eBay traders source and sell new or second-hand goods on the eBay platform, using either auction-style or fixed-price listings. Traders typically source items from wholesalers, charity shops, other eBay traders, suppliers of ex-catalogue or clearance stock and car boot sales, as well as from auctions and insolvency sales. Some traders sell items they have made themselves, such as handmade crafts and jewellery.

Many eBay traders start up as private sellers, offering their surplus household items, clothes or collectables for sale, and then develop their trading activity commercially as registered business sellers.

In order to promote items via eBay, traders list the items they have for sale and support their listings with photographs and written descriptions. They also monitor auctions, deal with enquiries, arrange for the despatch and delivery of items, and respond to customer feedback.

This article provides information about starting up and operating as an eBay trader. It describes the skills required, the training courses available, the current market trends and the key trading issues. It also explains the legislation that must be complied with and provides sources of further information and support.

Qualifications and skills 

There are no qualifications legally required to start up in business as an eBay trader. However, an in-depth knowledge and understanding of the eBay buying and selling process, codes of conduct, payment systems and advanced features are essential, along with administrative and IT skills.

The following guide and courses are suitable for anyone intending to start up in business as an eBay trader:

Anyone starting up in business as an eBay trader will benefit from training in general business and enterprise skills. Suitable courses include:

  • Free webinars provided by HM Revenue & Customs (HMRC), covering topics including business expenses, self-assessment online, VAT, self-employment and becoming an employer. Go to www.gov.uk/government/collections/hmrc-webinars-email-alerts-and-videos for more information.
  • Social Marketing Training, which is a free online course with six chapters run by Hootsuite Academy. Topics covered include optimising social media profiles (on Twitter, Facebook, LinkedIn, Instagram and YouTube), developing a social media strategy, building an online community of customers and creating online content that will engage followers' attention. Go to https://education.hootsuite.com/courses/social-marketing-education for more information.
  • Copywriting, which is a distance-learning course run by the College of Media and Publishing that costs around £500. The course covers writing persuasive sales copy and producing creative ideas for a variety of platforms, and may be useful for eBay traders who need to write engaging descriptions for items they sell (https://collegeofmediaandpublishing.co.uk/product/copywriting-course/).
  • GDPR Online Training, which is a 60-minute course provided by High Speed Training that covers the General Data Protection Regulation (GDPR). Topics covered include recognising personal data, understanding individuals' rights, the importance of appropriate security measures and the consequences of breaching the legislation. The course costs £25 (excluding VAT). Go to www.highspeedtraining.co.uk/business-skills/gdpr-training.aspx for more information.

Online trading resources

eBay traders can keep up to date with news and developments about online trading and improve their awareness of trends by attending events and reading newsletters, blogs and resources, including:

  • The eBay Community (https://community.ebay.co.uk), which is a discussion forum for eBay traders that also provides information about the latest eBay features, upgrades, scheduled maintenance, buying and selling advice and promotions.
  • News and updates for business sellers published by eBay (https://sellercentre.ebay.co.uk/business/news).
  • Business growth webinars for sellers provided by eBay, covering topics such as listing optimisation, promotional tools and customer loyalty (https://sellercentre.ebay.co.uk/business/webinars).
  • Tamebay (https://tamebay.com), which is an online resource that provides news and hints and tips about a variety of online marketplaces and e-commerce.
  • EcommerceBytes (www.ecommercebytes.com), which is an online resource providing news, discussion boards and advice for online auction traders.
  • 'Internet Retailing' (www.internetretailing.net), which is a monthly trade journal and online resource covering a range of e-commerce topics, including eBay trading.
  • The Retail Bulletin (www.theretailbulletin.com), which is an online resource providing news and information about the wider retail sector.
  • 'Retail Week' (www.retail-week.com), which is the leading trade journal for the general retail sector, featuring retail news and market data.
  • InternetRetailing Expo, which is a two-day exhibition that is held each April at the NEC, Birmingham (https://internetretailingexpo.com).

