AuctionBytes-Update Number 10 - March 26, 2000 - ISSN 1528-6703

ABOUT AUCTIONBYTES-UPDATE
AuctionBytes-Update is a free newsletter for online auction buyers and  sellers. AuctionBytes-Update will show you how to make money and is useful to anyone who uses online auctions -- business people, collectors and hobbyists. AuctionBytes-Update is published by email twice a month. (Print
it out for easier reading.)

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IN THIS ISSUE:
1) From the Editor
2) ARTICLE: Beware the Ides of April: Getting Down to Brass Tax
3) ARTICLE: e-Postage
4) ARTICLE: Building a Successful "Me" Page on eBay
5) ARTICLE: How to Set Up a "Me" Page on eBay
6) FOUND IN THE ATTIC - Toys Toys Toys
7) Bidder Email? Know When NOT to Respond
8) AuctionBytes.com Reader Question
9) NEWS

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1) FROM THE EDITOR

Spring is in the air. The crocuses are blooming. Maggie, the Auction Beagle, is digging up the yard. Only one thing can spoil the joy of Spring, and it starts with three letters: I-R-S.

April 15th is looming on the horizon, and I'm in a quagmire of paperwork - 1040's, W-2s, 1099s, receipts, schedules A B, C, D,...well, you get the idea. If you are in the same boat, read David's story about how online auction income may affect your tax reporting.

Also in this issue, learn about e-postage, and learn how to build a "Me" Page on eBay and what you should include.

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Some story ideas I'm kicking around for future issues include international auction sites, and how online auction sites might be affecting homebound folks. If you have any experiences or contacts, please let me know. We'll continue to review auction management software, online payment services
and other auction products and services. Unfortunately, it's impossible to fit everything I want into one issue - the constraints of a text email newsletter. I'm hoping that someday soon we'll have enough resources to add more content to the Web site and one day make this a weekly newsletter.

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We sent a press release on PR Newswire on Friday to tell journalists about AuctionBytes.com. But the best form of advertising is word of mouth. Tell your friends, and please, if you have a Web site, consider linking to ours!

Now, it's time for me to get back to sharpening those pencils and filling out those forms,...anybody have an aspirin?

-Ina Steiner, Editor
ina@auctionbytes.com

PS: We post all past issues of AuctionBytes-Update on the Web site. You can read them at http://www.auctionbytes.com/Email_Newsletter/email_newsletter.html (or just go to the home page, http://www.auctionbytes.com, and click on "Email Newsletter").

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2) ARTICLE: Beware the Ides of April: Getting Down to Brass Tax
By David Steiner

If you're easily depressed, skip this article.

You know all the time you spent finding auction items to sell? The hours you invested researching, taking pictures, listing and shipping your items? Recall the pleasant feeling you got, watching the constant stream of checks flowing into your mailbox each day? Well, guess what, folks...it's taxable.

Apparently, not everyone feels that it SHOULD be, however. According to a recent poll taken on the www.AuctionBytes.com Web site, over 75% of the respondents felt that the money they made online should not be taxed.

Several organizations are attempting to push legislation to make the Internet a "tax free" zone. Congress is considering imposing a moratorium on E-commerce taxes. This moratorium would be in place to study Internet sales taxes which are "special, multiple and discriminatory." But this relates
to SALES tax. Don't confuse it with not having to pay federal and state INCOME tax on what you've earned online.

So, with April 15th just around the corner, what does all that extra income you've made on eBay mean to your tax return?

"If you make a profit selling something like an old collectible or old doll that's been sitting around your house, it can be considered a capital gain much like when you sell a stock at a profit," says an IRS source cited by Alan Mendelsohn (www.moredeals.com). "If you sell old 45 RPM records for a gain, you should list that gain on your Schedule D of your 1040." You must determine "cost basis," and you may factor in commissions - it can be pretty complicated, so read the instructions and consult your accountant.

And don't forget State income taxes. Many states are aggressively pursuing this new source of tax revenue.

But, suppose you only sell a few inexpensive items a week? If you're only selling casually, is there a threshold that you can reach before you must begin declaring income? "There is no de minimis exemption for small income items," explains Tax Practitioner Michael Batsimm, CPA, MST. "They are included as taxable income. It's more a practical matter of enforcement than an actual exception in the law."

