posted on February 10, 2001 01:26:31 PM new
MagazineGuy + 1022: Great posts. We need lots more information at this level, even we bring in a legal team.
Can you folks repost some of this on the message board as it's important stuff!
posted on February 10, 2001 03:42:25 PM new
I am a Power Seller on ebay with over 1200 positive feedbacks who lists approx. 800-1000 auctions per month. I am also a tax accountant (Masters in Taxation) with over 20 years experience in the tax and accounting field. It is my opinion that given the current online auction environment, a co-op auction would have a high probability of success. Of course, the success would be dependent upon effective planning and startup.
Again, in my opinion, what is required is an "Angel"... someone of significant experience and stature to get this thing started correctly. As another post stated, it would be preferable to have someone outside the auction selling community (perhaps the head of another co-op) who would derive no benefit (financial or otherwise) from the endeavor. Perhaps this is a little overly cautious thinking, but the online auction highway is littered with the failed attempts of many big players (I would include Amazon's auction, Yahoo's auction, Krause's auction, etc. in this group) to challenge ebay. There needs to be someone at the top who has the skill and integrity to get the job done. As I recall, there is an organization of retired executives (I believe that it is SCORE) who should be able to help or perhaps a co-op organization could provide assistance.
I have reviewed several different boards on creating a co-op auction. Again, in my opinion (I seem to be very opinionated about this (- ), there needs to be one board used for all posting. I would suggest that any discussion be directed to this board and that any posters on other boards be directed to the centralized site. Posting activity and a list of potential members will be essential to show that this endeavor has a sufficient "critical mass" of sellers to be successful. Sorry if I offend anyone with this, but in my opinion the sellers are what is going to make or break an auction... buyers will eventually gravitate to where the items that they are looking for are being sold. Small hobby sellers are only minimally impacted by ebay's shenanigans. I calculate that their increases will cost me at least $100-$200 per month.
For some time I have thought of attempting to start a "Seller's Auction" or union as ebay has consistently tightened the noose around the necks of its benefactors (us) to maintain and embellish its profit margin and stock price. There is no recourse for us-ebay is a monopoly. In addition, I have periodically e-mailed other auctions (Yahoo, Amazon, MSN, etc.) to see if I could discuss my ideas for improving their sites with them with no response (they are all pretty arrogant). Free sites are not a long-term solution to our problem as they will only ebay-ize (if you made it this far in this post, then I have the right to make-up words).
This is a revolution....we are not that much different from the colonists in their fight against the British (well, maybe we are a little different...we sell items on ebay and we don't have muskets...I myself don't drink tea, except if it is iced tea with a lot of sugar...my wife makes some great iced tea with lemons and oranges but that is another story). As Patrick Henry said, "Taxation without representation is tyranny." If ebay decides tomorrow to raise all fees 100%, what will we do. Gripe a little...gripe a lot....and eventually we will pay it. There is no other show in town and our complaints have no impact whatsoever on their decisions.
Trust me, ebay is watching this closely. They know that if the seller's unite, they will be in serious trouble. I keep thinking about the movie "A Bug's Life" (I have 2 young kids, so I have no choice but to watch movies many, many times). We are the ants, gathering food for the ebay grasshopper. At one point in the movie, the head grasshopper said to his army of thugs that they cannot let the ants know that if they unite, they will be able to defeat us. Ebay will surely do anything it can do to defeat this movement...its existence could very well depend upon it.
I derive a major portion of my income from selling antiques and collectibles on ebay. I have no problem paying a fair price for the service. I am sick and tired of being nickel and dimed to death. When I am working to 3 in the morning, ebay is there with its hand in my pocket. When I am out at 5:30 AM going to yard sales, ebay is still there with its hand in my pocket.
They are not satisfied with growing their business slowly and steadily...they demand more and more from us, while providing less and less. They have earned their billions on the backs of the small sellers trying to make a decent, honest living. With the current economic downturn, lower (and less) bids, higher shipping cost, paypal fees, billpoint fees, software fees, etc., etc. it is getting to a point where there is no living to make anymore. Again, in my opinion, a co-op auction is not something that can be done, that should be done, that could be done.....it must be done. I am willing to assist with my money and with a little time. Thanks for your time and sorry for the long read.
