entrance fee" to the hobby i suppose.
Ive personally metal detected in 4 different countries over a 30 year span , the most ive ever put out on a machine was around $200. I understand that some of these machines can and do cost much more but like the hunters 4 wheeler and camo hat it's not vital to the hobby to have the best.
It's all about applying oneself , doing the research and putting in the time and effort as to any profit.Currently the detector i have cost me under $50 2nd hand , one of the first coins i found was a CC dime which paid for the machine itself , everything else is profit.
If i go out and pay 900 dollars for a detector it's going to take longer to start showing profit but inthe right hands and the right place it's not a tall order.Otherwise people simply wouldnt be buying them. >>
But isn't it more fun just to have fun instead of trying to eek out a small profit? I know it's a heck of a lot more fun for me to just have fun with my hobbies and spend my work actually working. Where my hourly wage is substantially higher I might add!
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<< <i>Fair enough to a point , a hunter doesnt need a 4 wheeler though nor the fancy como's and bells & Whistles. A rifle and a bullet does the job. Buying a license to hunt is the "entrance fee" to the hobby i suppose.
Ive personally metal detected in 4 different countries over a 30 year span , the most ive ever put out on a machine was around $200. I understand that some of these machines can and do cost much more but like the hunters 4 wheeler and camo hat it's not vital to the hobby to have the best.
It's all about applying oneself , doing the research and putting in the time and effort as to any profit.Currently the detector i have cost me under $50 2nd hand , one of the first coins i found was a CC dime which paid for the machine itself , everything else is profit.
If i go out and pay 900 dollars for a detector it's going to take longer to start showing profit but inthe right hands and the right place it's not a tall order.Otherwise people simply wouldnt be buying them. >>
But isn't it more fun just to have fun instead of trying to eek out a small profit? I know it's a heck of a lot more fun for me to just have fun with my hobbies and spend my work actually working. Where my hourly wage is substantially higher I might add!
Of course it is , that's why we make it our hobby. It doesnt take away the fact that most people are in a heck of a lot of hobbies primarily for the profit though.We need look no further than our own board here and the many threads that discuss profit and loss.
little over several years. It was fun and I enjoyed the hunt, but have tired lately.
Now, here's what I found, taxes aside. Ebay and Paypal fees as well as mailing and packaging and
insurance fees eat up your profit very quickly.
Let me explain very simply:
You buy a coin for $500 on a lousy pic but a nice date. You get it and it's what you hoped for and is
really worth $700. So, back up it goes and wallah, it does sell for the $700 you figured! Yea!! But,
now comes the reality. Ebay took 12%, Paypal took 3%, USPS took 3% with insurance and the good
free shipping you offered. Not counting any time involved or printing and ink, etc, I figure you have
$700 less 18% or you net is about $575. If you do that often enough, well and good, as you will make
a decent 10-12% profit. But, you need to do that over and over to make a living. And, no losses as
you only have enough money to do this 20 times. If you go cheaper than say $500 each then the ratios
remain the same but you just have to do it a lot more times each month. 5 coins a week at the $500
each would net about $1,600 a month if all went well.
Just crunch your numbers and see what come up. It might be different that mine were.
Good luck,
bob
<< <i>I would not want to discourage you. Heck, I tried it only to find that I broke even or maybe lost a
little over several years. It was fun and I enjoyed the hunt, but have tired lately.
Now, here's what I found, taxes aside. Ebay and Paypal fees as well as mailing and packaging and
insurance fees eat up your profit very quickly.
Let me explain very simply:
You buy a coin for $500 on a lousy pic but a nice date. You get it and it's what you hoped for and is
really worth $700. So, back up it goes and wallah, it does sell for the $700 you figured! Yea!! But,
now comes the reality. Ebay took 12%, Paypal took 3%, USPS took 3% with insurance and the good
free shipping you offered. Not counting any time involved or printing and ink, etc, I figure you have
$700 less 18% or you net is about $575. If you do that often enough, well and good, as you will make
a decent 10-12% profit. But, you need to do that over and over to make a living. And, no losses as
you only have enough money to do this 20 times. If you go cheaper than say $500 each then the ratios
remain the same but you just have to do it a lot more times each month. 5 coins a week at the $500
each would net about $1,600 a month if all went well.
Just crunch your numbers and see what come up. It might be different that mine were.
Good luck,
bob >>
This opinion appears to be flawless and should be stickied for any that want to consider eBay "flipping" as a business.
In honor of the memory of Cpl. Michael E. Thompson
<< <i>My opinion is that you are being far too optimistic with respect to this plan. >>
As I once was...
PS you are starting out with more buying power (10K) than I did!
<< <i>I say go for it! I quit my job so I could spend more time on my school work and when I am not with my family or doing school work I am on ebay sniffing around for deals! I have supported my family off ebaying for over 8 months now and havent heard a single one of them complain about needing something. Funny thing is all of my coins are consigned to 4 different sellers. That means I have a consignment fee on top of ebay fees on top of paypal fees and I still have over doubled my money! Send me a PM and I can lead you to a few that are no brainers!
PS you are starting out with more buying power (10K) than I did! >>
Wow, I'm super impressed!
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<< <i>I would not want to discourage you. Heck, I tried it only to find that I broke even or maybe lost a
little over several years. It was fun and I enjoyed the hunt, but have tired lately.
Now, here's what I found, taxes aside. Ebay and Paypal fees as well as mailing and packaging and
insurance fees eat up your profit very quickly.
Let me explain very simply:
You buy a coin for $500 on a lousy pic but a nice date. You get it and it's what you hoped for and is
really worth $700. So, back up it goes and wallah, it does sell for the $700 you figured! Yea!! But,
now comes the reality. Ebay took 12%, Paypal took 3%, USPS took 3% with insurance and the good
free shipping you offered. Not counting any time involved or printing and ink, etc, I figure you have
$700 less 18% or you net is about $575. If you do that often enough, well and good, as you will make
a decent 10-12% profit. But, you need to do that over and over to make a living. And, no losses as
you only have enough money to do this 20 times. If you go cheaper than say $500 each then the ratios
remain the same but you just have to do it a lot more times each month. 5 coins a week at the $500
each would net about $1,600 a month if all went well.
Just crunch your numbers and see what come up. It might be different that mine were.
Good luck,
bob >>
This opinion appears to be flawless and should be stickied for any that want to consider eBay "flipping" as a business. >>
Except for that fact that his numbers are wrong. eBay doesn't take 12% on a $700 sale. If it's a fixed price listing, the fee would be $45, or 6.4%. Even less if it's an auction.
Russ, NCNE
I do not sell a lot on ebay anymore but i have found a lot of mom and pop businesses have zero intrest in the internet, those types are a good source to pick up material. Just one example, i was in a small gun store a few weeks back and bought 6 rifle scopes, (weatherby's, red field, weavers etc) and gave 400 for all. Took 3 days to get rid of them for a little over 1300. I may never sell another scope on ebay or i may stumble across 200of them next week. If i thought i would only make 100 bucks off of all the scopes i would pass. I am greedy. One thing to keep in mind, if you figure out something that works well on ebay, 1 to 3 months later you will have others doing the same thing. I had the market covered a few years back on chromed grand national parts and making 1000's a month, 3 months later there were 5 or 6 others sellers doing the same, so i moved on to the next deal.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"