- A director at a major media outlet generated more than $84,000 in revenue as a reseller last year.
- By buying many items in bulk, he spends only a few hours reselling during the workweek.
- He said new taxes would make life difficult for smaller sellers who previously didn't pay them.
Max Clayton started browsing garage sales during the pandemic.
"I needed something to do that wasn't sitting around all day doing my job or watching the news," the 40-year-old told Insider. "During that first spring, garage sales started popping up, and it seemed like good timing."
And it was good timing to start a reselling business. Clayton had never done it seriously, he said, but joined eBay as a teenager in the 1990s, selling vintage T-shirts and antiques he found at thrift stores with his family.
"I would go to garage sales on a Saturday and come home with a variety of items I never would have thought of," he said.
Nearly three decades later, he revived the hobby as a side hustle — and grossed more than $84,000 in sales last year on eBay alone, according to tax documents viewed by Insider. Clayton also said he generated additional sales through other platforms. All that is on top of Clayton's salary as a media director, a role has had for nearly 20 years, at a popular media company, where he makes about $295,000 annually, before taxes.
Clayton requested that both his real name and employer be kept anonymous for privacy reasons. His identity is known to Insider.
According to ZipRecruiter, resellers in St. Louis — where Clayton is — make about $87,546 in revenue annually before expenses and taxes. Nationwide, that average is $95,190 a year, a figure that likely reflects gross revenue before profits for full-time resellers, ZipRecruiter told Insider. Clayton's resale profits for 2021 were about $45,000, according to a personal tracking spreadsheet viewed by Insider. Those proceeds are made primarily from he and his wife selling, shopping, and shipping on weekends.
Clayton said he liked that reselling accommodated his schedule as a full-time media director. But he said that customers could be hard to deal with and that changing tax laws in the US were raising tensions for many others in the reselling industry.
"I can wake up in the morning and have made $600 overnight," he said. "It's all about time flexibility."
Buying is a time-consuming hobby, but reselling can be profitable if you're strategic
Clayton doesn't have a niche as a seller: He and his wife are in the business of everything.
They have categories in which they sell more frequently because they're more knowledgeable in it, he said. For instance, he knows more about electronics, men's clothing, and activewear, while she has an eye for women's clothing and ceramics.
"When we both go sourcing together, we take home twice as much stuff," he said.
Clayton said one of the benefits of the business being so time-flexible was that he and his wife could trade off tasks more easily. He can post listings and buy inventory on weekends or before work, and she can ship stuff out whenever it needs to go. That's compatible with her work as a full-time homemaker, Clayton said.
Clayton added that they were sourcing items in person less and less.
"I'm operating in a situation where I have a limited amount of time. I have a full-time job. I can't bleed into that full-time job very easily, so I'm consistently looking for ways to source more inventory in less time," he said. He often buys wholesale from sellers he's built personal relationships with.
He bought over 100 pairs of Converse sneakers at a discount from one retailer, he said, and acquired them at a discount.
"If I were only sourcing from garage sales and thrift stores, it would take two weeks to get that much inventory," he said. "As much as our bandwidth allows, we buy in bulk and supplement with thrift stores and garage sales because we like doing that."
The government is cracking down on a once invisible marketplace
Clayton pointed out that businesses like his were about to face a new challenge. Tax laws are changing this year in a way that makes it difficult for resellers to avoid paying them.
Anyone who makes over $600 a year for goods or services through money-transfer platforms such as Cash App, Venmo, and PayPal — or retailers like eBay and Etsy — will need to report their income to the IRS. Until this year, that threshold was $20,000 a year.
It was always illegal to avoid reporting your income to the IRS, no matter how low, unless you were explicitly exempted. But now, websites like eBay will automatically request a seller's Social Security number or Individual Tax Identification Number once they reach $600 in sales.
"I'm a big-time seller. I pay my taxes, and I run it like a business," Clayton said. "But this would definitely draw small-time sellers away … who don't usually self-report."
That has the potential to affect a lot of people: In a 2016 survey of American adults by the Pew Research Center, nearly one in five respondents said they earned money selling something online.
For someone like Clayton who has always reported his income as a seller, the new rules don't make a difference. His biggest challenge, he said, is customers who can be "hard to deal with" at times.
"When people are buying merchandise online, they don't know who you are," he said. "They perceive you to be a faceless corporation, so they have the same expectation as if they were buying something off Amazon. That has made it more difficult to meet their expectations."
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