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15 Feb 2010 11:20 PM #1
Starting a Business On eBay - A Quick Guide
Starting your online business by selling products on EBay is a great idea. Itís sort of like setting up your store in the largest mall in the world. How large? In 2009, EBayís revenue grew to $8.54 billion, a 16% increase over the prior year. EBay also reported 90.1 million users!
Plus, you donít have to pay all of the rent, utilities and staffing fees that go along with a bricks and mortar enterprise. And, your customers donít even have to wander up and down the aisles looking for you and your merchandise. They simply ask the electronic kiosk (search function) to find what they are looking for and your merchandise pops upÖalbeit along with offerings from thousands of other sellers.
So yes, the competition is fierce but the opportunity is also staggering and the start up costs can be very, very low.
How do you get started? Our forum guide walks you through the steps, as told by those that went before you, i.e., experienced traders who used EBay as their springboard to a successful online retail business.
Get familiar with EBay
Everyone who has used EBay to get started says the same thing: donít start selling on EBay until you have experience buying on EBay. Why?
1. You need to understand something about how customers search for merchandise. You can learn that by doing your own searches.
2. You need to understand how the auction process works and FEELS to the customer.
3. You need to see what it feels like to win something, purchase it, receive it and complete the loop with feedback.
4. Buying something is your first glimpse at how sellers differ in terms of their approach to selling, i.e., how they differentiate themselves.
5. Most important of all, YOU NEED FEEDBACK! You will not be seen as credible unless you have some experience on EBay, even if itís as a buyer.
GOOD ADVICE: Itís worth repeating: Be a customer before you become a seller.
MORE GOOD ADVICE: Buy some things you can actually use, such as office supplies for your new business or eBooks about selling on EBay.
Find something to sell
Okay, now that you have spent some time in and around EBay, itís time to start your EBay selling business.
Start out selling what you own
The first issue is to find something to sell. Again, the overwhelming majority of people who started out on EBay say the same thing: start by selling your own possessions.
∑ If you own it, you have it in front of you so will be easy to photograph and describe in a listing.
∑ You'll be able to start your business immediately without having to wait for a supplier to deliver goods.
∑ Thereís no upfront cost involved so if you make a mistake it won't be costly for you.
∑ Itís easier for people to trust that they will receive it if they know that you already have it in your possession.
GOOD ADVICE FROM A TRADER: Don't spend huge amounts of money on stock and setting up. The world of eBay can be complex and the best way of discovering this world is by experiencing it. If you plow in with a huge store full of lots of stock, you risk falling quickly on your face.
Hereís some insider advice on how to decide what to sell.
1. Is there a demand? You may think your collection of owl pellets (the wad of leftovers that an owl vomits after eating; often contains teeth and other undigested items from its prey) is amazing and itís possible that others will too. But, on the other hand, the demand could be so slight that you just arenít going to get any bidders. Or, you may have a great collection of McDonaldís prize giveaways but in reality, since millions of people have gotten them for free, week after week after week, your collection may not be that attractive unless there is something unique about it.
2. Will it survive shipping? Your eggs laid by free range chickens will have both fragility and freshness problems in transit. (Food items are subject to specific restrictions so this example, while possible, is not probable.)
3. Can you sell it on EBay? EBay has clear policies on whatís acceptable to sell. While generally, you can probably anticipate what the list will look like, donít take a chance. Be sure you check first.
Hereís the general list.
