Saturday, May 19, 2012

A coin collection flips into profits

Ebay's New Richie Rich
My son's buddy came bounding into our house recently to do a little eBay bragging. Knowing I am the eBay gunslinger in these here parts, the young whippersnapper couldn't wait to tell me all about the big money he was recently making on eBay. It couldn't have come at a better time for the kid. Like a lot of newly minted college grads in a tough economy, he was between jobs and nearly broke. But lo and behold, he was now claiming to be raking it in on eBay. I was a little skeptical at first. But the kid insisted I check out his eBay listings to back up his boasts. So I humored the eager-beaver, condescendingly clicking on his seller account and fully expecting to find a bunch of lame baseball cards or similar. What I found instead nearly made my jaw hit the keyboard. Normally I am not easily impressed, but in this case I let out several stunned, "Wows!" The kid wasn't just blowing smoke-he was making major dollars that would put even this DUDE to shame! For a few brief seconds I hated the kid! How dare this rookie jump into eBay and hit home runs in his first go-round! Didn't he understand you first have to put your time in through eBay trial and error before seeing big profits? Once I worked through my emotions however, I learned the kid had pretty much stumbled across an awesome selling opportunity. His story proves you don't always have to be good at finding eBay inventory....sometimes you only have to be lucky!

After I picked my jaw up off the keyboard, the young entrepreneur gave me the back story on his finds. In hyper-excited tones, he told me about his friend who's grandfather recently passed away. His friend had inherited his grandfather's coin collection along with other neat collectibles. The grandfather wasn't super wealthy-just a regular guy who collected lots of different stuff including stamps, Franklin Mint items and most importantly-coins. The coins in question were not fancy numismatic rarities. Most were just standard mint sets and special commemorative editions purchased directly from the US Mint over 30 years. The entire collection was stored in several Tupperware storage containers. The cache was so big that the grandson was overwhelmed and intimidated with the thought of having to liquidate the countless sets. He also didn't know the first thing about selling on Bay. That's when the kid stepped in.

Something about being broke can really motivate a person. Smelling an opportunity to make some fast bucks, the kid made a sharp business proposition to the grandson. He offered to sell the coins and other collectibles on eBay, handling everything from photos to posting auctions and shipping. For his efforts he wanted 35% of the gross sales. It was a pretty fair commission considering some eBay sell-it stores ask as much as 50%. The grandson, looking to quickly liquidate the collection agreed. With a deal in place, hot-shot carted off the old timer's life-long coin collection and began his auctions.

By now you're probably wondering how much did the kid actually make? Okay, so here's where the fun begins. In the interest of bringing my readers useful, accurate information, I cyber-stalked the kid's completed auctions and added up his sales. In a recent two week period, this upstart punk, whoops...I mean young entrepreneur, had total sales of $6800! Several of his auctions closed at sky-high prices of $500 to $1100 per set. Overall, he averaged just under $140 per auction. Doing the math, the kid's commission for just that two weeks came to $2400 dollars! Keep in mind he's been at this for about four weeks, so he may have earned close to $5000 in commissions in a month! I am not sure if the kid has reached the bottom of the old timer's Tupperware containers yet. But either way, those are some awesome profits he's making!

The kid's coin selling deal proves consignment selling can be another great money making opportunity on eBay.
Like the kid, have you ever sold consignment items for a friend or relative? If so, how did it work out for you? Send in your stories and we'll post them.
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20 comments:

  1. I sell sometimes for my sister. She usually does not have high end items but I did sell a lot of 3 Orbitz Drinks for $75 I posted a blog about it. I took 50% after fees

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    1. beckyp-Nice....I didn't know Orbitz drinks were a big deal until just now! What other hot items are you keeping from us?! jk...Ha!

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    2. maybe you should read my blog to keep up lol

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  2. I have done some small selling for relatives. I am more worried about big consignment sales though in light of the mandatory 1099-k that us ebay and amazon sellers face this year. I plan on getting above the 200 item / 20k threshold to receive mandatory itemized monthly deductions.

    I wonder how that will affect the sell-it and other consigner sales on ebay. If you sell $5,000 for a friend or client, but only received $2,000 in commissions, you still have to claim the entire $5 grand in that monthly deduction minus your buy price/fee's/postal costs/misc. material like ink, labels etc.

    Any thoughts on that Dude?

    Long time follower..Love reading the blog every week.

