Making a Living from Your eBay Business

Appendix A. Accounting Basics

For those of you who slept through your college accounting classes, this appendix will help you brush up on just enough basic accounting to help you manage your burgeoning eBay business.

What follows are the key financial concepts that describe how a business is doing, money-wise.

Revenues, Expenses, and Profits

Three related concepts are key to the running of any business:

Note

Costs can be either fixed or variable. Fixed costs are typically those operating expenses that you have to pay no matter how many (or how few) products you sell; your monthly Internet bill is a good example of a fixed cost. Variable costs are those costs that vary depending on your revenues; eBay final value fees are variable expenses.

• Revenues. ...