How to open an eBay shop for your small business in the UK

An eBay shop could be the answer for entrepreneurs who want to start their own business but don’t want to open a physical shop or create their own website.

From its early days as a way for people to sell unwanted items gathering dust at home, eBay has transformed into a global selling platform over the last three decades.

With 132 million active buyers in 2024, the global online market platform offers a way to shop and sell online.

For small business owners, eBay has been a popular online marketplace for millions of people to set up an online store and successfully earn a living selling their products online.

According to the platform’s 2023 Small Business Report, 68% of small business owners say that eBay helped them start their business, and 94% rely on eBay for success.

Starting an eBay business can help you reach millions of customers with little effort and upfront cost.

Discover how to open an eBay shop and sell your goods successfully with our handy guide.

What is an eBay shop?

eBay is popular with individuals looking to remove clutter from their homes or selling valuable items such as collectables, but it can also be used as a platform for businesses to sell their products.

An eBay shop is a special area of the auction site where you can list all the items you have for sale in one central, personalised place.

Not only could eBay be a convenient way to sell your products, but it also comes with several built-in tools to help you manage your online sales and promote your products.

A red door icon will show next to your user ID on an individual listing if you have a shop on eBay.

Customers can click on the red door to visit your shop and browse through all your products for sale without the distraction of your competitors’ listings.

Why should I open an eBay business?

eBay’s popularity began with its auction-style format that allowed shoppers to grab a bargain.

Now, more users want to find and buy goods instantly – rather than wait until the close of a weeklong auction – which is reflected in the fact that approximately 80% of items listed include a Buy It Now option.

Thanks to its various payment options, buying an item is quick and easy, ensuring that customers find eBay an attractive shopper destination.

There are several good reasons to learn how to open an eBay shop as a business rather than using it as a private seller.

Setting up a shop is cheaper if you sell lots of products

This is due to eBay’s charging sellers to list items for auction or sale on eBay, which are called ‘listing fees’, and fees for business sellers on eBay differ from private sellers.

Although you have to pay eBay business fees – typically a monthly charge to own an eBay shop – you get a certain number of free listings included and discounted listings after that, unlike private sellers who have to pay for each item they list.

If you plan to sell more than 65 items monthly, opening a basic eBay shop could prove more cost-effective than listing items as a standard seller.

Dedicated business features and special promotional tools

You can customise your eBay shop to make it stand out from competitors and create custom shop categories to organise your products.

Other features include holding your own sales on selected items and setting promotions such as discounts for multiple purchases.

You can activate a holiday setting that hides your fixed-price listings and shows a custom message to inform buyers when you’re away and unable to process purchases.

These features enhance the shopping experience for customers and can contribute to increased sales and customer loyalty.

It could help you boost your profit margins

Another factor to consider as a start-up business owner is your profit margin – the percentage of sales revenue a company keeps after paying all costs.

Using eBay for your business could help you increase profit margins thanks to the platform’s massive global reach, which can connect you with many more customers than you would otherwise.

The low set-up costs can also mean more room for profit on the products you sell.

76% of small business sellers on the platform say that eBay helped them grow their business.

Promoting your shop is simpler

With its own dedicated web address (URL), you can direct customers straight to your eBay store.

Optimise your shop for people searching eBay, so it is more visible to customers searching online – for example, use keywords that specifically relate to your items, along with high-quality images.

You also receive basic sales and traffic reports and the option to send email newsletters to your customers.

Things to consider before starting an eBay business

There may be a few factors you want to think about before launching your eBay shop.

If you’re starting an eBay business from scratch, you'll need to decide on the products you want to sell.

You may want to choose to sell products you’re passionate and knowledgeable about but also avoid selling precisely the same items as other retailers.

Part of eBay’s appeal to shoppers is its reputation for selling unusual, unique items that are difficult to find on the high street.

Once you’ve decided on your products, you may want to research your competitors to determine how to price them.

