posted on May 12, 2003 04:49:43 PM new
I take my packages to a three-window post office in a small town about 7-10 miles from where I live. This afternoon, two of the regular clerks had their windowns open when I walked in. I was the only customer. The clerks were looking at a sheet of paper completely filled with names in multiple columns. They told me the names were all of the customers who had bounced checks to the post office recently. What they found interesting, the clerks said, was they recognized all of the names as being regular customers and that in reviewing the list it appeared that over 90% of the names who had bounced checks were eBay sellers. The one exception was a merchant a few doors down from the post office who had come in and purchased $400 of stamps, and that merhant's name was on the list.
One clerk said to me, how can eBay sellers do business like that? He went on to express his astonishment to me by saying that banks link bank accounts to credit lines, credit cards and other forms of credit, so that if a business person bounces a check today it means the person has maxed out all forms of available credit with the bank.
I told the clerk that sales are down on eBay for many sellers, but that it has to be incredible business mismanagement not to be able to pay for postage costs from their cash flow. I know of one seller who filed for bankruptcy because she maxed out all of her credit cards. I know of another seller who has admitted to me that her personal credit card debt is now over $30,000 and her husband only makes $40,000 a year. And I know of other sellers who admit to accruing large credit card debt because they charge their postage at the post office, plus their eBay fees, and are not able to pay off the credit card bills when they arrive each month, so that the debt increases each month until the cards are maxed out.
Wow, are there sellers reading this topic who actually operate their eBay business like these sellers I mentioned? It boggles my mind. I know stopwhining, another poster on this board, has very little debt. I am a seller with zero debt: no mortgage, car payments, credit card debt or any type of debt at all. I never feed my business cash from other income sources or go into debt for inventory acquisition or paying monthly costs; I take my profits and 1)spend, 2)reinvest back into the business and 3)transfer to investment accounts. If you are a seller on eBay and you are bouncing checks at the post office and maxing out your credit cards, then you need to go figure out another way to earn a living.
posted on May 12, 2003 05:12:40 PM new
I use my PayPal ATM card to pay for my postage. I have one actual credit card that I keep with me at all times, it is a low limit card that can get me out of trouble but never into it and I pay it off every month using my PayPal account as well. I can't imagine putting yourself deeper in debt by selling.
[ edited by neonmania on May 12, 2003 05:16 PM ]
posted on May 12, 2003 05:14:39 PM new
Depending on what you sell, there's a point where you have to "take that leap" into being a real business ... whether it's taking on debt, quitting your day job or some combination thereof. I have stood on the brink a few times with different business opportunities, but each time the security of a regular paycheck, health insurance and a debt-free life has been stronger.
I suspect a lot of sellers get into debt because they've gone past the point of "leaping" but never recognized it ... until they were in free-fall. Even if you're a hobbyist seller, you've gotta have a plan.
posted on May 12, 2003 07:10:03 PM new
I pay my postage with a paypal card also,the money goes there so it comes from there...I can see where a seller taking a leap into a hugh whole sell lot could take a dive but selling like I do ...yard sale,flea markets,salvation army...I could never get in trouble...lol I'm too cheap I have never paid more than 20.00 for anything I've sold (told ya I was cheap ) and both times I spent 20.00 it was something really great ...a hugh lot of tools and a taxidermy deer head mount(the only thing i ever bought I didn't wanna get stuck with Lmao!)Both sold for a large profit.. Would be really really hard for me to sink...the house would explode at the seams from to much junk first ROFL ! I don't truely understand how they get in debt unless greed for more and more sells get ahold of them.Sad story hotcupoftea...but i'll keep that in mind when I ever think of steppin out on a limb.Thanks for sharing .
posted on May 12, 2003 09:34:36 PM new
Especially going into debt to pay for postage! That is CRAZY!! I can see maybe going into a temporary debt "status" to acquire more inventory for sale, but for postage, whcih one is collecting for anyway? Of course, if they go bankrupt and drop out of the game, more for me.
"Who's tending the bar? Sniping works up a thirst"
posted on May 12, 2003 11:20:39 PM newHe went on to express his astonishment to me by saying that banks link bank accounts to credit lines, credit cards and other forms of credit, so that if a business person bounces a check today it means the person has maxed out all forms of available credit with the bank.
If a business check bounces it bounces. Chances are they had no available bank credit to start with. It means the business did not have the money in the account to cover the check. It could also be an accounting oversight on the part of the business.
Not all business have overdraft protection or credit lines with their banks. Many businesses don't qualify for overdraft protection or credit lines with their banks. Out of all of my business accounts only one has overdraft protection. I didn't ask for it, it came free with the account.
I have credit lines with none of my business bank accounts. I do however, have credit lines with all of the main manufacturers that I buy from. I have business credit cards and none of them are through my bank.
It is against both mastercard and visa policy to use one of their cards to guarentee a check, unless that check is written using checks from that credit card account. It does not matter if the bank issued the credit card or not.
I know stores that have bounced checks to employees, but have excellent business credit. $200,000 in credit lines with manufacturers that they pay on time, but they still screw around with their employees pay checks.
