March 31, 2022 | Last Updated on: July 6, 2023
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If you want to open a retail business, but you don’t love the idea of running a brick-and-mortar location, an online eBay business may be right for you. This type of small business can be an excellent side hustle or can become a full-time gig if you choose the right product and build your business right.
However, it’s not for everyone. To help you figure out how to start and run an eBay business and how much it would cost you, we’ve created this guide. Let’s get started!
While eBay is not the only online seller platform, it has been around for a while and still has a reliable base of shoppers. In fact, eBay offers some unique benefits that some other seller platforms don’t offer.
For example, eBay is a lot less competitive than Amazon but still shows up consistently in searches, especially for more specialty and collectible items.
In 2021, it was the second most visited online marketplace, surpassed only by Amazon. Not only did it receive 1.7 billion monthly visits as of April 2021, but it was rated the preferred online marketplace by sellers in a 2021 survey, surpassing Amazon by far.
Some of the other benefits of selling on eBay include:
While the idea of starting an eBay business can be exciting, it’s not free. If you’re wondering what the cost of starting an online business is, you’ve come to the right place.
When it comes to selling through a platform like eBay, Amazon, or Shopify, costs will always vary depending on what you are selling, how much you’re selling, and what kind of plan you get.
Because of its auction functionality, eBay is particularly well-positioned to be an excellent place to sell more unique and niche goods. If you have collector’s items to sell or you make one-of-a-kind products, eBay can be a great place to sell them.
There are a few main types of fees you’ll encounter when starting an eBay business:
When it comes to actually listing and running your business, there are a few primary scenarios for the type of fees you’ll have to pay:
Because it can fluctuate depending on the category you’re selling in and what tier your membership is at, it’s always best to check eBay’s website for exactly how much it would cost to sell your specific product at the volume you want to sell at.
There are a variety of other costs that you’ll need to take into account, regardless of where you decide to run your business. These are basic costs involved in getting your business off the ground and ensuring you have enough inventory and reach to actually be successful. Some of the costs you’ll need to take into account include:
The last big cost about starting an eBay business that you should factor in is not an upfront cost—it’s taxes. In the past, online sellers were not always taxed on their income from online marketplaces. Beginning in January 2022, the IRS is now requiring anyone who sells more than $600 worth of goods on any auction site or rival to report that money.
You likely won’t receive a 1099-K form detailing the transactions for the IRS unless you make more than $20,000 or have at least 200 transactions. But the good news is that it’s the platform’s job to provide you with that tax form, so as long as you’re following the rules, there’s nothing to worry about.
Once you’ve determined what you want to sell, if there’s an adequate market for it, and if you can afford to get started, it’s important to follow a few best practices for success.
Before you make your first listing though, you’ll need to come up with a business name and get yourself set up. From there, you can begin listing products. If you’re looking to turn selling products on eBay into more than a side hustle, dedication to these top tips right from the start will be crucial.
When you use eBay to sell your products, you want to make sure they stand out. You can think of your images as marketing tools that will entice potential buyers to want to buy it now.
Make sure you not only have good quality photos but that your photos show everything your buyer may want to see about your product. Get photos of different angles and show the details so that your buyers really trust you.
As a new seller starting a small business on eBay, you have to give your buyers a reason to trust you. On top of having great imagery, writing detailed descriptions with all of the information a prospective buyer could need can really boost your sales. Look at what similar products do in their descriptions and aim to do better!
Depending on the type of product you’re selling, your description could include:
The main purpose is to give your buyer enough information to feel confident in their choice and ultimately increase eBay sales to grow your startup business as quickly as possible.
This powerful tool can help you easily create listings as well as track the performance of your page. It also helps you decide on the best start price for auction items or price listings to maximize the chance that an item sells. Because it’s directly connected with your regular eBay account, it’s easy to set up and requires no extra input from you. Everything is automatic!
When you first start your eBay selling journey, it’s a good idea to start small and gauge the market for your product. Not every product is a hit, and sometimes it takes time (or trying different products) to get a successful ecommerce business going.
However, once you are selling consistently and have an idea of what your turnover rate is, you should always make sure your inventory is well-stocked. This not only gives you peace of mind, but it ensures that you will always have enough product for your customers, even if there is a supply chain issue. To do this, you can buy in bulk from wholesale distributors, eliminating the need to frequently restock.
No matter what kind of product you’re selling and how lucrative it is, people want to buy from businesses they trust and who treat them fairly. This means that you need to go the extra mile to ensure you’re offering top-notch customer service right from the start.
This can include:
Especially as a new seller, providing an excellent customer service experience to all buyers will only serve to improve your reputation and set you up for success going forward.
From identifying the product you’re going to sell, to determining a sale price, and more, there’s a lot that goes into creating a successful eBay business. With this guide, some research, and the right idea, you’ll be able to overcome those hurdles and be up and running in no time, just like Navneet, who used a Biz2Credit loan to purchase inventory for his business to have enough stock for the busy holiday season.
