How To Start a Profitable eBay Business

Many people shop online, and eBay is the number one chosen shopping and auction site where there are vast opportunities to make an income. However, to make money with eBay you must understand some simple steps that will assure your chances of success.

Begin your new eBay business

Firstly, do not be afraid of competition. Thinking that you will not be able to out-do sellers with many five-star reviews will lead you to fail before you have even started. Certainly you will have extra success the more positive reviews you have, but remember there are literally millions of people out there waiting to buy from sellers on eBay.

To begin, you will need to create an eBay seller account. First enter your details and ensure that you have a verified PayPal account, then link the eBay account to your PayPal account. PayPal is the preferred payment method with eBay and it provides a fast and secure method of transferring funds from the buyer to the seller. It also affords the buyer extra peace of mind, knowing that they have some security in place should the transaction fail for any reason.

Next, verify your identity by linking your PayPal account to whichever bank, credit card or debit card the auction site accepts. This is a basic requirement for being a seller and by doing so you can then specify how you want to pay the seller fees.

E-commerce sites that provide auctions give the opportunity to sell anything through the store. However, it is advisable to narrow down your interest to certain specific categories of products that you know very well. This enables you to answer any question that a potential buyer may have about your items, rather than having to give a generic response for the hundreds of different products that you can easily lose track of. You can also corner the market in a specific niche by concentrating on one category, and becoming the dominant seller of a product is an easy way to make big money on auction sites.

It is very important that you find out what sells best in your area of interest, and one method of doing this is by viewing completed listings on eBay. It can give you an overview of the sales by the various sellers and it’s a fantastic tool to determine which products are in demand. Use it to research your area of interest or favorite category and then make a decision about which products to sell.

Having done that, you can source the products from reliable wholesalers or drop shippers. Wholesalers will give you bulk discounts for ordering in large quantities and it is easy to purchase in bulk at reasonable shipping costs from developing countries such as India and China. Just be aware that some of these products may be of poor quality, so insist on seeing samples before going ahead and making a big purchase.

List your product

Now comes the fun bit – listing your products on eBay. This procedure is self-explanatory and the eBay website goes into a great deal of detail which we won’t go over again here, but there are some definite do’s and don’ts to remember when listing your products.

Do make sure you provide several photos of your items and include close-ups if need be. You want your customers to get as much information as possible before they hit that Buy button so try to use photos that cover all angles of the product, have good colour reproduction and are a high resolution. If the product has key features then make sure you include a few close-up shots of those as well.

The ultimate sales tactic for successful eBay sellers is to set up an eBay store. There are many perks to having a store, but the main one is that eBay promotes your store on search engines, so you get a lot more traffic coming your way. Additionally, having a store gives you instant credibility, and you will find that customers will naturally prefer to order from someone who has great feedback and a professional looking store. Customers will know that you take your orders seriously and that you have a reputation to protect, and this means that if anything goes wrong, you will stand by them. Although there will be an ongoing fee for running an eBay store, the benefits outweigh the additional costs. Your customers will also feel more protected and safe, so you can usually charge more than your competitors, depending on what you are selling.

Writing the product description

It might seem obvious, but do not use bad grammar or slang words in your advertising description, because customers will associate your poor use of language with the quality of the product. If you look at advertisements all around eBay you will quickly realise which ones are making good sales and which ones aren’t, with the differences centering on the quality of the written text and the photographs. Although it would normally be prohibitively expensive to get professional photos of a product taken, you can at least get cheap and professional advertising copy by utilising the skills of advertising experts at Spending a little extra on the quality of the listing will soon be re-paid many times over by the increased sales from your great-looking product page.

