It's important to do your research before starting a business on eBay.
By following a few key success tips, building a business on eBay can be a very successful venture. — Getty Images/svetikd

An international marketplace with 170 million active users, eBay boasts over 25 million sellers. Getting a piece of that action is as simple as listing an item and as complicated as beating out that competition.

Find the perfect product

Before you book your first sale, you’ve got a lot of decisions to make. None will be as impactful as your choice of product. Here are some basic criteria you should review before purchasing or manufacturing inventory.

  • Permissibility — While eBay seems the place to sell absolutely anything, there’s actually a list of prohibited items. Avoid future heartache by checking it first.
  • Availability — Consider the mechanics of replenishment. Products with long lead times require large purchases (read: bigger outlay) to avoid inventory gaps. Those that are available on a just-in-time basis may be more suitable if cash or storage space is a concern.
  • Demand — Whether its appeal is broad or narrow, your product needs a fan base. Specialization will separate you from the crowd and lessen the competition. It will also shrink your customer pool. An eBay search for a few specific items will reveal what you’re up against. Find information about what’s hot on the site’s What to Sell page.
  • Practicality — Some things are just too big or fragile or have too short a shelf life to be a practical choice. Can you successfully store, photograph, describe, pack and ship the item? Can you provide after sale support?
  • Profitability — This is the big one, but it’s easy to calculate. EBay will give you a very good estimate of what your product will sell for. When determining your cost, be sure to consider packing and shipping along with eBay seller fees. This rough calculation will tell you how much you can make per item. If you know your projected business overhead, you can determine the volume necessary to turn a profit.

Pay attention to the details

With your product(s) chosen, it’s time to get down to the business of business. The steps to setting up a business are straightforward.

  • Choose a name and register your business. Requirements vary from state to state — check with yours.
  • Open a business bank account. Keeping your business finances separate from your personal will make bookkeeping simpler.

[Read: How to Open a Business Bank Account]

Whether its appeal is broad or narrow, your product needs a fan base.

  • Open an eBay business account—not to be confused with an eBay store, which you may choose to open at a later date. A business account separates your new endeavor from casual sellers and qualifies you for promotions, professional tools and increased selling limits.
  • Open a PayPal account. While PayPal is not the only way to get paid for eBay transactions, it is by far the easiest. PayPal accounts are free to set up and customers trust the platform.

Differentiate yourself

There are 25 million sellers on eBay so make sure your listing stands out.

  • Photography: Plain white background, diffused light, shots from every angle. Follow eBay’s guidelines. They know what works.
  • Title: Use keywords in a logical, readable order. This is how customers will find you.
  • Descriptions: Make them clear and accurate. EBay will suggest item specifics, designed to guide customers to your listing.
  • Listing type: Auction, buy-it-now or a combination. Choose one or try them all. The outcome will help you with future listings.
  • Pricing: You know the optimal price for your item, but some flexibility may be required. As a new seller, you will have a low rating which can be a turnoff to some buyers. For a monthly fee, leverage eBay’s Terapeak tool to find your pricing sweet spot.

[Read: [How Should I Price My Product or Service?]

With your first products listed, you are officially in business. There is a lot more to do, including packing, shipping and follow-up. It’s all important to your success. EBay’s Seller Center has detailed advice on every aspect, including utilizing customer feedback to boost business.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published May 29, 2020