How to start an eBay business: what you need to know

When Pierre Omidyar launched eBay in 1995, he aimed to help his then-girlfriend — an avid collector of Pez dispensers — connect with like-minded people. He never imagined it would catch on like it did.

The internet had become public just two years earlier, and social media as we know it today was nine years away. So Omidyar created a small section on his website — he called this Electronic Bay — where collectors could connect, network, and trade.

Barely five months later, people had listed so many items for sale that he had to move to a business platform. Not long after, eBay made its first hire: an assistant to help Omidyar open all the cheques that were piling on his desk.

Fast forward to today, and while eBay is still the go-to place for trading collectibles — yes, including Pez dispensers — it has also become an e-commerce behemoth.

While eBay doesn’t disclose the number of full-time small business sellers, anecdotal evidence and platform data suggest that many sellers earn between £100,000 and £200,000 annually, and a few reach over £1 million in monthly revenue.

Thinking of joining in and trying your hand at becoming an eBay seller?

Here’s what you need to know about getting started.

Contents

• Why sell on eBay?
• How to start selling on eBay
• Step 1: Decide what you want to sell
• Step 2: Get legal
• Step 3: Open a seller account
• Step 4: List your products
• Step 5: Market your listings
• All set… but don’t expect overnight success

Why sell on eBay?

A captive audience

Joining eBay instantly connects you with approximately 134 million active buyers worldwide and over 2.3 billion live listings, providing your products with immense exposure.

Now, this doesn’t mean they’ll all land on your page (we’ll talk about how to attract customers in more detail in a minute). Or that they’ll all be interested in what you’re selling.

However, right from the start, you have the opportunity to reach people who are already familiar with eBay. And people are much more likely to buy from a website they already know and trust, than one they’ve never heard of before.

eBay also has an affiliate marketing programme, called the eBay Partner Network.

This is great for additional exposure. When you join the programme, other sellers will start marketing your products on eBay and other websites and pay you a commission every time they make a sale.

Low costs

The final value fee is a variable percentage of the total sale — this includes item price, postage, and any taxes — plus a fixed 30p per order. Categories are charged between 9.9% and 12.9%, though tiered rates apply in some categories (e.g. electronics, trainers, jewelry).

If the sale exceeds £5,000, eBay adds a 3% surcharge on the portion above that threshold.

Additionally, a 0.35% regulatory operating fee (subject to VAT) is applied to the total sale amount.

Plan	Monthly fee	Fixed-price listings	Auction listings
Basic	£25	250	50
Featured	~£69	1,500	300
Anchor	£399	Unlimited	500

After free listings are used, additional insertion fees are typically a few pence per listing, and Store subscribers benefit from lower final value rates compared to non-store sellers. For full breakdowns, see the eBay UK seller fee page.

Auction-style listings

Of course, eBay’s unique selling point is that you don’t have to sell your products at a fixed price if you don’t want to. The platform is known best — and, arguably, has grown so popular — because you can auction anything.

The success of auction sales largely depends on the type of product you’re selling. Rare, one-of-a-kind, or highly in-demand items, such as the latest iPhone, tend to perform better than everyday items.

That said, if your products are good candidates for sale by auction, you can usually expect to sell them quicker and for more money than you’d get if you sold them at a fixed price.

Other benefits

• The security infrastructure is all taken care of. For example, there are anti-fraud systems in place so both you and your buyers are protected
• You can create your own branded store and other marketing materials, including packaging
• Only verified buyers can leave feedback, so this tends to be more reliable than it is on other platforms

How to start selling on eBay

While the barriers to entry are very low — anyone with a laptop, an internet connection, and something to sell can open an eBay account for free — it pays to plan ahead if you want your efforts to bear fruit.

Here’s how to build your eBay business step by step.

Step 1: Decide what you want to sell

Needless to say, this is the most important part of the whole process. You can’t have a business — never mind a successful eBay store — if you have nothing to sell. So, settling on a product should be the first thing you do.

When Pierre Omidyar launched the website that became eBay in 1995, it was called AuctionWeb. The first item sold was famously a broken laser pointer, bought for $14.83.

The often-repeated story that Omidyar created the site to help his future wife trade Pez dispensers was actually a PR invention — although, fittingly, there are still plenty of Pez dispensers for sale on eBay today.

Three decades later, eBay has grown into one of the world’s largest online marketplaces.

Thinking of joining in and trying your hand at becoming an eBay seller?

Here’s what you need to know about getting started.

Contents

• Why sell on eBay?
• How to start selling on eBay
• Step 1: Decide what you want to sell
• Step 2: Get the tax and legal basics right
• Step 3: Open the right eBay account
• Step 4: List your products
• Step 5: Market your listings
• Start small and see what sells

Why sell on eBay?

