Career Testing
Career Testing
Career Testing
ENTREPRENEURSHIP / JUL. 07, 2014
version 3, draft 3

How to Start a Business on Ebay

eBay has become “the” place for buying and selling. Whether its an antique, collectible, new items, or even something that most of us would consider junk, there is likely someone, somewhere willing to buy it. The website conducts countless transactions each month, with sales figures in the millions and millions of dollars.

Selling on eBay couldn’t be easier, and there are many people making a decent living doing nothing else. The overhead and cost of doing business there is low. The potential profit is high. Thinking of joining the ranks? Starting a business on eBay is ridiculously simple.

Step 1 - Create Your Account

Joining the site requires the creation of an account. You input your name, email address, and create a password. Done. You can also register as a business, which requires a bit more information, but allows you to create a “store” for your listings.

Many forums and articles suggest buying a few small items when you first create your account. It helps to establish yourself online.

Step 2 - Listing an Item

Once you have an account, you’re ready to start listing items for sale. But what to sell? This can be the hardest part, as millions of people are looking to make a profit on the site. Take a look around your home. Do you have anything unusual, unique, collectible, or new that you’d be willing to sell? Try yard and garage sales. Antique shops. Flea markets. Some sellers purchase overstock from retail businesses and then sell it on eBay. The possibilities are endless.

It’s best to eventually settle on a niche. You want to become a known and trusted source on the website, and dealing exclusively in one item or industry is the best way to do that. Become “the” source for Stars Wars collectibles, or vintage books, or Hello Kitty! merchandise, or whatever.

When you do have an item, there are a few basics to remember:

  • Use SEARCH TERMS in the title. Avoid subjective adjectives (e.g. cute, darling, incredible). Title your item with the keywords people might use to find it.

  • Always include a photo, and make sure it is clear, in focus, and well lit.

  • Use a vivid description that accurately describes the item. Again, go for objective rather than subjective. What is it? Where did it come from? Measurements, size, history, and so forth.

  • Select the category carefully. Don’t just throw it in the first one that seems to fit. Think about it.

  • Price appropriately. Many new sellers either fall into the too low or too high trap. Consider everything when deciding on a price. Check the going rate for comparable items on eBay. Calculate your purchase price for the item, work in the shipping cost, don’t forget about the listing fee, final value fee, and PayPal fee that will be deducted. And remember that pricing too low because you’re anticipating a bidding war usually ends with you losing money. You might go with a live auction, which sets a time period during which buyers can bid on your item. This is useful when you’re a new seller, as it increases your exposure, or you can select a fixed price, which allows someone to instantly buy and gets you your first sale that much quicker.

  • Indicate the shipping options, and ALWAYS include a free shipping option if possible. You can offer free shipping, flat fee shipping, or calculated cost shipping. Indicate whether you ship internationally. Whatever you, keep the shipping costs as low as possible and NEVER try and increase the overall sale amount by inflating the shipping cost...it will eventually cost you positive reviews, sales, and could land you in trouble with eBay itself.

Step 3 - Shipping an Item

When you make a sale, your buyer will select the shipping option they want. eBay labels are a great way to ship items sold. You’ll get a great rate as a seller, your information is automatically printed on the label, and tracking and delivery confirmation numbers are added to your account (whatever method you chose, always utilize tracking for a package). Pack carefully. And get it shipped out FAST. Buyers don’t want to wait weeks for an item. Offer 1-day turnaround, meaning you’ll get it out via their preferred method within one day of the final sale. Share the tracking number with your buyer if it’s not done automatically.

Step 4 - Getting Paid

Most buyers use PayPal, which integrates fully with eBay and allows someone to pay easily by credit card or their PayPal balance. You will have to pay fees, so remember to calculate that when setting your price.

Once payment is confirmed, remember to leave a positive review for your buyer. It’s the right thing to do, and it increases the likelihood that they will leave one for you. Positive reviews are the way to increase the amount of trust and exposure that you’ll get.

Step 5 - Upgrades

You can use a free account, which allows you 50 free listings each month. You will pay final value and PayPal fees, though. A store subscription increases your monthly free insertion allotment and lowers your fees, but does carry a monthly charge (Basic $19.95/month, Premium $59.95/month, or Anchor $199.95/month). Additionally, a store allows you to personalize your page with logos, colours, borders, marketing and reporting options, and a few other upgrades not available with a free user account.

Step 6 - Understand the Potential Fees

As a seller, you’ll be paying for the use of eBay. The fees vary depending on your account type (free user, basic store, premium store, and anchor store) and category of the listed item(s). Understand them, and incorporate them into your costs and pricing practices. Fees include:

It might look overwhelmingly complicated, but once you read the fine print, it’s rather straightforward. Check out the eBay Fees Calculator for a quick calculation on any sale.

The Seller Centre is a great resource for information and tips on selling on eBay. The potential is there for excellent profit, but it is far from a sure thing. Start small. Don’t over-invest in stock until you KNOW something sells well on the site. Find a niche and stay with it, building up your visibility and exposure to the community. Price well, stay honest, and earn money.

Photo by Cheon Fong Liew

Creative Commons License

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