Getting Started

The first step is deciding what you will sell. First of all, you must know what items are prohibited on eBay. Listing items that are off-limits for the site will result in your auction being cancelled and possible disciplinary action being taken against you. Refer to the Rules & Policies page of eBay’s Membership & Account section for a complete listing of banned items, as well as items to which special rules apply.

It is also important to choose a product which you are knowledgeable about, particularly when you are first starting out. You will have a better idea how to price the item, how to describe it and answer the many questions buyers may have about the product. If you encounter a deal on merchandise that will make you a profit that is too good to pass up but you are inexperienced in such items, do some in-depth research to bring yourself up to speed.

Product Sourcing

Once you have decided what to sell, you must find a product source. Ideally, you would find a reliable source from which you can expect a steady stream of discounted merchandise that you could then sell at a profit. However, this is often easier said than done. Start by doing an online search for discount merchandise, special bulk pricing, closeout sales, and liquidations. You could also contact manufacturers or wholesalers and inquire what their bulk discounts are. You may even be able to find a company who is willing to work out a drop-shipping arrangement with you, meaning that you would not actually have to store or ship inventory. You would merely serve as the middle man, so to speak. A buyer would place an order with you and you would pass along the order to your supplier, who would ship the order directly to your buyer. You would make your profit on the difference in the manufacturer’s price and your selling price. This part is mainly trial and error. It may take a while before you are able to find someone with whom you can forge a long-term relationship. Do not become discouraged. Keep putting in the footwork, and keep your eyes open in day-to-day life, as you never know what kind of amazing deal you could run into at the most unexpected of times.

Make sure you are in compliance with federal and state income tax laws

Remember that if you make a profit of $1 or more on eBay, you are required to report the earnings on your tax forms. You will probably also need to pay self-employment taxes. You should meet with a professional accountant to be sure you do not inadvertently violate and tax laws.

Create your accounts

Create an eBay account and a PayPal account if you do not already have them. Be sure you have upgraded to either a premiere or business level account on PayPal, as you cannot accept credit card payments with the personal level PayPal account. There are many other advantages to having the upgraded accounts, such as the special features and tools available.

Design a logo

This will help you build repeat business by making yourself easily recognizable to customers. It is extremely difficult to instill a sense of loyalty into customers without a good logo, which will help customers identify you and your products at a glance.

Introduce yourself

Fill out the “About Me” section. When you do business in the physical world, people can have face-to-face interactions with you and determine whether or not you seem reliable, and knowledgeable. In the impersonal world of the Internet, you need to give them enough information about yourself that they feel comfortable trusting you with their hard-earned cash.

Buy a quality digital camera

A high-quality image of the actual product you are selling, not a stock photo from the manufacturer, is crucial to selling online. To take a good photo, you must have a good camera. Some cameras, like a model made by Casio, actually have an “eBay best shot” setting that takes some of the guess work out of the process.

Observe

Look before you leap. Get an idea of how things work, such as what similar items such are selling for and what other sellers are having success with. Explore the tools available to sellers. They can increase your profit by increasing productivity and decreasing the amount of time and energy you spend selling.

Start small

Try listing one or two items, then gradually work your way up. It’s probably not a good idea to open a store before you have a little eBay experience under your belt.

If you don’t know, ask

Visit the community message boards, and look into the educational resources eBay offers.

The Basics
Listing an item

Choose a descriptive, enthusiastic headline to draw in customers. Ask yourself what you would say to sell your product in 10 seconds to a customer, and write it as the headline.

Since a buyer is unable to handle and inspect a product personally, his or her only way of appraising items on an eBay listing is to view the images you provide and read the product description. You must provide quality photos and a detailed description if you hope to make the sale. Use a high-quality digital camera to take a picture of your item against a plain background in a well-lit area, making sure to get several clear, up-close photos of any important features that a buyer would be interested in. Before uploading your images, make sure they are appropriately sized.

When it comes to the full description, provide all the details that a potential buyer of such an item would like to know. Otherwise, potential customers will either click past your listing or flood your inbox with questions. Be descriptive, enthusiastic, and, above all, honest. Do not leave out or gloss over unfavorable facts. Along those same lines, be sure to detail all your policies as well, including accepted forms of payment, return policy, and customer satisfaction guarantees.

When setting a reserve price, have faith in the system. A high reserve price will often scare off potential buyers, while a low, $.99 reserve price will draw a crowd, leading to a bidding frenzy that will likely drive the price up to, or sometimes even past, suggested retail price. Do your homework and see what similar items are selling for on eBay before making this decision. Also use your head when setting a Buy-It-Now option. If you set a buy-it-now price too low, there is little incentive for people to bid on an item, meaning you limit your potential for profit substantially.

Shipping items

Rather than listing three flat rate shipping options, most buyers prefer that you include a shipping calculator which allows them to input their zip code and select the preferred shipping option and receive an exact total that can be built into their final price. This is an option you can choose to offer on your form when you are listing your item.
You may also consider investing in a scale to avoid waiting in long lines at the post office on a regular basis. Also, PayPal offers an easy and convenient way for you to create, purchase, and print shipping labels online. You can then schedule a pick up at your home or office, thereby eliminating the need to go to the post office or shipping center at all.

While many sellers include in their listing that the buyer is responsible for purchasing package insurance if they so desire, the responsibility of insuring that the package reaches its destination is that of the seller. Play it safe and purchase package insurance with delivery confirmation, preferably requiring a signature.

Feedback

Exercise stellar customer service in all transactions, since your feedback score directly affects your chances of success on eBay. Be honest in your descriptions, respond to inquiries quickly, ship as soon as possible after the auction closes, and handle any customer complaints promptly and with grace. You may find that it is better to fix problems that you’re not even responsible for at times, since the money lost due to bad feedback is likely to be more than the cost of resolving a customer complaint.

Be sure to also do your part by leaving honest feedback for the buyer as well. Guard against the tendency to give retaliatory feedback if a buyer rates you lower than you would like. Doing so can cost you business, and can even result in you getting suspended from eBay.

Once you have gotten the hang of the process and experienced some success, you will likely want to grow your eBay business by opening a store. The basic store option costs around $15 dollars a month, and offers numerous tools for automating and streamlining your business. As your business continues to grow, you may upgrade to the more expensive store options, which give you better placement and more seller tools. Remember to continue listing live auctions in order to increase visibility, since you can reference or link to items for sale in your store that would be of interest to someone who is already bidding on the item you have up for auction.