∑ Adult Only category
∑ alcohol (see also wine)
∑ animals and wildlife products Ė examples include live animals, mounted specimens, and ivory
∑ artifacts, grave-related items, and Native American arts and crafts
∑ catalytic converters and test pipes
∑ cell phone (wireless) service contracts
∑ charity or fundraising listings
∑ clothing, used
∑ cosmetics, used
∑ counterfeit currency and stamps
∑ credit cards
∑ currency, selling
∑ drugs and drug paraphernalia
∑ drugs, describing drugs or drug-like substances
∑ electronics equipment Ė examples include cable TV de-scramblers, radar scanners, and traffic signal control devices
∑ electronic surveillance equipment Ė examples include wiretapping devices and telephone bugging devices
∑ embargoed goods and prohibited countries Ė examples include items from Cuba
∑ event tickets
∑ firearms, weapons, and knives Ė examples include pepper spray, replicas, and stun guns (see also military items)
∑ food and healthcare items
∑ gift cards
∑ government documents, IDs, and licenses
∑ government, transit, and shipping-related items Ė examples include airplane operations manuals, subway employee uniforms, and U.S. Postal Service (USPS) mailbags
∑ hazardous materials Ė examples include batteries, fireworks, and Freon
∑ human parts and remains
∑ importation of goods into the United States Ė examples include CDs that were intended only for distribution in a certain country
∑ international trading
∑ items encouraging illegal activity Ė examples include an eBook describing how to create methamphetamine
∑ lock picking devices
∑ lottery tickets
∑ mailing lists and personal information
∑ manufacturers' coupons
∑ medical devices Ė examples include contact lenses, pacemakers, and surgical instruments
∑ military items (see also firearms, weapons, and knives)
∑ multi-level marketing, pyramid, and matrix programs
∑ offensive material Ė examples include ethnically or racially offensive material and Nazi memorabilia
∑ plants (see weeds and seeds)
∑ police-related items
∑ political memorabilia (reproduction)
∑ postage meters
∑ prescription drugs
∑ prohibited services
∑ real estate
∑ recalled items
∑ slot machines
∑ stocks and other securities
∑ stolen property and property with removed serial numbers
∑ surveillance equipment
∑ weeds and seeds
For example, you may be concerned to see that used clothing is on the prohibited/restricted list. You need to read the policy to understand that used clothing can be sold as long as itís labeled as used and have not been used as underwear. You will find the policies in EBayís policy area. Prohibited and restricted items ? overview
4. Is it worth the shipping cost? Many times shipping can cost more than what you're selling the product for. Often times it just isn't worth the cost. However, there are some circumstances where you can make money with oversized items, if you restrict the selling are to your local geography and require customer pickup. Lawn furniture might be sold in this way.
Check out similar items for sale on EBay
Next, check out the competition. Although this may be less important when you are selling items that you already own, you will need to look carefully at the competition when it comes to selecting products that you will purchase and stock then sell. For now, search for similar items in order to understand how people are pricing them, so you know how to set the right fee and what the level of competition is, so you can decide if itís worth it to incur EBay fees in order to try selling your items.
Becoming an EBay Seller
Once youíre a member of EBay, itís quite easy to set up a sellerís account.
Establish a seller account
Sign into EBay and click on ďMy AccountĒ. Click on ďBecome a SellerĒ and follow the steps.
1. Verify your identity.
2. Establish a mechanism for paying seller fees.
When becoming a seller, you need to select how you pay your eBay.com listing fees . You can pay your seller fees using any of the following payment methods:
∑ PayPal (monthly and one-time payments)
∑ Credit card (monthly and one-time payments)
∑ Direct pay from your checking account (monthly and one-time payments)
∑ Check (business only)
3. Select the payment methods you'll accept from your buyers.
The next step is to select and set up the payment methods you'll accept from buyers. You'll be offered payment options as you list your item. Payment options for most listings include:
∑ Merchant credit card
∑ Payment upon pickup
CRITICAL ADVICE: YOU MUST ACCEPT PAYPAL! Buyers expect it. You can accept credit cards as well, but PayPal is the bottom line must-have.
WARNING: To be able to open a shop, you need to have a PayPal account plus a minimum score of five positive feedback reviews. If you donít have a PayPal account, you need a minimum score of 10.
GOOD ADVICE: Register as a seller with a strong, credible sounding business name. If you already have an idea of what you will want to sell over the long run, your name should reflect that product line.
Now you have the means by which to sell on EBay.
Experienced traders have several pieces of advice on how to get organized, ranging from equipment to education to papers on your desk.
One of the great things about EBay that not everyone recognizes is that itís filled with good advice and tools that you can use to become successful. Become a regular visitor to the Seller Resources area of EBay and take advantage of the education provided there.
GOOD ADVICE: Watch the eBay Seller Audio Tour. This video can be found by going to the help pages and searching for "seller audio tour."
WARNING: Be careful not to get duped into buying "Get Rich Quick on eBay" kits. EBay selling is a fun, profitable, and convenient way to make money from home but itís not a quick trip to wealth. Itís just like any other entrepreneurial adventure - it takes time, patience, dedication and hard work.
MORE GOOD ADVICE: Join groups, forums, and support websites where you can interact from other sellers and learn from them. The best way to learn about eBay, as with anything in life, is to talk with other people about their experiences. You will save a great deal of time and money by learning from other sellers' mistakes.
Be sure that you have invested in a good computer and the highest speed Internet connection that you can afford.
Start now to keep track of your income and expenses. EBay will keep track of your listings and related information. You should keep track of any other costs associated with selling including purchasing product, shipping supplies, postal costs, Internet fees, etc. If your business takes off, you will want to be able to document the costs associated with your sales and determine if you are making a profit.
