eBay is one of the most well known online marketplaces, making it a popular choice for those looking to sell their products online. But how do you get set up as a business on eBay, and what are the HMRC eBay tax rules for small business owners?
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How to sell on eBay
If you think this could be the right online marketplace for you, here are some tips for selling on eBay to help you get started:
- Choose whether you want to be a private seller or a business seller – if you’re just getting started or only want to sell a few products, a private seller account will work for you. But if you’re looking to scale your business, look into business accounts
- Choose an eBay shop name that reflects your business or products – this can help add a level of reputation, while helping customers find you
- Take clear photos of your items and write detailed descriptions – our guide to product photography can help here
- Set your prices – you want them to be competitive but also give you a good profit margin, looking at similar products on eBay can help you
- Choose a listing format – eBay lets you choose between ‘auction-style’ where people can bid on your products, or ‘fixed-price’ which allows users to buy instantly
- Build a strong seller reputation – customers are more likely to buy from eBay stores with positive reviews, so make sure you provide good customer service and respond to any comments or complaints professionally
Looking for other ways to sell online? Our full guide to setting up an online shop includes more ecommerce platforms to consider.
And if you’re only selling clothes, you could also consider Vinted or Depop to reach a more targeted audience.
eBay shop for eBay business sellers
If you’re a small business looking to sell on eBay, you can sign up for an eBay shop by paying a shop subscription. This gives you your own eBay shopfront, which lets you:
- have a custom shop name and URL
- link your social media accounts
- upload a business logo or banner
- create Featured Listings to promote certain products
eBay shopfronts are available at three price points based on how much you plan to sell:
| Shop type | Monthly price | Shopfront | Free fixed price listings? | Cost of additional fixed price listings | Free auction listings? | Cost of auction listings |
| No shop | N/A | No | 300 | 30p | 300 | 30p |
| Basic shop | £27 | Yes | 250 | 10p | 100 | 15p |
| Featured shop | £77 | Yes | 1500 | 5p | 600 | 15p |
| Anchor shop | £437 | Yes | Unlimited | Free | 1,000 | 15p |
You don’t need to set up an eBay shop to be a business on eBay but you’ll lose access to certain features and have less customisation as a private seller.
HMRC eBay tax
It’s important you understand eBay tax rules before you start a business on eBay. These rules apply whether you’re set up as a private seller or a business.
How much can I sell on eBay without paying tax?
If you’re only selling your own items at the same price (or less) than what you originally paid for them, you won’t have to pay any tax. However, if you’re selling items you bought with the intention of reselling, you’ll be considered a trader, and will need to pay tax.
HMRC sets a £1,000 tax-free trading allowance, meaning you won’t need to pay tax if you earn less than this amount. However, this includes all your self-employed earnings, so if you sell on another platform, you’ll need to include this in your allowance.
Learn more: Will your side hustle be taxed?
How much are eBay fees?
If you’re wondering how to sell on eBay for free, there’s good news. If you’re set up as a private seller, it’s now free to sell on eBay. The only exceptions are if you sell:
- cars, motorcycles, and vehicles
- more than 300 items a month
There are also optional upgrades which cost you, such as setting a reserve price for an item or promoting your listings. But the lack of selling fees makes eBay a great choice for online shops just starting out.
Remember that if you choose to open an eBay shop as a business seller, you’ll need to pay the monthly fees listed above.
Is eBay safe?
eBay is an established platform with 133 million active users worldwide. You can take payments securely using services like PayPal and have access to the platform’s seller protection services.
Buyers and sellers are also rated on a feedback system, which helps to build trust and identify potentially problematic users on both sides.
However, much like any ecommerce platform, it’s not completely free of scams. One eBay scam to be aware of is if a buyer is insistent you move communication and payment off the platform. Offering to pay you more via bank transfer or asking for your phone number could be signs of a scam or potential eBay fraud.
eBay shop FAQs for eBay business sellers
Still looking for tips for selling on eBay? Here are a few useful things to know before you get started.
How to combine postage on eBay
Offering combined postage can be a great way to save time and money by sending all items in one package. Buyers can request a postage discount from you by selecting ‘request total from seller’ when they checkout. If the buyer has already paid, you can send the buyer a partial refund.
This makes selling on eBay similar to any large online business, meaning buyers are more likely to browse your whole selection and make multiple purchases. Make sure you highlight this as an option in your product or shop description – and maybe even mention complementary products in your listings.
How to refund on eBay
eBay buyers can request a refund by making an eBay Money Back Guarantee case request or payment dispute. However, open communication is key to getting a high rating on eBay.
By letting your buyers know your refund policy before they make a purchase, they may be more likely to message you directly if there’s a problem. You can then refund your buyer directly through your Seller Hub and hopefully get good feedback in return.
What sells best on eBay?
To find what sells best on eBay, you need to keep an eye on current trends and understand your target audience. Social media, competitor businesses, and local communities will all give you an idea on what’s popular.
If you’re passionate about one thing in particular (whether that’s vintage radios or South Korean accessories), your personal enthusiasm will help you find the right products to sell.
If you’re purposefully looking for a popular product to sell, try using Google Trends to see what people are searching for – and then see if there’s a gap in the market you could fill.
Looking for some inspiration? Here are 5 trending products to sell this year.
How old do you have to be to sell on eBay?
You need to be 18 years old to sell on eBay, which is the same with most online retail platforms. If you’re under 18 and looking for ways to get into retail, consider checking with your local market stall to see if they have any age restrictions.
Have any questions about selling on eBay? Ask away in the comments below.
More guides for selling online
- 9 best apps for selling clothes online
- How to register as self-employed
- Small business ideas – best businesses to start yourself
- How to sell on Facebook Marketplace: a simple guide
- Is business insurance a legal requirement?
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