Trends & Features

Winning bid

A friend of mine has run a successful business on eBay since the year 2000, with both a shop and an auction.

He provided many interesting thoughts and these have been woven into the tips below.

Understand the first key to success
The first key to success when selling on eBay is great service.

Without this you will see few orders and may be banned from the platform, which is why you need to be clear on pricing.

You can choose to either sell at a loss with brilliant service while you build positive feedback or price from the start at a level that enables you to provide great service.

Giving poor service because you have to sell cheaply to get started will result in failure. This point has been repeated because it’s that important.

Decide on an auction or ‘Buy It Now’
You can sell two ways on eBay.

The original eBay auction is exactly what you expect.

You set a reserve price, a time for the auction and the person with the highest bid at the end wins, provided the reserve is beaten.

The second method means you sell like a traditional shop with fixed prices for each product – this is called ‘Buy It Now’.

The latter is most like other forms of ecommerce and Amazon.

Auction is probably most appropriate for collectable items – things that are rare and second hand items where it’s harder to price them.

Understand eBay auction pricing
Auctions are unpredictable and the phrase ‘you win some, you lose some’ is a perfect description of the dilemma.

You must keep your nerve and avoid overcooking the minimum price.

Taking a risk with a low starting price will attract attention and is less risky for popular items.

The single most important thing is to have done your homework on the competition by looking hard at numerous previous auctions.

See the bidding patterns and learn from this to make your own plans.

If you can’t afford any risk then set the minimum price close to your cost.

Find your best strategy
On the one hand, eBay is the number one website in the world for collectables.

On the other, eBay presents a daunting challenge as a lot of competition is on price.

If you do not already have a high volume business, it’s hard to compete successfully.

You can tackle this problem in two ways.

The first is to try to find a niche within a niche.

Here you define your specialist area down to the point where you can provide the most expertise, the greatest experience in sourcing product, plus the widest product range.

With time you can expand from this beachhead into related areas.

An example might be boat spares. If the general category is too competitive and so is ‘motor boat spares’, you could just do Fairline spares (one particular make of motor cruiser) initially.

The second way is to utilise the fact that in general the more expensive the product, the bigger the margin.

The result is that competition is less fierce.

Of course, mistakes in purchasing expensive items, breakages, fraud and returns will be costly and painful.

You take more risk and more care is required, but the rewards are greater.

State your conditions clearly
Try to be as clear as possible on your conditions of sale.

Understand that not everyone will read them, so if you have anything unusual it will lead to negative feedback.

You should cover delivery options, payment methods and your returns policy.

These all need consideration in the light of your margins.

Check the cost of selling
eBay charges an insertion fee every time an item is listed, which can range from zero to £1.30.

It also takes the selling price and charges a percentage of typically 10 per cent up to a maximum of £40.

PayPal will charge an additional percentage of typically three per cent.

Research fully
Knowledge is power and the eBay community forums are full of information and advice, so it is well worth spending time there. See:

Chris Barling is co-founder and chairman of ecommerce software and EPOS systems supplier SellerDeck and has over 17 years’ experience of helping small and medium size retailers with advice on trading online.

In his third book Barling shares the basic steps to setting up shop on the web, together with the key lessons he has learned that can make the difference between success and failure.

The 440-plus tips are organised into a series of nine sections, so that it’s easy to dip in and out of.

The paperback edition costs £12.99 from and a Kindle version is also available on Amazon for £6.49.

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