FranLab is getting evicted

[AccountRemovedPerUsersRequest]

I've learned to stay away from the low margin and low priced stuff, it's not worth the effort packing and shipping something worth $10 for example.

Not sure are you agreeing with me or correcting. But anyway, I know nothing about youtube-business, but I do know something about the topic in general. And I think that both options are valid for a content creator as well. Of course, sending t-shirts is probably not time well spent. Someone else can do more effectively. Low margin, but high volumes: something that matters below the bottom line.
But my point in the first place was: I can buy a $5 t-shirt, but I have bought several $30 "Negative feedback" t-shirts (or what ever the price is shipping/tax included).

A

[EEVblog]

I've learned to stay away from the low margin and low priced stuff, it's not worth the effort packing and shipping something worth $10 for example.

Not sure are you agreeing with me or correcting. But anyway, I know nothing about youtube-business, but I do know something about the topic in general. And I think that both options are valid for a content creator as well.

Yes, I agree with you. She should be selling products.
Selling low margin products only makes sense if you have it completely automated and/or someone else is doing all the leg work, otherwise it's time wasted. And if you are doing the sales as a supplementary side income you can't be wasting a lot of time, otherwise you are working minimum wage.

[Bobertsawesome]

I wonder how these eBay companies are set up. They must have massive warehouses here in the US where they stock thousands of items. All of them will be low-margin items basically straight from AliExpress but have the incentive of being delivered within a week rather than the usual month. I imagine a lot of them are the same suppliers in China on Ali who move someone to the US to manage their inventory/shipping here.

[EEVblog]

I wonder how these eBay companies are set up. They must have massive warehouses here in the US where they stock thousands of items. All of them will be low-margin items basically straight from AliExpress but have the incentive of being delivered within a week rather than the usual month. I imagine a lot of them are the same suppliers in China on Ali who move someone to the US to manage their inventory/shipping here.

Likely just all automated drop shipping and they include faster shipping from China instead of the normal shipping.

[james_s]

There are some that have US warehouses. There was a company next to where my friend's machine shop used to be that sold random trinkets from China. I don't know exactly how the business worked or what sort of specific products they sold but he had a good sized space and I know he stocked a lot of the more popular stuff locally. I think he did a mix of selling local stock and drop shipping direct from China. I would speculate companies like that make most of their profit on the higher cost items and sell the cheaper stuff as loss leaders.

[james_s]

Encapsulating a PCB in epoxy is a good deterrent to make the thieves work harder, especially with random scrap electronic pieces thrown in the mix.

Not really. I got quite adept at reverse engineering and even repairing potted bricks, I used a combination of xray images and in some cases de-potting. In fact I would say that potting something is a good way to entice me into working out what is inside it, whereas I might otherwise just ignore it. You only need to de-pot one single example, and if you don't care about destroying the sample it is really quite easy.

[nctnico]

I wonder how these eBay companies are set up. They must have massive warehouses here in the US where they stock thousands of items. All of them will be low-margin items basically straight from AliExpress but have the incentive of being delivered within a week rather than the usual month. I imagine a lot of them are the same suppliers in China on Ali who move someone to the US to manage their inventory/shipping here.

Likely just all automated drop shipping and they include faster shipping from China instead of the normal shipping.

I think so too. I have noticed that Aliexpress is delivering very quickly nowadays. Typically 10 days.

[Bobertsawesome]

They have started to bundle packages to the US now. I placed an order a few weeks ago that was from several different vendors, all showed up in the same bag, with the individual items postmarked in smaller bags inside.

[EEVblog]

I posted this comment on the video:

I can confirm the Patreon thing is not counted as "income" for loan purposes. I do wonder though if there is a way to structure it so that it would be counted as income? Like setting up a company or trust and having Patreon pay into the trust account and then Fran works as full time employee as the company director? If it's a trust or some other structure, the banks might not go asking questions. If they do, then you are just a regular self-employed person. Still hoops to jump through, but maybe not insurmountable then. You just need to hide that the income is a donation.
It's not illegal, and if the bank doesn't bother to jump through extra hoops to do its due diligence on the source of the companies funding, that's their problem.

[james_s]

Don't they call that a shell company? I mean I guess if wealthy people can game that for their own purposes there's nothing wrong with a regular person doing it. Another option is to cosign with somebody, or buy a building together with a partner. Doesn't have to be a romantic partner, it can be a business partner. It can be risky and I wouldn't do it, but it's an option.

[nctnico]

I posted this comment on the video:

I can confirm the Patreon thing is not counted as "income" for loan purposes. I do wonder though if there is a way to structure it so that it would be counted as income? Like setting up a company or trust and having Patreon pay into the trust account and then Fran works as full time employee as the company director? If it's a trust or some other structure, the banks might not go asking questions. If they do, then you are just a regular self-employed person. Still hoops to jump through, but maybe not insurmountable then. You just need to hide that the income is a donation.

Feeding the money through some kind of organisation (could even be a non-profit!) sounds like a very wise thing to do. From there you can pay yourself a salary. I don't see why income from donations is a problem for an organisation. Lots of charities and political parties rely on donations to pay their staff and other bills. It is not like the people working at a charity can't get mortgages.

Yes, there will be some extra work involved at the administrative side which may incur a learning curve but nothing extraordinary.

[Kasper]

I've heard this is a good plan for consulting also.  Clients pay your business and you take salary from your business.

[BrokenYugo]

I know a guy who used to do a lot of 1099 (independent contractor) work and put it all through a shell corporation with himself on the payroll, he claimed it saved him tax money, even after paying an accountant to set up and maintain it.

