ebay.co.uk

Start your own Online Business on eBay

eBay is an online auction house, but more commonly referred to as an 'online marketplace' because many items can also be bought at a fixed price. eBay is one of the most visited websites on the Internet and can only be described as an online phenomenon, even being featured in blockbusters such as Men in Black, Transformers, etc. With hundreds of millions of items listed worldwide, and millions of items bought and sold daily, it's the behemoth of auction websites.

I first signed up for eBay in 2002 and have since bought and sold hundreds of items on the site. I even achieved Power Seller status from all my selling for a while. The idea of eBay is that a seller lists an item for sale, either at a fixed price, or as an auction. With this in mind, the seller can sell off their unwanted items or sell inventory as a trader, and the buyer can buy something that they are looking for.

BUYING

Before you can buy, you need to register for an account, which requires an email address, name, address, etc. as well as a preferred password, date of birth, security question answers. On top of that, depending on your email address, you may be required to enter credit card details if you use a free email provider such as Hotmail, Yahoo, etc. The sign up process is quick and easy as it is with most other websites.

As a buyer, you can buy from 'Buy It Now' (BIN) listings at fixed prices or bid on auctions. The site is extremely easy to use and you can either use the search box to find your item or you can browse the categories. Either way, you can filter results right down if there are too many pages of listings to dig through, which is not uncommon. To bid on an item, you bid the highest amount that you are willing to pay for the item and the eBay system will bid on your behalf up to your 'Maximum Bid' amount. For example: If a seller starts an auction at £1.00, and you bid £10.00, the item will stay at £1.00. However, if someone else bids £2.00, eBay will bid on your behalf so the item will then cost £2.00 plus the bid increment, so something like £2.25. This will continue up to your Max. Bid Amount (£10). However if the other bidder then bids £10.50, you will no longer be the highest bidder. Many bidders tend to bid low though and bid at the last minute(known as 'sniping') to try and win auctions at bargains. This type of bidding practice is also very addictive.

If you win an auction, you need to send payment for the winning amount plus quoted delivery costs to the seller via one of the accepted payment methods. Some business sellers add VAT to the winning amount so read carefully. PayPal is the most popular payment method, as it's owned by eBay and is heavily promoted and integrated into eBay. Many sellers accept alternative methods such as cheques, postal orders, etc. but because of the eBay / PayPal monopoly they convince sellers to make listings that require you to have a PayPal account to buy the items. This can be to prevent time wasters but it prevents buyers whom don't wish to use PayPal from buying or forces them into using it. Once payment has been sent and received by the seller, simply wait for the seller to send you the item purchase, and once you receive your item, leave the seller a feedback rating to rate the overall transaction. Most sellers would reciprocate and leave you a feedback rating and comment in return.

Buying is very easy, too easy in fact, as it can take less than a minute to buy or bid on something. There are also lots of tools for you to track items i.e. Watch the item, in your eBay account as well as view what items you're bidding on, add sellers to your list of favourites, do advanced searches, etc. You can find practically anything on there from electronics, cars, to small collectibles. You can even find houses, services and clothes.

Buying can be dangerous as there are many scammers on eBay. Some sellers may advertise items for sale but will not send out the goods once payment has been received. Others may intentionally make descriptions misleading, and some may just send you an empty box. There are also a lot of counterfeit items on eBay so be sure to read the description carefully and to check the seller's feedback. If unsure about something, ask the seller before bidding/buying. Some items are from abroad so you do need to read carefully as you could be charged customs and excise duty. Some items have bumped up postage costs where the seller is trying to circumvent fees and just because something is on eBay does not mean an item can't be found cheaper in shops. Those things aside, eBay can be a great place to shop. You can even buy from abroad.

SELLING

Selling involves listing your item, which consist of specifying a auction format, title, description, starting price, listing duration, as well as a load of optional extras. The description can be spiced up using HTML, which is free but most of the optional extras cost extra. You're allowed one picture for free but additional ones cost extra, so you're better off learning a bit of HTML to add more pictures for free.

Sellers can also open an eBay shop if they have a lot of inventory. Shops are subscription based, starting from £6 up to £300 depending on the amount of exposure required. Items listed as Shop Inventory have reduced fees so it is worth it for high volume sellers.