The price you place on an item is the result of considering the cost of the item to you, the price that similar products are selling for online and in bricks and mortar stores, the popularity of the product and how you plan to sell it on EBay. For example, many traders believe that you should start an auction at a low price in order to get the bidding going and then the price will rise. Others are convinced that itís a mistake to price too low.
In general, experienced EBay sellers say that you may not be able to compete on just price because there are so many large volume sellers these days. So, price at what works for you in terms of making a profit and build your business with quality, customer service, fast shipping and so on.
You can find additional information at Fees for selling on eBay
GOOD ADVICE: Donít be influenced by the prices you see on listings. Go to the advanced search function and look at how many of those products actually sold and for what price; thatís the information to think about.
Create Product Listings
Your product listing is your store front. The way you handle your listing will help determine whether or not a buyer will actually find it and then whether they will choose your product over someone elseís listing.
Selecting a Category
If you donít select the right category, your buyer will never find your item or, you may undermine the value of your item. Hereís an example.
Language tapes are popular and usually sell at a fairly good price. So do used iPods. A seller had an iPod to sell, that usually sells for around $150 on EBay. His iPod also had $1,000 worth of Chinese language tapes installed. He listed his iPod in the electronics category rather than in the language category, probably figuring that people would go looking for the iPod first. Unfortunately for him, if he had done some research he would have discovered that buyers were paying $300 for the language lessons. People looking for iPods didnít care about the lessons and bid around $150. In the language category, buyers would have bid $300+ for the lessons plus the iPod.
Search for the same and similar items using a variety of possible search words. See where products like yours are most typically found.
Auction or Buy It Now
This is a hard decision and most traders say that it really depends on what youíre selling and what the marketplace looks like. EBay started as an auction site but now leans more towards a Buy It Now (BIN) marketplace. Many buyers like BIN if the price seems worth it because they donít have to wait until the auction ends and they know that they will get the item.
GOOD ADVICE: Take advantage of all options by listing both an auction and a BIN option.
Description of item
Your description should be crisp and clear. Many sellers say that you should spend all the time and words you need to completely describe the product. If your product is something that has a model number, you may want to list that in the heading and repeat in the body of your description.
GOOD ADVICE: Do not clutter your auction with unneeded items like animated Gifs, and colored backgrounds.
MORE GOOD ADVICE: Think about what you would ask a store clerk about a product. If itís clothing, does it tend to run large or small? If itís an electronic item for the bedroom, how loud is it? If itís used, what the REAL condition?
A Word about condition
Be absolutely clear about condition. If itís used and in fair condition, say so. If you arenít completely honest and your buyer thinks you oversold the condition, youíll hear about it in the feedback.
A word about fakes
Donít do it! You risk your reputation and you can be kicked off EBay. This shouldnít be an issue while you are selling your own possessions but itís a temptation when you begin buying in bulk. And, sometimes, itís a trap that you fall into if you buy from the wrong supplier.
WARNING: Avoid buying bulk designer goods from anyone who claims they get their supply directly from the manufacturer. It just doesn't happen for multi-million dollar brand name companies. They protect their brands ruthlessly and the only way you can get them authentic is from an authorized distributor (and you will have to be a retail store to do this) or from a retail store.
Make sure that your description is correct and supplies all the information that your buyer needs to know.
WARNING: Avoid spelling mistakes. Most people use the search function. If you spell the product name or brand name wrong, no one will find it. Plus, buyers may think that if you are not careful enough to check your spelling then you might not be careful enough to post my item on time and safely.
Good pictures are a must. You should take pictures of your product from every angle so that the buyer can see it as if they were holding it in their hands. Post at least three pictures with your listing.
GOOD ADVICE: Host your own pictures. By hosting your own pictures, you will save money, and, more importantly, be able to use as many pictures as you need to adequately show eBay bidders your item.
MORE GOOD ADVICE: Optimize your images for the web. Many sellers use the highest resolution settings on their cameras and generate huge files that download very slowly. Computer monitors only show 72DPI, any extra detail is just a waste of the bidder's time.
INCREDIBLY SMART TIP: Instead of purchasing a photo box for shooting product pictures, place your item inside a clean white bath for the same effect.
Choose the correct time for the auction to start so that it ends during a peak time. You need to list your items so that they end at the time that your market is most likely to be on the computer or able to access the computer.
We find a lot of conflicting advice around and listing times is one of those places.