If you decide to write the sales copy by yourself then there are some simple guidelines that you need to be aware of that can really make the difference between making a sale or not. These include:

  1. Be clear about what the product is. Include the size, condition (if you are selling new or used), colour and list its features. For most products, listing the features by bullet-point is the recommended method.
  2. Explain exactly what your product does and how it will benefit the buyers’ life. So, if it is a hair product for example, explain how it will make the customer look and feel better than before. Make your customer feel good about themselves by purchasing your product.
  3. Use a single clear, easy to read font, and keep it in one colour. Using five different calligraphy fonts all in different colours will make your listing difficult to read and look unprofessional.
  4. If you are selling several products on your eBay account, consider using a template. Not only will it help you to remember which details you need to include for each product, it will give your store continuity and will help with your branding.
  5. If you have several products then try to cross-sell by mentioning similar items that you have for sale.
  6. Make it clear what your shipping and returns policies are. If you include free shipping then make a big point of it, and explain if you offer postal insurance as well. Likewise, if you offer returns, then explain exactly under which circumstances the product can be returned, and exactly what you will do for the customer when they return a product.
  7. Be clear about how your customers can contact you. Include an address (consider obtaining a P.O. box number if you want to look professional), and set up a business email address to keep your eBay and personal email accounts separate. Also, try to include a phone number, but only if you are certain your 5 year-old will not answer it!

After you have selected the appropriate listing style, added a theme to the page and listed your products in the appropriate categories, you can submit the listing and it will immediately go live on the eBay website. After it goes live, be sure to regularly be on hand to check customers’ feedback and answer any queries they might have. This is where having the eBay app on your smart phone can be worth it’s weight in gold, because the sooner a customers concerns are addressed, the sooner they’ll click the magic ‘Pay Now’ button.

Dealing with customers

If you get an annoyed customer who wants a refund, then immediately refund him or her and be as courteous as possible. Definitely do not get irate with them, as you will lose a customer for life, and you never know how many people they will discredit your business to just to get some form of revenge. Whilst most disputes can be easily resolved via direct communication with the buyer, if the process breaks down then you can at least be assured that PayPal will resolve the matter for you. Usually this process requires both parties to submit an account of the transaction, with the buyer stating their complaint and the seller stating an account of the sale and what they have done to address the complaint. Whilst PayPal examines each case individually, there may be an instance where they do not resolve the issue in your favour. In such a scenario, you have the option to take the matter further via a legal representative if you wish, but for low value sales this simply isn’t worth it, and the general advice of eBay sellers is to notch it up to part of the whole eBay process, and move on.

When dealing with customer queries, make sure you answer any questions truthfully and promptly. What you are trying to do is build a relationship of trust with your customers so they return to you again and again. With this in mind, aim your prices at a reasonable level so that your customers do not feel like you are trying to rip them off, and also ensure your shipping costs are fair. Contrary to common belief, the general public know when they are being taken advantage of and will vote with their feet by shopping elsewhere if they feel they are getting poor value for money.

Shipping costs

One of the biggest costs that will have an impact on your profits are shipping costs, and they can really ruin your chances of making a profitable income if you fail to keep them low. It generally costs about £5-£10 to send a box via Royal Mail, depending on what size and weight it is. As an example, let us say you have sold a box of your old CDs for £30. The actual money in your pocket can quickly become near half of that, with around £7 taken up in postage (do not forget that higher value items will also need postal insurance), around £3 in eBay fees, and another £3 in packaging.

Here are some solutions to help you keep these costs down:

  • Try to keep the size and weight down as much as possible. For example, if you are mailing out a single CD then you do not need to bubble wrap it and send it in a cardboard box, when a padded envelope will do the job just as well.
  • Make the buyer pay all the shipping costs, but as previously mentioned, do not inflate the cost in order to make a ‘stealth profit’. Your customers will always see through this and will likely buy elsewhere instead.
  • Purchase shipping from home and use your computer to print your labels. You will save about 20% over the retail price they charge you at your local post office.
  • Get your packing materials for free. You can get bubble wrap and packaging from the local free-ads, and you would be amazed at how many businesses give old cardboard boxes away for nothing.

If you are seeking to make money online at home through selling products via online auctions, you do not have to restrict yourself to eBay. There are many other alternatives such as; Amazon, Craigslist, Etsy, and Facebook selling groups. Although not as popular as Ebay, they do not require such stringent verification processes as eBay does, which can be a positive or negative depending on what you are selling.

I hope that these tips will give you some ideas on how you too can join the legions of people who are making a living by selling via online auction sites. If you have any other suggestions then please leave a comment below.


Personal finance blogger who's fanatical about financial freedom, investing and making money in the UK

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