Topics in this issue:
- eBay news – Not again!
- An Inspector calls
- Shall I fetch you a box?
- Ask Molly – Can you point me in the right direction?
Hello and welcome to this week’s edition of The eBay UK Bulletin.
It was a warm weekend in the UK, something of a rarity, so the entire tribe of elves descended on local car boot sales to haggle, plunder and eat bacon rolls. I did feel a little like Fagan sitting in the car inspecting purchases as they were delivered. It is a tough job, but it has to be done.
Most of the elves have now returned home and as the weather is set fair for this weekend it could well be worth a visit to your local sale; the bargains are still out there.
It was quite an exciting week at Molly HQ with the long-expected visit of HMRC (drum roll in background), more on this later. Also in this bulletin there is a word of caution concerning the size of your box!
[For admin details for this newsletter, please scroll down to the end.]
1. EBAY NEWS – NOT AGAIN
Oh no, PayPal are going to undertake another site upgrade and if it goes as well as the last one we could all be in trouble.
Did you wonder why some of your payments last week had been refunded without your knowledge or that of your buyer? Something went horribly wrong in the early hours of last Friday and it took ages to put right.
It is hard enough to get money from buyers in the first place, but trying to be paid for a second time is almost impossible. Poor old Molly lost four sales as buyers didn’t understand why they should repay and then there is the issue of eBay fees.
The next upgrades are due On 17 May from approximately 6:00 a.m. to 10:00 a.m. BST, there will be six intermittent one-minute outages. Fingers crossed.
2. AN INSPECTOR CALLS
No, not the play or movie but quite dramatic in its own way; Molly was subject to a business records check by HMRC this week.
The venue was a freshly cleaned shed with not an elf in sight and the inspector was… a really nice lady who is now an attentive reader of this bulletin [Ed - I have cut out all the usual jokes about Gideon].
If you are selected for a records check then don’t panic, with a little preparation you should be fine. The purpose of the visit is not to check out your business as such but instead to confirm that you keep adequate records which enable you to fill in your tax return accurately.
I would imagine, however, that if anything untoward was seen during the visit then a quick call back to head office would result in a full audit.
An eBay trader needs to keep records relating to sales – more on this later in the bulletin- and expenses. I still believe that a simple system is best and although most of the information is computerised it is all very easy to follow. On the subject of computer records you will be asked to show them on your screen. The inspector cannot touch your PC or load data on to their laptop, so set up a folder on the desktop that is easy to access.
A simple process of compiling receipts by month, recording the figures in an expenses spreadsheet and finally entering all figures into a summary sheet worked well – it is easy to follow even for an elf.
The records check is based on recent activity, which in my case was January to March this year. The inspector will want to know about your business, where you get stock, what you sell and so on. It doesn’t matter too much if you don’t have receipts as purchases from a car boot sale, for instance, don’t come with receipts. The important thing is that you have a process in place to record what you buy. If you are selected for a compliance check then what you spend on stock may come under a little more scutiny.
The check takes about two hours and the time simply flies by.
3. SHALL I FETCH YOU A BOX?
I became aware of the footnote on the latest handout info sheet thanks to you. My wife and I are both quite experienced eBayers and have been following your writings for a long time now. The thing that I did not believe from your latest edition was the 6″ cube small parcel!!
At coffee break I decided to look carefully at the small parcel info. The size you quoted only appears as a tiny lettered foot note. They are obviously not keen for it to be used. Also I see that a tube is also detailed as an exception.
Please stress in the next edition that these footnotes are meant to be used. My guess is that when I visit my PO with a cube they will be unaware and I shall have to point it out!”
You are quite right, many employees within the PO have no idea and their incompetence could end up costing you money. My local depot has two lines drawn on a wall depicting the width and length of a small parcel and another line representing the 8cm max height. For the exception rule of 16cm x 16cm x 16cm they actually have a slightly larger box and if your parcel fits inside then all is well.
Molly did get a bit confused this week and sent out a 5 inch square box without any stamps. A card was posted through my buyer’s door asking for £6.20 before the parcel could be handed over.
