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EntryLevel Dropship Walmart Tax Question

by gjmc
12 replies
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How are many ebaystores dropshipping walmart products so close to margin (without losing or just breaking even)? Most of the time,a sales tax from walmart, plus ebays mostly 9% in the product types I'm referring to, so that's 16% already. I see people selling these products at 15%, and 17% margin. What gives? Surely I'm missing something obvious in my inexperience. Is the walmart tax fully deductible? Thank you for insight.
#dropship #entrylevel #question #tax #walmart
  • Profile picture of the author jeawings
    Cash back, discounted gift cards, etc. Even if you only make $3 on a sale, that's still $3. You can shoot for volume instead of focusing on margins.
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    • Profile picture of the author violet0176
      Originally Posted by jeawings View Post

      Cash back, discounted gift cards, etc. Even if you only make $3 on a sale, that's still $3. You can shoot for volume instead of focusing on margins.

      As far as profit margins are concerned, my time and customer service is worth more than $3.
      With drop shipping, I make a rule to sell nothing that doesn't guarantee a $10 or higher profit after merchant fees and shipping is paid.
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      • Profile picture of the author mich800
        Originally Posted by violet0176 View Post

        As far as profit margins are concerned, my time and customer service is worth more than $3.
        With drop shipping, I make a rule to sell nothing that doesn't guarantee a $10 or higher profit after merchant fees and shipping is paid.

        I think it is more time dependent also. If they can make $3 per item and sell 10 of these and it took one hour actual work it might be worth it. Now if it took ten hours of actual work to achieve this there are probably better choices to earn that cash.
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  • Profile picture of the author violet0176
    Originally Posted by gjmc View Post

    How are many ebaystores dropshipping walmart products so close to margin (without losing or just breaking even)? Most of the time,a sales tax from walmart, plus ebays mostly 9% in the product types I'm referring to, so that's 16% already. I see people selling these products at 15%, and 17% margin. What gives? Surely I'm missing something obvious in my inexperience. Is the walmart tax fully deductible? Thank you for insight.

    How are you privy to where they source their products?
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    • Profile picture of the author chuff1026
      Originally Posted by violet0176 View Post

      How are you privy to where they source their products?
      google search the image or the discription

      thats some dropship 101 type shit
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      • Profile picture of the author violet0176
        Originally Posted by chuff1026 View Post

        google search the image or the discription

        thats some dropship 101 type shit
        Lol, what crawled up your booty and died? Google searching an image will not reveal from what Supplier a business, ebay seller, etc...is drop shipping. Every entity selling the products are typically using the same images whether it be Best Buy, Walmart or Joe Blow and Best Buy is buying directly from the manufacturer, Joe Blow is likely not.

        Try again.
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  • Profile picture of the author chuff1026
    Originally Posted by gjmc View Post

    How are many ebaystores dropshipping walmart products so close to margin (without losing or just breaking even)? Most of the time,a sales tax from walmart, plus ebays mostly 9% in the product types I'm referring to, so that's 16% already. I see people selling these products at 15%, and 17% margin. What gives? Surely I'm missing something obvious in my inexperience. Is the walmart tax fully deductible? Thank you for insight.
    there are some dropshippers who do high volume and have auto orderers and VAs for customer service as well as get cash back and discounted gift cards. With that combination you are set. there are other smaller guys that do everything on their own and still take a 10% margin. eBay dropshipping has gotten very competitive so you may need to spend a lil more time looking for items to sell and dropshippers to snipe from
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  • Profile picture of the author chuff1026
    Originally Posted by gjmc View Post

    How are many ebaystores dropshipping walmart products so close to margin (without losing or just breaking even)? Most of the time,a sales tax from walmart, plus ebays mostly 9% in the product types I'm referring to, so that's 16% already. I see people selling these products at 15%, and 17% margin. What gives? Surely I'm missing something obvious in my inexperience. Is the walmart tax fully deductible? Thank you for insight.

    oh.
    I also charge taxes in 27 states
    the other 21 i just take the hit and make a smaller margin
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    • Profile picture of the author TorrenceJ
      Originally Posted by chuff1026 View Post

      oh.
      I also charge taxes in 27 states
      the other 21 i just take the hit and make a smaller margin
      Not trying to crap on you but make sure you're not breaking the law on that one.I've read and been told we're not supposed to be charging tax in states we don't have nexus in and Uncle Sam is the LAST person you want to upset while dealing in business.
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      • Profile picture of the author violet0176
        delete this one.
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      • Profile picture of the author violet0176
        Originally Posted by TorrenceJ View Post

        Not trying to crap on you but make sure you're not breaking the law on that one.I've read and been told we're not supposed to be charging tax in states we don't have nexus in and Uncle Sam is the LAST person you want to upset while dealing in business.
        Exactly. The only state that you can charge sales tax in is the state where you are doing business or for drop shippers, the state where the item ships from, if the customer resides in the same state.

        Sales taxes are owed to the state that your business is licensed in, meaning that it(sales tax) should be deducted and in no way, shape or form be included as part of your business profit.
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  • Profile picture of the author jeffduhon
    They use upromise with a credit card and get 10% cashback. OR Discounted gift cards. I sell walmart gift cards for a 5% discount in addition to the cashback they get so their margins are a little higher.
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