BTW, this user name and e-mail address were created solely for posting purposes. They are not used for ebay (so you can forget any of attempted character assassinations that you are thinking about (-: ).
posted on February 10, 2001 03:58:15 PM new
Good thoughts, Dave.
10-22: You're right, section 6 is the one that most applies. That's why we applied for 501(c)6 exemption from the IRS for OAUA, and it was granted.
My lay understanding regarding the profit issue is this. The corporation can show a profit- but individual members cannot profit directly from the corporation in the form of profit sharing, or dividends, or the like. They CAN benefit from joining together to share discounted costs of services and the like, and they can receive other benefits that can accrue indirectly.
At the same time, most of these members probably have their own small business, which (hopefully) shows a profit (this on schedule C or whatever). Just because someone joins the Auction Co-op (or OAUA, or whatever), it doesn't mean that they cannot continue to have and run their own business, and to profit from that business. That's the goal, after all.
So, at the end of the year, if the corporation shows a profit, that's OK- as long as it's meeting the mutual benefit goals as submitted to the IRS under section 6, and as long as profits aren't divided up and returned to members directly. I'm sure it's much more complicated than that, and that's why accountants have tons of books, but that's my basic understanding.
So individuals run their own small for-profit businesses. They join a non-profit 501(c)6 Auction Co-op, and benefit by virtue of their clout and ability to do things as a group (sell on their own auction site, for example) that they could no do singly. They pay dues, and hopefully receive equal or more value back in the form of services and benefits.
Think auto club. They started out decades ago as a small club of auto enthusiasts. 10-4?
posted on February 10, 2001 04:08:46 PM new
Magazine_guy-
I understand the concept. The only question I have is, in the execution, and if the Coop is incorporated as an Auction Site, among other things, whether the small businesses of the members will become by law part and parcel of the umbrella the corporation will be incorporated under for the purpose of eligibility for non-profit status. We have an Accountant here- Dave, care to comment on this non-profit issue?
posted on February 10, 2001 04:33:39 PM new
Wow, great posts. Can you guys repost on the message board too.
AF25: Welcome aboard. I encourage you to post on our message board and Cathy will have the info website up pretty soon.
Auction Watch has very strict guidelines which we all want to follow. That's why we can't use this as a sole board as much as most of us would wish too.
I hope you decide to join up and volunteer. We can use some of your knowledge.
Barry and Steve, thanks for helping to hammer out some of this legal stuff. I think we need to be as prepared as possible before we bring in the legal folks. And I'm sure there's a legal definition for what we want to do.
I think most of us want a co-op and after getting some of the news I did today from out tech sources I can tell you we jumped six steps closer to the goal.
We will be forming a planning group very shortly and breaking into sub-committees.
If anyone wants to be a part of this just email me or drop in on the other message board.
We really could make this happen. And it's no longshot!!
posted on February 10, 2001 05:15:04 PM new
10-22:
I'm a member of the Online Auction Users Association, along with 2,500 others. It's a non-profit, just like we're considering the co-op might be. Nearly all of us who are members of the OAUA have businesses, and they aren't impacted tax-wise by membership in the association.
Similarly, if you are a member of the Auto Club (for insurance, discounts, travel assistance, and such), it doesn't impact your tax standing.
The co-op, as I see it being proposed,isn't a joining of businesses, or a relinquishment of one's business to the co-op. It's a bunch of business people getting together, pooling limited resources, and creating something that will benefit the whole group.
That's how it looks in my lay opinion. An accountant or tax attorney could give you a definitive answer, I'm sure.
posted on February 10, 2001 05:49:11 PM new
Steve, what he may be asking, and what MY question is, is how can it be a NPO if it is a business iteslf.
I think they are proposing something along the lines that already exist: ebay, etc, which are businesses.
Maybe by scheduling payments a specific way; set monthly, one time, annually, etc, might in some way determine how it may be viewed as different from ebay?
posted on February 10, 2001 05:55:42 PM new
Hi Everyone,
Whew.....I'm getting just plain DIZZY jumping from board to board this past week trying to keep up.
