Selling items

ghogie91

Hi All,

Not sure if this is the correct place to put this.

I am just looking to find out is it illegal to buy products from a website and sell them for a small profit

For example:

Buying lets say 5 packs of chewing gum (first thing i seen in front of me) for 50c a piece online and then selling them for 75c a piece yourself?

Thanks

rubadub

Can't think why it would be, loads of shops would already be doing it. As long as you are all above board if its a proper business you're running.

Many ebay sellers are really "dropshipping" which is a safe way to do it without having to hold stock.
http://en.wikipedia.org/wiki/Drop_shipping

I had thought of going into a €2 shop myself to sell them a particular item I have found cheap online in bulk that I know there is a good market for, I was considering even swopping stock with them.

dudara

It's not illegal to do that, but there are potential implications with Revenue if you don't report your additional income. Eventually, if your business gets to a certain size, you would have to consider VAT, company registration etc.

Moving thread to Entrepreneurial & Business Management

ghogie91

dudara wrote: »

It's not illegal to do that, but there are potential implications with Revenue if you don't report your additional income. Eventually, if your business gets to a certain size, you would have to consider VAT, company registration etc.

Moving thread to Entrepreneurial & Business Management

Thanks dudara

That's grand I am going to register business name and start declaring income to keep it above board alright in terms of vat

I just wasn't sure where I stood buying things online and then moving them at a higher price myself

By size of business what do you mean when it comes to vat, is there a certain barrier where you would and wouldn't have to factor in VAT?

jimmii

ghogie91 wrote: »

By size of business what do you mean when it comes to vat, is there a certain barrier where you would and wouldn't have to factor in VAT?

With goods you must register for VAT when you reach €75k (although can be €37.5k if its produced from zero rated materials) below that then it is optional. Is the website the producer of the product as well or just a reseller? You might find the minimum order from the producer isn't as much as you think.

I would say if you are starting a business just register for VAT its a painless process and VAT returns are pretty straight forward also means that you are able to claim back VAT on any start up costs you incur if you have paid VAT on them.

ghogie91

jimmii wrote: »

With goods you must register for VAT when you reach €75k (although can be €37.5k if its produced from zero rated materials) below that then it is optional. Is the website the producer of the product as well or just a reseller? You might find the minimum order from the producer isn't as much as you think.

I would say if you are starting a business just register for VAT its a painless process and VAT returns are pretty straight forward also means that you are able to claim back VAT on any start up costs you incur if you have paid VAT on them.

Ah I see, thats good to know.

Now that you say it the website is just a reseller too, I could have nearly answered my own question on that one. I was planning to register for VAT from the get go. I have listed in detail all startup costs, im keeping a ledger/journal of every detail, costing, supplier, quantity etc so that should fit in with VAT.

One last question, sorry this has gone totally off the original thread topic. What sort of items would be considered start up items for a general business start up, a (so-far) basic online store. What I have come up with so far would be starting stock, business name registeration, general office type supplier, web hosting, suitable PC, printers for reciepts/ invoices etc

Thanks for all the help btw. Have the vision, not the know how

jimmii

Basically anything that costs money that is required for you to run the business whether it be stock or paper to print out invoices if you need it then you claim it.

Having your own business is great fun but its more hard work than you will think beforehand! This is a great place to use for finding things out so if you ever get stuck always post on here people are normally more than happy to help out even if you just need reassuring that what your doing isn't totally mad!! The beginning is always tough so don't worry if sales are slow at the start. Do make sure you have as much money as possible better to be safe than sorry plan to have ATLEAST 6 months worth of rent, bills, rates etc for the company and 6 months living expenses for yourself ideally you'd have a years worth as its very tough to be taking money out of the business for a good while.

rubadub

Have you researched to see if there is a market for what you are selling.

If you go to the advanced section in ebay you can check completed listings to see the real "going rate" for things, not just what chancers try and sell them for. It also shows how many sales happened per day.

I have a few things I thought would sell well here. A friend of a friend owns a market stall, I was thinking of having them add the items to the regular stall just to see if they sell. Or stick ads up on adverts.ie or in the buyandsell and see if you get many phonecalls.

ghogie91

I see I see

Thanks lads I am still very in the research period and am pulling together surveys and random testing to see how it goes down before I go full gas Into it. I myself believe I can grow a successful business in my chosen market but ill let the figures decide which way I should go

Very helpful

kaymin

jimmii wrote: »

With goods you must register for VAT when you reach €75k (although can be €37.5k if its produced from zero rated materials) below that then it is optional. Is the website the producer of the product as well or just a reseller? You might find the minimum order from the producer isn't as much as you think.

I would say if you are starting a business just register for VAT its a painless process and VAT returns are pretty straight forward also means that you are able to claim back VAT on any start up costs you incur if you have paid VAT on them.

If you register for VAT then you have to charge VAT on your sales and account for that VAT to the revenue. Granted you can claim a credit for VAT suffered on your inputs but, assuming you are trading profitably from the start and are below the thresholds, I'd be inclined not to register for VAT.

Stella Virgo

ghogie91 wrote: »

Hi All,

Not sure if this is the correct place to put this.

