How to Start an eBay Business: A Step-by-Step Guide
If you have some items you want to sell, you may have wondered how to start an eBay business. As an ecommerce website, eBay allows people to list items like collectibles or memorabilia for sale to people all over the country — and the world. For those who want to start a side hustle, or even run a full-fledged business, selling on eBay can be one strategy.
Here’s what you need to know about how to start selling on eBay.
- Choose whether to sell under a personal or business account
- Register your business
- Select a payment method
- Add inventory and determine your pricing
- Ship your items
- Reconcile your sale transactions and prepare for tax filing
Tips for selling on eBay
Frequently asked questions
1. Choose whether to sell under a personal or business account
After you’ve decided you want to become an eBay seller is to set up an eBay store. You can sell items on eBay with a personal account or you can sell with a business account. If you plan to sell a few items and make some quick cash, a personal account might be a better option. You’ll pay a listing fee and a final value fee with a personal account. These fees are based on the category of the item and the price the item sells for. You can get up to 250 items listed without the insertion fee each month, but you will always pay a percentage of the sale to eBay as a final value fee.
If you want to operate your eBay account as part of a business, it might make sense to open a business account. When setting up an eBay store, pay attention to the tiered pricing for business accounts. You’ll pay a monthly subscription fee, but you get specific perks, such as more free listings and lower fees when you sell. Plus, as a business account when you open an eBay store, you can use your own branding.
| Subscription plan | Free fixed-price items per month | Subscription cost per month (with annual subscription) |
|---|---|---|
| Personal | 250 | n/a |
| Business: Starter | 250 | $4.95 |
| Business: Basic | 350 | $21.95 |
| Business: Premium | 1,000 | $21.95 |
| Business: Anchor | 10,000 | $299.95 |
| Business: Enterprise | 100,000 | $2,999.95 |
2. Register your business
When starting an eBay business, you will need to make sure you’re properly registered as a business entity. This applies to S-corps, LLCs and sole proprietorships. As part of the process of how to set up an eBay store, you need to provide your company’s employer identification number (EIN), as well as provide other documentation about your business, including the business address.
In many cases, it might make sense to register your business, and then create an eBay seller account and decide what subscription option works best for you.
3. Select a payment method
As you set up an eBay account to sell your merchandise, you also need to consider how you’ll want to receive payment. You can have eBay process the transactions, allowing you to accept PayPal, credit card and debit card. After you become an eBay seller with a business or eBay storefront, you can also set up invoicing. This way, if someone buys multiple items from you, it’s possible to create a combined invoice. You can also decide whether you want to be paid daily or weekly, as funds are available.
Be aware that the payment process can take some time, however. When the funds are sent from the buyer, they show up as processing. You prepare and ship the order, and once the funds are settled from the buyer, they become available in your eBay account. Depending on your payout schedule, available funds will be used when your payout is initiated. It can take one to three business days for the funds to reach your connected account.
4. Add inventory and determine your pricing
The next step in setting up an ebay store is adding the items you want to sell. Part of adding inventory involves determining prices for items. Research competitors to get an idea of how they price similar items. One of the helpful tools eBay offers to sellers is its pricing flow that suggests ideas for pricing, based on the category and item.
On your eBay storefront, you can choose to sell items in several different ways: by auction, fixed-priced selling, a method called “Buy It Now” or allow buyers to submit an offer. With an auction, you create the listing and buyers compete, so the price can potentially rise. You can add Buy It Now to an auction listing, but it usually has to be at least 40% above the starting price. You can also use fixed pricing, and just use the Buy It Now function regularly. It’s also possible to allow potential buyers to make an offer, so you can choose to sell for less than the fixed price you set.
5. Ship your items
Timely shipping of the items you’ve sold is an important part of selling on eBay. In general, eBay recommends setting a dispatch time of no more than two business days. You can set regular delivery options for your eBay storefront, including using a shipping calculator that estimates costs based on your location and the buyer’s location. You can also set a flat shipping rate or no shipping rate. However, if you don’t charge your customers for shipping, that can cut into your profits. Using the calculated shipping rate can be one way to make sure that you keep your costs under control.
