An Inventory Question For Dealers And Former Dealers

I was sitting waiting in the doctor's office earlier today and a thought hit me.

At stamp bourses I have noticed that the dealers are not marking down what is sold when I buy stamps/covers from them, even those that are (at least for me) higher dollar items.

Why?

Do dealers use any type of inventory software?

Just kind of struck me today and I was curious how dealers track inventory and sales.

Are they charging you any taxes on those sales?

Careful, your doctor may charge you for that thought.

When I was selling second-hand records many years ago, I suppose I had a shifting set of thousands of prices in my head, and an idea of what we had a lot of. We used to note down prices for some rarer items, but that was all. I imagine a lot of stamp dealers rely on knowledge, memory and instinct.

Nah. I don't think I've ever been charged separate sales tax. Which is kind of another thing about a sales/inventory system.

My dealer told me that at a show he will keep the money he brought with him in one pocket and put all new money in the other— that's how he keeps track of his earnings

When I have a table at a show, most items aren't inventoried. The better items in sales binders are inventoried, and I keep notes on specific items. Those I update in my inventory records after the show. The remaining sales $ are accounted as from the "uninventoried" stock.

It depends on the dealer. I have generally worked for dealers at shows that mark things down, and keep careful track of what has sold.

If the dealer handles consignments, then details of a sale will usually be noted so as to properly settle with the consignor regardless of how the dealer may handle the company's stock.

I'd say the vast majority of dealers keep their inventory values loosely. Mental impression, etc., possibly with a periodic overall physical inventory review (the old brick and mortar shop I patronized in Toledo, Ohio back in the day used to close for a few days at the end of each year for physical inventory).

It's not practical for most dealers to track items on an individual basis, but it requires some good faith estimating.

I track every single cover I sell individually, but it's a lot easier to do that as an online seller than as a show dealer.

With, perhaps, tens of thousand of stamps in stock, how do dealers determine their cost of goods sold? Must be an estimate at best and how does that satisfy the IRS when stating net profit?

DonSellos

In the real world only two numbers matter .......First what total of checks you wrote to pay for stamps and supplies . The second total of what you deposited into your stamp account at the bank , but now you got statements from eBay or Paypal of sales as sales totals . All the rest is fun and games with numbers .

Can only speak to online selling, but if doing it in any kind of volume IMO some kind of tracking system is a must. At 12,600 items, I'd be lost without my listing spreadsheet, tracking every item listed, category, date, price, when sold & to whom, that kind of info. It also is the source for bulk uploads of new listings. Invaluable for sales analysis. Also track everything on the buying & expenses side obviously.

~Greg

For show dealers who buy an album and break it up into hundreds or thousands of individual lots for their stock, it cannot be practical to track individual items - only the overall "cost of goods bought this year" and "goods sold this year". Pay taxes on the difference and don't worry about the value of the unsold inventory.

Agree that bourse dealers are a different beast. The stock for some of them is massive, it must be a horrendous effort in scanning & tracking for anyone trying to transition from show to online.

I would imagine they do track overall inventory value for insurance purposes.

I do agree that an inventory system would be a nightmare for a large dealer. Can't imagine how many individual items are skus might be included.

I was just curious as I've not noticed a lot of tracking, but then again, a "high dollar" item for me isn't really all that high & other than just revenue, may not be worth tracking.

I have seen many poster's commenting on taxes in the income sense. I was thinking of sales taxes if applicable.