Key market issues and trends 

Current market issues affecting start-up and established eBay traders include the following:

  • According to Statista, the number of active buyers worldwide on the eBay platform rose from around 90 million in 2010 to 180 million in the first quarter of 2019 (www.statista.com/statistics/242235/number-of-ebays-total-active-users).
  • Figures from Tamebay have revealed that visitors to the eBay UK platform rose year-on-year from an estimated 24 million in September 2017 to 25 million in 2018. eBay UK is the second biggest territory with the highest number of users in the world after the US. Go to https://tamebay.com/2019/05/why-ebay-uk-25-million-monthly-visitors-is-significant-to-ebay-inc.html for more information.
  • However, eBay has faced criticism of its processes in recent years, including allegations that it favours buyers over sellers in cases of disputes. Some sellers have also said that they have been disappointed with the results of eBay auctions as their items have either not sold or have achieved only very low prices.
  • A survey of the top 1,000 eBay sellers worldwide published by Web Retailer in 2018 revealed that the world's top ten sellers included three UK-based traders, and of these, the top two were from the UK. China was the country with the most sellers overall in the top 1,000 in 2018 with 305, followed by the UK with 253 (www.webretailer.com/lean-commerce/worlds-top-ebay-sellers).
  • Web Retailer has also published figures revealing the top-selling items in a range of eBay categories in 2019. For example, beads were the top-selling item in the 'Crafts' category, men's T-shirts were top in the 'Fashion' category, necklaces and pendants were top of the list in the 'Jewellery & Watches' category and luggage was first in the 'Travel' category (www.webretailer.com/lean-commerce/best-selling-items-on-ebay).
  • The use of online auctions has been falling steadily in recent years. All eBay sales were made via auction-style listings when the marketplace was first launched in 1995, but fell to 20% of sales in 2016 (the most recent figures available), while fixed-price listings grew rapidly over this period to reach around 80%. The reasons for the increasing popularity of fixed-price listings reportedly include a desire by buyers for a quick sale and exposure for listings via Google searches, because only fixed-price items are displayed on the Google Shopping platform (https://tamebay.com/2017/02/are-ebay-auctions-a-thing-of-the-past.html).
  • According to the annual Sellers Choice for Marketplaces Awards 2019, the top online marketplace worldwide was Etsy (www.etsy.com/uk), which is a marketplace for art and craft designer-makers. eBay (www.ebay.com) was down to third place in 2019, from first place in 2016. Amazon (www.amazon.co.uk), which was first in 2017 and 2018, was not placed at all in the top five in 2019, but two selling apps, Mercari and Poshmark that had never been ranked in the top five before, were placed fourth and fifth respectively. Go to www.ecommercebytes.com/C/blog/blog.pl?/pl/2019/2/1549849285.html for more information.
  • Numerous alternative marketplaces have emerged in competition to eBay as a result of the growth in social media, and there are now local Facebook groups in many areas of the UK where people can trade or swap items, as well as options to buy and sell items via Twitter and Instagram. Marketplaces such as Preloved and Gumtree, and apps such as Shpock that enable people to sell items via their smartphone, also provide competition for eBay and its traders. Other smaller or niche marketplaces that provide competition for eBay include eBid (www.ebid.net/uk), Poshmark (https://poshmark.com), which is a US-based marketplace, and Depop (www.depop.com), which is based in the UK.

Trading, commercial and legal issues 

Start-up and established eBay traders face the following trading, commercial and legal issues:

Setting up an eBay business account and eBay rules

In order to sell on eBay, traders must be at least 18 years old. While many sellers begin trading on eBay as 'private sellers', using the website as a way to dispose of unwanted personal items, they often develop their trading activity to a commercial level at a later date. However, once they are registered as a 'business seller', they cannot revert back to selling on a private basis.

Traders who wish to start selling on eBay as business sellers must register with eBay and set up an eBay business account in their preferred 'user name', which can only be accessed via a secure password. When registering, traders must provide their full name and e-mail address, along with contact and personal information and bank account details, as well as their company registration number (if they operate as a limited company) and VAT registration number, if appropriate.

Sellers must also confirm details about the way in which they will pay the sellers' fees charged by eBay on the items they list and sell (for example via PayPal or by credit card or direct debit) and must comply with eBay's Rules and Policies (www.ebay.co.uk/help/policies/default/ebays-rules-policies?id=4205).

