eBay can be a fantastic way to make extra money, but it can be difficult for new sellers to know where to start. There are so many steps involved with running an eBay business— from choosing a product to sell to setting up your account and marketing your store.
If you're curious about selling using eBay, doing your research beforehand is imperative so that you know the market, the legality of running an online business, and how to list products effectively.
I've created this step-by-step guide to walk you through the process. Whether you're looking for a side-hustle or a full-time venture, I will show you how to set up a successful eBay business, as well as provide tips so that you stand out against the competition once you start selling.
Let's get started!
What Is eBay?
eBay is an e-commerce platform where individuals and businesses buy and sell items. The company has been running since 1998 and is one of the most well-known online marketplaces.
When most people think of eBay sellers, they probably picture people who list things they no longer want or need as a hobby. While this is true, many eBay stores sell new products just like a retail store. You can find almost anything for sale on eBay—from cars to clothes, antiques to art.
Therefore, eBay is an excellent platform for entrepreneurs and online sellers, whether you're a newbie or have experience with the eCommerce world. Best of all, it's easy to get started!
There are two ways to start selling on eBay: auction listings and fixed-price listings.Auction Listings In Select Categories
eBay is well known for its auction feature, which lets customers bid against each other. When auctioned, items can sell much higher than their original value because of "bidding wars" between interested buyers. The process is fast, too—eBay puts a time limit on how long your item can be listed (most last 3-10 days).
Auction listings will appear in your eBay store, as well as eBay Search and Listings, which will give more viewability to your products.
However, there are some downsides to this model. Unlike fixed-price listings, auction listings are not automated, so it takes more work on the seller's end. Buyers also have the option to pay later rather than immediately, which can cause them to pull out of the deal and delay your payment.
The best items to auction are antique, rare, or in high demand. These products will create more competition between potential buyers, which means higher bids on your items! You'll have to put more work in to reap the rewards, but if you have collectibles or any niche item, you can make an excellent profit.
Fixed-Price Listings
Fixed price listings, also known as "Buy It Now," allow you to list your products at a designated price. This feature is more commonly seen in other online stores and takes the bidding out of the process since customers can purchase your item immediately at the listed price. Additionally, you can keep your product listed for longer—listings generally last for an indefinite period, but you'll be charged each month for relisting.
However, these items will only appear in your eBay store rather than on search and listings, so it may be more difficult for buyers to find your products.
Fixed price listings are easier to manage, but it may take longer to move inventory since there is no urgency, as there is in auction-style sales. Therefore, this is a better business model if you sell a similar product in the same price range.
How Much Does eBay Cost?
eBay is free—up to a certain point. If you plan on listing less than 250 items a month, you'll be charged $0.35 per listing. eBay also takes out a final value fee upon selling: $0.30 per sale, plus an average of 12.55% of the sale price (depending on the category).
Therefore, if you're trying to scale your eBay business or make it your full-time job, paying for an eBay store subscription can help boost your business and sales. eBay provides five different subscription options that fit any business need—whether you're running a side-hustle with a low-time commitment or a full-fledged enterprise.
eBay makes selecting a plan simple. On their store page, you can fill out a survey about the number of items you plan to list each month and what kind of business plan you have—they then will suggest a plan for you.
Each subscription comes with an online store, free listings, and up to 50% reduced final value fees.
I will outline each plan below, including annual subscription costs and plan benefits, so you can determine which business account fits your needs the best. These prices apply for yearly subscriptions, and the listings included are per month.
Subscription Plan Benefits
Before we dive in, I’ll define some of the categories so you can better understand the benefits you get with a subscription.
Reduced Final Value Fees
eBay charges a final value fee when your item sells. This fee is calculated as a percentage of the profit, plus $.30 for every sale. For a list of final value fees per category, check out eBay's article on store selling fees. With a subscription plan, eBay will reduce these final value fees.
eBay Branded Shipping Supplies
eBay shipping supplies include branded items for your packaging needs, including tape, tissue paper, envelopes, stickers, and thank you cards. You can also purchase supply bundles, including everything you'll need for shipping, at a discounted price.