Bad points to selling can include time wasters winning your auctions and not paying for them, scammers trying to scam you, eBay unfairly 'pulling' (ending/cancelling) your listings, and you pay sky high fees. I have experienced it all! eBay can be a pain in the backside sometimes. As a seller, you may have competition, and your competition can report your listings for minor offenses which can get them pulled. Another problem is that there are people from trademark holders trawling through listings and ending listings because they either think you're selling cheap knockoffs or they simply do not like the idea of their brand being sold on eBay. So, even if you have an authentic item, you could be accused of selling fakes and have your auction pulled and even get your account suspended (yes, I've been suspended before). eBay have grown to the point where they do not care much for the individual sellers. Even if they lose a seller whom has a turnover of thousands solely from selling on eBay, it's a drop in the ocean for eBay as they have many other big sellers as well as individuals listing their items and making them over a billion in listing fees each year.

Listing auctions costs a minimum of 15p, which will not break the bank this is just the insertion fee for an item with a starting price of 99p or less. A higher starting price will bump up the fee to 20p and even more if you start higher. A gallery picture, which helps with your items visibility with a picture for your item in search results will be another 15p but after your item sellers (if it sells), you will also have to pay a Final Value Fee (FVF), which is a percentage of the final price and which tier depends on the final price.

The FVF percentage varies depending on the final price and there are variations on percentages for some items. Some things like cars are fixed price. It can be quite complicated but the fees can add up to a lot as I've found. I used to pay over £100 a month just in eBay fees, which isn't a lot to some high volume sellers but this does cut into the profit and some sales can become losses if things go unexpectedly (i.e. item sells for less than expected). For extra exposure, there are many extras that can applied to listings but these can cost anything from 5p up to £50. i.e. Featured listing costs £9.95 per listing, Bold title costs 75p, etc. Even though eBay are making so much profit, the fees keep increasing. On top of that, most buyers pay via PayPal (an eBay owned company, remember!?) so that would be another 3.4% + 20p of the overall transaction.

For example:
I list a phone for sale starting at 99p with a gallery picture (30p insertion) and with a delivery charge of £8. People bid and it sells for £200. That would be "5.25% of the initial £29.99 (£1.57), plus 3.00% of the initial £30.00 - £99.99 (£2.10), plus 2.50% of the initial £100.00 - £199.99 (£2.50) plus 2.00% of the remaining closing value balance" (£6.17) and PayPal will charge me 3.4% + 20p (£7.27) for the whole £210 transaction.
0.30 + 6.17 + 7.27 = £13.74 (Total fees for selling the phone)

eBay hold promotions such as free listing days or 5p, 10p listing days sometimes but they usually have annoying terms attached to them. Free listing days can be annoying as the site gets flooded with people going trigger happy.

Sellers can also be victims of scams. For example, someone buys a high value item from you, they pay for the item via PayPal so you post the item but then you receive an email from PayPal saying your money has been reversed because the buyer filed a charge back or the card used was stolen, and you're left without the item and no money to show for it. The seller protection programmes are useless half the time even though they promise to protect the seller. Other scams can involve a bidder winning your item and then those sending you fake emails saying you have received payment for the item and to send the item. I've experienced both of these. If selling items like high profile phones, 99% chance you will be targeted by scammers. The protection only covers about £500 maximum and you'd lose out if an item value exceeds that even if a claim is successful.

If you have an established eBay account, or even a not so established one, you are prone to receiving phishing emails. These are fake emails that appear to be from eBay, but are actually from fraudsters trying to trick you into giving away your details i.e. login details, bank details, personal details, PIN number, etc. eBay and PayPal phishing emails are the most common form of phishing emails. They ask you to log in through a link in the email to verify your details, or even to answer a question from a would-be buyer or seller chasing payment for an item you've never seen or heard of before.