I am just looking to find out is it illegal to buy products from a website and sell them for a small profit

For example:

Buying lets say 5 packs of chewing gum (first thing i seen in front of me) for 50c a piece online and then selling them for 75c a piece yourself?

Thanks

its not illegal ,loads are doing it,where do ya think all the rubbish on ebay comes from.if u only make 25 cent profit on the gum ,dont forget the cost of postage!. have a gander at Adverts,Donedeal etc ,people are selling cars,furniture etc all sorts of junk to make a quick buck.as for paying tax....u might be lucky to make 50 a month so dont worry about it.

rovoagho

If your turnover will be below the thresholds, there are very few circumstances where registering for VAT is good advice. It's unnecessary complication for a new business. I say this as someone who was advised to do so, and actually ended up deregistering again until I started dealing with a few businesses that required VAT receipts.

jimmii

rovoagho wrote: »

If your turnover will be below the thresholds, there are very few circumstances where registering for VAT is good advice. It's unnecessary complication for a new business. I say this as someone who was advised to do so, and actually ended up deregistering again until I started dealing with a few businesses that required VAT receipts.

I think it really depends on what website the OP is talking about and what other costs they are going to incur locally that may involve paying VAT like import or courier charges etc. Would also depend on how naturally accounting comes to them as well. Don't be scaring them off implying its a lot more work than it is!!

rovoagho

It's not a huge amount of work but it is tedious and a distraction. If they don't /need/ to do it, there's no logical reason to do it. Small businesses have enough on their plate without making extra work for themselves.

miamigo

I hope I am not hijacking this thread but I really need some advise. So here is the story. I have a contact in Australia, who as part of his business sells his products online within Australia and all over the world. Shipping costs are killing his international trade. He has asked me if I would consider buying some of his stock at just over cost price and selling it online within Ireland. I will pay for the stock I get, pay for shipping and duty and vat etc on it coming into the country and then sell for a profit. I am currently in full time employment and I don't think I will be making more that about a €5000 profit out if in, we'll not in the first year anyway...
What would I need to do by way of paying tax on this extra income or do I need to pay tax on it? This is all completely alien to me so any advice is much appreciated, even if someone can just point me in the right direction of where to go to get advice/guidance.

kaymin

miamigo wrote: »

I hope I am not hijacking this thread but I really need some advise. So here is the story. I have a contact in Australia, who as part of his business sells his products online within Australia and all over the world. Shipping costs are killing his international trade. He has asked me if I would consider buying some of his stock at just over cost price and selling it online within Ireland. I will pay for the stock I get, pay for shipping and duty and vat etc on it coming into the country and then sell for a profit. I am currently in full time employment and I don't think I will be making more that about a €5000 profit out if in, we'll not in the first year anyway...
What would I need to do by way of paying tax on this extra income or do I need to pay tax on it? This is all completely alien to me so any advice is much appreciated, even if someone can just point me in the right direction of where to go to get advice/guidance.

You would need to register this business with the Revenue Commissioners using the ROS system - link below:
http://www.revenue.ie/en/online/eregistration/index.html

You would also need to pay income tax on any profits generated - the tax return (form 12 in your case) would need to be filed by 31 October 2015 in respect of 2014.

Also, you will need to make a preliminary tax payment by 31 October 2014 in respect of the profit you expect to generated for 2014 (using your best estimate).

miamigo

Thanks Kaymin,

So what I have learned so far is that I need to register as a sole trader, register a business name with CRO, get a domain name and now I know I need to register with Revenue Commissioners. Is registering a business name the same as registering as a sole trader?

Thankfully I don't need to worry about web design, marketing etc as my contact in Australia will be doing all of that but I just want to make sure the business is all legal and above board. Is there anything else you can think of that I need to do?

kaymin

miamigo wrote: »

Thanks Kaymin,

So what I have learned so far is that I need to register as a sole trader, register a business name with CRO, get a domain name and now I know I need to register with Revenue Commissioners. Is registering a business name the same as registering as a sole trader?

Thankfully I don't need to worry about web design, marketing etc as my contact in Australia will be doing all of that but I just want to make sure the business is all legal and above board. Is there anything else you can think of that I need to do?

The requirement to register a business name is imposed by CRO whereas the requirement to register the business for tax is imposed by Revenue - so not the same thing.

The only other point to consider is VAT registration. Presumably you will be below the thresholds for registering but if the supply is deemed to come from your Australian contact (and you are just facilitating that supply and aren't making any sales yourself) then the thresholds don't apply. Non-established suppliers (i.e. not an Irish supplier) must register for VAT regardless of turnover levels. Might be worth getting the opinion of the Revenue Commissioners on this point.

CathalDublin

ghogie91 wrote: »

Hi All,

Not sure if this is the correct place to put this.

I am just looking to find out is it illegal to buy products from a website and sell them for a small profit

For example:

Buying lets say 5 packs of chewing gum (first thing i seen in front of me) for 50c a piece online and then selling them for 75c a piece yourself?

Thanks

I don't think this is a great business idea.
Who buys their chewing gum online?

miamigo

Thanks again Kaymin,

I have looked into the VAT and I think I am ok not to register. I will be purchasing the stock from the guy in Australia and selling it on myself. I am going to contact Revenue and Citizens Information tomorrow.

Obviously I have a lot to learn about having my own business!