Terapeak Sales Insights Tool
The Terapeak Insights tool gives you insight reports and assists you with product research. You can see how products have historically performed on eBay through the data reports Terapeak provides for millions of items.
Customer Service
eBay provides exclusive access to customer service with a toll-free phone number and email.
eBay Subscription Fees
Here is an overview of all eBay’s plans based on your business needs:
If you’re starting small….
If you want additional benefits…
If you want more monthly listings…
If you need customer support….
If you’re running a large business…
How To Start An eBay Business: Step-by-Step
Now that you have a better idea of how eBay works and the costs to set up your store, I'll walk you through the steps to start running your store—from creating a business plan to selling your first product. Let's dive in!
Step 1: Create A Business Plan
It sounds obvious, but it's crucial that you have your finances planned out before starting an eBay business. This process involves determining how much capital you'll need to start your business, what products you want to sell, and how to fulfill orders. Your overall budget should also consider the costs of running an eBay store, including fees for subscription plans.
Here are some questions you can ask yourself before getting started:
Once you’ve brainstormed a plan, it’s time to get started with setting up your eBay account and ensuring that your business is legal.
Step 2: Make Your Business Legal
The next step is to make sure that your business’s name isn’t patented—you can do this by checking on the U.S. Patent and Trademark Office's website. You’ll want to register your business name as well to protect your business idea.
If you choose to create an eBay business account, you'll have to register your business legally. The most straightforward business structure is a sole proprietorship, which means that all your income will appear on your personal income tax returns. However, this also means you are personally liable for any damages.
Another option is setting up a Limited Liability Company (LLC). LLCs are not attached to your personal assets, which provides more protection for your finances and business.
You'll also have to apply for an Employer Identification Number (EIN) on the IRS website. Your EIN allows you to register for and pay state and federal taxes.
There may be additional requirements, such as licenses and permits, so you can check out this article on the legality of running an eBay business for more information.
After taking these steps to ensure your business is legitimate, you can finally register for an eBay business account. To set up this account, you’ll need the following information:
Step 3: Choose A Product To Sell
Before choosing a product to sell, you should consider the competition. This way, you know whether there's a good chance of success and can adjust your strategy accordingly.
If you have a subscription, you can do market research using the Terapeak Sales Insight tool. If you aren't paying for a plan, you can try HammerTap, a third-party website that lets you track buyer patterns on eBay.
For more inspiration, check out my guide on what to sell on eBay, which covers the most popular (and lucrative) categories and items. The most sellable products range from phone cases to luggage, so consider what will be easier for you to source and ship.
If you have a particular passion or knowledge about a product, this is an excellent place to start. The more you know about what you're selling, the less work it will be to list your items and answer any customer questions.
Step 4: Figure Out How To Source And Ship Your Products
You'll want to consider the costs of shipping and finding suppliers if you're new to selling items on eBay. Calculate these costs before getting started with your store so that you have everything set up and ready to go when it comes time to start listing your items.
You have a few options for sourcing your products:
Buying wholesale involves purchasing bulk quantities of similar or identical items at a discounted price. However, you may require storage space, and you'll want to ensure that you'll be able to move all the products you've bought.
Retail arbitrage is the process of buying products from retailers—from big corporations like Walmart or Target to local businesses—and reselling them for a profit. This process will take more work on your part but allows you to work independently.
Dropshipping is a fulfillment method that makes it so you never have products in hand. Instead, you list items and once they sell, delegate the fulfillment process to a third party that will ship the product to the customer. For more information, check out my guide on eBay dropshipping.
These are items you make yourself, like artisanal crafts or jewelry. If you have a hobby or are particularly artistic, this is an opportunity to make your passion project a business.