I AGREE with Dave the Accountant. CENTALIZE...stay on ONE BOARD.
Where has it been said that AW don't want us posting here?
This is where everyone is at.
After jumping all over these boards and threads I've got a couple of thoughts to share.
FIRST.....Jamie start a new thread HERE with THE proposals "FIRST PLATFORM".
Let people see it here. If the thread gets to be 3 pages start another thread to "continue it" with a link to the old thread. That will be for those that feel a need to catch up. Thats what your concerned with isn't it??....the threads getting to long. I, myself hate long threads.
SECOND....You keep asking for help and volunteers. Ummmm, could you or someone be a little more specific in the type of volunteering you want...other then Accountants, Lawyers and related EXPERTS.
Someone like me would be of no use to anyone in those regards, but maybe in some other capacity. I'm sitting here in Central america miles from any BIG city, and I'm computer illiterate, everything I know I taught myself. That still doesn't keep me from wanting to help if I can.
I was reading where Your asking for help for Cathy LaBelle to set up a web sight. OK..how about some hints as to the kind of help she needs.
In other words SPELL IT OUT, I'm good at taking direction. If its spelt out then I can decide if I'm capable of offering anything of value.
At this point I haven't a clue as to what you or anyone else wants.
I had a third thought but it got lost....I guess I'll have to start taking hand written notes as to what I read and WHERE!
posted on February 10, 2001 06:10:57 PM new
Hi Packer,
There's always room to help. Email Cathy, I'm sure she can find some stuff for you to do. Other than that what you and everyone else can do to help the most is to spread the word.
Tell folks about what we're trying to do and post as often as you can here on AW and on the message boards.
Share with us what you like or don't like about the platform? Share what you like about ebay or other sites or about what you don't like and share what you want in a co-op. Tell us how you would do it and tell us a bit more about yourself as a seller.
And if you want join one of the committees when they get formed in the next week or two.
And if none of this covers what you want to do then do your own thing! There are no bosses here.
We all are working towards the same goal! You can create a thread anywhere and start a discussion. Let's all bring something to the table and I bet we have more in common than you think?
posted on February 10, 2001 06:12:33 PM new
Hi Mike:
Well, non-profits ARE businesses. They typically have a board of directors, a President, a Secretary, and a Treasurer, and often other officers. They buy stuff, pay bills, advertise, and all the other stuff most businesses do.
The advantages to non-profit corporate status (cribbing from some of the books I got when we incorporated OAUA) are:
1. Tax exemptions (state and federal income tax).
2. Limited Liability for directors, officers and employees. This is a HUGE advantage- it means that generally the folks who work for the corporation aren't liable for corporate debts. The personal assets of the folks who run the thing generally are safe. This is the "corporate veil" that you hear about sometimes. There are significant exceptions, though- that's why it's called "limited" liability. Directors and Officer's insurance is still a good idea, from what I understand.
3. Perpetual Legal existance. The corporate entity continues on, despite changes in leadership. It can be desolved through legal means, though.
4. Employee Benefits. The principals can also be employees of the corporation, drawing a salary. If the group wants to hire a full-time president and secretary, for example, these employees can be eligible for tax-deductible benefits like sick pay, group life insurance, health insurance, and the like.
Non-profit corporations can operate businesses that charge fees, sell things, and generate revenue. There are some pitfalls tax-wise if the activities being operated aren't "substantially related to the tax-exempt purpose." See why an attorney is a good idea to get on board at some point?
The Goodwill is, I imagine, a non-profit. The operate stores, they buy and sell stuff, they make profit on some things. AutoClub is, I believe, a non-profit. They are busineses. (Again, just my lay opinion and things I've learned this past 2 years working for OAUA).
posted on February 10, 2001 06:26:58 PM new
Its a little hard discussing the PLATFORM here, when nobody is reading it here.
I feel to post on the ez-board only a select few are seeing it and it is EXCLUDING a large part of the audience.
Your audience is here....HERE is where the IDEA was born. Am I right?
And as far as telling people about our cause...where do you suggest I send them? I certainly don't want to send them to all the threads where all the "bickering" took place.