Details about registering as a business with eBay are available at www.ebay.co.uk/help/account/signing-ebay-account/signing-ebay-account?id=4191.

Useful tips for new business sellers about how to sell on eBay are available at https://sellercentre.ebay.co.uk/business/how-to-sell.

Further information about getting started as an eBay seller, including setting up a PayPal account, is available at https://sellercentre.ebay.co.uk/business/getting-started.

All eBay members (whether buyers or sellers) must provide valid and complete contact information, including a valid e-mail address, which must be kept up to date. Go to www.ebay.co.uk/help/policies/member-behaviour-policies/member-behaviour-policies?id=4209 for an overview of eBay's 'member behaviour policies'.

Setting up an eBay Shop 

Traders can choose to set up an eBay Shop, displaying all their stock for a monthly subscription fee. Shop subscriptions are entered into for a minimum one-month contract term. Shops can be personalised with the trader's brand name, images and logo. Before opening a shop, a seller must have an eBay seller account with an automatic payment method (such as PayPal) on file.

The three types of eBay Shop available are a Basic Shop, a Featured Shop and an Anchor Shop. The eligibility criteria and benefits of each type of shop are:

  • Basic Shop. A Basic Shop subscription provides 50 free auction-style listings and 250 free fixed-price listings per month. Additional fixed-price listings are charged at 10p each and additional auction-style listings are 15p each. Final value fees are also charged when items in certain categories are sold. In June 2019, the monthly subscription fee for a Basic Shop was £25.
  • Featured Shop. To open a Featured Shop, traders must have a seller level of Above Standard or eBay Top-Rated Seller. A Featured Shop subscription provides 300 free auction-style listings and 1,500 free insertions each month. Additional auction-style listings are charged at 15p each and additional fixed-price listings are charged at 5p each. Final value fees are also charged when items in certain categories are sold. This type of subscription provides a professional listing management tool, a comparative pricing tool and free international listings. The monthly fee for a Featured Shop was £69 in June 2019.
  • Anchor Shop. To open an Anchor Shop, traders must have a seller level of Above Standard or eBay Top-Rated Seller. In June 2019, an Anchor Shop subscription includes 500 free auction-style listings (with a charge of 15p each for additional listings) and unlimited fixed-price listings each month, along with a dedicated customer care team, in addition to the other benefits provided to Featured Shops. The monthly fee for an Anchor Shop was £399 in June 2019.

For more information and details of the benefits of setting up an eBay Shop, which include the capping of final value fees in certain categories, and access to eBay marketing tools and e-mail marketing campaigns, go to www.ebay.co.uk/help/selling/fees-credits-invoices/fees-business-sellers?id=4122 and click on 'Shop subscription benefits and fees'.

For more information about eligibility and how to open the different types of eBay Shop, go to www.ebay.co.uk/help/selling/ebay-stores/opening-ebay-store?id=4092.

Setting up a PayPal account 

eBay recommends that traders register with the PayPal payment system, which is a fast payment system that provides protection for chargebacks and unauthorised transactions and enables sellers to accept credit and debit card payments without subscribing to a separate merchant system.

Payments made for items bought and sold on eBay are forwarded directly to the seller's nominated bank account by PayPal, which charges a small fee for its service.

Sellers' fees can also be paid via PayPal.

Further details about how to set up a PayPal account are available at https://sellercentre.ebay.co.uk/business/set-your-paypal-account.

The eBay User Agreement 

eBay traders are required to accept the terms of eBay's User Agreement and User Privacy Notice, which set out the conditions under which they may trade via the eBay marketplace.

The User Agreement is lengthy and detailed and stipulates that eBay users must not:

  • Sell counterfeit items.
  • Fail to pay for items they have bought, without a valid reason.
  • Fail to deliver items sold, without a valid reason.
  • Post misleading, malicious or libellous content on the website.