If you are doing eBay regularly as a business (even if you have a full-time job), you can file a Schedule C and deduct your auction-related expenses. (Don't forget about paying quarterly estimated taxes.)
According to Batsimm, you should consult your accountant for specific tax advice. Records that you should keep (and that will aid your tax preparer) include:
Date of sale
Sales proceeds
Dates of original purchases
Purchase price
Expenses related to the purchase
Expenses related to the sale
Any other related business expenses. These could be office expenses, supplies, telephone bills, vehicle expenses incurred (except for commuting), insurance expense related to the business, advertising, any fees or commissions paid to the auction site or any other expenses incurred in the course of the business.

Remember, there is no such thing as free money. Not even in cyberspace.

>>>For More Information on Income Taxes

-Visit the IRS Web site for forms and instructions: http://www.irs.gov. If you have Adobe Acrobat Reader (available free from http://www.adobe.com), you'll be able to download the forms to your computer and print them.

-Purchase a book. We like the Ernst & Young Tax Guide. (Tax laws change every year - make sure you have the CURRENT edition of the book!)

-Nolo Press publishes self-help law books and software including tax guides like "Stand Up to the IRS" and "Tax Savvy for Small Business." http://www.nolo.com [AOL keyword NOLO]

-Visit Web sites of tax firms, for example, H&R Block: http://www.hrblock.com.

>>>For More Information on the Internet Sales Tax Debate

Read the following articles:
http://www.wired.com/news/politics/0,1283,35087,00.html
http://washingtonpost.com/wp-srv/business/feed/a49525-2000mar21.htm

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3) ARTICLE: e-Postage
by Edith Reynolds

Perhaps you've seen the new TV commercial in which a group of young entrepreneurs stare at their new Web page, watching the purchase recorder increase with a quickening pace. Joyous grins give way to worried frowns when the realization finally hits--all those orders need to be shipped!

The increases in your own business may not suffer the same alarming growing pains, but e-commerce often provokes a continual search for time-saving techniques and programs that enable you to spend more time online making money. One nifty time-saver you may want to explore soon is e-postage.

Gary A. Thurlow, known as The Bookman on eBay, says that his local post office is "staffed with extremely nice people who work with antiquated equipment." The staff is friendly and efficient, but the time he spends at the counter is sometimes 30 minutes or more. "That's rough on the 20 or so people who end up behind me."

Shanti Forte, who also sells on eBay, complains that the Internet business-person isn't quite as welcome at her post office. Logjams at the counter often result in abuse by postal workers. "I was actually in tears over it yesterday," she laments. Whether you find yourself in Gary or Shanti's shoes, e-postage may be a reasonable and necessary step. When you're ready to take it, there are several options to consider.

Pitney-Bowes (www.pitneyworks.com) has been doing business for the past 75 years and jumped on the Internet market fast, offering lease arrangements for desktop posting machines and extending credit lines to Internet sellers who showed a track record of success. Its lease arrangement is simple. You pay $19.95/month for the desktop machine ($24.95 if you include their electronic scale). And, as with any process you use, your expendable supplies include ink cartridges and labels. Competing online postage companies tout Pitney-Bowes' lease arrangement as passe, a situation the company hopes to remedy by inaugurating Clickstamp, a method of providing postage via the home computer and printer in the samemanner as Stamps.com. Clickstamp is still in the works, and Pitney-Bowes
is currently taking pre-registration for this process through its Web site.

Stamps.com is probably the easiest of the processes to use. It requires no extraneous equipment other than a PC and printer. According to Paula Berge of The Solace Lambs Network, "I use Stamps.com for all postage and I love it and have never had a problem." Its software is downloaded free, and to
make its product more appealing, it currently offer $20 worth of postage free.

eStamp.com competes with a similar incentive. Customers begin with a $49.99 starter kit and a label printer (cost $209.95). Its home page offers $50 worth of free postage if you sign up now. Its ad on eBay's home page gives a different eStamp offer--you pay 1/2 the cost of the start up kit and receive
$25 worth of free postage (only a 1 cent difference). Gary Thurlow reports he was really excited about eStamp when it debuted. "Unfortunately it didn't work as well as I'd hoped, several times charging my account and not printing postage. God forbid you have a printer jam. I lost lots of money
that way."

Another dependable venue to explore is UPS. Depending on the size of your operation, UPS claims to have a program for you. Low-end users benefit fromthe Internet Shipping service that provides free downloaded software.Accounts with daily pick up service can opt for Worldship, a process that
requires a label maker that is leased for $2 a week. There are plusses and minuses with UPS that differ from the USPS. UPS allows you to track packages, obtain delivery confirmation, insurance, and mail international packages from home. The downside is that UPS does not deliver on weekends,
and the cost for packages traveling long distances can be higher than the USPS (it does not have a 'bookrate' saving). Home pick-up is an additional charge, but its reliability rate exceeds more traditional methods ofsending.

