Starting an eBay Business is the next logical step if you've already mastered the basics of selling
and you've gotten good at figuring out what will sell in an auction and
what won't. Eventually, you'll have sold everything that you can from
your own closets and you'll find that it's time to move on to selling
things for other people or finding some good sources for wholesale
products. Before you leap into signing up for an eBay store, sit down
and plan out this next stage of your business development.
Yes, that's right - business development.
Congratulations, you're about to move from simply making money online to owning your own business!
Starting an eBay Business Right with a Business Plan
ARGH! OH NO!! Business-school speak!
Go ahead, get it out of your system now.
you're quite done, relax, take a breath and pull out a pen and paper -
you can do this! Remember, unless you're applying for a business loan,
there's no right or wrong way of creating a business plan, except
perhaps not creating one at all!
If you're going to get serious
about starting an eBay business, you need to realize that you are in
fact starting your own business. If you're going to start filing taxes
differently (when you make over $600 in one year, if not before), if
you're going to get a reseller's certificate, if you're going to be
taken seriously, you need to know what you're doing.
The only way to do that is to have a clear plan from the beginning.
business plan will basically lay out what you want from your business -
laid out by monthly, quarterly, yearly and 5-year goal plans. Actually,
the last one is optional - I usually do 3-year goals. Not only will you
set goals, you'll come up with a clear road map for how you're going to
get there each step of the way. This road map will be unique to your
own business, but I'll give you some thinking points to get you started.
no real format that you need to do this in. I like using blank white
paper and a nice pen, but that's just me. I also enjoy planning in the
bathtub, but again, that's just me. Planning is, after all, my favorite
part of owning my own business. What's important is that you take the
time to thoroughly think through what you're getting yourself into and
write down your road map.
Here's some questions to get you started:
What do you want from starting an eBay business? Money? Brand Awareness? Do something you like? Make money from your passion?
will you sell? What kind of market is there for this on eBay? What
about online in general? Where will you get your stuff? How much of a
markup will you have after eBay fees and shipping? How much do you want
to make on each item? How will you ship your stuff?
items will you try to carry on eBay at once? Will you list in
fixed-price or auction format? How much will this cost you (on average)
each month? Which store level makes sense for you to subscribe to given
How will you set yourself apart from other eBay sellers
offering similar items and services? Will you have more accessible
customer service? Will you have free shipping? Will you have quicker
delivery? Will you have hard-to-find or unique products?
you only sell on eBay or will you attempt to drive traffic to a
non-eBay store through branding so you can capture customers on a
cheaper system? Will it make sense for you sell on other eBay sites
such as Half.com and eBay Motors?
How will you keep customers coming back to your store? Newsletters? Specials? Discounts?
How fast will you ramp-up your item listings and services? How much time do you have to devote to this enterprise?
How will you manage your time and resources? At what point will you hire assistants and employees?
Given all the above, and your local laws and taxes, what business structure makes the most sense to you?
Will you need to get a reseller's license? What paperwork will you need to have before you can apply for one?
Will you need to be insured and bonded? What will be required to make that happen?
Getting Paperwork in Place
an eBay business is like giving birth - you're creating an entirely new
entity separate from yourself, but (in my experience) it doesn't have
to take quite as long. I live (relatively) near both a State and County
records office, so I was able to get all my paperwork done in about two
days of concerted effort. It was overwhelming and stressful, but I
self-medicated with Ice Blended Mochas and made it through. Looking
back, I'm glad I did it all so quickly - it made finding wholesalers
much easier, they were eager to speak with me when I could include all
my business paperwork as a PDF attached to my initial email.
can't provide specific advice for every state, as I'm not a lawyer and
I've only learned by trial and error, but if you're not selling
something that needs to be licensed and bonded (like cars and such)
it'll probably make sense to start off with simply doing a sole
proprietorship. Because you're probably already selling and your now
starting an eBay business, this can be the easiest way to transition.
In most places this is very easy to set up (register a DBA name) and
doesn't require any paperwork that would be better served having a
lawyer look over it. Once you've got that in place and you're starting
to see some cash coming in regularly, talk with your tax advisor to
figure out what business structure would be best for your tax bracket.
your stuff into PDF is pretty easy and well worth from the very
beginning of starting an eBay business because of the time that it will
save you in the long run. I have my paperwork in two forms - one long
PDF with all possible documents included and each document in an
individual PDF document. This allows me to send everything quickly to
wholesale companies who don't ask for specifics in their applications.
It also gives me the option of sending just what they need if they do
specify. Finding a source for your sales
The source you use
for your products depends on your intentions when you're starting an
eBay business. If you love china dolls, hunting for them at garage
sales and learning about them so you know what to buy will be a
pleasure therefore starting an eBay business with garage and estate
sales as your sourcing model is ideal.
If your goal is
starting a successful eCommerce business and starting an eBay business
is just your first step, the time it takes to hunt garage sales and
learn the product line will be tedious and you'll never do it as well
as someone whose passionate about it. Instead, you should consider
finding wholesale sources for items that sell well and reliably year
round on eBay.
If you like helping people and enjoy providing
customer service but don't want to manage a specific inventory or
warehouse, you might consider becoming a certified Trading Assistant
with eBay that will open doors for you to sell other people's junk from
their closets and basements. Most Trading Assistants charge a
percentage of sale and take it off the top, which can be great because
it requires no initial outlay of cash and you'll get your percentage
before fees and such are taken out.
Like I said in my article on Learning to sell on eBay, if you're wanting to sell new things, I love Wordwide Brands for
finding great sources of wholesellers and dropshippers. They have TONS
of tools to help you learn how to set up an effective eBay business,
research viable product ideas and find legitimate dropshippers and
wholesale companies. The initial membership fee is well worth it, and
unlike many of the other services out there - this one actually lives
up to all the hype.
Managing the Books and such
I didn't do enough research into this when I was first starting an eBay business and got myself into some expensive trouble. Don't be like me! Since then, I've learned A LOT about bookkeeping. Mostly that it annoys me and I want it to be as automated as possible.
For sole proprietors who sell and buy exclusively through PayPal, Outright Bookkeeping
is an amazing service. When I got into trouble with too many receipts
and spreadsheets that weren't working for me, Outright reached into the
darkness and saved me. (pardon the melodramatics) I wish I had know of
them when I was first starting an eBay business but better late than
never. Not only will it help you by automatically importing your sales
and keeping track of your expenses for you, it will help you understand
(roughly) your tax liability. I truly <3 Outright!
currently getting ready to move to a new business structure and I'll be
moving to Quickbooks at the strong (read: emphatic, vigorous,
threatening) suggestion of my tax professional friends. They all swear
by it, but I'll write my review in a couple more months.
business is based on a reseller model, so I have to pay sales tax. I
pay yearly at this point and I keep track of this still using a
spreadsheet. I don't do a lot of in-state sales, so it's not a huge
thing to keep track of.
Becoming an eBay Power and Top-Rated Seller
you're starting an eBay business that you want to survive the long
haul, you'll need to set your sights on becoming both an eBay Power
Seller and a Top-Rated Seller. Why? With both of these accolades you'll
not only get more conversions, you'll get better placement in search
results and, best yet, DISCOUNTS on eBay closing fees.
to making both of these scores is to sell in volume (of dollars) and to
be very pro-active in communicating with your customers.