If you are just going to do a sale here and there, you probably won’t need an extensive record keeping system. For instance, let’s say you sell a couple of things a month from your home. Depending on how organized you are, you should be fine.
One summer, I conducted an experiment to see what would happen if I created a super-organized system with employees. So I hired my college-age daughter and one of her friends while school was out. It took a short while for them to get the hang of the auction business but by the end of the summer, the profits were flooding in. In my best week, I made $4700+ in profit, not gross!
Our super organizational system is what paid off. Two examples show how...1) I sold a customer a tote bag and she returned it because she decided she wanted a colored one (it was black leather) and I agreed to refund her money. I then received a “warning” message from PayPal because she claimed that I had not sent her a refund. In less than five minutes, I was able to prove that I had sent her a refund. She looked foolish and end of PayPal problem. Of course, I could have eventually proven that I had paid her but it could have been a long, drawn out problem.
2) Another customer won an auction and sent me several messages after the auction complaining about various things. Finally, I told her to withdraw her bid and I wouldn’t send any negative feedback. Frankly, I was happy just to be rid of her. Approximately two months later, she sent me a threatening message -she was about to report me to eBay because I had never sent her merchandise. Again, in a couple of minutes I was able to locate her own email ending our transaction and forwarded it to her. I never heard another sound from her.
The reason for these two anecdotes in to emphasize how necessary it is to have an organizational system. I confess! I am naturally a disorganized, haphazard person. Self-defense has made me get my act together. If you are one of those organized, everything-inits-place people, this will come easy for you. If you’re not, don’t despair. If I can do it, anyone can.
To build a successful auction business, you need to get a system going immediately. Organization makes a difference...1) Good service means happy customers -- If you don’t keep good records, you will soon be floundering and making mistakes. Not the best way to impress your customers. Ask me how I know? Let me horrify you with some of my mistakes...
I once sent a customer the wrong merchandise! For the sake of good customer relations, I asked him to keep what I sent him and then mailed the correct merchandise at my expense. Sure did lose money on that deal! Another time I received two money orders and didn’t know why. Eventually the buyers contacted me but delivery was late and they were less than thrilled with my customer service.
If you have several auctions going, you will soon get lost and make pointless and expensive mistakes. Learn from my foolishness and keep comprehensive records right from the very first transaction.
2) Tax Purpose -- Even though there are no Internet taxes at this time, you still have to pay income tax. You certainly want to claim every single legitimate deduction. You need good records to do this so that you will have a complete list of every transaction you have made -- who, what and how much. No last minute rummaging to find the necessary information.
3) Customer List -- You are creating your own customer list. If Joe bought or bid on your antique telephone, he may be very interested in similar items in the future.
4) Legal Protection -- In the event of any future problems, have all your information...
... at your fingertips.
For example, George files a complaint with an auction site, or even a law enforcement agency, that he paid you $240 for the Fantasia Sericel but he never received it. If your records are complete, it will take you only moments to find the tracking number. You can then confirm that George’s package was delivered, and you are protected! Without records, you may be in a mad scramble to cover yourself and end up refunding George’s money, while he laughs to himself about his free Disney memorabilia.
5) Identification of profitable items -- How can you know what merchandise is profitable and what isn’t...
... without agonizing over the computer for hours? If your records are good, you will be able to tell at a glance which items are profitable, and which are not. You can also evaluate degrees of profitability. For example, your records will show that with this item your profit is 137% but with another it’s 482%. The more distinctions you can make, the more powerful your selling will be!