[nctnico]

I know a guy who used to do a lot of 1099 (independent contractor) work and put it all through a shell corporation with himself on the payroll, he claimed it saved him tax money, even after paying an accountant to set up and maintain it.

I always take these kind of stories with a grain of salt. You can probably save some taxes by spreading out income more evenly across several years and put money into a retirement fund if the money is received by a company. Over here money put into a retirement fund is not taxed until you start to draw from it once you are retired. But more likely the guy you know didn't investigate much into how to deal with his income in a tax friendly way; in such cases an accountant is worth the money.

[Bassman59]

I know a guy who used to do a lot of 1099 (independent contractor) work and put it all through a shell corporation with himself on the payroll, he claimed it saved him tax money, even after paying an accountant to set up and maintain it.

I see claims like this all the time, but for small businesses (S Corps, sole proprietorships) the "savings" is less than you might think.

Remember a sole proprietorship is not incorporated. You just say "this is my business." As the "owner" you get all of the profits but you are personally responsible for debts. With a sole proprietorship, you (the owner) does not get paid a salary. Instead you pull an "owner's draw" which is what it sounds like: you pull cash out of the business to pay personal expenses. But! For tax purposes, the IRS considers the business's profits (that is, money left over after expenses) to be your income. Your business could net $100,000 but you took a draw for only $25,000 -- this means your personal income is $100,000 and you owe personal income taxes on that (minus various deductions available to regular taxpayers) and you also owe the 15.3% FICA tax in full and the ~4% Medicare tax, too. (Though half of the payroll taxes are a business expense and as such will be deducted from business income.)

It's also worth noting that if you do the sole-proprietor route, your self-employed status means you are required to make quarterly payments of estimated income and payroll taxes.

With an S Corp the IRS requires the owner to pay themselves a "reasonable" W-2 salary. (There's a lot of wiggle room there.) The usual taxes are deducted from the paycheck: Social Security, Medicare, state and federal income taxes. The corporation owner is also allowed to do a draw in the form of a "shareholder distribution." Because of our peculiar tax laws, this distribution is taxed at a lower rate than personal wage income, and they are not subject to withholding for payroll taxes. Also, whatever profit is left over in the business at the end of the year is taxed at the lower corporate rate, not the higher personal rate. This might be where "your guy" is saving money.

[EEVblog]

I don't see why income from donations is a problem for an organisation. Lots of charities and political parties rely on donations to pay their staff and other bills. It is not like the people working at a charity can't get mortgages.

Yes, it would be a matter of scale. I'm sure that legit charities with lots of employees have no problem getting loans.
But for an individual to rely (almost sole in Fran's case I think) on donations and Youtube income alone, that can vanish in an instant I can see why it doesn't count.
I've been told essentially that by banks. In my case though it wasn't my sole or major source of income, and I had a long business history behind it.

One of Fran's problmes is that she doesn't have a history of company income and paying herself wages. It just doesn't look legit enough. She needs to at the very least set up a ocmpany now and start paying herself a wage. In a few years it may pay off.

[eti]

Is she okay now?

[james_s]

donations and Youtube income alone, that can vanish in an instant I can see why it doesn't count.

This.

I would expect it will vanish at some point, well probably not vanish but significantly dwindle. There are people who may donate once to help a person in need, maybe twice, but they're not going to keep doing it if the person keeps finding themselves in the same situation. Then there is the fact that celebrity tends to be fleeting and there is the very real chance that Fran will run out of interesting content to produce, or just lose interest in doing it, or the winds of trends and fads will shift and people will just become interested in some other form of entertainment. All it takes is a recession like we've had a few times and people cut their expenses, donations tend to be one of the first things to get cut.

[EEVblog]

Is she okay now?

She is ok in that she has a new lease in a new place, so will not be leaft homeless in 7 weeks. But she is still in the same lease position as before, so the problem will almost certainly reoccur again.
It's easy to do nothing when things aren't broken. I think she really needs to start doing something now.

[Quarlo Klobrigney]

 No worries

[Psi]

It makes me wonder why there's not a Kickstarter/GoFundMe equivalent but for giving people a small loan.

I'm sure Fran has enough viewership to loan her enough money to get a house.

It's probably a legal nightmare to setup unless done on trust with no obligation to actually pay it back, and if you did that it would be a hotbed for scammers.

[Bassman59]

It makes me wonder why there's not a Kickstarter/GoFundMe equivalent but for giving people a small loan.

I'm sure Fran has enough viewership to loan her enough money to get a house.

It's probably a legal nightmare to setup unless done on trust with no obligation to actually pay it back, and if you did that it would be a hotbed for scammers.

GoFundMe is entirely built on trust -- trust that the person running the campaign will use the donations as advertised, and not just take the money and fuck off to Las Vegas for the weekend.

And it's true that many GoFundMe campaigns really are just grifts. There is no real recourse for anyone donating.

[PlainName]

It makes me wonder why there's not a Kickstarter/GoFundMe equivalent but for giving people a small loan.

I think there is, kind of. Google 'peer to peer lending' or check out https://www.investopedia.com/terms/p/peer-to-peer-lending.asp

But this kind of thing expects repayment of the loan, which GoFunding doesn't.

[rsjsouza]

It makes me wonder why there's not a Kickstarter/GoFundMe equivalent but for giving people a small loan.

I haven't checked US, but microloans are quite common in many countries.

Indeed it is still a loan that needs to be paid back and could perhaps help with the downpayment for a long term mortgage, but I think that Fran's issues were to actually go over the barriers of securing a loan, not just the downpayment...

[EEVblog]

I'm sure Fran has enough viewership to loan her enough money to get a house.

Not in Philly, and that's essentially the problem. She won't consider a reasonably priced place outside the city.