How to Start an Ebay Business

Many people dream about the independence of having their own business. However, starting a business requires considerable amount of money, infrastructure, and education. When I mention education, I do not necessarily mean college education. What I mean is education on the intricacies of the business you plan to start. Formal education is useful; but regardless of your level of education, you must become familiar with the type of business you plan to start, or you will most certainly fail. When it comes to Ebay, there is no difference. Ebay provides a wonderful platform for anyone to start a business with minimal investment and generate income. This article is a guide on how to start your Ebay business and it’s based on the steps I have taken to start selling on Ebay. This article is relevant to doing business in the United States and some steps may vary from state to state. I must warn you, starting an Ebay business is not a substitute for hard work. As a matter of fact, if you plan to start your own business, expect to work harder at your business than you would for another person.

Difficulty: Moderate

Instructions

Things You'll Need:

• Computer
• Printer
• Internet Service
• Digital Camera
• Digital Scale
• Office Supplies
• Packing Supplies
• Shipping Supplies

1. Before you can start your Ebay business, you need education. Get at least two or three books from your local library that will educate you on the subject of starting an Ebay business. I recommend two or three books because you can gain different perspectives on how to operate an Ebay business. You can also see the similarities from the authors as to what seems to work when dealing with Ebay sales. Go to the Ebay website and learn Ebay’s policies. The last thing you want is to have your listing pulled off or your access revoked because you are violating Ebay policies. The Ebay website has great tutorials that can help you understand how Ebay works.

2. Next, observe Ebay. Browse through the categories and see what people are selling, how they present their product, what prices they are asking. Many people ask what can one sell on Ebay? The answer is almost anything. However, the reality of Ebay is similar to the reality of other businesses that sell merchandise. Not everything will sell. Therefore, you must understand this and not become frustrated if your items do not sell. Large department stores also deal with the same problem and they discount merchandise that does not sell in order to make room for new merchandise. They may lose money on the discounts, but they will gain by selling items that make them money. You will need to operate your Ebay business in the same fashion.

3. After this, if you decide Ebay is for you, then you will need to become a member. You will need to sing up as a member and then upgrade your membership to become a seller. Next you will need to sign up with Paypal. This is the main method of collecting payments for what you sell on Ebay. You can sign up as an individual; however, I recommend you upgrade your Paypal membership to a business membership. The benefits are greater, especially if you plan on selling. Next, I recommend that you sign up with some type of mailing service such as FedEx, UPS, or the U.S. Postal Service. I prefer the U.S. Postal Service. I use it because you can buy postage online, arrange for package pick up, track your deliveries, and get flat rates on shipping. You can also order free boxes, that’s right free boxes, and you can even by an electronic scale to weigh your packages. Signing up for Ebay, Paypal, and the US Postal Service is free and it can be done online. Also, you will need to explore different licensing requirements depending on where you live. You may have to apply for city licenses as well as state licenses to do business. In addition, you may want to explore different ownership options for your business and determine which one will work for you. Those options are sole proprietorship, partnership if two or more people are involved, and corporation.

4. Now you are ready to sell, but before you can start your Ebay business you need a few items. You will need to invest in a computer if you don’t already have one and Internet service. You will also need to invest in packaging materials such as bubble wrap, packing tape, and other packing materials, as well as in some office supplies like scotch tape, paper, pens, pencils, scissors, etc. You will also need to invest in a scale, preferably an electronic one. You can buy a scale from the post office online or an office supply store. You will need a digital camera, five mega pixels or more, and you can get one from Ebay fairly cheap. As your business continues to grow, you will discover you will need more items. One very important component of your Ebay business will be to devise an accounting system that you can use to track your cost, your inventory, and your sales. If you don not know how much money you are making, then you will not know if you are making a profit or not. Therefore, an accounting system is very important. You also need to understand the basics of accounting as some of your expenses will be tax deductible as cost of doing business.

5. Next you will need to have some capital to purchase merchandise. How much you need depends on how much you have. The beauty of Ebay is that you can start with a lot of merchandise or with just a few items. Naturally, the more merchandise you have the greater your cash flow will be. Once you establish your purchasing budget, then you will need to find merchandise. The good thing is that merchandise is all over the place. People who buy on Ebay are sensitive to pricing, therefore you will need to purchase items low enough to make them attractive when you put them for sale. People on Ebay are also sensitive to shipping costs. For this reason, you will need to have a reasonable shipping and handling fee or people will not buy. It’s also against Ebay policies to charge excessive shipping. You can obtain merchandise from many sources. Some of the most common sources are: yard sales, estate sales, store sales, store liquidation sales, second hand stores, dollar stores, and from people who want to sell items but do not have the time to do it themselves or don’t know how to do it. I use all these sources.

Tips & Warnings

• Ebay has several formats you can use to sell your merchandise. These formats are the auction style with no minimum or with minimum bid, fixed price, auction with reserve price, auction with buy it now, and so on. Get familiar with Ebay’s selling formats because they will be a very important component of your marketing plan. I recommend that you also do purchases on Ebay. In that way you can become acquainted with the bidding/purchasing process. You will also find that buying on Ebay can be fun. Please understand, it costs money to sell on Ebay. You will be charged for listing an item as well as selling the item. If you use Paypal, you will be charged for receiving money through it. That is the reality of business. It cost money to make money. The benefit of Ebay is the absence of the fixed cost associated with having a storefront. Perhaps, the most important aspect of your business is to buy as low as you can so that you can make a good return on the sale. The most beautiful thing about Ebay is that you can compete with the big businesses because everyone has the same rules. You can sell power tools on Ebay lets say right next to Home Depot’s listings. However, if you have a small hardware store on a local street and Home Depot builds a store across from you, your demise is guaranteed.
• Ebay is not a get rich quick scheme. You will need to work at it to be successful. The other day, I came home from work at 6pm. I ate dinner and then watched some TV. Then from 9pm to 12am I packaged items, processed postage, and then took them to the Post Office. That does not count the time I spent finding the items and listing them for sale on Ebay. However, I obtained a good return for my efforts. Expect to do some work when you list items and then when you ship them. Remember, some days you may make less than others. That is the nature of business. So I hope the little insight into Ebay helps those of you who want to start your own business, and I wish you the very best in your endeavors!