How to Track Sales for Your eBay Business

If you operate an eBay business, it is crucial to track your sales, profits, inventory, and other financial information. Unfortunately, many eBay sellers do not take the time to keep good financial records. In July 2008, Congress passed the Housing and Economic Recovery Act of 2008. Under this act, PayPal will be required to report to the IRS the total payment volume received by PayPal customers in the U.S. who have received more than $20,000 in payments in a single calendar year, and who receive more than 200 payments in a single year. In 2012, eBay will send 1099s to eBay sellers (based on sales in the year 2011). Keeping your own records will help you with tax write-offs as well as help you stay on top of your sales figures.

Difficulty: Moderate

Instructions

1. eBay's 1099 figure will include the sale price of the item plus the shipping fee charged to the customer. You will need to deduct the shipping fee you paid for the item as an expense on your tax return. It is imperative that you track all of this information correctly.

2. Use the eBay sales reports. Log into your eBay account. Go to your eBay Selling main page. On the left hand side of the page, choose the tab that says Reporting. You can generate customized reports based on information that you choose.

3. If you have an eBay store, there is another way you can view sales reports. Go to your eBay store. Scroll to the bottom of the page and click on Seller Manage Store on the bottom right. On the next page, scroll down to the Reports tab on the right. Depending on the level of store subscription you have, your sales reports may be available for 24 months.

4. Search Google for eBay inventory software or eBay financial software. You can find all sorts of software packages with prices all over the board. Be sure to do your research and find one that works for you.

5. Make your own spreadsheet in Excel. You can enter your information on a daily basis. Include important information such as your purchase price of the inventory item, the sale price on eBay, eBay fees, Paypal fees, and shipping fees. See the resources section for a sample spreadsheet.

6. Use the Ultimate eBay Spreadsheet. This is a spreadsheet application created by eBay sellers for eBay sellers. This application pulls all of the information (except the price you paid for the inventory item) from your eBay account so there is no need to manually enter the information. See the resources below for more information about this product.

Tips & Warnings

• Always keep good records for your eBay business for use at tax time.

Resources

• Ultimate eBay Spreadsheet
• Free Sample eBay Inventory Spreadsheet

[kaseysviewblog]

on 7/17/2009 This is going to be so helpful for a lot of sellers. Thanks for sharing.

[happymaker]

on 6/27/2009 This is FANTASTIC information. I had no idea. Thank you so much. 5* and a Digg!