@anspa84 wrote:
Hi...I am a new Ebay seller who is very ambitious...I live in Vancouver, British Columbia...I am planning to set up my Ebay store based on dropshipping model and will be selling to US customers for the most part...
With the utmost respect, I think you are getting way ahead of yourself, and have some serious misconceptions and erroneous information. How much reading have you done about selling on eBay?
Everything the other posters have said is absolutely valid, including all the points mentioned by 'i-am-vivian'. Please take that advice to heart before you throw money into this venture.
For the most part, drop-shipping is a fool's game -- someone else will be making your profit, and control of inventory and shipping will usually be out of your hands. This can cause serious trouble on eBay unless you have an unusually favourable drop-shipping arrangement.
The two cardinal sins on eBay are inability to ship due to being out of stock, and late delivery. Drop-shipping is usually the quickest way to get stuck with these defects. And when you're just starting out, those defects can put you out of business pretty fast. Even if you can avoid these issues, there is, as 'recped' mentions, the whole problem of competition with such goods. Drop-shipping suppliers remind me of scavengers -- they suck the profit out of a "client" as far as possible, then move on to the next victim.
If you're going to gamble with a capital venture, far better quite honestly to make a wholesale deal with a local manufacturer of some great product(s) who needs an online outlet for their products but doesn't have the time, knowledge, or staff to sell on eBay.
Every new seller on eBay is also subject to selling limits (as 'i-am-vivian' mentioned) until they establish themselves as reliable sellers. Read the link in the post above and be sure you are prepared to deal with it. You will also find funds may be held back on your Paypal account until you've passed a certain threshold. See the Paypal site for seller information.
Unless you are actually a resident of the U.S., you will not have to report to the IRS or pay U.S. taxes. Whoever gave you this information is wrong. If you are a Canadian, all your income is reported to CRA.
Until you have a few months' worth of established business income and know your enterprise will likely succeed, incorporation is a waste of good money. Whoever gave you information that incorporating will protect you from lawsuits is wrong. It may protect your personal assets in the event of bankruptcy, for example, but if you are a director of a corporation, you are legally responsible for the corporation's dealings.
And forget completely for the time being about registering as an LLC in the U.S. That is absolutely unnecessary unless you get to a point where you actually need to establish a large-scale base in the United States.
I don't know where you got the idea that you could be subject to lawsuits as a result of selling on eBay. Unless you happen to be the manufacturer of a product, the only issues that you will ever need to deal with as an eBay seller are prompt and satisfactory shipment of items, and items being as described in your listings. Any issues you might encounter here will be covered by the various seller and buyer guarantees and protections provided by eBay and Paypal.
As for GST registration, that is not required until you've actually reached the $30,000 income level. Before you waste your time and effort on GST registration, you need to see whether your income is going to justify it. Give it 3 or 4 months before you over-think your success. Some sellers do register sooner in order to be able to claim GST rebates on purchases, but quite honestly, once you register you are going to have the hassle of charging Canadian customers GST/HST on every sale, and all the complicated accounting paperwork that goes with it. Besides, if you're expecting to sell mainly to the U.S., the whole GST question is moot. Leave it on the back burner.
It seems to me that if your ideas are as big as you say they are, you should be getting sound, professional accounting advice, rather than starting out by flying blind.
You also need to prepare yourself for eBay selling by reading and thoroughly understanding the Seller help and policy pages. Ask any specific policy questions here before you begin, because selling on eBay is not as simple as eBay likes to make it sound. Experienced eBay sellers have seen it all.
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