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Becoming an eBay Entrepreneur
Chapter 1: What You Must Do First
Chapter 2: Becoming a
Businessperson, Part One (Coming Soon)
Chapter 2: Becoming a
Businessperson, Part Two (Coming Soon)
Chapter 3: Writing a Business Plan, Part
One (Coming Soon)
Chapter 3: Writing a Business Plan,
Part Two (Coming Soon)
Chapter 4: About Taxes (Coming Soon)
Chapter 5: Keeping Business Records (Coming Soon)
Chapter 6: Business Start-Up Costs (Coming Soon)
Chapter 7: About Domain Names (Coming Soon)
Chapter 8: eBay Stores (Coming Soon)
Chapter 9: Doing Business on the Internet (Coming Soon)
Chapter 10: Marketing Your Business, Part One (Coming Soon)
Chapter 11: Marketing Your Business, Part Two (Coming Soon)
This work is licensed under a Creative Commons License.
Chapter 1: What You Must Do First
NOTE: Unless otherwise specified, this article applies to opening a United States eBay store.
First, you must become a businessperson. If you just want to sell things at auction, this series isn't for you. These articles are to help you become an eBay entrepeneur
- someone who actually owns a business that sells things on eBay. I have also written this specifically for people who want to work from
home. There are lots more things to consider if you're not going to work from home, and those things are not covered here!
There are literally thousands of resources to teach you how to start your own
home-based business, and thousands more about how to sell on eBay.
First, if you like, you can read things like "I Made $333,000 on eBay Last Year, You Can Too!". But beware - what works for one seller
seldom works for others. (Please don't pay money to read these papers!) If you're interested in owning your own business selling
on eBay, for real, then read on. But be prepared: you must spend hours and hours setting everything up,
and hours and hours working once you get it going! Since I got my business license
on Febuary 16 of 2005, I have spent 10-12 hours a day, more than 6 days out of 7, getting started. I love it! I'm working for myself
now: I can take a break whenever I like, work into the wee hours of the morning and sleep late (I'm a night owl), and I know that every
dime I make is MINE (after taxes, of course). However, you could be a business owner who sells part-time, if you like. You needn't quit
your day job!
A. Why should I have an eBay store? I can just list things at auction, can't I?
Yes, you can just list things at auction. But if you want to sell a LOT of things, an eBay store is the way to go. You can list items
for sale for an extended period of time for less money than putting them at auction constantly. It's called "Store Inventory" and yes,
you can send those store items to auction any time you like. By "auction", I mean fixed price listings, "Buy
It Now" items, and every other way you can sell without having a store.
The second reason is that having a store on eBay is the online version of having a store on
Rodeo Drive. If you learn how to market your
store, you'll have customers worldwide coming to check out your stuff. Let's face it, there are too many things at auction at any
given time for people to look at them all. eBay says that if your item isn't one of the first 30 listed in any given auction or after
any search, chances are it won't even be looked at, much less bid on. But if you have a store, it's one-stop shopping for your
repeat customers. (By the way, the things you currently have at auction are listed in your store, too.)
B. How to Get Started
Don't be intimidated by this list. It might sound complicated, but it really isn't. Just take it one step at a time. And count on
spending some money if you're going to do it right, although we're not talking about a lot of money. Since I assume you're already selling
on eBay you probably have the most expensive thing you need: the computer. I got started with all the things
I needed for less than $200!
Now that you have decided you want to open a Store on eBay, here are the most important things to do BEFORE you open:
1. Read every single eBay policy, agreement, terms of use and recent eBay update you can find. Take notes on what you can and can't do
on eBay; also make note of what you're committing to if you do open a store on eBay. If you don't understand something, print it out and
get someone to translate for you. You MUST know what you're getting into if you're to be a success. Here are some links to get you started:
2. You must have a reliable computer with a big hard drive (80GB+), at least 512Mb of memory, and a 1024 x 768 resolution monitor.
You'll need hard drive space and fine resolution for storing and editing photos
of your items - trust me, you'll want to spend the extra money to put pictures up of your items. You'll also need a CD or DVD writer, a printer,
and if it's available and you can afford it, get a high-speed internet connection. Make sure your computer has the right ports for
connecting all the peripherals to it - the printer, a digital camera, the high-speed modem. (All this is tax-deductible for a
business!) A really good online computer store is Tiger Direct.
3. You'll need some accounting software. The easiest way to go is to get Intuit's QuickBooks because eBay will let you download your
store's financial information directly into your copy of QuickBooks. And if you're smart, you'll keep your personal finances in
QuickBooks, too. Completely separate from your business finances, even if you're a sole proprietorship (a one-woman company, or a wife
and husband team who are not a corporation or a business partnership). When it comes tax-time you will claim your business profit/loss
and your business expenses on your personal tax return. QuickBooks is very easy to use. Please note that it is ABSOLUTELY CRUCIAL to
keep accurate, up-to-date financial records. It makes tax-time (shudder) a whole lot easier for everybody! Get QuickBooks
here.
4. If you intend to have a real business, you must get the right business licenses for your area. Look for state, county (or parish),
and/or municipal licensing requirements. Your local Chamber of Commerce can tell you who to call or what website to check out. Or you can
run an internet search for "Idaho Business License" (for example) - it will at least point you in the right direction. You will be in "retail sales",
and might have to specify exactly what kind of thing you're selling. Believe me, it's worth the cost to get licensed.
If you get caught
without the right licenses, don't think you can claim it's a "hobby." Most revenue departments won't buy that, and the IRS
definitely won't if you have
more than a piddly amount of sales.
5. Do your homework:
a. Write a business plan. It forces you to really think about what having a business means and makes you
formalize your goals for the business. It's also absolutely necessary to have if you intend to seek financing for your start-up business. Writing a plan is time-consuming, and requires a lot of research.
Chapter 3 of this article series will go into detail about writing a
business plan. Meanwhile, here are some links to get you started with writing a business plan:
b. If you don't want to write a formal business plan, at least write down your goals for the next year with specific dates you want to
meet those goals. Try to predict how much you'll have in sales each month. If you have no idea how to predict sales (and it's very
difficult when you're selling at auction), at least write down how much you'd LIKE to make. But be realistic! It will take some time
to build up a customer base for your store (depending on what you're selling), so a good way to estimate sales is to look at how much
you've been making at auction each month for the last few months. I started my
Store never having sold anything on eBay, and I'm doing OK!
c. Investigate start-up costs. Start-up costs include everything you need to go into business: the computer hardware & software,
the licenses, domain name registration, the cost to collect sales tax, your Social Security and Medicare contributions (more on that stuff
later). It includes paper and pens, CDs or DVDs to make backups of your computer files, a digital camera for taking those all-important
photographs (borrow one if you can't afford to buy). It includes the cost of providing a way for your customers to checkout, the cost
of having a store on eBay, ink for your printer, a separate business telephone/fax line, and a few more things depending on how big you
want to be. I'll talk more about start-up costs in Chapter 6.
5. Consider getting a domain name. For $7.95 - $9.95 a year you can have your very own name. Mine is www.ravenscroftart.com. Others
are www.ebay.com, www.amazon.com. You get the drift. This is important for your returning customers. They can find you easily, without
having to find your store in their bookmarks or, God forbid, going to eBay to look for you.
Having your own domain name also helps reassure buyers that you're professional,
not just some fly-by-night guy who might take your money and run. Here are some reputable domain name registrars:
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