    EpicToyz

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    1. Epic-It doesn't seem fair to be exposed to $5000 in sales if you only personally profited $2000 in the deal. The safe answer is to always check with your tax preparer. But there also are some good comments below on tax issues below.

      Thanks for enjoying the blog. ...Dude!

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  3. Good point about having to claim the income. I used to sell for others and I charged 30% (15% for fees and 15% for me). It became a problem because people would get disappointed when their item sold for less than they expected. So now I just try and encourage people to sell for themselves.

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  4. Yeah.. I just don't wanna get stuck paying taxes on their profit portion of the money. That can ruin the bottom line real fast. Selling a friends small $50 item seems harmless enough, until you realize that your paying the taxes on it. That is if of course your entire sales for the year extends the threshold. For smaller under 20k sellers, no need to worry as much.

    EpicToyz

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  5. Just like PayPay would send you a 1099, you would send that person a 1099 (just be sure to get their SSN and mailing address up front so you don't have to do it later). So that amount they made is now a business expense for you that is deducted from the total you received. You can download the 1099 from the IRS website; I haven't looked but you might even be able to fill it in online and then print rather than printing and having to type the info on a typewriter.

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  6. I found your blog a few days ago and I have to tell you that I have enjoyed it so much. This morning I read your first post from 2011. That's how much I've enjoyed your blog...I've read every entry! Thanks for all the great tips. Ive finally listed my first item on EBay! Keep up the great work AND the great writing!

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    1. Shani-I appreciate that, thanks very much. Keep coming back and I'll have more. Also, good luck with your eBay adventures, if you have some good deals, let me know so we can share with everybody. Thanks again....Dude!

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  7. I hate listing. Since I don't want to list for other people I encourage them to sell. Several family members and friends have started. My niece has already far from surpassed me in sales. But we each have our own niche. Hers just happens to being knowing, finding and sellIng high end clothing.

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  8. That's awesome for the kid! And I like the information re: a 1099 for someone else...after all...we are a business and can take advantage of all the deductions and benefits available to us as small business owners. Thanks!

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  9. Crystal- The kid did good, right? I agree, the 1099 is a good tip. Thanks for checking in....Dude!

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  10. I'm just wondering how the kid sold so much on a new account. I've heard that eBay is placing limits on these accounts, and generally limiting the first month's sales to $1000, and the number of auctions to 100 or fewer.

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  11. Wonder no more. Here's what I found out...Ebay places a 90 day trial period on new accounts. The kid's account was past the 90 day period. Thanks for writing in...

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  12. So is this why people become eBay stores? I'm wondering if things go well for me if I'm going to have to upgrade my eBay or something like that. Any thoughts for newbies?

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  13. Here is the new policy for "new sellers": You sign up for an ebay account. Mind you, it used to be a lot easier back a couple of years ago. You didn't need a credit card or bank account, and you didn't even have to use your real name (my dad did it with his nickname). But, nowadays it's a lot harder! So, you sign up to be a new member of ebay. You have to wait 90 days from the complete sale of your first item. That means you could have opened an ebay account 6 months ago, but if you waited until today to sell something, you still have to wait 90 days. During that 90-days you are limited to approx. 50-100 auctions (or buy it now items) and/or $5,000 profit per month (whichever comes first). They said that after each 30-days you can call and discuss your "business plans" for selling on ebay and they "might" bump up your limit per month. I can't tell you how much ebay has changed in a matter of only 3 years. Thoughts for newbies: just try to be the best seller that you can be. Detailed descriptions, fast to ship, and great customer service. You have to consider yourself like Walmart, thinking "the customer is always right." Otherwise that customer has the power to bring you down (in feedback and stars). Ebay's biggest competitor is Amazon, and if you look at Ebay's recent changes, you can see that they are trying to be more like amazon. If you have any questions, let me know. I have been selling on ebay for approx. 11 years straight.

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  14. Hi,
    I liked your blog and I personally invite you to join http://www.coollectors.com - The World's Free Collectors Zone.
    We will also be happy to cooperate with your blog such as adding its link to our site.
    All the best,
    Diane
    info@coollectors.com

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  15. That's how things should be. Do not quickly dispose or disregard what you can still find at the corners and the storage of your home. They are most probably be of merit, though temporarily divorced from the context that will give them pertinence. Keep it up!

    Angelica Jenkins @ Royal Gold LLC

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  16. Thanks for sharing. I'm collecting coins. I have pretty big collection. I'm using this thing http://metaldetectorstar.com/ to find more of old coins.

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