I never feed my business cash from other income sources or go into debt for inventory acquisition or paying monthly costs; I take my profits and 1)spend, 2)reinvest back into the business and 3)transfer to investment accounts.
Yep. And you will be around when many others have failed. Going into to debt for expansion or initial strt up is fine. If a seller keeps falling deeper in debt just to stay afloat, that is bad.
posted on May 13, 2003 12:02:03 AM new
This is a horrible credit-card economy in the U.S. Horrible. Watch or listen to Suzie Orman on this topic. I can't imagine going into debt the way I sell on ebay--20 or 30 items at a time, yard sale origin. It would kill me to be paying that kind of interest month after month.
If you haven't read "The Millionaire Next Door," get hold of a copy. (We gave one to each of our adult kids.) It's great reading. Shows how self-made (not inherited) millionaires actually live. Driving cars for several years, often living in their first or second home all their lives, being thrifty, not cheap, so that when they need money for something they care about, it's there, and their top priority, to a person, is a good education for their children. Number-one priority.
Those who owe huge credit-card debts are trying to live the way they THINK millionaries live--the whole nine yards. If you could see the personal finances of some of those "rich" folks, you'd see they are living on the edge all the time. It has to be a huge worry for them. Live is 'way too short.
posted on May 13, 2003 01:24:33 AM new
It is crazy how much people use their credit cards. I have overheard 20 year olds saying they were $25,000 in debt.
I consider myself thrifty (except where shoes or books are concerned). As of this moment the only thing I owe are my mortgage and a $16.00 bill to UPS.
I don't care if I become a millionaire or not. I just want to be able to live in comfort and not go crazy worrying over bills.
I saw another thread (can't find it now) where direct pay billed on the first this last month, instead of the 5th as stated on ebay.
I think maybe this could be part of the problem, ebay's billing doesn't seem to be very regular anymore. We don't use direct pay, but have seen ebay bill our credit card twice for one payment in the last few weeks, and these kind of things could cause anyone trouble, especially if you depend upon ebay for income.
posted on May 13, 2003 07:33:52 AM new
eBay sellers/buyers are not immune from the problems going on in the economy.
I am sure there are millions of sellers on eBay who have never adjusted their business practices for lower sales and lower sale prices.
New eBay seller terminology:
Sales are great = I had gross sales last week of $30, this week I had gross sales of $60.
You have to diversify = You have to sell whatever the wholesalers have this week, and do it first before your competition undercuts you.
I make the things I sell and sales have been great = My time is basically worthless, but if I paid myself $5 an hour I would be losing money.
My eBay fees were huge last month = But my FVFs were small, which means I am listing things that just aren't selling.
I employ one full time person and 2 part time in my eBay business = My high school drop out daughter works full time for me to off set her and her two children living with me, and the two part timers are my retired parents who actually work for free just for something to do - plus I buy their Bingo cards.
posted on May 13, 2003 08:18:46 AM new
reamond,
thats what family business is all about.
dont forget oldies get to go the bingo hall and brag they have a prodigy child who is no less than sam walton.
posted on May 13, 2003 09:59:10 AM new
No stopwhining, what I described is a family hobby. A family business makes a profit and pays wages.
I follow my competition closely. In the last year, 40% of my competitors are gone, 20% have drastically reduced their listings and 40% actually increased their listings and are producing more profit for eBay than for themselves.
I think the 40% that have increased their listings are dependent on eBay sales and really have no choice. They have to have the cash flow no matter what the profit margin is. I predict they'll be gone unless things change in the next few months.
The annual summer drop off in sales will be shaking more sellers out.
posted on May 13, 2003 10:26:49 AM new
::40% actually increased their listings and are producing more profit for eBay than for themselves. ::
I'm having a blast these days watching two of my former competitors in a bloody battle to see who can lose the most money. One is averaging about 300 listings a week with a 20% sell rate - their GROSS is not coming close to covering listing fees yet they continue to list at that rate. The other has a better sell thru rate and less listings but all their sles are going with 1 bid and their opening bid is their actual cost. so they too are giving away their merch once they pay listing and FV fees.
I'm just watching what sells and what doesn't then waiting for them to drop out then I will reenter the frey.
posted on May 13, 2003 11:37:10 AM newI employ one full time person and 2 part time in my eBay business = My high school drop out daughter works full time for me to off set her and her two children living with me, and the two part timers are my retired parents who actually work for free just for something to do - plus I buy their Bingo cards.
I have never paid more than 20.00 for anything I've sold (told ya I was cheap ) and both times I spent 20.00 it was something really great ...a hugh lot of tools and a taxidermy deer head mount(the only thing i ever bought I didn't wanna get stuck with Lmao!)Both sold for a large profit.. Would be really really hard for me to sink...the house would explode at the seams from to much junk first ROFL ! I don't truely understand how they get in debt unless greed for more and more sells get ahold of them.Sad story hotcupoftea...but i'll keep that in mind when I ever think of steppin out on a limb.Thanks for sharing .
Sniping works up a thirst"