How to Start an eBay Store

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Quick Reference

Do you have a product to sell and need a platform where you can sell it?  Maybe you like to buy and sell antiques, clothing, or art.  eBay is a great place to offer your products either as an auction sale or a fixed price sale regardless of your product.  You could start your own eBay store simply and start selling your products immediately.

Business Overview

Almost every product imaginable is offered on eBay. An eBay store offers products that customers can either bid on auction-style or buy at a fixed price. When customers win an auction, they are committed to buying at that price, so they pay for the item, and the eBay seller ships the product to the customer.

Industry Summary

According to Statista, eBay is ranked the second most visited marketplace online in 2021.  Gross merchandise volume is $100 billion, and there are 159 million active users.  The site receives 1.7 billion monthly visits.

Related Industries

E-commerce business
Etsy Shop

Industry Trends

More and more people are using eBay’s mobile app to make purchases.  eBay is growing in popularity, with the number of active users in 2021 up 7.47% from the previous year.  The number of users has been increasing steadily since the beginning of the 2000s, having more than doubled since then.

Target Market

Your target market will be those looking for your specific product online.

Skills, Experience, and Education Useful in Running an eBay Store

There are several specific skills that you will need to open an eBay store.

  • Experience.  Experience in and a talent for producing the product you are offering are important.  Your product will need to stand out from the competition.
  • Business knowledge and Experience.  You will need to have at least some basic understanding of marketing, finance/accounting, and human resources.
  • Customer service skills. Positive feedback is essential to building a successful eBay business. Communication and customer service are essential to make your score and have more buyers trust buying from your store.

Costs to Start an eBay Store

Here are the typical costs you will face when you open an eBay store.

  • Initial inventory $200 – $1500 depending on your product.
  • Desktop or laptop computer – $500 – $2,000
  • Printer – $100 – $300
  • Shipping supplies $200 – $500
  • Internet connection – $30 – $50/month


Steps to Starting an eBay Store

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your eBay business should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate precisely what your start-up expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.

How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect eBay store name can be challenging. Not only does the name have to reflect what you do and be appealing to buyers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of Business Entities

Step 4: Select your Location

Most sellers start their eBay store from their home; however, a well run store will quickly take up a lot of space. If running a business from home, be sure there are no city restrictions on running a home-based business.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Check with your state for specific license and permit requirements for your eBay store. Some other common local, state, and federal registrations an eBay store may need include a sales tax permit and an Employer Identification Number.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Fortunately, the costs to start a new eBay store are relatively low as most of the costs are for inventory.  While it’s recommended to not go into debt in starting a store, some people will still want to purchase sufficient stock. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

An eBay store will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for an eBay store include social media marketing and online advertising. Developing a website can be a significant expense, but it can also give your eBay store greater visibility online.  eBay also has tools that you can use to make your store more visible.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

An eBay store needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You may need employees to help you run your eBay store.  Make sure that you select people with appropriate Experience and training.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your eBay store is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

There is software that will automatically sync with your eBay store to help automate getting the sales and shipping expenses to your accounting software.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning an eBay Store?

Your potential revenue is completely dependent on the type of product you are selling.  You can research other eBay stores that offer similar products to see what prices they charge.  3.9% of eBay sellers make over $1 million per year.

Things to Consider Before Starting an eBay Store

Running an eBay store or any business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

Marketing and acquiring customers will be your biggest challenge. There are around 790,000 active eBay stores, so you will face massive competition, depending on your product, and so you’ll have to spend money to get your store noticed.

When pricing your items for sale, pay attention to the categories as the final value fees vary. For instance, seller fees for electronics are lower than most of the other categories. You want to be sure you are charging enough to cover all costs.

Many people get Experience as a seller by selling a few items from their home or purchasing heavily discounted items from local retailers and reselling them. Eventually, you may want to focus on a particular niche, which will help build customer loyalty.  To open an eBay store, you will need to sell a few items first through your eBay account.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other eBay stores to see what they offer and what prices they charge.

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