GOOD ADVICE: For ten cents you can schedule any start time for your auctions.
Yes, itís probably worth it to choose your listing time, but what time should that be?
Some say peak buying periods are generally considered to be, Saturday, Friday and Sunday evenings between 6 and 8 pm eastern standard time. Others say to avoid day time listings in almost all cases and stick to evening listings between 7:30pm & 10pm. Also, avoid Friday nights and Saturdays unless you are sure that your target market is at home on the computer then.
Many sellers say they have better luck with featured listings. You will probably have to test this out and see what works best for your products. Feature fees vary widely from $.50 - $1.50 for subtitles to $2.00 - $4.00 for bolding and up to $73.00 for listing in first position.
There are three big issues when it comes to the topic of shipping.
Some sellers try to make additional money on the shipping costs. While itís reasonable to charge more than the actual postage of shipping fee in order to cover the costs of packaging and handling, you should keep in mind that online buyers hate to pay shipping costs and especially hate it when the shipping cost makes the overall price of the product unworkable. So, do make sure that you cover your shipping costs but donít try to make a lot of extra money on the shipping; itís a strategy that will backfire.
GOOD ADVICE: If you are sending a large item, shop around. There are plenty of couriers that price competitively.
WARNING: Do not try charging a large postage amount and low listing price to avoid eBay fees. One complaint and EBay will take action against you.
You must be sure that your products arrive safely. Otherwise, you will be issuing refunds or receiving negative feedback and negative feedback is death to an EBay seller.
GOOD ADVICE: Wrap absolutely everything, even non-breakable items, in bubble wrap, just to be safe.
INTERESTING TIP: A great free source of bubble wrap comes from supermarket packing in the produce area. Bananas are typically packages in bubble wrap that arrives clean, does not retain a smell and can usually be obtained for free.
Send out products as soon as possible. The best sellers aim to have packages sent out same day or next day.
Ebay allows buyers to leave feedback about the experience they had with each seller. Interestingly, several years ago EBay switched its policy so that sellers could ONLY leave positive feedback for buyers. Not exactly fair but thatís life!
Potential buyers use feedback ratings to decide whether or not a seller can be trusted. This makes your feedback rating absolutely critical to your success on Ebay. Bottom line, you need to have a lot of positive feedback and no negative feedback to be able to be successful on eBay. Sellers say that you should GUARD YOUR REPUTATION ON EBAY LIKE YOU WOULD GUARD YOU LIFE.
From the very start seek to gain positive feedback from EVERY transaction. Some ways to achieve positive feedback:
ē Communicate promptly and frequently.
ē Maintain a fair returns policy.
ē Treat every customer with respect.
ē Err on the side of ďthe customer is always rightĒ if you can; a small loss on one customer is better than a negative hit in your feedback.
One seasoned trader gave the following good advice.
GOOD ADVICE: The quickest way to get great feedback is to ship products quickly.
From the very start seek to gain positive feedback from EVERY transaction.
Growing your business Ė finding products to sell
Once you have taken tested out EBay and decided that itís time to get seriously into the selling business, you will need to decide which products you will sell and how to find them. These issues are very important and each is the subject of its own forum guide. Before you move on to our next guide, however, experienced sellers say this about product selection.
Itís just too difficult to compete on many of the goods that newbie sellers would like to be involved in such as electronics, gaming, DVDs, etc. There are huge resellers that can get product at such low prices that itís really not possible to do well against them.
Instead, consider specializing in a niche where thereís a demand and you can obtain product at a reasonable price. Thatís not to say that if you run across a great deal on something outside of your usual product group, you shouldnít give it a try. However, you will be better off looking for bargains in a product area where you know the marketplace, you know what people want and what they will buy for.
Ride the trend
You can still ride the trend of the hottest selling items on EBay. For example, since cell phones are very hot but you probably canít compete in that market, you may be able to find cell phone chargers or cases or charms at a good deal and sell those products, which follow the hot products but do not directly compete. In fact, you may need to be even more esoteric by selling products that tween and teen girls will want for their cell phones and promote to that market very directly. Even though you may think that this is creating too small a niche, remember that in a global marketplace, itís hard to have too small a niche.
Another great way to find products is to consider items that experienced sellers consider being ďstickyĒ, meaning that customers return to you for repeat purchases or for associated items. For example, if you sell crafting supplies, they will be consumed and need to be replenished. Or, if you sell fashion dolls, those dolls will likely need clothes, furnishings, fashionable cars and so on.
