Monday, September 14, 2015

Fashion Bloggers Selling The Free Stuff They Get

So last fall your favorite blogger had this beautiful brown bag that you lusted over. From September through Thanksgiving, that bag was featured in countless Instas and blog posts. It was appearing in your dreams. The blogger couldn't stop talking about how "obsessed" she was with it, talking about how she'd keep it forever and it was such a great investment piece. You spent hours at H&M and Forever 21, maybe even Nordstorm looking for a similar bag that wasn't $1,300.

A year later, you still think about that bag. Maybe it's on sale on Ebay, you think to yourself. You cruise Ebay/Poshmark/Tradesy/Threadflip and lo and behold, there's the bag. Yes, it's truly that beautiful brown purse for a much, much more reasonable price of $350. You've got the cash, even though you'd be eating peanut butter sandwiches for a month.

As you look at the pictures while fumbling through your purse for an AMEX, you start to notice a few things. The wedding ring on the hand holding up the bag in the pictures looks awfully familiar. So does the couch in the background. The name of the shop happens to be the middle name of your favorite blogger. When you finally fork over the $350 buckaroos for the purse, you discover the package is shipping from Bumfuck, California. The same city where that blogger lives.

Let me discuss c/o items for a minute. C/O means "care of" or "courtesy of" and it's a signal that the blogger was given this item for review. I've talked about this before, but lots of people seem to think that bloggers get tons of free stuff. Don't think of those c/o items as free, because they're not. According to the IRS, those items are considered income, meaning I have to pay income taxes on them, not to mention my state's hefty self-employment tax. This can easily be 30% or more of the item's cost. So really, bloggers don't get honest-to-goodness, 100% free stuff. It's just a discount.

What I really want to talk about today is the contracts for c/o merchandise. Let's go back to that brown bag you fell in love with while reading my blog. Yes, I may have posted about how much I loved that damn bag for three months but only because I was contractually obligated to. I may have been required to post four Instagrams a week featuring the bag, and once every other week in an outfit post. This doesn't even cover Twitter or Facebook mentions.

To finally get to the point of this blog post, a lot of the contracts have stipulations regarding what one can do with their c/o items when they're done with them. You might have to wait anywhere from a month or year after the contract ends. Some brands will make you donate instead of selling.

There are a lot of feelings when it comes to bloggers selling their (not truly) free stuff. Some say it's a conflict of interest, others will point out to the insincerity of the blogger and call bullshit. For some bloggers, selling their c/o items help them pay the rent. For others, it's just a way of making a small bit of coin on the side.

So are brands upset that bloggers sell the stuff they gave them? For the most part, no, as long as you keep it on the down low. I sold a lot of my c/o stuff on Ebay under a fake name and sent my items out from a post office half an hour away using a PO Box as a return address. There are bloggers who are much more brazen and will make separate Instagram accounts to sell straight from their closet.

Like everything, though, it all comes down to money. Obviously, these brands want to sell products, that's why I'm getting courtesy goods.

There is no such thing as a free lunch. Over the several year span that I blogged, I received around $75,000 in "free," or more commonly known as "c/o" merchandise. Like I said in a previous post, I had to claim all of this stuff as income and pay sometimes as high as 30% of the item's cost in taxes.

Tuesday, September 30, 2014

A No Bullshit Guide to Making it in the Fashion Blogging Industry | Part #1B: Timing

A No Bullshit Guide to Making it in the Fashion Blogging Industry | Part #1A: Luck

Last year, I closed my blog down for good. There are several reasons why I chose to close it down with the biggest reason being that I really just didn't enjoy blogging anymore. Yes, I was making excellent money and had some incredible experiences but at the end of the day, I just wanted to go on and do something--anything--else. I still get spotted on the street a lot by former readers and they're always full of questions. Typically they want to know if I'm ever going to blog again (probably not but I won't rule it out) but their next question are always about wanting to know my secret to successful blogging. They're typically not happy with my answer:

30% luck, 30% timing, 40% smart working
A lot of highly successful bloggers will say one of the secrets to their success is a mixture of luck and timing. A lot of people think this sounds a bit pompous but truly, at this point in the blogging industry luck counts for a lot. I've seen lots of blogs with great writing and graphics/photos and women (and men!) with amazing style...only for their blog to never really make it off the ground. I've seen blogs with lackluster content get blown up with readers because a single big-time blogger mentioned she liked one of their Polyvore outfit boards (hint: if you want to become a full-time blogger DO NOT USE Polyvore!).

The only thing I can tell you about luck is that you won't get lucky if you don't put yourself out there. You can't get famous as a blogger if you don't start one. Now, as for timing...timing you can work on. Timing involves lots of research, tons of work, and most importantly, patience.

Part B coming soon: Timing & How to Get Started in Blogging

Wednesday, February 26, 2014

On Taxes and Fashion Blogging

I spent this morning with my accountant getting my taxes done. Finding an accountant who even had remote idea of what the tax rules surrounding blogging was a bit trickier than I imagined. My office for my day job is in an building full of lawyers so I asked one of the tax lawyers I'm friendly with for a recommendation and I couldn't be happier. The first session I had with my accountant, whom I'll call Cindy, took over three hours. She's an older lady and wasn't familiar with blogging but she was very eager to dive into subject. I know from poking around on GOMI at the tax issues surrounding bloggers is a constant subject so here's a bit of what I've learned:

1. I have to claim every single thing I get from a company as income.
A lot of people think fashion bloggers get a ton of free stuff. While my new c/o $500 Tory Burch handbag may have not cost me a cent this morning, I'll be paying come tax time. I typically estimate that 18% of an item's cost will end up being the amount I pay in taxes. 18% of $500 is $90, so I end up paying that $90 in taxes. I almost prefer it when companies will give me a deep discount, say Tory offers me the bag for $75. I don't have to pay the taxes on it (well, sales tax) and the company gets a tad bit of coin. However, a lot of companies are unwilling to do this as they can count the bags they give away on their taxes as a form of advertising. C/o items, a blessing and a curse.
  • The only things that don't count as income are bonafide gifts. Typically to count as a gift it can't be from the brand's own line (Tory can't send me a pair of shoes for turning 30), but she can send me a nice bottle of wine or a teddy bear or whatever. My accountant tells me that "best practices" dictates if Tory sends me the shoes as a gift, she also includes a document that states it's a gift and will be marked on her books as such.
2. If I don't show a c/o item, I don't have to claim it as income.
There is a long-standing rumor in the blogging community that as long as I don't show a c/o item on my blog it doesn't count as income. I don't know where this rumor came from but it's hella false. If I accept an item it's income, period. I can show it on my blog, on Instagram, tweet about it, sacrifice it to appease Quetzalcoatl, it really doesn't matter what I do with it. The moment I accept that FedEx delivery that c/o dress is officially income.

3. I can count all the clothes, shoes, makeup, etc., I buy as a business expense.
I wish but this is just another rumor. If you'd like to know more about this history of this topic, read this because it explains it better than I can. In a nutshell, if I can wear it running errands I can't deduct it off my taxes.

4. I can deduct my rent/mortgage payment since I blog from home.
Partially true. There are deductions for having a home office but that space has to be exclusively for work (you can read more here). The main point to make here is that the space is used for work only. If you use a spare bedroom as your office you can count that but the moment you put in some boxes of stuff to send to Goodwill, it doesn't count anymore.

5. Blogging gives people an excuse to write off their Starbucks addiction.
A.) Nothing pisses me off more than bloggers who consistently pose with a Starbucks cup. Congratulations, you're a middle class white woman doing the same thing as everyone else. If you're wearing Rockstuds and carrying a Celine Luggage bag along with that Starbucks cup, you better not trip when I fucking come after you with a Kalashnikov.

Um, okay, where was I? Oh yeah, I can write off some of my cups of coffee and the occasional meal but my accountant warns that this is where the IRS catches a lot of people lying. If the IRS thinks you're spending too much on the 'Bucks they're going to investigate you. Tip: Write down who you saw for that coffee/lunch and what you all talked about/did on the receipt. Did you email about the lunch beforehand? Print off a copy of the email, staple it to the receipt, and file away. Pain in the ass but SO HELPFUL in case of an audit.

6. So what can a blogger write off?
Blog designers, pens, markers, a new printer, a desk, hosting fees, a little bit of my utility bill, and other assorted odds and ends. Pretty much the same stuff anyone else with a home office can write off. 

My accountant and tax lawyer buddy have both warned me that the IRS and government will probably crack down hard on bloggers in general and their taxes. The lawyer told me he read somewhere that bloggers have a wickedly high audit rate.

A lot of people tend to get their panties in a bunch over fashion bloggers and their supposed free stuff. Yes, getting expensive things for "free" is wonderful, but it sucks when the taxman holds his hand out. I had to save for months in order to pay those damn things. In the end, the $500 purses and fancy shoes aren't worth having to worry about where I'm going to get money for groceries or how I'm going to pay my rent. Next time you see a blogger selling that jacket she "obsessed about for months" on Poshmark the day after it was posted to her blog cut her some slack. She's gotta eat somehow, too.

Sunday, February 16, 2014

A Sale Means Saving Money, Right?

As a mostly-former fashion blogger, it's hard for me not to shop. I've eaten peanut butter sandwiches every day for two weeks at work because I spent all of my work lunch budget. The winter fashion cycle is currently dying down and so, so many beautiful sweaters are going on sale. I'm trying not to buy ALL the sweaters but it's hard when it's fairly ingrained into your system. Do I really need another sweater? No. I used to be able to try to justify my clothing purchases when I had a montized fashion blog but since I've majorly put the brakes on blogging I really can't use that excuse anymore.
So many pretty things, so little time. And money.

Friday, February 7, 2014

I Shaved My Legs for This?

I went to my first therapy session today. I was interested in learning some better methods of handling stress and anxiety other than heading to the mall all the time. What did I learn? I found out I needed to come up with a location for my "happy place" and that when I was having trouble coping with stress I need to go to my happy place.

So... I basically learned I should just take my $30 copay and hit the mall. Got it.

(I'm probably not going back to therapy.)

Thursday, January 30, 2014

Not C. the Writer, so sue me.

I'm a reader of a website called Get Off My Internets. If you're not familiar with it, it's basically a forum where people can go to discuss blogs and the bloggers behind them. While reading the forums one day, I came across the thread about the former owner of this blog, C the Writer. I read a few pages and decided she was a bit of an idiot. This woman achieved heights of complaining I've never fathomed existing. Granted, I'm a financial idiot myself but I sure as hell never considered certain jobs like retail beneath me just because I had gone to college.

I started following the Dealing with Money thread because C was a bit of a trainwreck. Every now and then I'd pop back over to see what new debt she was bitching about until one day I discovered she had deleted the blog. Sadly, there went that bit of entertainment. However I discovered the blog address was open so I went ahead and took it. I didn't even really think about it. Having a bit of an entrepreneurial spirit, I figured here's a nice (lolz.) already-built brand with which I could conceivable do something.

There are all sorts of incoming links to this blog and while most are pretty run-of-the-mill "here's some other personal finance blogs" there's one in particular that's funny as hell: Control Your Cash's Financial R****d of the Month.

C, whoever you are and where ever you are, good luck. Last I heard you were working at Walmart and while it's nothing special you never know where it might lead. I worked at a big box store for four years that led to some amazing opportunities.