How To Start an eBay Business

Successful business owners start with a detailed business plan. Creating your business plan at startup helps you identify your business's strengths and weaknesses. Especially with an online business, you want to see how your items for sale compete with similar products in the marketplace.

When crafting your business plan for an eBay business, you should determine:

• What items are you selling?
• Who is your customer?
• How much will your product cost to produce (or buy)?
• How much will you sell it for to make a profit?
• Will you offer a buy-it-now option or fixed-price listings?
• Will you offer auctions for your eBay sales instead?
• Have you incorporated the eBay fees into your operating expenses?
• How will you ship your product once the item sells?
• Will you print shipping labels or have a pre-paid account with a professional mail courier?
• Have you researched copywriting for similar items when writing product descriptions?

When pricing your items, be sure to factor in the seller's fees and shipping costs so you can make a profit.

The first two steps to starting your own business is to chooose a name for your business and a determine your legal business structure.

Choose the Legal Name for Your Business

A business name is a significant part of your store brand. You want people to notice and remember your company. You can only have loyal customers if they remember you. This is especially true in an online marketplace like eBay.

There are many factors when choosing a business name. Besides enhancing your brand, there are legal implications for a business name. For example, you can't use a name affiliated with a branch of government. You also can't use a name if it is in use or trademarked by another company.

Conduct Business Name Search

After selecting a business name, check that no one else has claims to it. You can search for prior name use by checking with your Secretary of State's office, the USPTO trademark database, social media, and the Internet. If the name is already in use, try to pick another.

Register Business Name

If the business name is available, claim it for your use. To reserve your business name, you register it with your local city, county, or state office. If you are a sole proprietor, you register by filing a fictitious name or "doing business as" (DBA) with your local government.

You do not need a separate business website as an eBay seller. But you can register a domain name if you want a website for your business.

Incorporate Your  Business Entity

Many entreprenuers choose to set up LLCs for their business activities. The corporate structure separates your business liabilities from your personal assets. You can register it with the Secretary of State. Or you can let our trusted partner LegalZoom handle your business formation filing for $99 plus filing fees.

A taxpayer identification number (TIN) is also known as an EIN. An Employment Identification Number is a nine-digit identification number for your business. For example, when you open a business bank account, apply for business licenses, or file business taxes, you use your EIN.

To get an EIN, complete the SS-4 application and submit it to the IRS. It's fast and free.

To operate as a business, you want all your transactions to run through a business bank account. Don't mix your personal finances with your business operations. This jeopardizes your personal liability protection from your corporation.

Open a bank account using your business EIN. Then, you can link your business account to eBay to get all income from your sales. Be sure to pay all business expenses from your business account.

Depending on your business, you may need a bank loan or financing.

To operate any business, you need a business license. Also, you may need other licenses and permits for your eBay business.

Seller's License

Most states make online businesses get a seller's license for online sales. Each state has its own threshold amount for requiring this.

A seller's license authorizes you to sell goods to customers in that state. Some states call this a "sales tax ID" or a "sales and use license."

According to the Supreme Court in South Dakota v. Wayfair, all sellers must collect and remit sales tax in states requiring it. So that means that if you are in California and sell to someone in Georgia, you must collect sales tax. eBay can collect and remit the sales tax for you.

Most eBay sellers operate from home. Your city or state may have specific permits for running a home-based business. Homeowner's associations often have rules for operating out of your home. So, review your HOA regulations for home-based businesses. Check your lease to ensure you can run a business there if you are renting. You could get evicted if you cannot operate a business in your leased home or office.

You can also look into a business insurance policy tailored to handle the risks of your business. You may want to insure against property damage, theft, or personal injury claims.