I'd like to see you start a thread HERE with the FIRST PLATFORM plan. I would send them to that. As that is the first coherent thing I've read thus far.
posted on February 10, 2001 07:15:14 PM new
yup many of the goodwill stores are non-Profit and some goodwill stores I know of are as well incorparated they these non-profits can be state a fedral tax income tax exempt.
How ever they are not exempt from state coutny and local land taxes and they must collect state sales tax on there sales even if it is a church group this is a requirement of the incorporation status or at least a part of it.
This I learn just discussing issue with the minister of the church here at one time not long ago.
As a church orgainization they had to give up some of the benfits of relgious non-profit to gain some of the safty of a corporation.
For some its a happy balance for other ideas like a Co-Op it would look to be the Only way a sellers Co-Op could come under a club as well in the 70s the days of CB radio and amature radio popularity I remember there were hundreds of radio clubs set up as non profit many even incorporated they collected month membership fees for services of different types as well.
posted on February 10, 2001 07:25:19 PM new
Magazine_guy-
Here is what seems to be the definitive word on whether or not this Coop could be incorporated as a non profit business league. It doesn't seem to leave much doubt about the answer. See especially Section 1-F.
posted on February 10, 2001 08:23:16 PM new
10-22:
Yeah- I guess it goes to the issue of what the primary purpose and primary activity of the entity is. All the more reason to have a lawyer involved before things get too far.
*****
An organization engaging in business activities is exempt under IRC 501(c)(6) only when it can be determined that such activities do not constitute its primary activity. The following organizations were held to be exempt:
a chamber of commerce that operated a credit bureau as one of its fifteen departments (see Milwaukee Association of Commerce v. United States , 72 F. Supp. 310 (E.D. Wisc. 1947));
a chamber of commerce that develops an industrial park to attract new industry to the community (see Rev. Rul. 70-81, 1970-1 C.B. 131, Rev. Rul 81-138, 1981-1 C.B. 358, and text 6.8.1);
*****
So as I read it, if the sole purpose and activity of the corp was to run an auction site, it wouldn't qualify under 501(c)6. But if it had a much larger purpose, and the auction site was one of many activities, it might.
If the co-op's sole goal is to do the auction site, maybe the non-profit status wouldn't work then. Maybe a for-profit would fit the needs better.
I know that the applications for non-profit status ask in some detail, what % of the business is involved in which specific activities.
posted on February 10, 2001 08:32:56 PM new
Magazine_guy-
I don't know if that argument would even be worth trying...
<<<Its purpose must not be to engage in a regular business of a kind ordinarily carried on for profit, even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining. >>>
First, this Coop will be forming an Auction Site. If it does, every activity will be collateral to that, and it would be seemingly impossible to claim that the member sellers who pay dues to the Coop wouldn't be as their main function selling for profit.
But that's not the only problem.
<<<Its primary activity cannot be performing particular services for members.>>>
That's exactly what it will be doing, and there's not even a conceptual way of getting around that.
And there's more, but if you can find any tax accountant/attorney who can get around those 2, please let me know, I'll use him/her myself.
posted on February 10, 2001 09:03:21 PM new
I'm no expert, but it sounds like 1F means that if you organize your trade organization specifically to run an online auction, it may not qualify as a business league or trade group.
But if your organization's mission is to promote and support online buyers and sellers, and provide a wide variety of resources & benefits to the members, then it might qualify. If you have a wide enough variety of activities, then an online auction MIGHT be one of them, but is not your _primary_ reason for organizing.
I mentioned in other threads that organizing is more important than starting an auction site, IMO. If you organize, you can get what you need from others without building your own site from scratch.
posted on February 11, 2001 05:42:56 AM new
OK, my opinion on the proper sequencing of this whole project-
At all stages find ways to disseminate this information freely and broadly, so that anyone who may be interested in the project could comment and/or advise.
#1. Write a conceptual mission statement that doesn't address things like specific fees, tiers of items, etc., just addresses why there is a need for a Coop, and the guiding principles of that Coop. Address WHY a Coop should exist, and how it would differ from ebay or Yoohoo etc. Address only those issues as ISSUES, and how this Coop would solve the problems that currently exist. Invite comment.