The User Agreement also requires eBay users to:

  • Comply with the rules for listing and selling or buying items.
  • Comply with the eBay Money Back Guarantee policy, which enables eBay to resolve matters by refunding the purchaser's money if an item does not arrive or if it does not match the listing description and the issue cannot be resolved privately between the buyer and the seller.
  • Comply with obligations under the Data Protection Act 2018 and the General Data Protection Regulation (GDPR).

The eBay User Agreement is available in full at www.ebay.co.uk/help/policies/member-behaviour-policies/user-agreement?id=4259.

Details of the eBay Money Back Guarantee policy can be viewed at www.ebay.co.uk/help/policies/ebay-money-back-guarantee-policy/ebay-money-back-guarantee-policy?id=4210.

The eBay User Privacy Notice can be viewed at www.ebay.co.uk/help/policies/member-behaviour-policies/user-privacy-notice-privacy-policy?id=4260.

Prohibited and restricted items 

Various items are either prohibited for sale on eBay or are restricted items that can only be sold under certain conditions.

'Prohibited items' include adult-only goods, guns and weapons, lock-picking devices, medicines and medicinal products, offensive material and stolen property. 'Restricted' items include animals, plants and seeds, food, electrical and electronic equipment, human parts and remains, used cosmetics, alcohol and property.

Restricted items can be sold subject to specific eBay conditions, for example used clothing (with the exception of underwear) can be sold as long as it has been cleaned in accordance with the manufacturer's instructions and is stain-free.

A full list of prohibited and restricted items and details of eBay's Rules for Listings can be viewed at www.ebay.co.uk/help/policies/prohibited-restricted-items/prohibited-restricted-items?id=4207.

eBay's Rules for Listings 

eBay traders must comply with eBay's Rules for Listings, which can be viewed at www.ebay.co.uk/help/policies/listing-policies/listing-policies?id=4213. The Rules for Listings cover prohibited items that cannot be listed, actions that are not allowed, such as the use of obscene language in listings, and prohibited actions on completion of a sale, such as accepting payment and sending an item to the purchaser that differs significantly from the item that was listed for sale.

For each listing, traders must stipulate the selling format - either auction-style or fixed-price (Buy It Now); payment methods, such as PayPal, cheque or postal order; delivery charges; and, where necessary, a reserve price, which must be £50 or more.

Both auction-style and fixed-price listings can be set to run for various numbers of days. Guidance about creating legally compliant listings can be viewed at www.ebay.co.uk/help/selling/listings/listings?id=4072.

New sellers are subject to selling allowances in relation to the amount of items they can list, which are imposed by eBay until they can demonstrate a positive selling history based on buyer feedback. For more information, go to https://sellercentre.ebay.co.uk/business/selling-limits.

Selling allowances are also placed on established sellers who fall below their previous performance standards in relation to the number of items they regularly sell. However, eBay has published guidance for business sellers whose sales have fallen in order to help them improve their performance. Go to https://sellercentre.ebay.co.uk/business/news/autumn2016/seller-standards for more information.

Some sellers list items for auction with a reserve price and are not obliged to sell the item for less than this if the bids received do not meet the reserve price. Bidders cannot see the reserve price, only a message stating that the reserve price has not been met. For more information about Reserve Price Auctions, go to www.ebay.co.uk/help/selling/listings/selling-auctions/reserve-prices?id=4143.

eBay and PayPal fees 

eBay charges fees to business sellers that are calculated differently from those charged to private sellers and vary according to what is sold, how listings are set up and whether or not the seller has an eBay Shop. Business sellers who do not have an eBay Shop are charged a fee for each item they list (an insertion fee), regardless of whether it sells.

Fees vary depending on the type of listing (auction-style or fixed-price), starting cost and final value. Go to https://sellercentre.ebay.co.uk/business/fees for more information about business sellers' fees.

There are three fee categories:

  • Insertion fees are 30p for a fixed price item or an auction item for a business seller who does not have an eBay Shop.
  • Final value fees, which vary depending on the listing category of the item and range from 6% to 11% of the selling price.
  • Optional listing upgrade fees, covering advanced listing options such as scheduling that enables sellers to choose when a listing 'goes live', Gallery Plus, which provides larger images in search results, and design templates that can be added to listings to make them stand out.