Despite the attempts to appear different from the others, each company providing e-postage requires a scale, uses ink to produce the actual postal mark, and uses paper/label supplies. Also, the downloading of postage into an "electronic vault" costs 10% of the actual dollar amount ordered. This
cost is somewhat inflexible, but you can shop around to cut corners elsewhere. Scales offered online, with package deals, begin at $49.99 and reach $99.99. A quick trip to Staples will give you a 4-lb. weight alternative for $18.

But the cost of equipment and supplies shouldn't be daunting. Talk to your accountant to find out what are deductible and legitimate operating costs.The added expense spread out over time can be passed along to customers without hurting sales if your volume is high enough. Remember, when it comes
to Internet sales, one old adage proves true: time is money. If the time younow spend waiting in line at the post office can be better used to make theamount of money to cover the start up costs and supply bills, then the decision to use e-postage will prove worthwhile.

ePostage Options - Summary

All options require a scale and utilize ink, paper and label supplies that
you must supply.

Pitney-Bowes (www.pitneyworks.com), tel. 1-800-5PITNEY
Lease desktop machine for $19.95/month (other plans available) Future plans to introduce Clickstamp, providing postage via PC & printer

Stamps.com (www.stamps.com)
Download free software to your computer and print postage using your printer.
Download charge: free Transfer fee: 10% of the amount you put into an "electronic vault" Offer: $20 free postage

eStamp.com (www.estamp.com)
$49.99 starter kit
Download charge: free
Transfer fee: 10% of the amount you put into an "electronic vault"
Offer: $50 free postage on its home page; ad on eBay's site offers starter kit for 50% and $25 free postage

UPS (www.ups.com)
Download free software. Daily-pickup accounts can opt for Worldship and  lease a label maker for $2/week
http://www.ups.com/bussol/solutions/internetship.html
Extra charges: weekly fee for pickup service

Edith Reynolds is a former newspaper and magazine writer who now owns an antiquarian bookstore with her husband, Dan. For the past nine years, they have specialized in early Americana and rare bindings. Edith is responsible for online sales. In addition to their bookstore, The John Bale Book Company, Waterbury, CT, and eBay sales (eBay: TAXTER), they utilize the book show circuit, attending shows in New England and the Mid Atlantic states.

Editor's Note: The January 2000 issue of "Home Office Computing" magazine reviewed four electronic postage systems and gave Stamps.com a "best buy" rating.
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4) ARTICLE: Building a Successful "Me" Page on eBay
By E. S. James

Some do it for fun. Some do it to sell. And some just do it to do it.

eBay's "Me" Page allows you to post information about yourself and your
auctions so that other eBay visitors can learn more about you. (When you
see
the word "Me" next to a user's name, click on it and it will bring you to
their "Me" Page.) You can include personal information about yourself with
photos, or keep it strictly business, including some of your current
auctions and your feedback profile.

"It's really a personal page," said one eBay member. "There is almost as much variety as there are types of people."

A "Me" page on eBay can be just about anything, but if you're serious about selling, it shouldn't be a jumbled mess.

I am serious about selling, and also serious about saying, "Hello, welcome to my world," to potential bidders and passersby alike. And I wanted my "Me" Page to reflect that. After weeks of debating, mulling over text, fonts, and lingering on the eBay Q&A Board submitting so many "Should I or Shouldn't I?" notes, I threw caution to the wind (and threw all of my previous reflections away) and just started to type.

So many pages are filled with Vanity Items, such as baby pictures and snapshots of pets. And, while the baby pictures would prove that I was born blond (really, I was!) and I love my spoiled-rotten cat just too much, every facet of my life, both the detritus and delectable, needn't rear its head online. I figured it's just too much to sift through. That isn't to say you should make your page cold and calculated. eBay is a community with lots of personal contact, even if it is largely over email.

"A 'Me' Page shows who you are, that you are a real person and not someone selling 'magical cards' on the board," according to eBay member Nancy (eBay:L36Suds).

I decided that soft colors combined with brief, conversational text would do that job. The colors would convey comfortable surroundings, like a friendly shop where bidders can come in and browse. As for what I'd say, a "Just the facts, ma'am," approach just isn't "Me." I drew on the basic reporting
technique of Who-What-When-Where-Why-How. Then, I edited, and edited, according to my own KISS principle: Keep It Short and Sweet. I figured that "Me" pages that ramble on wouldn't necessarily hold onto page viewers. An expert agreed.