INTERESTING IDEA: If your product is sticky enough, you can sell a loss leader in order to get customers who will then buy other products from you.
The final piece of advice from experienced sellers is not to sell junk. Leave the fake products and low quality merchandise to those who are less informed. Selling inferior products will not get you to the success you want to achieve.Want To Be An eBay Powerseller?This is the Service You Need.
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05 Oct 2011 02:11 AM #2
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- Oct 2011
- United States
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I think that starting a business on ebay is really easy as you only have to setup your account and a name for your store and you are already running live.
I think that tough task would start with getting your first client as customers are too keen with choosing the seller with a good feedback so starting from 0 would be a little hard.
Sellers have a lot of ways to get about this hump but some would include illegal methods like creating false accounts just so they would have their first feedback.Over 150,000 Verified Sources + Deals 95% Off MSRP + Free Website!
15 Nov 2011 05:02 AM #3
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- Nov 2011
- United States
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Hi, thank you so much for your tips on how to start a business on ebay. I am doing some of the the thing that you suggested like selling stuff that is around the house and even buying stuff that is on sale or at a bargain price then selling them for a little mark up (not much success in that, but I'm trying).
I'm just really concerned about how I am going to get merchandise to sell. I tried doing research on getting access to distributors but they always ask for a TIN or EIN or some official number in order to do business with them. So i did research on how to get these numbers and I realize that i have to file tax forms and the tax forms asked questions like where is my store located and such. Do i actually have to have a brick and mortar store in order to deal with distributors?
Is it possible for some one on this forum to point me in the direction to starting a business from the home so I could be able to order from distributors stuff that is name brand (or not named brand)?
I would appreciate more details about starting a business in the home and pursuing a relationship with real distributors, if its possible. I also checked out the website this forum recommended, https://www.wholesaleforum.com/discuss/www.worldwidebrands.com. If any one can tell me about how the distributors that they have on their directory would feel about dealing with someone that doesn't have the tax ID numbers or about how many of them require the numbers to business with would be appreciated.
Thank you so much for this forum and the tips you guys have. I will look forward to learning and sharing knowledge here
Thank you for this post:
cheertone (21 Nov 2014)
25 Nov 2011 11:24 AM #4
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- Oct 2011
- United States
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I do not have a brick and mortar store. I have a registered business with an EIN and state tax ID numbers. Just list your home address or wherever you will do business from. Some suppliers will not deliver to a residential address, some do not care.
One thing about eBay now....they do have a limit on the number of items you can sell as a new seller. It is 20 items until your feedback reaches 5 then goes to 100 for at least 90 days. This really hurt me as I just began in October and cannot list all I wish to for the holiday season.
20 Dec 2011 09:58 PM #5
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- Dec 2011
- United States
- 4 Times in 2 Posts
@jack2ky: Try spending $10 or $20 at Goodwill or Salvation Army. You won't believe how much money you can make. Especially if you know what to buy. I use my cell phone to check online prices when I'm unsure if something is woth buying or not. Craigslist.com(all over) and campbellyardsales.com(KY/TN area only) are where my sister bought and sold a ridiculous amount of things. Pawn shops are good for personal items and have negotiable prices but now some of them sell on ebay and have worse prices than they used to. I just started selling on ebay again a couple days ago and re-opened my store yesterday. It has been closed since 2005. I used to sell a wholesale/dropship list that I researched and made for .99 I sold a lot. Virtual goods sell great believe it or not. Anything with a code sells including game add-on codes, drink codes, nos can codes(my 1st listing for sale in forever), xbox codes for free from using the bing bar, etc Be creative and you will do great.
01 Feb 2012 07:16 PM #6
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- Feb 2012
- United States
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This string of posts gave me a lot of ideas how can I start a business online. Actually, I am looking to start a a-shirt, t-shirt and men's undergarments business from home and it has still not been very clear how do I start. This is the line of business which I know best because I had supplied those items to US importers when I was not in US. Now I am trying to find a way to establish this business on my own.
I will welcome anyone's suggestion and information on this line of business.
11 Dec 2012 02:35 PM #7
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- Dec 2012
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I believe this thread is out of date? The insertion fees and percentages are inaccurate, otherwise the thread is good for the concept and process of starting an ebay business.
09 Apr 2013 11:21 AM #8
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Thank you very much really helpful information
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Rated this thread:15 Apr 2013 03:55 PM #9
Thanks all for your great info about how to sell on Ebay. I have a question, which is the best website to source products for resale.
Thank you for this post:
Lucy Gong (16 Aug 2013)
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