How to set up an ebay shop for your small business

Reach millions of customers using ebay as your online store front. Discover how to set up an ebay business and sell your goods successfully on ebay.

From its early days as a way for people to sell unwanted items gathering dust at home, ebay has transformed over the past 20 years into a global selling platform that rivals Amazon in its scope.

With 162 million users worldwide, including more than 18 million Brits shopping through ebay.co.uk, ebay offers the perfect way to shop online. And for small business owners, ebay has been invaluable in helping millions of people set up an online store and successfully earn a living selling their products online.

With more than 200,000 small businesses selling their goods on ebay in the UK alone, starting an ebay business can help you reach millions of customers with little effort and upfront cost.

What is an ebay shop?

An ebay shop is special area of the auction site where you can list all the items you have for sale in one central, personalised place. If you’ve an ebay shop, a red door icon will show next to your user ID on an individual listing. Customers can click on the red door to visit your shop and browse through all your products for sale without the distraction of competitors’ listings.

Why should I open an ebay business?

ebay’s popularity began with its auction-style format that allowed shoppers to grab a bargain. Now more users want to find and buy goods instantly – rather the wait until the close of a weeklong auction – which is reflected in the fact that more than 80 per cent of items listed include a Buy It Now option.

Thanks to PayPal integration, buying an item is quick and easy, ensuring that customers find ebay an attractive shopper destination. Together this has led to ebay becoming a marketplace for sellers looking to list multiple items on a regular basis as a business.

There are lots of good reasons to set up an ebay shop rather than use it as a private seller:

  • Setting up an ebay shop is cheaper – especially if you sell lots of products. This is due to the way ebay charges people to list items for auction or sale on ebay, called listing fees. Although you have to pay a monthly charge to own an ebay shop, you get a certain number of free listings included and discounted listings after that – compared to private sellers who have to pay for each item they list. If you plan to sell more than 65 items a month opening a basic ebay shop is more cost-effective than listing items as a standard seller.
  • You benefit from dedicated business features and special promotional tools. You can customize your ebay shop to make it standout from competitors, and create custom shop categories to organize your products. Other features include the ability to hold your own sales on selected items and set promotions such as discounts for multiple purchases. You can even activate a holiday setting that hides your fixed price listings and shows a custom message to inform buyers when you’re away.
  • Promoting your ebay shop is simpler. With its own dedicated web address (URL), you can direct customers straight to your ebay store, as well as optimise your search engine keywords so your shop is more visible to customers searching online. You also get basic sales and traffic reports, and the option to send email newsletters to your customers.

Getting started setting up an ebay shop

If you’re setting up an ebay business from scratch, you’ll need to decide on the products that you want to sell. Choose something you’re passionate and knowledgeable about. Avoid selling exactly the same items as other retailers – most shoppers use ebay to find unusual and unique items that are difficult to find in high-street shops.

Research your online competitors to help you decide pricing. To make a decent profit, you’ll need to think carefully how much you charge for items and the selling costs involved including ebay fees and postage costs.

Consider the practical aspects of selling your goods online. How will you store inventory – in a spare room or garage? How will you wrap and ship items, and how you will handle refunds and returns. Take time to find a good wholesale supplier for your products and negotiate with care. Cost is important, but so too is supplier flexibility so that your ebay business can keep up with a growing demand.

Starting an ebay business

Once you’ve decided on a name for your ebay business, you need to set up a business account with ebay. For this, you’ll need a UK address to receive a confirmation letter sent by ebay in the post. Have your bank account details to hand too as you’ll need to set up a direct debit to cover your monthly subscription fee. You’ll also need a PayPal account so that online transactions can be securely made. PayPal is ebay’s preferred payment system, and makes it easy and safe for shoppers to transfer money to your account when buying from your shop.

Once registered, you can choose which type of ebay shop best suits your needs and then select a name for your shop. This name determines your shop’s website address (URL). Be careful to avoid a name that’s the same or similar to another online trader.

The next step is to set up and design your ebay shop. Making your shop’s pages look attractive and easy for shoppers to browse and buy items increases your business’s chance of success. ebay offers several predesigned themes and shop layouts, but you can change elements at any time to create a custom shop that’s all your own. You can also change the way your items are displayed: gallery view or list view. You can then start listing items using either an auction-style or fixed price format.

Watch this: ebay has created the ebay Seller Hub, which contains all of ebay’s selling tools, marketing and monitoring dashboards so you remain in control of your online business:

Opening an ebay shop is like starting any other business, so you’ll need to register as self-employed with HMRC. You may prefer to register your new business as a limited company to protect your personal assets including your home and savings if your online business fails. You’ll also need to register for VAT if sales from your ebay shop exceed the VAT threshold, which is currently £85,000 (April 2017).

Choosing the right ebay shop

There are three types of ebay shop available for a monthly subscription charge. This monthly fee includes access to various sales and marketing tools that you can use to help build and promote your business. Not everyone can open an ebay shop, however, as there are certain minimum requirements to do so for each shop type.

A basic shop costs £19.99 per month, including 200 free fixed-priced listings. The listing fee then drops to 10p per item. To open a basic shop, you must be PayPal verified and have a minimum of 10 positive feedback reviews.

A featured shop costs £59.99 per month, including 1,200 fixed-priced listings. You’ll also get access to Selling Manager Pro (normally £4.99/month) that can help you create listings, complete post-sale activities and manage your inventory. Consider this option if you’re a small-to-medium sized business with sales volumes of more than 600 items per month. To open a featured shop, you must be a registered business seller with ebay, PayPal verified and maintain an average score of 4.4 for 12 months in all four detailed seller ratings.

An anchor shop costs £249.99 per month and gives unlimited fixed-priced listings. This premium shop is best suited to higher-volume sellers listing more than 5,000 items per month. To open an anchor shop, you must be a registered business seller with ebay, PayPal verified and maintain an average score of 4.6 for 12 months in all four detailed seller ratings.

ebay has a handy fee illustrator  to help you decide which type of shop bests suit the number of items you want to list and the subscription fee you want to pay.

Top tips for starting an ebay business

  • Use great quality images – The quality of the photography on your ebay shop can make or break a sale. Use several well-focused shots taken at different angles against a white or solid colour background. If the item is hard to size, position it next to a ruler in the shot so buyers know what they’re getting. There are lots of free online photo-editing tools that can help improve your photos or if you’re selling high-cost items, consider using a professional photographer.

Watch this: Looking for some advice on how to market your ebay shop? ebay has a helpful video seminar packed with tips on promoting your ebay shop:

 

  • Optimise your text –  Provide a clear description of each item detailing its features and how it should be used. Optimise your item’s title and description with appropriate keywords that make it easier for search engines to find the listing. These are the words that people type into their web browser when searching for the items that you’re selling. Use ebay’s Good-til-Cancelled (GTC) format for many of your listings as this gives them a far better chance of being indexed by Google and other search engines, boosting your search visibility.
  • Have great customer service –  A positive feedback score is essential as many shoppers won’t buy from stores with poor ratings. Respond quickly and politely to questions and problems, have a clear returns policy and post items without delay. Make sure goods are well packaged to avoid damage in transit. While you can’t remove negative feedback left for your ebay shop, you can reply to customers to resolve their complaint.
  • Keep track of your sales – ebay’s Selling Manager Pro can help you keep on top of the admin that comes with high volume sales. From scheduling listings in bulk to automating feedback and post emails, it can save precious time. You can also create email templates to keep customers updated at the click of a button, print invoices and view sales at a glance.

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