To make a decent profit, you may need to think carefully about how much you charge for items, the selling costs involved, including eBay fees and postage costs, and how you will handle refunds and returns.

Despite selling in a digital space, you may also need to consider the physical realities of running an eBay business, such as where you will store your inventory.

Think about how you will wrap and ship items and handle refunds and returns.

Take time to find a wholesale supplier if needed, and consider negotiating for the best prices.

Cost is important, but supplier flexibility is also important so that your eBay business can keep up with a growing demand.

Choosing the right eBay shop

There are three types of eBay shop available to choose from (depending on your business needs) for a monthly subscription charge.

This monthly fee includes access to various sales and marketing tools to help you build and promote your business, as well as a customisable shop front, listings, and eBay-branding packaging supplies.

To open a shop, you need to set up an eBay business account and link a valid bank account for eBay’s Managed Payments system.

You can choose from the following types of shop:

basic shop –includes 250 free fixed-priced listings, with subsequent listings costing 10p per item
featured shop –includes 1,500 fixed-priced listings – additional listings cost 5p per item – and you gain access to free international listings
anchor shop – provides unlimited fixed-price monthly listings, free additional listings, and access to all of eBay’s sales and marketing tools, as well as eBay Concierge.

eBay has a handy fees for sellers page so you can research all options.

How to start an eBay business

Select your shop type

You will need to decide which type of eBay shop is right for your business – basic, featured, or anchor.
Once you’ve decided the shop type, you can open your store using your My eBay account.

You will need to select the shop type, enter your shop name, and then click Accept fees and subscribe.

Set up an eBay business account

Once you’ve decided on a name for your eBay shop, you will need to set up a business account with eBay.

You will need:

a UK address – you will receive a confirmation letter sent by eBay in the post
bank account details – used to set up a direct debit to cover your shop’s monthly subscription fee; you’ll also need to link a valid bank account to receive payouts from eBay Managed Payments.

Choose your shop name

Choosing your eBay shop’s name can be important for several reasons.

It could be wise to ensure the name reflects the products you’re selling.

This could help your shop pop up in searches for your core items, while an easy-to-understand name could also help draw in more customers.

Your eBay shop name will also determine your shop’s website address.

You may want to avoid a name that’s the same or similar to another online trader to avoid confusion or potential legal issues.

Read our guide to choosing a brand name for your company.

Personalise your shop

The next step will be to set up and design your shop.

Making your shop’s pages look attractive and accessible for shoppers to browse and buy items could increase your business’s chance of success.

This could promote a better user experience and faster shopping for those looking to snap up a bargain.

eBay offers several predesigned themes and shop layouts, but you can change elements to create a custom shop that matches your branding.

You can also change how your items are displayed – for example, you might choose a gallery view or a list view.

Organise your inventory

Next, you have to handle the physical reality of your digital business – how you manage your stock.

You could store and organise your stock in a personal space, such as a spare room or garage, but that might make achieving a good work-life balance difficult.

Alternatively, you could decide to work with a dropshipping company.

This low-cost option involves products sold to customers by one business – the seller (you) – and delivered directly from a different company – the supplier – without the seller storing or handling the goods.

On your eBay shop, you can organise your products by category or certain listings, making it easier for shoppers to browse.

Add selling information

eBay offers a variety of payment options to buyers, but as a seller, you will need to select the ones that best suit your business needs.

These can include PayPal, eBay Managed Payments, offline credit card payments, or pay upon pickup.

To ensure transparent transactions, you will also need to provide clear information on your returns policy and shipping, including costs, methods, and estimated delivery times.

Preview your shop

Before you open your eBay shop to the public, you might want to make sure everything is perfect so you make the best first impression.

eBay allows shop owners to preview their shops before they go live to ensure that all the details are correct and the shop looks good.

If something isn’t right, you can easily make a change and preview again before opening your online shop to the public.

Registering your eBay business with HMRC

Opening an eBay shop is like starting any other business in the UK.

