Earlier this year we started our reselling business, selling on eBay and Amazon. It has been a steep learning curve, and I wanted to let you know about 10 things that you should know, or consider, before starting your reselling journey.
You need to have an eBay business account
If you are purchasing items to resell on eBay (so not just selling your unwanted items) then eBay stipulate that you will need to have a business account. Setting one up is really simple, and a business account is different to a shop. Opening a business account does not automatically mean that you have en eBay shop, that is something else that you can add on later if you want.
You don't have to open a new account either, you could convert your personal eBay account into a business account.
There are some terms and conditions that you will need to follow by the simple nature of being an eBay business.
Most notably, you will need to comply with what was the distance selling regulations here in the UK and you will need to accept returns for any reason, not just if an item isn't as described.
You will also need to pay eBay listing fees.
Your address will show on your eBay listings
Another part of having an eBay business account that often shocks new sellers is that your address will be shown on every single listing. What's more, you can't even use a PO Box.
There are a couple of ways around this – you could use a relative's address, but this is likely where any returns will go, so you will need an understanding relative and access to the address so that you can collect ant returns. You could also pay out for a virtual office.
Know your postage costs
There are a lot of postage options available to you, and it is important that you get your pricing right for a number of reasons. First of all, you don't want to be left out of pocket, and secondly, if you overcharge for postage then buyers can mark you down for this and it can impact on your seller status.
We mostly Hermes, with Royal Mail coming up second.
We also offer free postage to our buyers (we find that this works well for us), so if this is something that you are considering then make sure you add it to your price.
Consider all of your fees
When you see an item for sale and you are trying to work out all of your profit, remember to account for all your fees along the way. They are:
- Listing fee (once every 30 days if it doesn't sell immediately)
- Final Value Fee (roughly 10%)
- Paypal fee (roughly 3% plus 3op)
- Postage costs
You can save money on your listing fees by choosing to open an eBay shop for a set monthly fee.
Remember that you will also have other costs along the way – your packaging, ink, labels or paper and more.
You will need to register with HMRC & keep records
If you are buying items to resell then you are in business and you will need to register with HMRC. You will most likely want to register as a sole trader (or consider a partnership if you are running this with someone else) but this will depend on your own situation.
You will need to keep records and start logging not only the items that you purchase, but also car boot entry fees, mileage and other expenses. You will need to complete a tax return once a year and pay any outstanding National Insurance and tax.
Pro tip: Check out this guide to eBay reselling.
Keep your accounts from day one
You don't have to have a separate bank account or Paypal account, although I would recommend that you do, but you do need to keep your accounts from day one. This means keeping a track of not only what you pay for stock, but also fees, mileage and more. Xero is a fantastic cloud based accounting software that is great for resellers – check out 5 ways Xero helps resellers to find out why and get your free trial. There may be other app developers working on other accounting software.
Amazon has locked categories
If you are looking to sell on Amazon, especially Fulfilled by Amazon, then it is important to know that some of the categories are locked and you won't be able to list in them without lots of effort. There are some categories that you can unlock, although this requires finding a wholesaler and submitting multiple invoices.
It can be done, but it is worth mentioning. This one tripped us up, as we had purchased a lot of electronics and health & beauty items that we couldn't list. We ended up selling them on eBay, but it took ages!
Know where to source
Reselling isn't as easy as walking into your nearest charity shop and finding bargains that will sell instantly for tons of profit – if only it was that easy! You can source from tons of places, and it is about getting out there and finding what works for you. Some of our charity shops charge ridiculous prices, but we have found that our local auction is great for sourcing items.
You have listing limits
As a new eBay seller, you will have listing limits placed onto your account. Ours started at 100 – we could not list over 100 items without contacting eBay to ask for the limit to be increased. What's more, you can only contact eBay about this via phone. Just bear this in mind if you are running this with someone else, and choose whose name to open the account in.
Our listings were increased after lots of questions about what we sell (anything!) and where we find our products (everywhere!).
17 tried and tested tips for selling on eBay
Do you know how to get the most out of your eBay listings? What day of the week should you list, and what should you price your items at? Check out 17 tried and tested tips for selling on eBay to help you along your journey.