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How to Start an eBay Business: A Step-by-Step Guide

Updated on:
Content was accurate at the time of publication.

Figuring out how to start an eBay business is relatively straightforward. The ecommerce platform makes it easy for individuals and businesses to list and sell items. There are multiple tiered business subscriptions to choose from, each with its own set of benefits and fees. The right one for you will depend on your business’s size and goals.
No matter what you choose, understanding how it works can put your business in the best position to thrive.

The first step to becoming an eBay seller is to set up an eBay store. You can sell items on the platform with a personal account or business account. 

Personal seller account

If you plan to sell just a few items to make some quick cash, a personal account might be all you need. This type of account is free to open and maintain, but you can expect the following fees:

  • Insertion fees: eBay allows you to list up to 200 items per month for free. For each listing beyond that, you’ll be charged a $0.35 fee per listing in most item categories.
  • Final value fees: This fee is expressed as a percentage of an item’s total sale price. It can vary from one item category to the next, but it usually doesn’t exceed 10%.

Business seller account

Tiered business accounts are designed for sellers who want to make a business out of their eBay store and are available for a monthly subscription fee. Each level offers specific perks, such as more free listings and lower fees when you sell. Once your eBay store is up and running, you can customize it to reflect your business’s brand.

Subscription planFree fixed-price items per monthSubscription cost per month (with annual subscription)
Business: Starter250$4.95
Business: Basic350$21.95
Business: Premium1,000$59.95
Business: Anchor10,000$299.95
Business: Enterprise100,000$2,999.95

When launching an eBay business, you’ll want to make sure you’re properly registered as a business entity. This applies to S corporations, limited liability companies (LLCs) and sole proprietorships. You’ll need to provide your company’s employer identification number (EIN), as well as other documentation about your business. In many cases, it might make sense to register your business first, then create an eBay seller account and decide what subscription option works best for you.

While it’s possible to sell on eBay without registering your business, it may be in your best interest to do so. Registering with the appropriate governmental agencies in your state can help ensure buyers that your business is on the up and up. It can also offer tax and legal benefits, as well as personal liability protection.

When you sell an item, eBay will manage the payment process for you. That includes accepting and processing payment from the buyer, then deducting seller fees before passing the proceeds onto you. You prepare and ship the order, and once the funds are settled from the buyer, they become available in your eBay account. 

Funds are typically available for payout one day after the buyer’s payment is confirmed. Your payouts can be sent to a linked checking account or Visa or Mastercard debit card. You can decide if you want to receive payouts daily, weekly, biweekly or monthly. 

When selling items through your eBay business, you can also set up invoicing if a buyer hasn’t gone directly through eBay checkout. Just keep in mind that you can only send an invoice if it’s been 30 days or less since the listing ended.

When is accepting invoices a good option?

Invoicing is another potential way to collect payment — and it might make sense if you frequently sell multiple items to a single buyer. According to eBay, invoicing may come in handy if:

  • Someone buys multiple items from you and you want to create a combined invoice.
  • The buyer has requested to change certain transaction details, like their payment method, or you need to modify the shipping charges. 
  • A buyer has won an auction but hasn’t paid for the item yet.

The next step in setting up an ebay store is adding the items you want to sell. Part of adding inventory is determining prices. Research competitors on the platform to get an idea of how they price similar items. Depending on the item, eBay might provide its own price suggestions in the listing flow that are based on similar items that have sold recently. 

On your eBay storefront, you can choose to sell items in the following ways: 

  • Auction: You select a starting price, then potential buyers can place bids. This allows you to sell to whoever makes the best offer. You can also add a Buy It Now option to these listings if you’re satisfied with the price, but it must be at least 40% higher than the starting price. Auctions might be a good option if you’re selling collectibles or rare or limited-edition items.
  • Fixed-price listings: You set a fixed price (also known as the Buy It Now price) for each item. That means there’s no bidding. You can also choose to accept a buyer’s best offer.

eBay recommends shipping your items no more than two days after they’re purchased. Here are some different ways to tackle shipping costs:

  • Allow eBay to calculate the cost for you: The platform can estimate shipping costs based on the package size and the buyer’s location.
  • Set a flat shipping rate of your choice: This can help simplify things for buyers, though your actual shipping costs may be over or under the amount you set.