#2. Find a person who has done online Coop setup before from outside of the Online Auction Community. Explain the general concepts of the project, show them the conceptual mission statement, and get a broad outline from that person of what needs to be done in the SETUP stage, and the viability of the project, and what needs to be done in the implementation stage.
#3. Make an abstract of this outline that addresses specific startup issues. Present it to the Community.
#4. Ask for volunteers with expertise in relevant aspects to both comment on the abstract, and if appropriate, help form a coherent business plan. Taxes. Legal liability for officers and members. Incorporation issues. Technology issues. Regulatory issues. Member fees, NOT auction listing fees or fvfs. Etc. I would think that there are many experts out there willing to help.
#5. THEN, put together a preliminary business plan which will address each necessary step in the order that it has to be taken, including this time the proposed structure of the site itself regarding Listing fees, membership rules, fvf's, etc.
There may be steps that I've missed, but if things aren't done in the approximate sequence above, I believe everything that's done would be putting the cart before the horse.
posted on February 11, 2001 07:12:46 AM new
What if we started a club or association, or co-op for sellers that would pool resources with the 'idea' of promoting sellers, insurance providing auction tools, image hosting, payment services, shipping supplies, all the things we might need as sellers. Maybe even tax advice etc at discount. Then the auction piece that we all want. Would that type of structure fair better as NFP?
You got it that is exsactly it The order that is needed.
The Idea was to organize a Co-Op of Auction sellers.
That a big enough group of seller could support each other in many ways from group buying power on thing like shipping supplys maybe payment services to maybe affordable group health insurance for anyone but would help full time sellers big time and could even offer Auction management services many other things maybe seller and buyer education that would help new comers and not so new become better buyers and sellers.
The main focus would be not a coop auction site This discussion group got off on the auction site Idea I think mainly half the people trying to proove an auction site is posiable cost wise and workable with out haveing to think it needs to meet ebay Head to head.
Another half of the people trying to prove it would be totally imposable due to the High cost of the advertizeing nessary alone.
I heard RubyLane the frist time and I think they are right if we just organize the coop we will be able to get what we need from others with out building an auction site from scatch.
Now if we could get back on this track and off the defence we could get this Co-Op going
Now here is the Qustion How Do we get sellers and buyer who have been programed by an ebay to beleave that anything to do with online auction sellers must make a billion or 3 each year to be sucessfull how do we convince them that there is things we can do as a big group of sellers build this coop to provide for each other more afforably as a not-for-profit coop then a mega gaint like ebay would ever even be able to provide.
how do get this group to under stand that if a few hundred to start of a few thousand people could get this started this way and that in time we could have a auction site or auction sites we more then likely wont even have to start from scratch that its posible that what we are looking for is already out there and arrangement and ageements can be made with them already out there.
How do you get people to understand that it is posible there is one or more auction sites out there already who would work with a Co-Op of sellers in some way that would mutually help each other in many ways.
There still could be one member one vote, There still could be neighbor hoods or comunitys of categories ran by coop members who design and conrol evry part of there category.
That it can still work cheaply on a yearly member ship leavel a fixed monthly fee With or with out fvfs that a auction site and a coop could shar costs of advertizeing and not even starting out with the Idea of meeting ebay head to head kick there butts.
if you got a large gourp of sellers/buyers in this coop and two or three privitely own auction site working togeather there is 4 times the effort in this and Money to work with when the time for a Co-Op website has come.
it wouldnt be to hard I dont think to show some auction site owner how this could produce income for them as well as a coop some of the privitely run auction sites right now have no income at all and fear if they charge people they will lose the suport they already have.
Is there anyone seeinf sense here in this ?????????
A Co-Op of this kind could indeed Be A not-for-Profit Corporation It main idea would nt just foucus in one area it would be run like a business and even being non profit dont mean your not trying to make money The auction site many profit from a Co-Op but this would be Ok because they would not actually be the Co-Op Just agree to be a member and share in fee meet the guide line set up by such a group of sellers.