If you exceed the income threshold or if selling on eBay constitutes regular business activity, you need to register as self-employed with HMRC.

As of 1 January, 2024, digital marketplaces such as eBay are required to provide HMRC with a report of users’ sales over certain thresholds.

This legislation ensures that income earned through such platforms is properly reported for tax purposes, ensuring fairness, and reducing tax evasion.

You can register your new business as a sole trader, partnership, or limited company – the latter route can protect your personal assets, including your home and savings if your online business fails, but comes with additional legal responsibilities and administration.

Find out which would be the best for you with our handy guide to start-up business structure.

Once registered, you will be set up for tax returns, which are usually completed annually.

These will outline your income and expenses and help you calculate the correct amount of Income Tax and National Insurance you owe as a sole trader.

Limited companies will need to submit an annual return to Companies House and pay corporation tax to HMRC.

If your shop’s sales exceed the VAT threshold, currently £90,000, you’ll also need to register for VAT.

You may want to keep thorough and organised financial records for your eBay business to complete your tax returns and VAT payments and avoid financial or legal penalties.

Consider opening a business bank account to separate your business and personal finances.

Top tips for starting an eBay business

Here are a few top tips to help get your eBay business up and running for the best results.

Use high-quality images of goods for sale

The quality of the photography on your eBay shop could make or break a sale.

Use several well-focused shots taken at different angles against a clean white or solid-coloured background to give buyers a clear idea of the details and size of your product.

If the item is hard to size, position it next to a ruler in the shot for scale.

Several free online photo editing tools can help improve your photos.

You could consider using a professional photographer if you’re selling high-cost items and have the budget.

Write detailed product descriptions

Detailed, well-written product descriptions could mean the difference between your customers clicking “Add to Cart” or scrolling on.

A product description highlights your product’s features and convinces buyers to purchase.

Without clear and enticing product descriptions, potential customers may find it difficult to see the value in your products.

Optimise your text

Optimising your item’s title and description with appropriate keywords could make it easier for search engines to find your listing.

Keywords are the words people type into their web browser when searching for the items they want to buy.

Remember to use eBay’s Good-til-Cancelled (GTC) format for many of your listings.

This gives them a far better chance of being indexed by Google and other search engines, boosting your search visibility.

Prioritise great customer service

A positive feedback score is essential on eBay, as it could affect your sales – many shoppers won’t buy from stores with poor ratings.

You could raise your score by practising good customer service.

Respond quickly and politely to questions and problems, have a clear returns policy and post items without delay.

You could also ensure goods are well packaged to avoid damage in transit.

While you can’t remove negative feedback left for your shop, you could reply to customers to resolve their complaint.

Keep track of your sales

eBay has several sales tools to help you optimise your business – Selling Manager Pro can help you keep on top of the admin that comes with high volume sales.

From scheduling listings in bulk to automating feedback and posting emails, it could save you precious time that could be better spent on growing your business in other areas.

You could also create email templates to keep customers updated at the click of a button, print invoices and view sales at a glance.

Learn with Start Up Loans and help get your business off the ground

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Our free Learn with Start Up Loans courses include:

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Disclaimer: The Start -Up Loans Company makes reasonable efforts to keep the content of this article up to date, but we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. This article is intended for general information purposes only and does not constitute advice of any kind, including legal, financial, tax or other professional advice. You should always seek professional or specialist advice or support before doing anything on the basis of the content of this article.

The Start-Up Loans Company is not liable for any loss or damage (foreseeable or not) that may come from relying on this article, whether as result of our negligence, breach of contract or otherwise. “Loss” includes (but is not limited to) any direct, indirect or consequential loss, loss of income, revenue, benefits, profits, opportunity, anticipated savings, data. We do not exclude liability for any liability which cannot be excluded or limited under English law. Reference to any person, organisation, business or event does not constitute an endorsement or recommendation from The Start-Up Loans Company, its parent company British Business Bank plc, or the UK Government.

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