"People are going to want get to the heart of things," said Scott Rigby, head of Thoughtbubble Productions, a New York City-based Digital Media Consulting group with a staff of 50 and clients such as Comedy Central, MediaOne and Cablevision's entertainment and news channels.

But, it's a fine line: Rigby added that someone considering building a "Me" Page should try to avoid being too short. "A few sentences saying, perhaps, how long you've been in business, your specialties, customer satisfaction, anything that will help to build trust."

Others, as well, maintain the page should be professional. "They allow a person to judge what sort of person they are dealing with. Whistles and bangs don't get it -- just a bit about what the person collects, sells, some helpful hints are nice," says Janice M. (eBay: janice142), a seller who added that she "always" looks at "Me" pages. And so do the customers, which is why a page should ideally be lean and mean.

"People who come to eBay are coming with a specific task: they are there to buy stuff," according to Rigby. "They don't want to be overwhelmed with too many choices, or just too much," he said.

Rigby recommended featuring a few top items, or two days worth of auctions, rather than the 150+ items you may have for sale that week. If that's unavoidable and your "Me" Page ends up scrolling on forever, selectively add some graphics, Rigby suggested. Visually, it draws people in and breaks up
the text.

And keep what few graphics or icons you have compelling, by tying them into your merchandise descriptions. In a word: neat graphics and tightly edited text to match. I tried that, adding a little typewriter icon on the paragraph about writing and reporting -- and it worked! Again, I added a small picture (that loads fast) of an antique wood box, alluding to both  my merchandise and the "Pandora's Box" that the fun of selling on eBay has opened in my life.

Rigby also said to follow through on your item pages, "so the customer can 'pick it up and read the back of the box,' so to speak."

He said many clients come to him not knowing what they want from their Web site or, wanting too much from it. Those are the clients who want soup-to-nuts -- as in souped-up graphics and nutty amounts of text, information and every note, record and sale ever done by the company. "Too little doesn't often accomplish much," he said. But, worse yet, too much doesn't accomplish anything.

Just remember: Before you put anything on your Web page, Rigby recommends looking at it from a customer's point of view. "If it doesn't help them through their buying experience or guide them through your Web site, omit it."

E. S. James is a writer and member of the eBay community and active seller dealing mainly in art, antiques and books under the ID ehs@pb.net and can
be
reached by email at the same address. She would also like to thank members of the eBay Q&A Board for their encouragement and for * not * booting her rear-end off in the process!

When Creating Your "Me" Page, Ask Yourself: What do I want to say? What do I want to accomplish by having this page? What or how much do I want to show about my business or myself?

Tips:
Graphically, keep it neat, clean and straightforward. The page should load fast.
Select options carefully from the eBay templates: You do not need to choose everything!
Edit, edit, edit.

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5) ARTICLE: How to Set Up a "Me" Page on eBay
By Ina Steiner

What is a "Me" Page? Here's what eBay says:

"New to About Me? Be creative and create an About Me page. It's a page to express your creative side and your interests. You don't have to know any HTML or anything fancy."

If you see the word "Me" next to someone's handle and feedback points, just click on it and you'll be brought to their "Me" Page.

Steps in Creating a "Me" Page:
a) First, figure out what you are going to say. (Be sure and read Elise's story above.) And if you want to include a photo, load it to the Web and have the URL handy to enter into the "Me" Page form.
b) Go to http://members.ebay.com/aw-cgi/eBayISAPI.dll?AboutMeLogin.
c) Type in your user name and password. Click on "Create and Edit Your Page."
d) Choose a layout (2 column, newspaper or centered).
e) Now comes the part where you have to be creative - fill in the items as prompted.
f) Preview your page - proofread carefully.
g) When it is perfect, save it!

Once you've created your own "Me" Page you can go back and edit it later in HTML.

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Limited space available in AuctionBytes-Update newsletter. Our rates are low now as we build circulation - take advantage. We'll treat our early advertisers right in the future for helping us in this early stage. Please email advert@auctionbytes.com for more information.
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6) FOUND IN THE ATTIC - Toys Toys Toys
by Michele Alice

This month, Silly Putty hits the big FIVE-O! (Hey, it's older than I am!) In its honor, I've searched eBay's completed toy auctions (14 March 2000) and brought up a few familiar names. These should bring back a few memories!