New Privitely owned stores and sites could work there way in and if some found it nessary could leave the co-op with the proper notice and in the proper way.
posted on February 11, 2001 02:07:18 PM new
I agree with 10-22 about the best way to proceed-- I think it's premature to try to develop fees structures, listing structures and the like so early in the process. Cart before the horse, as someone said.
posted on February 11, 2001 03:16:29 PM new
Yup there are a lot of models to build a Co-Op on 10-22 is on the track with his list he did miss a few step I believe in all there are 16 along the way a group may go Three steps forward only two find they must go three steps back to move forward to the fourth step.
The porcess could take one month the process could take a year of more but with carefull work when you finilly get to that final step you have a Co-Op and have the support you need to be a soild organization.
I Hope this frist platform will help get some people such as 10-22 and other on the fact finding missions and smaller groups this idea will need to be able to come forward with a workable mission statement that the majority will see as useable.
No money or fees are nessary for cost finding fact finding and digging into the legal aspects we need. http://www.Dman-N-Company.com
posted on February 12, 2001 08:32:30 AM newBefore the split with Jamie, we had ToyRanch, Magazine_Guy and Rosalinda working with us. Those people represent the interests of thousands of eBay sellers. Unfortunately, not everyone was able to work together cooperatively.
If I'm not mistaken, ToyRanch is a well respected member of the OAUA and Rosalinda and Steve are on the board of that organization. Seems they work together just fine as the OAUA is still humming along.
This is what I have seen so far: Radh started a thread asking what people thought of a co-op. Once the discussion got more detailed, one AW member then decided that the idea for such a venture was really his and threw up a message board that was supposed to be for all people to post suggestions and ideas.
This was followed by lengthy discussions on AW that were dominated by this poster and another. Both seemed to want badly to define and then make an attempt at the co-op.
However, once one of these two folks had ideas that differed from the other, they were kicked, banned and told they were not wanted, not wanted in a venture that hadn't even been defined yet. So much for the exchange of ideas.
Now, we have this thread in which both posters are posting ideas about the co-op. If these two folks are not willing to work together, isn't it a little confusing to be posting in the same thread?
I hope to see Steve and Rosalinda involved in this venture simply because they have some expertise in the OAI and have never given any inkling that they were on any kind of power trip.
Canvid: I do have a problem with your feedback situation, however, your posts here have been very informative and I'll continue to read them with interest.
I also do not believe that this endeavor can be successful if done in the open. Another poster in either this or another thread made an excellent point about the OAUA needing to go underground in order to proceed.
posted on February 12, 2001 08:55:06 AM new
Look, I'm starting to get a wee miffed about this little debate... Like I said, I've "involved" myself in this for 3 (now 4) days, but I truly and honestly believe this is "proceeding" in a haphazard and incorrect non-sequential way, and of course like many other people, I also believe I'm always right about what I believe (JOKE)... SOMEONE or SOME GROUP who has been involved in this thingie for a while needs to throw out a coherent mission statement so that the Online Auction Community (if such a thing exists) can get behind it, one with only the WHATs and WHYs of the whole project, NOT the HOWs. If noone does that, this thing will end up being the Doppler Effect Coop project- all these little suggestions about fees and non profits and taxes etc. will hit the water, and probably dissipate into nothingness. I would even take it on myself to write this lil' document, but I don't think that someone who hasn't been involved with the situation for a reasonable period of time SHOULD. A SPECIFIC suggestion-
Jamie, Toyranch, Magazine_guy, Nancy- from what I've seen, you 4 have the most experience with this, get together and see if you can agree on a mission statemnet to present to the whole community, then present it....
), there needs to be one board used for all posting. I would suggest that any discussion be directed to this board and that any posters on other boards be directed to the centralized site. Posting activity and a list of potential members will be essential to show that this endeavor has a sufficient "critical mass" of sellers to be successful. Sorry if I offend anyone with this, but in my opinion the sellers are what is going to make or break an auction... buyers will eventually gravitate to where the items that they are looking for are being sold. Small hobby sellers are only minimally impacted by ebay's shenanigans. I calculate that their increases will cost me at least $100-$200 per month.