Despite the high selling fees, starting an eBay business can be a lucrative income stream. With over 180 million customers, and almost 2 billion online visitors every month, eBay is a huge online marketplace with significant opportunity for sellers. Want to know how to start an eBay business? Keep reading to learn everything you need to know for success.
Things to Do Before You Start
As a minimum, ensure you research the following before starting an eBay business:
- Tax and VAT requirements
- Impact on employment status
- International selling rights
- eBay selling fees
- Restricted/prohibited items you can’t sell on eBay
- Local laws around selling the products you want to sell
- Delivery requirements, fees and charges
You should also develop a business plan that includes market research on your product, niche, brand, competitors and profit margins.
How to Start an eBay Business Account
Starting an eBay business account is relatively simple and can be completed quickly when you have the right information available.
Here’s how to start an eBay business account in 5 simple steps:
- Register for a business account
- Disclose VAT details
- Set payment and communication preferences
- Add inventory
- Start selling
Getting the information you need to create an eBay business account may take several days or weeks, depending on your VAT registration and payment requirements.
For example, if you need to create a new bank account or become VAT registered before starting an eBay business, this could delay how quickly you can register with the marketplace.
How to Open a Shop on eBay
You can open an eBay shop instead of selling via a business account. When you have a shop, you’ll get discounts on selling fees and you can create a professional brand for your products.
To open an eBay shop, you need to have an active selling account first. You’ll also need to have an active PayPal account.
Learn more about how to open an eBay UK shop.
How Much Does it Cost to Start an eBay Business?
Starting an eBay business is free, but you’ll need to pay various fees when you start physically selling items and/or products.
The most common fees you’ll have to pay with an eBay business are:
- eBay selling fees
- Tax (if applicable)
- VAT (if applicable)
- Delivery fees and charges (if applicable)
- Hire charges for professional listings and photos (optional)
eBay Selling Fees
eBay fees are compulsory for all eBay business sellers. Fees are subject to change and vary depending on where you live.
Some fees are charged at a fixed price, while others are based on a percentage of the sale price.
At the time of posting (Jul-22), eBay UK charges the following as standard:
- Listing fee: Charged at a fixed price
- Final value fee: Charged at a fixed price plus a percentage of the final selling price (including postage)
If you want to add extras to your listing, you’ll also be charged a:
- Reserve price fee
- Buy it now price fee
- Subtitle fee
- Gallery Plus fee
- 2nd category listing fee
- Promoted listing fee
- Scheduler fee
- International visibility fee
- Special duration fee
You can pay less fees when you run an eBay business via a Shop or Concierge. Requirements vary and you’ll need to carefully consider which option is right for your products and profits.
Learn more about eBay UK fees and charges.
Tax & VAT Fees
Whether you need to pay tax or register for VAT when starting your eBay business depends on your local laws.
Usually, paying tax and becoming VAT registered depends on how much you earn from your business, what products you are selling, and where in the world you are selling them.
Visit the GOV guidance on selling goods in the UK via online marketplaces for more details. If you are running a website alongside an eBay account you need to consider whether you need to register your website as a business too.
Delivery Charges
Delivery fees vary depending on the size, weight, and class of the packages you need to send. Charges also vary per supplier. If you don’t need to deliver any items via your eBay shop, you won’t need to pay delivery fees. For example, if you only sell online products or collection-only items.
Charges for Professional Listings & Photos
It’s tempting to DIY everything when starting an eBay business. But it’s important to remember that writing listings and taking photos of your products takes time and skill.
A poorly written listing with bad imagery won’t sell your products.
If you aren’t good at writing sales-focused product descriptions or taking professional photos, you may need to hire a professional writer and/or photographer for support.
If so, ensure you budget for these additional costs in your business plan.
Is it Worth Starting an eBay Business? Tips for Success
Starting an eBay business can be a lucrative way to start earning (or earning more) from your products. Like most businesses, you’re more likely to find success if you have a clear business plan, sell high-quality products, and write professional listings.
When starting an eBay business for the first time, here are some expert tips to help you grow your online shop successfully.
1. Start Small
To quote the most cliché saying, Rome wasn’t built in a day, and neither are successful eBay businesses! Starting small is the best way to dip your toes into selling on eBay. When you start selling a few select products, you’ll get to know your target customers better and gain more insight into how much time, money, and other investments you’re spending on eBay.
2. Budget Properly
No one goes into business to not make money, but eBay fees are complicated and can quickly add up. Within your business plan, you need to assess your financial viability and ensure your financials are strong. Do your research or seek professional help to ensure you’re budgeting appropriately when deciding your listing prices and profit margins.
3. Use Professional Photos
Your photos will be the reason someone clicks on your listing over your competitors. Using a professional, stock-like photo of your product is important if you want to advertise your business as reputable, trustworthy and high-quality. Remember, less is more with images. Even though you can add up to 12 photos, experts recommend sticking to around 6.
4. Write Optimised Listings
Writing detailed listings is paramount to running a successful eBay business. As is optimising your listings and using the right keywords. Applying SEO (Search Engine Optimisation) to your listings will help them appear higher than your competitors in search results. Consider hiring a professional eBay copywriter if you don’t know how to optimise listings.
Summary
Selling your products on eBay can be a lucrative way to start or grow your business. But the fees and charges can easily eat into your profit margins.
Developing a business plan before you start is the most important step on your eBay selling journey. It can help you assess your financial viability properly and build a successful business on eBay.
Learn more about how to create a successful business plan.
Need help starting your eBay business? Seeking professional help to design your eBay business model can be well worth the investment.