Silly Putty
Number of items: 8
High: $34.00
Low: $3.25
Average: $14.79
Sell through rate: 88%

Etch-a-Sketch
Number of items: 10
High: $4.25
Low: $1.25
Average: $2.95
Sell through rate: 60%

Slinky
Number of items: 109
High: $200.00
Low: $0.58
Average: $15.48
Sell through rate: 62%

Yo-Yo
Number of items: 743
High: $585.00
Low: $1.75
Average: $25.39
Sell through rate: 55%

Mr. Potato Head
Number of items: 118
High: $100.00
Low: $0.99
Average: $14.04
Sell through rate: 62%

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7) Spam Alert: Bidder Email? Know When NOT to Respond
by David Steiner

Recently, I received an email from a "bidder" on one of my auctions that had "Ebay Auction" in the subject line, and contained the following message:

"Hi,
I have a couple questions before I bid.

1) Is this the only item you have sold on Ebay?
2) Can I make payment with a credit card?
3) Do you have any others?

Thanks!"

Normally, I'm one to get a response right out to a potential buyer. I  figure that the more information a person has, the more likely he or she is to bid on it. But this email struck me a little funny.

First, it was titled "Ebay Auction" with no auction number or item referenced. Secondly, the email wasn't addressed to me. It was addressed to "None". That was more than enough to get my antenna up.

After determining that the sender was not a registered eBay user, I decided to investigate further. I used a free email account that I don't use for receiving primary email and wrote a note to the sender. I simply asked him if his email was a legitimate inquiry or an attempt to harvest email addresses. The sender had used a free email service, so I sent a copy of my email to his email provider.

The sender never got back to me, but the email provider responded with the following note:

"Hi!
Thanks for reporting spam. It is our policy to immediately remove any accounts which are in violation of our Terms of Service, and in compliancewith that policy, we have removed this account for its involvement with spam distribution. If you have further questions or comments, please let me know."

The lesson: If you receive a suspicious email, look up the user's email address on eBay. (In my case, it was an invalid ID). If you're not sure but don't want to seem unresponsive, use a secondary email account, such as a Yahoo! or Hotmail, and respond with the question, "which auction were you interested in?" You're either going to start a dialogue or you'll get no response (more likely).

Spammers and email-harvesters have all kinds of tricks up their sleeves.  So be aware before hitting the "reply" button.

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DO YOU HAVE A SHIPPING QUESTION FOR BILL THE POSTMAN?
Email askbillthepostman@auctionbytes.com.
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8) AUCTIONBYTES.COM READER QUESTION

CURRENT QUESTION: How long do you usually run your auctions on eBay?
VOTE NOW!! http://www.auctionbytes.com

Visit the General Message Board and tell us what you think (and read what others have to say): http://www.auctionbytes.com/bin/generalbbs/config.pl

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9) NEWS:
While PayPal reduced its Refer-A-Friend bonus from $10 to $5, there is now no limit to the amount of money you can collect for referrals...BillPoint is eBay's online payment system, charging sellers when buyers use BillPoint; for details on a special promotion from VISA, go to: http://pages.ebay.com/help/buyerguide/bp-overview.html...i-Escrow is offering its online escrow services for free for a limited time to eBay users for transactions under $1000...iWant.com allows you to post messages with your "wanting to buy" info; sellers pay to reply - 30-day free trial available...eBay's new site for small business auctions: http://pages.ebay.com/business_exchange...Yahoo B2B Marketplace:http://b2b.yahoo.com...eBay announced a partnership with Autotrader.com; meanwhile, Auctionauto.com is a tool exclusively for car Dealerships...

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AuctionBytes-Update ISSN 1528-6703
AUCTIONBYTES.COM CONTACT INFORMATION
Editorial: ina@auctionbytes.com
Advertising: advert@auctionbytes.com or 508-655-5697
Letters, Comments, Suggestions: feedback@auctionbytes.com
Want to Write for AuctionBytes-Update? Go to http://www.auctionbytes.com and click on "write for us" to view author guidelines. If you are interested, send email to ina@bibliodata.com.

Ina Steiner, Editor, Publisher and Co-founder: ina@auctionbytes.com
David Steiner, Webmaster, Technical Editor, President and Co-founder:
dsteiner@auctionbytes.com
Michele Alice, Contributing Editor
AuctionBytes.com
c/o Steiner Associates
PO Box 668
Natick, MA 01760
508-655-5697
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