Another option is to offer local pick-up at your home or other location. This eliminates the need to ship items — and cuts out the shipping costs. You could also offer free shipping to attract more buyers, though that will likely eat into your profits. 

As a business, your work isn’t done when the items ship. You’ll also need to keep records of your sales and any expenses like shipping or supplies for business tax planning. Keep good records so you’ll have what you need for accurate taxes. Doing so can also reduce your chances of an audit.

For the 2024 tax year, eBay will issue a 1099-K form to any seller who receives $600 or more in gross payouts. One copy of the 1099-K will be sent to the IRS; another will be sent to you. You can also download it from the Seller Hub or My eBay.

Every listing is required to have a photo — and using strong ones can be good for business. According to eBay, listings with better photo quality are 4.5% more likely to sell. Also keep in mind that your first photo will be the one that appears in search results. Below are some tips to help your photos be the best they can be:

  • Follow eBay’s photo guidelines: Use the minimum photo size, don’t use borders and don’t add text or artwork to your images.
  • Take advantage of natural light: Instead of using artificial light, try capturing natural light through a window.
  • Go with a neutral backdrop and avoid distracting backgrounds. A white backdrop lends itself to easier editing. 
  • Use a tripod or even surface: This can make for smoother shots and prevent lopsided images.
  • Upload multiple photos: Capture shots from different angles and be sure to include images of model numbers and brand labels.

Now that you know the basics of how to start an eBay business, here are some tips you can use to improve your chances of success. It’s important to note that it’s not enough to set up an eBay account to sell — you also need to take steps to make your listings attractive and competitive.

Find a niche

When starting a business, you’ll need to figure out what makes it unique. That can give you a competitive edge. Finding a niche market to target on eBay can go a long way. If your eBay storefront has a specialty, you’ll be more likely to attract repeat customers. For example, you might choose to specialize in collectibles, clothing, refurbished electronics or another category. What matters most is catering to a particular audience. Having a niche can also help you better price your items.

Pay attention to your descriptions

When it comes to attracting buyers and standing out, your item descriptions are just as important as your images. Use this space to provide necessary product information and keywords that buyers may be searching for and highlight what makes the item special or unique. That can help set it apart from the competition. It’s also important to be transparent so that buyers know exactly what they’re getting. That can prevent returns down the line, which could damage your eBay reputation.

Ask for customer feedback 

Customers can rate sellers on eBay. As an online business owner, it makes sense to solicit feedback to help improve your profile. By engaging positively with customers, you’re more likely to get positive feedback — and that can help your store in the long run. Also, be sure to resolve any customer complaints as soon as possible. 

Set up a business bank account

If your eBay shop is a business, it’s a good idea to have a separate business bank account. This can make it easier to track your cash flow and expenses and keep accurate records, which will be important come tax season. Having a business bank account can also ensure that your business funds are kept separate from your personal money.

Yes, it’s possible to sell items on eBay with a personal account. But if you sell a lot of items each month, or want to make it your business, it can become expensive to use a personal account. Compare eBay business subscriptions to see if it’s more cost-effective to set up an eBay store instead.

With a personal account, you can list up to 200 items per month without paying an insertion fee. You can get more free monthly listings with an eBay business subscription. Either way, you still need to pay a final value fee.

The cost to open an eBay store depends on the subscription level you choose, how much you sell and whether you need to purchase inventory to sell. Insertion and final value fees are based on the item category, as well as your subscription level.
You can get a starter subscription for as little as $4.95 per month, or a basic subscription for as little as $21.95 per month.

To create an eBay seller account, all you need to provide is your name and email address. For a registered business account, you’ll need your business name and address. You’ll also need to provide a tax identification number, whether that’s a Social Security number or EIN. Depending on the situation, you might need other documentation. Once you verify your identity and connect an account to receive payments, you should be ready to sell.

Your tax liability depends on how much you sell. You’ll need to pay any state and federal business taxes that apply. You will be issued a 1099-K if your annual sales on eBay amount to $600 or more. How much you’ll ultimately pay in taxes in a given year depends on your total income and tax-filing status.