There is a £1.00 admin fee included which is ok, I just won’t pay an elf one day next week. The remaining £5.20 is the minimum charge for a medium parcel sent 2nd class, whereas it should be £2.60 as the 16cm rule applies. This depot (Winton delivery office, Poole Lane, Bournemouth) refused to amend the charge, causing some distress for my customer. The parcel is now winging it’s way back to me on a matter of principle and I am waiting for the poor feedback to be left.
Just to set the record straight this is the very small footnote included on the red pricing card:
Exceptions apply. The following items are also priced as Small Parcels. Parcels that measure up to: Length: 16cm, Width: 16cm, Depth: 16cm. Also roll or cylinder shaped parcels that measure up to Length: 45cm, Diameter: 8cm.
I am so glad that the Royal Mail thought this change through before implementing it, one wonders if things will stay the same when they are privatised!
4. ASK MOLLY – CAN YOU POINT ME IN THE RIGHT DIRECTION?
I’m a great fan of your bulletin and have a copy of your book – it started me up on eBay and I’ve just become a top-rated seller, so thank you.
I need to do my first year accounts and am hopelessly muddled, could you send me your simple-to-use spreadsheet please and point me in the right direction?”
dashed-decent – http://www.ebay.co.uk/sch/dashed-decent/m.html
Congratulations on becoming a TRS, no mean feat in this day and age.
I have sent you the spreadsheet that I still use today, it should help as a starting point. The secret with accounts in my opinion is to work slowly through them and take bite-size chunks out of the problem.
There are only really three things you need for your accounts:
- your sales figure (turnover),
- the cost of all the things you bought to sell and
- the cost of all the things you had to use in order to sell them.
For an eBay trader the till roll of sales can be found easily using eBay reports from the File Management Centre or from PayPal history reports. Many of my virtual buddies have super software to do all this but some still use crayons. I now use the PayPal history.
There are a few reasons for this, firstly I am far too mean to spend any money on software, the other main reasons relate to non-payers and refunds. The headline eBay sales figure includes any sales which are not paid for so you would have to calculate how many buyers didn’t pay and deduct them from your sales. eBay cannot calculate any partial refunds you may make, while a full refund will eventually show in the figures. You need to know these figures as all refunds are deducted from turnover. The PayPal history report is based on money received so any non-payers don’t feature at all and any refunds are shown in the one report, it is much easier.
If you do take payment in any other form then you need to include this income as well. Another interesting point about turnover is that the figure includes all postage and insurance income, again the PayPal report tracks these so no worries.
The cost of your stock should be easy to calculate from receipts or a list of purchases if you don’t have receipts. I use a simple spreadsheet for this and group receipts into months giving each receipt a reference number. Enter this aginst the entry in your spreadsheet and you have an audit trail. You will also need to know how much stock you had at the beginning and end of the year as the stock you actually use is calculated thus:
(Opening stock plus purchases) less closing stock
Enter figures into a summary sheet each month and you will be able to see at a glance how things are going and what your liabilities might be.
If you deduct the cost of all your stock purchases from your sales you have gross profit.
The final part is to deduct all your operating costs, stamps, packing, eBay fees and so on. This is the part that takes the time. Some expenses need to be treated in the same way as stock purchases – stamps and packing materials for example may have an opening value and some value at the end of the year.
PayPal fees are fine, ink for your printer is ok, an allowance for every mile you travel for business is good, but coffee and coffee-related items are frowned upon which is a shame as this is by far my biggest cost.
Deduct your expenses from your gross profit and you have net profit or loss, this is where your income tax (and NI) liabilities come in.
If you have a question about eBay or home working in general, please send it to firstname.lastname@example.org. I will reply personally to every email I receive and remember, there are FREE copies of my book available for the best questions, tips or stories.
– END NOTE –
That’s all for this week. Check out Harriman Intelligence for the latest news from Molly HQ.
Great news as the new Limited Company is now in place and almost ready to use. So far it has taken almost two months to form and now I have to structure the payroll system for the elves! Apparantly it is customary to pay your elves every month and not just at Christmas!
Best wishes and happy eBaying,
– NEWSLETTER ADMIN –
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