How to set up a business on eBay

How to create an eBay store for your business

How to set up a business on eBay

What began as little more than an online second hand good store has grown to become a force within the global business community with small and large businesses alike now having a presence on eBay.

Often overlooked is that eBay isn't just about auctions. The ability to place fixed priced items on the site has been highly attractive for business owners for several years. Why open a store on eBay?

  • 17 million unique visitors come to eBay each month to buy a vast range of goods
  • Stores on eBay can be set-up in a matter of hours
  • Start up costs are low and eBay won't charge you until your first month of trading is complete
  • Payments are received quickly and securely via PayPal so there's no need to apply to Visa etc to take credit cards
  • The sales and performance of your store can be easily tracked
  • Promotions can be set up and used easily from your eBay account

"There are 10,000 businesses in the UK selling on eBay," explains an eBay spokesperson. "They are attracted to it because eBay is a ready-made e-commerce solution – everything is taken care of, all you need is a computer and a digital camera."

Article continues below

Setting up

To open a new store on eBay you must have one of the following:

  • A minimum feedback score of 10 on your personal eBay account to open a basic store and also be PayPal verified
  • Registered as a business seller to open a Featured Store and also have a Detailed Seller Rating of at least 4.4 or above in each of the four areas
  • If you want to open an Anchor Shop your Detailed Seller Rating score must be 4.6 or better

top rated eBay business seller logo
top rated eBay business seller logo

You also have to consider the costs associated with the type of store you want to open. Currently costs are:

  • Basic Shop - £14.99 each month
  • Featured Shop - £49.99 each month
  • Anchored Shop - £349.99 each month

If you're not sure what type of store would suit your business best, eBay has a handy feature comparison chart you can use to help you decide. Also, new businesses that set up on eBay may have listing and selling allowances applied to their store. Ensure you fully understand the possible implication these could have on your new store before you move forward and create your shop.

Also note that eBay doesn't allow certain items to be sold on their site. These include alcohol, firearms and drugs. A full list is available here and the other rules that could apply to your new store can be viewed here.

You also need to carefully consider the on-going running costs in addition to the basic shop cost that are associated with your new store. You have to pay your monthly subscription, but you also need to take into account:

  • The listing fees you will pay on each item
  • The final value fee that will be applied when a customer buys an item from your store
  • The fees that PayPal will charge to process your customer's transaction

What to charge?

For new business on eBay deciding on a pricing strategy can be highly complex. However, the price you charge should take into consideration all the usual fixed and variable costs you would associate with any store.

What you do need to think about is how the price you set impacts on the fees you pay. Don't forget, listing items on your store with a fixed price will attract a fixed listing fee, but also a final value fee that is a percentage of the price you charged with the percentage depending on the category your store's goods are in.

For instance, if you have a Basic Store, your listing fee is £0.10. The final value fee for goods such as computers and video games is 3 per cent. Media such as books and DVDs is 9 per cent, with clothing and accessories costing 12 per cent. These costs should be carefully considered when you are setting the prices for your new eBay store to ensure you get the return you need to ensure a good level of profit.

Design your own eBay business store
Design your own eBay business store

Design and layout

It is possible to make your eBay store as simple or complex as you want. Basic templates are available that allow you to choose a design that can then be customised. You can change the colour of your store and add logos and other design elements.

One of the most important aspects of any eBay store is the quality of the images. People that buy on eBay want to see what they are purchasing. The better your images the more sales you will make – it's as simple as that.

Try and make your images as appealing and attractive as possible, and don't forget to optimise them for the web to ensure they download quickly. Customers want pages that load fast, and won't wait for large images to appear. You can even buy third party store templates to use for your new eBay business. Leading services include: Auctiva and Vendio.