A huge existing audience

One of eBay’s biggest attractions is simple: the customers are already there.

Of course, this doesn’t mean they’ll automatically find your listings. You’ll still be competing against other sellers on price, delivery, feedback and the quality of your listings.

But compared with launching your own ecommerce website from scratch, you can start selling to an established audience immediately.

Relatively low barriers to entry

You do not need to build a website, payment system or checkout from scratch.

However, the costs depend greatly on whether you’re a private seller clearing out unwanted possessions or operating as a business.

UK private sellers currently pay no final value fee or regulatory operating fee on most eBay sales, although exceptions and optional charges can apply.

Business sellers pay fees when items sell. These vary according to the category, seller status and whether you have an eBay Shop.

As of September 2026, eBay’s standard business seller charges include:

• a category-based final value fee calculated on the total sale, including postage
• a per-order charge of 30p for orders of £10 or less and 40p for orders above £10, although some categories qualify for a reduced per-order charge
• a 0.35% regulatory operating fee on the total amount of the sale
• possible international, advertising and optional listing fees.

eBay quotes its business seller fees excluding VAT, so VAT at the applicable rate is added to these charges.

The rates vary substantially between categories, and lower percentage rates can apply to the part of higher-value sales above particular thresholds.

For the latest figures, check eBay’s business seller fee page.

What might the fees look like?

As a simple example, suppose you sell an item for £100 and charge £4 postage in a category with a 12.9% final value fee.

The final value fee on £104 would be £13.42. Add the 40p per-order fee and the 0.35% regulatory operating fee, and the eBay charges come to approximately £14.18 before VAT, or around £17.02 including 20% VAT.

That’s before you’ve paid for the product itself, postage, packaging or any advertising.

This is only an example based on eBay’s September 2026 fees. The percentage charged depends on the category and other factors, so always check the current rate for what you’re selling.

If you sell regularly, you can also subscribe to an eBay Shop.

eBay Shop prices and allowances as of September 2026:

Plan	Monthly fee	Included fixed-price listings	Included 7-day auction listings
Basic	£27 + VAT	250	100
Featured	£77 + VAT	1,500	600
Anchor	£437 + VAT	Unlimited	1,000

These prices and allowances can change, so check eBay’s current fees before subscribing.

Auctions or Buy It Now?

Auctions remain one of eBay’s distinctive features, but they aren’t automatically the best way to sell.

They tend to make most sense where an item is rare, collectible or difficult to value and several buyers may compete for it.

For ordinary products with an established market price, a fixed-price Buy It Now listing may be more appropriate.

Before choosing either format, search completed and sold listings for similar products. This gives you a much better idea of what buyers are actually paying rather than simply looking at sellers’ asking prices.

Other benefits

• eBay provides the marketplace, checkout and much of the payment infrastructure.
• You can build your own eBay Shop and brand if your sales grow.
• Seller Hub provides tools for listings, orders, sales and performance.
• You can sell internationally, although additional postage, customs and eBay charges may apply.

How to start selling on eBay

It’s easy to create an account and list an item. Building a profitable eBay business takes rather more work.

Here’s how to approach it.

Step 1: Decide what you want to sell

Start with what you know.

Is there a particular industry that interests you? Or perhaps a hobby or specialist area where you already know which products are desirable and what they’re worth?

Make a shortlist and then look at what has actually sold on eBay, rather than simply what other sellers currently have listed.

Ask yourself:

• Is there a market for the product, and how frequently does it sell?
• What price do comparable items actually achieve?
• How much will the stock cost you?
• What will you spend on packaging and postage?
• What eBay and advertising fees will apply?
• How much could returns and damaged or lost parcels cost?
• What profit is left after all of these costs?
• Is the product covered by eBay’s prohibited and restricted items policy?
• Where will you store your stock?

If space becomes an issue as the business grows, you may need to look at external storage, but don’t commit to extra costs until you’ve proved there is enough demand for what you’re selling.

Step 2: Get the tax and legal basics right

There is an important distinction between selling your own unwanted possessions and trading as a business.

Selling old clothes, furniture or gadgets that you already own doesn’t automatically make you self-employed.

But if you’re regularly buying or making goods with the intention of reselling them for profit, you’re much more likely to be trading.

If you’re trading as an individual, the simplest structure is usually to operate as a sole trader. You could instead trade through a partnership or limited company depending on your circumstances.

See our guide to choosing between a sole trader, limited company, partnership and LLP.

The £1,000 trading allowance

If your gross trading income is £1,000 or less during the tax year, the trading allowance means you will usually not need to tell HMRC about it, subject to some exceptions.

Once gross trading income exceeds £1,000, you will normally need to register for Self Assessment.

