How to Start an eBay Business

[kkpilchers]

The first rule of starting an eBay business is: Don't do it.  It will be a big mistake.

I've been selling since 2016 and sell about $65K/yr.  I remember seeing disgruntled seller rants on these forums and thinking something along the lines of "...malcontents, what's the problem?  Just follow the rules and everything will be OK."  eBay has since disabused me of this notion.

The irony is now I am posting a rant just like they did!  In a dispute between buyer and seller, you can always count on eBay to do the best thing.  For eBay.

I'm closing my business at the end of this year.  I'm no longer going to partner with these people.  You kind of wade into eBay.  It is fun and exciting at the beginning. Then you slowly, ineluctably become eBay's b**ch.  eBay sets your business rules.  You don't.  You will be treated as a supplier.  eBay will spec an item to be sold.  The seller will be required to meet that spec.  eBay will charge you additional fees if your business model does not comport to what they think it should be.  Think of eBay as the special-needs equivalent of the company that begins with "A".

As your business grows you will have to have business liability insurance, you will pay quarterly state sales and use tax.  You will need a business license.  You will need to hire a CPA for your federal tax.    You will be doing end-of-year inventories.  Then as you find yourself spending more and more time listing items, shipping items, buying items and selling items, you will deal with your first difficult customer.  When they file a case/dispute, you will undoubtedly come out on the losing end of the deal.  This is how it will be.  This is how it will always be.  

You will of course appeal to eBay because you are "right", but you will quickly find out that it doesn't matter that you are right.  It matters that the outcome will keep eBay in good graces with buyers.   That's how it works.  Get used to it.  Embrace it.  

Wait until you call eBay customer support!  They are looong on empathy, but have little power to affect anything.  CS: "Yes, you are totally right Mr. Smith and it is perfectly understandable that you would feel that way. I would too in the same situation....."  Seller: "Are you going to do something about it?" CS: "No!"

It will only be a matter of time before you get bent over by eBay and then you will be enlightened...just like I was!  I know what your thinking.  You are thinking, but eBay has seller protection!! HAHAHAHAAHAH!!! Let me know how that works out for you 🙂

Listen, you have probably had some initial successes selling on eBay and will more than likely disregard this post.  I know because that is what I did with posts like these.  I can only suggest that when eBay throws you under the bus for the first of many times, please think back to this post you read and dismissed.  Remember: I told you so!

[luckythewinner]

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The first rule of starting an eBay business is

IMHO the first rule is to have a business plan that does not rely on eBay alone. And IMHO part of that business plan should be learning eBay before committing to it. 

I'm no longer going to partner with these people

You and eBay have never been "partners". eBay is just one of many tools a business might use. If a tool no longer does the job, you find a new one. 

When they file a case/dispute, you will undoubtedly come out on the losing end of the deal.  This is how it will be.

I suspect most sellers will have run into this long before they rely on eBay as part of their business model, and will account for it. 

you will pay quarterly state sales and use tax

Unless you live in a business-friendly state that does not burden you with that.  

You will be doing end-of-year inventories

Not if you read IRS Publication 334 and choose to treat your inventory as supplies. 

You will need to hire a CPA for your federal tax

Unless you can figure how to add, subtract, and multiply and enter a dozen numbers into a Schedule C. But I agree, you might need someone to show you the ropes the first time. 

Then as you find yourself spending more and more time listing items, shipping items, buying items and selling items

So in other words, your business will not run itself. You have to run it. 

[fairdeal*lb]

Make no mistake this is not a partnership and never will be, you are only a number to eBay. When you start trusting eBay is when you get bitten.

   eBay will never have your best interest in mind. Diversify as much as possible, try not to over expose yourself to this platform. I promise you will regret it.     

Good Luck  

[dhbookds]

From your post....sounds like you were/are doing well.  I'll never understand why one incidence would cause you to quit.  Certainly your choice....

[kkpilchers]

Because it is not one instance.   Also, it takes an inordinate amount of time.  It is constant and unrelenting.  I retired and started this as a hobby that became a business due to the amount of sales.  I don't need the income.  I don't need the hassle. I don't need eBay.

But it is deeper than that.  No one, no one is going to treat me the way I was treated and do it with impunity.  I'm voting with me feet.  Now of course I realize that eBay couldn't care less. I know that there are probably  legions of new sellers sign up every day.  eBay can find a new seller to abuse.  I won't be around to stand for it. 