When it comes to fulfillment and shipping, don’t underestimate shipping costs. It's easy to forget that shipping adds up over time, but this is one of the costs that sellers must always keep in mind when running an eBay business.
If you’re a casual seller, you can choose to package and ship products yourself, which may take quite a bit of time but will help you cut costs on outsourcing the labor. With a subscription plan, you’ll receive credits towards packaging supplies but may still need to spend some extra cash on shipping. You can use the eBay shipping calculator to get a better idea of the costs.
If you are selling many products or your business is growing rapidly, dropshipping is a fantastic option, or you can hire eBay fulfillment services like Deliverr.Step 5: Create Your eBay Seller Account
Creating an eBay account is super easy—all you have to do is sign up with an email or Facebook account. From there, the site will direct you to your homepage, where you'll be able to access your bids/offers, purchase history, saved searches, and more.
eBay assigns you a username, and you can change it in your personal settings by going to the Account tab. You can also choose to upgrade to a subscription plan if you want the extra perks, like a store page and a higher number of free listings.
Step 6: List Your Products
To start listing products, click on the "sell" button in the upper-right-hand corner of your screen. From there, eBay will prompt you to input what you are planning to sell. You can enter specific details, like product identifiers, part numbers, or a product name. They also provide a list of categories that you can browse through.
Listing Details:
You’ll be redirected to a listing page where you are required to input the following details:
You can also fill out recommended categories to improve your chances of selling. The more details you can give, the better!
While this may seem like a lot of detail, the more specific you are, the more likely you are to make eBay sales. Ensure that you have an accurate title, an in-depth description, and visually-appealing (and realistic) photographs.
Step 7: Choose Between Auction Style And Fixed (Buy it Now) Price
Image credit: AuctionNudge.com
Now that you’ve created the listing, you have to choose which method you’ll use to sell the product. Below is a more in-depth comparison of the two options:
If you choose auction-style, you can list your product for either 3, 5, 7, or 10 days. You can schedule them to be listed at a specific date and time, so there is no pressure if you aren’t quite ready to go live with your store yet.
You will also set a price now: both a “starting price” and “Buy It Now'' price if you want to allow customers to purchase it immediately. Think of these two categories as the minimum and maximum prices you’d be willing to accept.
You can also include the best offer option that allows sellers to negotiate a price—which you can either accept, decline, or counter.
With a fixed price, the duration of the listings is marked as “Good Til’ Canceled.” Therefore, listings renew automatically every month until the products sell or the listing ends.
Keep in mind that you will be charged the applicable fees whenever a listing renews.
There is only one option regarding pricing: the "Buy it Now" price, so make sure to list it at a price you are comfortable with. Buy it now also requires immediate payment from buyers.
Step 8: Price Your Products Right
When trying to price your items, remember that most people shop online for convenience or to locate better deals. Therefore, your price should be lower than what the items sell for in retail stores without being so reduced that you won’t make a profit after eBay takes its fees.
Overpricing products is one of the most common ways sellers lose customers when starting an eBay business. You can find out how much your competitors are charging for their items by searching on eBay and looking at similar listings.
Step 9: Set Up A Payment Method And Keep Track Of Accounting
Image credit: EcommerceBytes.com
After creating a listing, eBay automatically adds check-out options for credit cards, debit cards, Apple Pay, Google Pay, and Paypal. Check out this article for more details on eBay’s accepted payment methods. Keep in mind that payment processing fees are also 2.7% per transaction.
You’ll receive payments via your linked checking account. An efficient way to keep track of your income is to set up a business bank account. Linking your business bank account to your eBay account is a smart way to keep an eye on your profits.
You can also set up an account with QuickBooks to track profits and expenses, organize receipts, and manage invoices for tax purposes.How To Start An eBay Business: Tips For Success
The benefits of email marketing can be summarized in three words: trust, convenience, and targeting. People are used to being interrupted with advertising messages everywhere they turn, whether it is billboards on the highway or ads that follow them around online.