If you use the trading allowance to calculate your taxable profit, you cannot also deduct your actual business expenses. An eBay seller with significant stock, postage or other costs may therefore be better off claiming allowable expenses instead.

Read our full guide to the £1,000 trading allowance.

If you started trading during the 2025/26 tax year and need to complete a Self Assessment return for the first time, you should tell HMRC by 5 October 2026.

Online marketplaces such as eBay may also have to collect information about sellers and report certain details to HMRC under the digital platform reporting rules. This does not introduce a new tax or mean that simply selling your unwanted possessions becomes taxable.

VAT

If the business grows, keep an eye on VAT.

The compulsory VAT registration threshold is currently £90,000 of taxable turnover. This is measured over a rolling 12-month period, rather than simply by looking at your financial year.

Our guide explains when you need to register for VAT.

Making Tax Digital

Making Tax Digital for Income Tax is now in force for some sole traders.

It applies from:

• 6 April 2026 if qualifying income for 2024/25 was more than £50,000
• 6 April 2027 if qualifying income for 2025/26 was more than £30,000
• 6 April 2028 if qualifying income for 2026/27 was more than £20,000.

Qualifying income broadly means your gross income from self-employment and property before expenses.

See our MTD for Income Tax guide for more information.

Consumer rights

If you’re selling as a business to consumers online, consumer law also applies.

Among other things, you need to provide clear information about the goods, price, delivery arrangements and your business details.

Consumers buying most goods online also have a 14-day cancellation period after delivery, although there are exceptions.

See the GOV.UK guidance on online and distance selling.

Insurance

The cover you need will depend on what you sell and the scale of the business.

For example, product liability cover may be sensible where a product could injure somebody or damage property. If you hold a significant quantity of stock, check whether your home or existing business insurance actually covers it.

Don’t simply buy every type of business insurance going. Match the cover to the risks you actually have.

Step 3: Open the right eBay account

eBay distinguishes between private sellers and business sellers.

A private account is appropriate if you’re selling casually — for example, disposing of possessions you no longer want.

But eBay says you need a business account if you:

• sell large quantities of goods
• sell goods that you’ve made
• buy goods specifically to resell, or
• already operate a business outside eBay.

So if you’re following this guide because you’re genuinely setting up an eBay business, start with a business seller account rather than trying to build a trading history through a private one.

You do not have to subscribe to an eBay Shop just because you have a business account. A Shop becomes worth considering once your listing volume and the available fee savings justify the monthly cost.

Payments are handled through eBay. Buyers can use the payment methods eBay makes available and your sale proceeds are paid out to your linked bank account.

Step 4: List your products

With your seller account set up, it’s time to create the listing.

A good listing should include:

• A clear title. Describe exactly what the item is and include genuinely useful details such as brand, model, size, colour and condition.
• Accurate item specifics. Complete the relevant eBay fields rather than relying entirely on your free-text description.
• A concise description. Explain the key features and be completely upfront about faults or wear on used goods.
• Good photographs. Clear images reduce uncertainty for buyers and can also reduce disputes later.
• The right selling format. Decide whether fixed-price or auction is best suited to the product.
• Realistic postage and handling times. Don’t promise dispatch times you can’t consistently meet.
• A clear returns policy. Business sellers must also comply with their statutory consumer obligations.
• A sensible price. Look at completed sales of genuinely comparable items rather than simply copying the cheapest current listing.

eBay also provides tools which can use AI to help create listing details and improve product images. These can save time, but check anything generated automatically before publishing it.

If you’re selling a large number of similar items, templates and eBay’s bulk listing tools can save a lot of time.

Step 5: Market your listings

Getting the listing live is only half the job.

Your visibility will depend on several factors including the relevance of your listing, price, postage, handling times and your seller performance.

eBay also offers paid Promoted Listings. These can increase exposure, but they’re another selling cost, so include the advertising fee when working out whether a product is genuinely profitable.

You can also increase traffic from outside eBay through your own website, mailing list or social media accounts where that makes sense.

As sales build, keep a close eye on your seller performance. Late dispatches, cancellations, defects and poor customer service can affect your standing on the platform, while sellers who fall below eBay’s required performance standards can face additional restrictions or costs.

Start small and see what sells

The safest way to find out whether an eBay business idea works is not to buy hundreds of units or rent storage space.

Start by working out the numbers on a genuine comparable sale. Take the sale price and subtract the cost of the item, eBay fees, postage, packaging, advertising and a sensible allowance for returns.

Then list perhaps ten items and see what happens.

Measure how quickly they sell, what margin you actually make and how much work each order involves. If the numbers stack up, you can then start thinking about buying more stock, opening an eBay Shop or expanding into other products.