Online shopping platforms such as eBay allow anyone to become entrepreneurs. But how does a person prepare when it comes to creating and managing an eBay selling business?
eBay is undoubtedly the world’s largest online selling platform, with buyers and sellers coming from all parts of the world. The website has cheaper fees compared to other online marketplaces, making it ideal for budding entrepreneurs who want to explore setting up an online selling business.
However, not everyone who enters the online selling industry ends up being successful.
The following steps must be taken into consideration by beginners who want to explore the eBay selling sphere:
- Learn about eBay fees
- Consider using eBay store subscriptions
- Create a business strategy
- Set up an eBay and PayPal account
Learn about eBay fees
Regardless of what products are sold, potential online sellers must first know how much it costs to set-up shop on eBay. While the website’s fees are relatively cheaper compared to other sites, these fees still need to be paid. Failing to map out these initial expenses might cause the business to collapse even before it starts.
One of the biggest fees that will definitely take a chunk out of a business owner’s capital is the final value fee. The final value fee takes off 10 per cent of the total sale price, including everything except tax.
If a business owner is satisfied with maintaining a basic listing, the final value fee will be the only thing that needs to be paid on eBay.
The normal number of listings per eBay account is usually up to 50 listings. If a business owner wants to list more than 50 items, they will have to pay an insertion fee. Insertion fees are usually at $0.30 for every listing above 50—but if a seller posts more items, expect the total sales to be slashed off by another 10 per cent.
Other expenses that sellers need to look out for can include shipping fees, handling fees and PayPal fees. To ensure that the business becomes a profit-generating venture, sellers must know how to set a competitive pricing for their items allowing the business to gain profit without making it too expensive for buyers.
Consider using eBay store subscriptions
Budding entrepreneurs are encouraged to consider using eBay store subscriptions for their business. A store subscription allows sellers to have more flexibility and access to discounts and freebies, which frankly are worth the money considering how reasonable the subscription fees are.
A basic eBay store has a subscription fee amounting to $19.95 a month for a 12-month subscription. This basic store includes free fixed-price listings of up to 250 listings. Any listings above 250 requiring an additional insertion fee. This is beneficial for sellers who list more than a hundred items a month.
Store subscriptions also feature lower final value fees as compared to non-subscribers. While non-subscribers have to put up with a 10 per cent final value fee, store subscribers only deal with 4 per cent final value fees.
Lastly, store subscriptions allow sellers to have access to premium features, such as customisable marketing options.
Create a business strategy
Devising a business strategy for potential eBay sellers includes a lot of things, ranging from marketing to shipping to profit generation. First, you have to create an eBay listing that brings out the product for potential buyers to see.
It is recommended that potential sellers do ample research first before deciding on how much each item will be priced. eBay sellers can research the price of similar items from other stores and how each product is placed in every category.
eBay also provides pricing recommendations during listing, gauging how much every item should be priced by the seller.
The prices of similar items that have been sold can be viewed by searching for an item, scrolling down to the “show only” options and then clicking on “sold listings”. This leads sellers to a database of the prices of similar items sold.
If the item has not yet been sold on eBay, simply remove the filter for sold listings to see if other shops have listed the item. If the item that has been listed hasn’t been sold, chances are the item will not fare well on eBay—consider listing other sellable products instead.
Selling on eBay also requires a good shipping strategy. A lot of time will be spent packing and mailing products to customers, especially if they are overseas. Make sure to respond promptly to orders—failure to do so might result in getting a negative customer feedback.
Consider teaming up with shipping companies such as FedEx and UPS and consult about shipping fees and delivery periods. Some shipping companies allow doorstep pickups, while others offer discounts for those who ship in bulk.
Set up an eBay and PayPal account
After going through everything mentioned above and deciding on business strategies, shipping options and listing procedures, sellers can now set-up their eBay and PayPal account for payments. eBay has two account options, namely personal and business.
If a seller plans on buying and selling items for profit on a larger scale, a business account is recommended. However, if a seller only plans to sell personal items on a much smaller scale, a personal account might be more fitting. A PayPal account is also important since a lot of eBay buyers resort to using PayPal for payments.
Starting out on eBay might seem daunting for beginners, but eBay is a good place to start for budding entrepreneurs and could make way to earn more long-term benefits.