My heart goes out to anyone trying to make a go of it on eBay.

[my-cottage-books-and-antiques]

In your case, it sounds like you just wanted a nice little  hobby, that wouldn't really be work. And you've discovered that when a hobby becomes a real business and needs to be run like a real business, it's, well, no longer a hobby.  So.....yes, best if you give it up. 

Maybe take up gardening or golf instead. 

[southern*sweet*tea]

The first step in starting a business on a third party selling venue is to remember that the venue calls the shots. 

When YOU have your own business, YOU are in control. When you use a third party to sell and ship items, that third party is in control.  You are using Ebay to sell your items, and Ebay is in control, because this is Ebay's business, not yours.

[silverstatetreasureboxes]

@kkpilchers 

Sounds like you were very successful but your retired now change up your business model. I could see why selling electronics would get to you, those are not fun things, sell some interesting items things you enjoy collecting or know something about.

     Go on junking trips and buy some " cool" stuff to list. Electronic gadgets blah! 👅👎Don't throw the towel in just yet! Best to you!

[call*me*alfred-o*]

Understand how you feel.

23 years here.  We have been powersellers at least 18 of those.  Now powersellers ending, no more conceriege.  We are now no one.  We paid ebay 6 figures last yrar - do they care?  No.  They used to.  Now I'm the same as the china trinket sellers.

We are considering retiring in July.  My wife no longers wants to do this.  You can make money here, but you better understand at what cost. 

[divwido]

eBay collects and pays over the sales tax, so you do not need that.

[kkpilchers]

eBay just started doing this for my state late in the 3rd quarter of 2020.  It is a business and as such I have to file quarterly state taxes even if my tax liability is zero.  Also I must pay use tax if I buy something tax exempt and decide to keep it for personal use.  I do this from time to time.

[kkpilchers]

I don't mind the work.  This is my fifth year of doing this.  I do mind eBay sniping at me  and being detrimental  as I attempt to run a successful business.    Like adding an additional hefty fee on my sales above and beyond FV fees; doing it based on illegitimate grounds and an invalid comparison,; not informing me when they started doing it;  and then failing to address it when brought to their attention.  Yes, that **bleep** me off.

[katzrul15]

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@kkpilchers wrote:

Because it is not one instance.   Also, it takes an inordinate amount of time.  It is constant and unrelenting.  I retired and started this as a hobby that became a business due to the amount of sales.  I don't need the income.  I don't need the hassle. I don't need eBay.

But it is deeper than that.  No one, no one is going to treat me the way I was treated and do it with impunity.  I'm voting with me feet.  Now of course I realize that eBay couldn't care less. I know that there are probably  legions of new sellers sign up every day.  eBay can find a new seller to abuse.  I won't be around to stand for it. 

My heart goes out to anyone trying to make a go of it on eBay.

It is not the e-Bay many of us started out with.  Hope you can enjoy retirement.  Not everyone who sells on here becomes successful at it, so congrats that for a time, you did.  

When anything truly becomes "work" it is probably time to call it a day.  There is a HUGE difference between "having" to do some to survive and "choosing" to this to supplement income, expand a *hobby*, etc.    

I agree with your sentiment for those this IS a needed source of income.  But for many of us, it still has enjoyable elements.  Best wishes.

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[corvettestainless]

What 'additional' fees are you being charged? For what?

[kkpilchers]

I am being charged a "Very high SNAD return" fee on everything in the computer & networking equipment category because the rate is above the average.  The fee is significant.  I had 10 returns out of 118 sales.   People return tech items for two reasons: The item has a legitimate hardware or software problem.  The buyer thinks there is a problem when there isn't.  Five of my returns were the former; five were the latter.  eBay doesn't care whether the return was legitimate or not.  They just take the buyers word for it and the algorithm takes over.   I was never notified of this fee.   The whole comparison is invalid.  A computer is a collection of components each of which have to work correctly for the item to work.  To compare the return rate on computers to return rates on components is absurd.  Example: I have only seen three memory stick failures in my life and I have been doing this for decades.  How can computer return rates be legitimately compared to a an average rate that includes memory sticks.  Computer return rates compared to computer return rates? No problem.  eBay customer service lied to me and said they only compare computer sales/returns to computer sales/returns.  Based on ebay taking my returns and dividing them by my sales to arrive at my rate  indicates that this cannot possibly be true.  I sold other things besides computers in this category.