6. Reconcile your sale transactions and prepare for tax filing
As a business, your work is not done with shipping the item. You’ll need to keep records of your sales and any expenses like shipping or supplies for business tax planning. Keep good records so you have what you need for accurate taxes — and to reduce your chances of an audit.
Starting in tax year 2022, eBay will issue sellers a 1099-K form for any sales over $600. A copy of the 1099-K will be sent to the IRS and one will be sent to you. You can also download it from the Seller Hub.
Tips for selling on eBay
Now that you know the basics of how to start an eBay business, here are some tips you can use to improve your chances of success. It’s important to note that it’s not enough to set up an eBay account to sell, you also need to take steps to make your listings attractive and competitive.
Find a niche
When starting a business, you’ll need to figure out what makes your business unique by finding a niche market to target and selling on eBay is no different. If your eBay storefront has a niche, you’re more likely to attract repeat customers. You can choose to specialize in collectibles, clothing, refurbished electronics or any other type of item. A niche can help you better price your items as well.
Photos and words matter
As you learn how to create an eBay store, make sure you pay attention to photos and descriptions. Each item should have clear, high-quality photos from multiple angles. The better your photos, the more a buyer will trust you.
The written description is also an important part of any listing in your eBay store. Use keywords in your title and description so that people searching for similar items will be more likely to find yours. A clear, accurate description with keywords is vital to success when you create an eBay seller account.
Be prepared to pay seller fees
Whether or not you have a store subscription, you should be prepared to pay seller fees. eBay permits a set number of free listings per month, and above that it charges “insertion fees.” If you have a store subscription, you will have a higher number of free listings per month, depending on your subscription tier.
Next, you need to be prepared to pay the final value fees. Once the item sells, your final value fee is part of the payment processing fee. It’s a percentage of the sale, based on category, sale price and whether you have an eBay store subscription. You might pay up to 14%, depending on the value and category of the item. In addition to the percentage, the final value fee also adds $0.30 per order.
Ask for feedback from customers
Customers can rate sellers and the scale of options. As a seller, it makes sense to solicit feedback to help improve your profile. By engaging positively with customers, you’re more likely to get positive feedback and that feedback helps your store overall.
Set up a business bank account.
Because you’re running this as a business, it’s a good idea to have a separate business bank account. This makes it easier to track your cashflow and expenses so you have good records at tax time.
Frequently asked questions
Can you sell items on eBay with a personal account?
Yes, it’s possible to sell items on eBay with a personal account. However, if you sell a lot of items each month, or want to make it your business, it can become expensive to use a personal account. Consider comparing eBay store subscriptions to see if it’s cost-effective to set up an eBay store instead.
How many items can you sell on eBay for free?
With a personal account, you can list up to 250 items per month without paying an insertion fee. You can get more free listings per month with an eBay store subscription. Regardless, you still need to pay a final value fee.
How much does it cost to open an eBay store?
The cost to open an eBay store depends on what subscription level you choose, and how much inventory you need to buy. Insertion fees and final value fees depend on the category you’re selling under, as well as your subscription level. You can get a Starter Store subscription for as little as $4.95 per month or a Basic Store for as little as $21.95 per month.
How do I register as a seller on eBay?
All you need to create an eBay seller account is to provide your name and email address and set up a password. For a business account, you need your business name and address. You will need to provide a tax identification number, whether that’s a Social Security number or your EIN. Depending on the situation, you might need other documentation, but once you connect an account to receive payments and verify your identity, you should be ready to sell.
How much are taxes on eBay?
How much you pay in taxes depends on how much you sell. You will need to pay applicable state and federal business taxes. You will be issued a 1099-K if your sales amount to more than $600 on eBay.