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[TowerTalk] spare parts dealingRe: Yaesu G2800 Rotor CalibrationQuestion

To: David Gilbert <>,
Subject: [TowerTalk] spare parts dealingRe: Yaesu G2800 Rotor CalibrationQuestion and Complaint
From: Jim Lux <>
Date: Mon, 26 Mar 2007 18:01:05 -0700
List-post: <>
At 03:59 PM 3/26/2007, David Gilbert wrote:

>You are definitely correct.  Last year I bought my son a VEX robotics
>kit, once handled by Radio Shack but now sold direct.  Some of the extra
>piece parts are pretty expensive, so I checked around on eBay for some
>sources.  I found a small father/son enterprise that was doing a lively
>business buying compatible screws, nuts, and stamped metal pieces in
>volume, then selling them at a fair markup on eBay.  The son, a
>teenager, had the original idea and handled the individual sales while
>the father provided encouragement and startup funds.
>EBay takes their cut, of course, but on the whole it makes for a very
>low overhead storefront operation with wide access to a global customer
>base.  I see many of these operations that deal only through PayPal,
>which pretty much avoids most transaction problems.  There are other
>storefronts as well (Yahoo, etc), although some of them might take a bit
>more marketing to get the needed exposure.
>Nobody is likely to get rich doing this kind of thing, but it should at
>least hold it's own.  And who knows, it might blossom into something
>larger with a decent plan.  I'm not knowledgeable enough in this
>particular arena, but there are obviously many out there who are.
>Dave  AB7E

An operation like this can hold its own as long as volumes are small 
and time required is in the "spare time" category and can be 
considered free, and the customer support is limited (i.e. nobody is 
going to call you up and ask how do you use a screw or nut)..  The 
challenge (as in any small business) is when it gets to be time to 
scale up:  When it gets big enough that you need to spend serious 
time (which takes away from some other time sink, e.g. your "day 
job") or you need to hire an employee (even part time). Or, when you 
need to borrow money to support the business (e.g. to buy 
inventory).  That's when the rubber hits the road and you turn from 
"hobby that makes small profit or at least pays for itself" into 
"business".  All of a sudden there's a whole lot of regulatory issues 
that start to crop up, for one thing.

You can skate by most of the regulatory stuff (sales tax, property 
tax, etc.) if your volume is small, because the regulators tend to go 
for high value low hanging fruit first.  However, I'll never forget 
the day I got a call from the County Assessor asking about my missing 
business property tax return.  I was doing a very small amount of 
consulting business on the side (hah.. small... $1000/yr would have 
been outstanding!) but had filed the DBA/Fictitious Business Name 
statement and gotten the Seller's Permit as needed.  That triggers 
the county knowing that "there's a business there!" and where there's 
business, there's personal property to be taxed, however small the 
amount.  So the very nice lady from the county walks me through it... 
My initial protestation that I have no assets resulted in, literally, 
a giggle.. She (hereafter NLFCA-Nice Lady From County Assessor) asked 
"are you sitting down?".
Me: "Yes"
NLFCA: "On what?"
Me: "A desk chair."
NLFCA: "OK, that's business property, at least partially, so you need 
to put it on the form, as well as the table or desk you're using, and so forth"
Me: "But it's 10 years old and worthless"
NLFCA: "Fine, but you still have to put it down, when you bought it, 
how much it cost, how you depreciated it, etc., so that you can show 
that it's really worthless..."
Me: "Aieeeee"

NLFCA: "Now, in your consulting work, do you write or type anything?"
Me: "Sure.. that's what I do"
NLFCA: "Do you buy paper to print on? Or do your customers supply it?"
Me: "I buy it."
NLFCA: "Is any of it sitting there now?  If so, it's business 
property, inventory, technically, and subject to tax."
Me: "No kidding, so I guess it goes on the form also?"
NLFCA: "Sure.. Now, I'm not from the Board of Equalization {CA Sales 
tax folks}, but you should know that if you provide a customer with a 
written report, on your paper, you have to charge sales tax on the 
full value of the report.  But at least you don't have to pay sales 
tax when you buy the paper."

Me: "Aieee..."

She was pretty nice about it, and, as it happens, since the tax rate 
is about 1%, and my total business property was maybe $400, my total 
tab including the filing fees, was in the <$10 range.  It was a very 
educational experience, and not particularly painful or expensive to boot.

But it's just one of those things about "being in business" that you 
have to deal with.  And it's the plethora of little things like that 
that make the small business hard to get rolling, because a lot of 
them are down in the noise level once you're really going, but a real 
hit when you're doing all of $10K/yr in business.  By the time you 
can actually say you're paying yourself something, you're probably 
out of the category where it's a pain.. (Figure, say, $30K/yr to you, 
and that's 10% of sales, that implies you're doing 300K/yr in 
sales... 2 hrs a week for clerical help at $25/hr is $2550/yr, <1% of sales)

While the internet and ebay and paypal make starting and running such 
a business much easier (no storefront, etc.), they also make it 
easier for the regulatory authorities to find you and insist that if 
you're making money, you're really a business, and you need to play 
by the same rules as all the other businesses.  The same internet 
that makes it easy for customers to find you also makes you now the 
"low hanging fruit" from which it's easy to collect all those taxes.

{And it makes me perfectly willing to pay someone else who's in 
business stocking those oddball parts a premium over raw parts costs, 
because I have first hand knowledge of how the system works...TANSTAAFL)

Jim, W6RMK 


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