The easiest way to start an online business seems to be selling on eBay because of the amount of users the site has. eBay is ideal for selling as a business as they make managing your auctions so easy. You can upload in bulk using the free Turbo Lister program and Selling Manager (Pro or non-Pro) with your 'my eBay' account helps you manage your listings and sales. It automates many of the processes and saves you from having your own website. There can be potential losses but it can also be profitable. However, with so many users, there is also much competition. Many rival sellers undercut. eBay have also been known to suspend sellers permanently and unfairly. Breach a few minor policies and you could kiss your entire business goodbye so I would advise against basing your entire business on eBay. It's good to use it to subsidise your business but I wouldn't like to rely on it in case this goes wrong as many people who rely on eBay for a living have found themselves in a dilemma after their eBay account was suspended. You're not allowed to register a new account if you are suspended, nor use eBay in any way in such cases. New accounts simply get suspended once they find out.

FEEDBACK

The feedback system is an important aspect of eBay as this indicates the reputation of each user on eBay. The feedback rating is the number in brackets next to each user's username. i.e. username (152), where the number represents the number of positives against negatives. Each positive increments the number by 1 and each negative deducts 1. The feedback rating is only affected by each unique member you have transacted with. Feedback ratings available are Positive, Neutral and Negative.
Example scenarios for each rating:
POSITIVE - For smooth transactions or transactions where both parties come to a satisfactory conclusion if anything had gone wrong, etc.
NEUTRAL - Not an entirely satisfactory transaction where some effort was made to resolve the transaction or item is not exactly as described but acceptable, etc.
NEGATIVE - No payment sent, no contact or no product received, rude person to deal with, item not as described and unwilling to resolve problems, etc.

**NOTE: eBay have made some daft changes where the seller is unable to leave anything other than Positive feedback for the buyer. This means, the buyer can be fraudulent and seller cannot retaliate. Only option seems to be to report hte buyer if problems arise. A step in the wrong direction...

On top of the ratings, a comment needs to be left for your buyer or seller. There is also a 1-5 star rating for each aspect of the transaction such as 'item as described', dispatch time, delivery costs, etc.
Feedback is not mandatory but the majority of people do use the system and it is important for buyers to determine how trustworthy a seller is to decide whether to buy/bid or not and for sellers to determine whether a buyer is a potential troublemaker or not.

CUSTOMER SERVICE

Depending on what the problem is, customer service can go both ways. Communications is always via email as they don't really publish a phone number. Most of the time, eBay will send you standard emails that don't help at all. Other times, they can resolve the problem first time. With some issues such as trying to get your account back after it gets suspended can be near impossible as they will just reply back with a load of rubbish to brush you off. For good advice regarding eBay buying and selling, you're better off visiting eBay forums as I find that a lot of replies I get from eBay are very impersonal

BUYER ADVANTAGES
► Find just about anything
► Bargains
► Easy to buy stuff
► Buy from abroad
► Bidding can be exhilarating

BUYER DISADVANTAGES
► Not everything is a bargain
► Bidding competition
► Makes it too easy to spend your money
► Scammers and dishonest sellers

SELLER ADVANTAGES
► Sell unwanted items easily
► Easy to set up your own business selling stuff
► The site gets lots of traffic
► Lots of site features
► Easy to manage your auctions

SELLER DISADVANTAGES
► High fees
► Lots of scammers
► Too much competition (undercutting prices)
► Poor customer service
► Unfair listing cancellations
► Unfair suspensions

VERDICT

I definitely do recommend buying on eBay as there are definitely bargains to be had. Whether it's fixed price or auction format, I find that some items cannot be beaten in price no matter where I look. However, just because an item is on eBay, doesn't mean it's not cheaper elsewhere! You have to price check. Site navigation is easy as pie and it makes buying stuff easy, a little too easy sometimes! Unfortunately, it's also very dangerous. The buyer protection programs only cover so much and they aren't guaranteed to recover anything. If you don't follow rules to a tee, you'll find yourself out of pocket as eBay / PayPal won't help you if you've been scammed.

For selling, with the bad points aside, selling on eBay is still by far a lot easier and cheaper than leasing a shop. If you have something to sell either as an individual or as a business, eBay isn't to be sneezed at. I would recommend it as you can get rid of unwanted junk and get some money back from them as well as make a profit. However, I would not recommend for a business to rely solely on eBay as you'd be screwed if you eBay account is suspended. Use it but don't put all your eggs in one basket.

Thanks for reading!