Every year some of us are over the moon with joy after getting what we wanted for Christmas. At the same time there are millions of people who ended up with gifts that were neither on their Christmas lists nor liked and desired as surprises. They cause cluttered closets, garages, basements, and unnecessary headache. There is a cure for that though – sell your unwanted gifts on eBay.
eBay is very easy to use once you figure out what you’re doing, but before that you might have plenty of questions. Let us cover at least a few of them to encourage you to sell and make somebody happy while getting money back to get a gift that you would love this time around.
Do eBay sellers have to pay fees?
Yes, you will have to pay some fees as nothing is free in this world. You will pay around 12% of your total sale + $0.30 for eBay and PayPal. 12% applies to your asking price plus shipping.
How will you handle shipping and delivery?
While an ad is being created, eBay will offer shipping options that are fast and for the best price. You can leave it as offered or change it before the ad goes live.
- $5 on Your Next Order at eBay with code WELCOME5
- Free Shipping on Most Orders
- 90% OFF Top Fashion Brands, Home, Electronics, Auto, Sporting Goods & more
You should always think about your own convenience, so make sure you have a courier for cheap and efficient shipping. Don’t drive for 30 minutes to FedEx if UPS is across the street and don’t pay for pickup.
eBay will help you by providing estimated shipping cost for your item to help you set the right price. You can choose to incorporate that cost in your total price and offer “free shipping” or charge for shipping on top of your asking price.
Is there tax for selling unwanted gifts?
While tax law is complicated, here is how we understand it in short:
TurboTax states that if you are selling a gift received for less than the giver paid for it, you shouldn’t pay any taxes. Let’s say your mom paid $50 for something and you sold it for $47 – you get to keep the money and not think about Uncle Sam.
Make sure you know how much did the giver pay for an item and not how much it’s worth. If your mom bought that $50 item with 20% discount, you will have to report $7 profit after selling it for $47.
All you have to do is try your best to find out how much they paid. You can call the store where the item came from, look for similar products online, or see if somebody went gift shopping together and can help you.
Should you worry about sales tax?
If you are just selling occasional items and unwanted gifts, you have nothing to worry about, but if you are running a business on eBay, you will most likely have to pay sales tax based on the same percentage your state is charging. Some states, like New Hampshire or Florida, don’t charge it all, so you also won’t have to pay. Other states have 5-7% sales tax, but most allow a few items per year be sold without reporting ad taxation.
There are a few states that require tax on absolutely every sale, so you will have to get sales tax permit, which is also not free, and pay taxes to the state. If you live in one of those states, check the rules in depth, because sometimes tax is collected only if you are selling from a physical location, your “nexus”. If you have all your items at home, it becomes your “nexus” then. This might mean that you have to pay taxes only when selling to someone in your state, but not when shipping to out of state buyer. And even then you might be exempt from sales tax on a few occasional sales per year.
Should you use personal account or business?
For your few unwanted gifts personal account will do. You only need business account when you are selling for profit.
Should you sell via an auction or for fixed price?
If you don’t have any aspirations to start an eBay business, go with fixed price for your gifts. If you do organize an auction and sell your items very profitable, you might have to come back to that income tax issue, and who wants that? It is a different story when you have a very expensive item or an antique to sell for a nice chunk of money, in which case worrying about sales tax might still make financial sense.
What are some ways to get your list noticed?
When it comes to unwanted gifts, chances are that there already are other people selling the same thing, unless it’s something very unique. So how do you get noticed?
This is what you should try:
- Offer great photos
- Set great price
- Write a great description
- Create a great title
In short, just be great and buyers will find you.
Should you continue selling after the unwanted gifts are gone?
Many people start like that and get addicted to making a bit of money. If you want to start a business on eBay, look for more resources and read some advice about that before making an investment. So who knows, maybe you are going to find your calling after this Christmas just by selling a few unwanted gifts and start a business. We have definitely seen it happen!