The Length of Time to Start an eBay Business

An eBay business plan can be prepared in about a day.

While it only takes minutes to set up a business on eBay, it takes time to actually start an eBay business. In order to handle it properly, the online business needs to be treated with the same planning as any other business. Preparing for the eBay business properly at the onset makes for smooth business growth but the whole process can be accomplished in a day or two.

Plan

Before starting the eBay business, it might be wise to create a business plan. Now, since the eBay business is going to initially start off small, the business plan does not have to be an in-depth prospectus. What it should focus on is the amount of financing available for inventory and a brief breakdown of what items will be sold. As the eBay business grows, a more developed business plan can be created. Creating a workable business plan should take only about one day.

Sales Tax

Some states require Internet businesses to pay sales tax. The states requiring sales tax information changes constantly so the eBay business owner should check with his state comptroller to find out if his state is one that charges sales tax for online purchases. Applying for a sales tax number can take a matter of minutes for online applications and seven to 10 days for postal applications. Some states, such as New York, require sales tax to be collected for items that are sold out of state but are purchased by in-state customers.

eBay Store

Setting up an eBay Store online is a fast, simple process. The eBay site has step-by-step instructions that will have even a novice eBay user up and running in no time. A couple of conditions must be met before selling on eBay. For one, eBay requires a valid credit card or bank account in order to process payments. A valid PayPal account is also mandatory.

Records

When starting the eBay business, the owner needs to make sure that good records are maintained. Even if the business is operating out of a bedroom, it is a business and that means that in addition to sales tax, other taxes must be paid, including income tax. If sales over $20,000 a year are credit and debit card processed (which is how most of them are processed online), the IRS is notified of the amount. When starting the eBay business, it might also be a good idea to set up an accounting program. Between setting up the basic record keeping system and possibly installing an accounting program, it should be no more than five or six hours.

References

• Entrepreneur: eBay Fever
• MSN Money: Ready to Start an eBay Business?
• ebay: New Study Reveals 724,000 Americans Rely on eBay Sales for Income
• Center on Budget and Policy Priorities: New York's "Amazon Law": An Important Tool for Collecting Taxes Owed on Internet Purchases
• Forbes: Coming Soon to eBay: The Taxman
• EBay: How do I Open an eBay Store?