Getting your message into someone's inbox is a softer sell because people are used to getting emails in their inbox. Email subscribers have also opted in to hear from you—and everyone else who contacts them via email—so it's less likely for your message to be marked (or considered) as spam, which results in more positive engagement overall.
Thanks to the power of advanced features such as segmentation (more on this later), marketing emails also tend to be hyper-targeted. Businesses can use their data on file, such as purchase history, browsing behavior, and customer surveys, to send more relevant messages that appeal directly to their customers.
Let's get a bit more in-depth about the benefits of email marketing.
Set Goals
The first step is to set clear, achievable goals for your eBay business. Knowing what you want from your business—including the time commitment and desired profit— will help you determine if it’s worth investing money into starting an eBay store.
Start Small
If you're new, it's best to start off slowly and gradually build your customer base. Rather than creating a large inventory in the hopes of making money fast, focus on providing quality products and service so that customers will want to come back for more.
Stay Organized
A lack of organization is a common reason why so many people fail to succeed with eBay. Keep all your paperwork in one place, and always double-check that the products you list have the correct details before going live with them.
Have A Niche
It will be challenging to stand out if you're selling the same kinds of products as your competition. Instead, look for a particular niche in the market and tailor your products to meet that need. You can check out eBay’s suggestions for what to sell to get inspired.
Improve Your Seller Profile
Your seller profile consists of your reviews and ratings. The higher these are, the more likely you will be to attract customers to your listing. If you're relatively new to selling on eBay, it's crucial that you pay attention to feedback so that you will be perceived as a reputable business.
Communicate With Customers
A little communication can go a long way to help you grow your customer base. Ask customers about the quality of their experience with your products or service and see what improvements you can make.
You can also use this as an opportunity to send them updates on new items that you're selling through email marketing. You may also want to create an FAQ section on your store for common concerns.
Market Your Store
Advertise your store on eBay by promoting your store on your social media accounts. In addition to social media marketing, you can purchase Facebook ads or Google ads that will link directly to your shop page.
Use The eBay Seller Hub
With the eBay Seller Hub, you can more effectively run your business and increase sales. The seller hub makes it possible to quickly create listings, see your sale trends, find out how buyers found your page, and boost business with promotion tools.
eBay Seller Hub is free with a subscription plan—it is also risk-free to try since if you aren’t happy with the platform, you can return to the My eBay selling format at any time.
Download The eBay Mobile App
The eBay Mobile app provides a quick and easy way to manage your business on the go. You can manage orders, message customers, and get real-time notifications, all from the convenience of your mobile device.
FAQ
eBay is free to sign up for, but subscription plans range from $4.95/month to $2,999.95/month, depending on the size of your operation.
You’ll also have to account for shipping costs, eBay’s listing and payment processing fees, and the cost of the products if you are a retail arbitrator or buy wholesale.
eBay is a fantastic option for small business owners and large corporations alike as it has a proven track record of working as an effective e-commerce marketplace for millions of shoppers worldwide.
However, you have to take quite a few steps to get set up, including registering as a business. If you are interested in casual selling, this process may take more time and energy than is worth the income.
Here is an overview of the steps required to start a business on eBay:
How much you make selling on eBay depends on the profit margin for your chosen product, shipping costs, and eBay’s fees. Having a subscription plan may also initially increase costs, although the benefits can prove to be worth the money.
According to ZipRecruiter, the average seller makes about $17/hour.
The more items you list, the greater chance you have of making a sale—and the more money you stand to make overall. You can also stand out with advertisements and marketing techniques to drive more traffic to your page.
Final Thoughts
Image credit: Forbes.com
There are a lot of measures to take to get started with selling on eBay, including choosing what product to sell, advertising your business, and keeping customers happy. However, once you set up your account using my step-by-step guide and start seeing a cash flow, all the hard work will have been worth it!
Whether you’re a casual seller reselling items or a large e-commerce business, these tips and tricks will lead you towards starting a successful business on eBay today.