Ebay and tax

[bmwe46parts]

I am selling auto parts, importing from china and reselling here in australia on ebay, really i would still consider what i do as a hobby as i am still only able to make small orders and making very small profit at the moment but am ramping up and fully intent to continue dumping money into larger and larger orders getting those import cost's down per unit and maximising profit, we currently only have 4 products we import but selling pretty well at the moment last 60 days we have had $2000 aud go through our bank account with sales, so not a bad start but i am getting worried about tax and to go from here. 

Can i just continue to sell as i am and declare it at tax time as "other income", at some point i will register an abn and fully legitimise it but what over heads will this bring?, can someone tell me the pros and cons the 2 options, i currently have an order for 500 kilos of stock coming from china, once that comes i feel pretty comfortable to no longer consider it a "hobby", but is an abn and filing bas statements a bit overkill for now, can i not deduct all expenses and just pay tax on profit with out an abn just as i could with one?

[chameleon54]

Just one other thought. It may be worth looking at the thread titled " Dangerous parts sold via ebay " in the " motors" section of the ebay discussion boards. It is around the 10th thread on that forum.

It details an accident ( with photos ) of a BMW that resulted in the car being written off. The accident occured as a result of the fitting of cheap Chinese suspension components, purchased from an Australian ebay seller. If you follow the links to club forums etc. you will find a number of BMW.s have been involved in accidents including injuries as a result of fitting dodgy BMW components purchased from ebay sellers. 

Do the parts you import from China meet Australian Design standards ? If not it may pay to research public liability insurance as well as tax laws.

I know this sounds a bit harsh, but the photos on the thread on the motors forum are a sobering reminder of how things can go awfully wrong when businesses and products are not properly researched.

[collect247]

OP has stated in their listings that the parts are after market parts and that they are of better quality than original parts and gives a lifetime warranty.

But as you say there is that risk factor when purchasing non genuine parts.

[chameleon54]

---

@eezipeezi888 wrote:

OP has stated in their listings that the parts are after market parts and that they are of better quality than original parts and gives a lifetime warranty.

But as you say there is that risk factor when purchasing non genuine parts.

---

The problem is how do you know the parts are better quality than the original parts unless they have been tested to meet Australian design standards ? The Chinese are experts at making things look good, even when they are fairly cheap rubbish.

. Steering components ( including after market parts ) for cars are covered by Australian design standards and if the components being imported have not been tested, they are illegal. If someone buys them and they fail, the resulting accident could easily lead to some-one being killed. If that happens the OP will be held legally liable as they are the ones who imported them and sold them in Australia. This could have catastrophic consequences for all concerned.

Eezi, If you hav'nt already done so, I would suggest checking out the photos of some-ones prize BMW in the " motors section of the ebay forums. A search of club forums will show similar accidents. How do I know all of this ?  I regularly sell new old stock car and machinery parts on ebay and keep an eye on the legalities. Personally I would consider importing BMW car components from China too risky, unless I was certian they had been tested and passed Australian design standards tests.

[collect247]

I'm 100% with you in what you're saying but it's OP that has to deal with it and not me hahaha.

It's a risk I know but towards the end Holden had parts that were manufactured in China and now Honda machinery motors are manufactured in China.

BONDS are manufactured in China.

But as you said everything needs to be to Australian standards and if not then don't buy.

[chameleon54]

I have just had another look at the motors thread and associated BMW forum thread and bumped it to the top of the ebay " motors" section. It appears the ebay seller of the dodgy BMW steering parts that caused the car to be totalled was an international seller, so not covered by Australian law. The parts looked good, but weak threads on the tie rods allowed the whole thing to come apart. You cant see the internal threads unless the parts are dismantled and even if you could see them, how could you tell if the metal was of a suitable standard or simply mild steel. Without proffesional testing you have no idea what metal your car component is made of.  

Personally it is waving red flags all over the place to me, but thats just my opinion.

[brerrabbit585]

Just out of interest, when my sister was getting a roadworthy on her car many years ago, she had to buy new ball joints or something similar.  Dad bought the parts and was going to fit them but he noticed they were looser than the ones already on the car so he took them back.  I can't remember the rest of the story but I do remember that part of it - and they were genuine Vauxhall parts.  

Coming out of China wouldn't worry me, but HOW they came from China would, as in what sort of control there was over the manufacture and testing.