Record keeping for auction sellers

Part 1: Learning how to mine gold efficiently

Our online store at Yahoo
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My seller's profile at eBay (with all customer feedback)

The following article was written for GoTo Auctions (formerly known as AuctionRover). The rights have reverted to the author.

Imagine that you just inherited a gold mine in South Africa. There's real gold in that ground -- lots of it. The only problem is that it will take a lot of work to mine it and refine it -- maybe so much work that it would cost you more than you could sell it for. So maybe you'd just let it sit until the price of gold went higher or until you could figure out a less expensive way of cashing in on it.

Now think of all the stuff you have stored in the attic and the basement that you don't really want or need. You've procrastinated about holding yard sales, because they're so much work and usually don't get very high prices. Now you hear about online auctions, which reduce the work of connecting with customers and also promise to get you better prices. You figure you've got it made. You list one item after another, and people actually bid on them. So you list more and more. Payments arrive, and you ship stuff, and you get lots of email. You list more stuff. Soon you have dig through stacks of paper and read and reread old messages trying to figure out who won what and what this check is for and to make sure that you really sent that package you thought you sent last week. In short order, you find yourself spending 20, 40, even 80 hours a week dealing with all the details of managing these auctions. What looked like a gold mine in your attic is starting to feel more like a tar pit; and you can feel yourself sinking.

If you find yourself in that position, pause; let your current auctions run out, and start all over again with careful, systematic record keeping. And if you are just getting started, get organized now before the problems start.

Remember, your own time is not free. If it takes you two hours to deal with all the hassle of listing, communicating, shipping, keeping track of the transaction etc., and the item which cost you $10 sells for $20, you're only making $5 an hour.

Typically, when you first get started, you don't count the time. You get a kick out of the experience and take pride in all the details. But once the novelty wears off, let's be honest -- if someone offered you a job doing this same kind of tedious work at that rate of pay, you'd turn it down.

But by organizing what you do and keeping careful records -- in a form that's easy and yet that provides you with everything you need to know to work efficiently -- you can cut down on the time you spend on tedious tasks. That means you can either wind up making money at a better rate, or spend the extra time on the creative and social aspects of auction sales -- communicating with the buyers and making your listings witty and fun as well as informative.

Next week, we'll provide practical tips on how to deal with the details of record keeping. And the week after, we'll take a look at record keeping for taxes. 

Other auction articles by Richard Seltzer

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