Tax implications of inventory for a Wahm auction business

Tax implications of inventory for a Wahm auction business

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If you are interested in becoming an auction Wahm, you might be curious about where to get items to sell on eBay or one of the other popular online auction sites. Actually, there are a wide variety of choices for your auction inventory. Each has different benefits and disadvantages. However, with so many options it is easy to find a method that works well for you and that can help you start a successful Wahm business.

The first, and most simple, method of finding things to sell in online auctions is searching the garage sales in your local area. Many people are not comfortable with selling online, or they don’t want to take the time to do it. You may find a lot of interesting and valuable treasures that can be sold for a nice profit. The benefit of this method is that your inventory can usually be purchased very cheaply. Try going to yard sales as they are ending and see if you can get a bulk deal to buy whatever the person has left for a flat fee. Sometimes there will be items that will double or even triple your initial investment. You also have the benefit of being able to shop locally. You won’t have to travel far to get the items that you need. Another similar option is to look for estate sales and auctions in your area.

On the downside, when you purchase inventory from yard sales, you really have to know what you are looking for. Sometimes this method works better if you are focusing on selling a specific category of items, like pottery or children’s toys. If you have a category of items that you are familiar with, you will know how much you can afford to spend. You will also be able to spot deals when you see them. The other downside is that when you purchase items, you need somewhere in your home to store them before you sell them. If you buy a lot of items and have to sort through them, your garage and spare room will fill up in no time.

Some people prefer to keep the inventory out of their homes and work with a drop shipper. Drop shipping companies have items that you can sell on auctions. You list the items on the auction site, and then once the auction is complete, you arrange shipment with the drop ship company. You never have to have the product in your home, and don’t have to worry about going to the post office a few times a week. As a Wahm, the convenience of working with a drop shipping company can be a huge benefit. However, the profit margins of having the company do the shipping can be very small when compared to some of your other options.

When you obtain a business license you can order wholesale products from a company. Light bulk wholesale is the best option for most Wahms. These wholesale packages include from several hundred to a thousand dollars worth of product. Light bulk wholesale can be delivered to your home and won’t require excessive amounts of storage space. Selling from a wholesale lot means that you are in charge of setting your prices and can have more profit than you would by drop shipping. You are also not at the mercy of a drop shipping company, who may deliver your items late and put your customer service at risk. 

On the other hand, stocking your own inventory can be a bit overwhelming unless you are organized. You can easily get bogged down in getting the right items to the right buyers. You will also be responsible for going to the post office several times a week, and packaging the items yourself.

However, with a bit of preparation, the most successful auction site Wahms find that buying items in wholesale lots gives them the most control over their business and the best profit margins. If you are just getting started, try one of the other methods first and then work up to buying wholesale lots.