Keep everything. Receipts for boxes, mailers, shipping labels, etc. You can run a report on paypal to see your payments received.
Most of us don't make any money doing this, now we're being asked to prove it. But if the IRS wants to treat card collectors like businessmen, I'm going to run it like a business. I got a business license, so now I can write-off expenses and report my LOSSES.
It also helps to know a few CPA's (especially if they are named partners with the firm
)