The eBay fee structure is subject to relatively frequent changes; up-to-date information is available at https://sellercentre.ebay.co.uk/business/news.

eBay invoices business sellers on a monthly basis. Invoices include eBay Shop fees and can be paid via PayPal, automatically by direct debit, or by credit or debit card.

In addition to eBay's fees, PayPal charges sellers a fee based on a percentage of the final value of the listing when items are bought by purchasers via PayPal. Its Buyer Protection scheme has been criticised by some financial commentators for being too complicated and not sufficient to guarantee payment protection.

Specialist listing and management tools 

eBay provides a number of online tools for traders, many of which are free, to help manage listings and stock. Examples include:

Sourcing stock 

Depending on the type of items they intend to supply, and whether they are new, used or homemade, eBay traders purchase their stock from a variety of sources, including discount wholesalers and suppliers, auctions, online platforms, local markets, car boot sales and other eBay traders.

There are 36 individual eBay sales categories, and the main categories listed on the eBay UK home page are 'Fashion', 'Home & Garden', 'Electronics', 'Sporting goods', 'Collectables & Antiques', 'Jewellery & Watches', 'Toys & Games' and 'Motors'.

In June 2019, eBay published a variety of changes to its categories in order to simplify the buying, selling and searching process. Go to https://pages.ebay.co.uk/categorychanges for more information.

The following are examples of suppliers of stock for some of the most common eBay trading categories:

  • Ex-catalogue or clearance stock, including clothing, jewellery, giftware, garden products and pet supplies, can be sourced from specialist wholesalers, including:
    • Q Clothing (www.qclothing.co.uk), which supplies ex-chain store clothing, accessories and shoes for men, women and children.
    • Marthill International (www.marthill.co.uk), which supplies a wide variety of ex-catalogue returns, ranging from air conditioners to bedding, clothing, toys and vacuum cleaners.
    • ASLexpress.com (www.aslexpress.com), which supplies branded sportswear and clothing.
    • Wholesale Clearance UK (www.wholesaleclearance.co.uk), which supplies a wide range of bankrupt and clearance stock.
    • UK Stock Supplies Ltd (www.ukstocksupplies.co.uk), which buys and sells excess, unwanted and liquidation stock, including clothing, home and garden products, building and electrical items, health products and footwear.
  • Live online public auctions run by John Pye Auctions are a source of various items of bankrupt and re-possessed stock, items seized by high court bailiffs, returned and ex-display goods such as furniture and white goods from major high-street retailers. Small items of electrical kitchen equipment, laptops, TVs and other consumer electrical goods, jewellery, watches, clothing, vehicles and boats are also auctioned. The auction charges a buyer's premium on top of the bid price for the lot, and VAT at 20% is charged on the total amount due (www.johnpye.co.uk/all-auctions).
  • Antiques, household items, vintage clothing, collectables, china and glass, furniture, jewellery, stamps and toys are commonly sold in general house clearance auctions. UKAuctioneers (www.ukauctioneers.com) provides access to online catalogues from a number of auction houses throughout the UK and enables online bidding for items at live auctions. Lots are 'sold as seen' when sold at auction, and the auctioneer will not guarantee the condition of the items being offered for sale.
  • eBay itself is a useful source of stock, and its specialist 'Wholesale & Job Lots' category includes clothing, second-hand items, collectables and electronics (www.ebay.co.uk/b/Wholesale-Job-Lots/40005/bn_1838749).
  • Online resources such as the Wholesale Forums (www.thewholesaleforums.co.uk) provide opportunities to find and network with potential suppliers of new items such as household and garden goods, electrical items, jewellery, fashion and beauty items.
  • Online platforms providing access to clearance stock of all types, such as toys, health and beauty, electrical items, gifts, fashion items, car parts, computers, books, music, and home and garden products, include CrazyClearance (www.crazyclearance.co.uk).
  • A variety of second-hand items such as vintage clothing and homeware can be sourced from local markets and flea markets. Listings of UK markets and fairs are available at www.localmarkets.org.uk.
  • Car boot sales are a useful source of retro and vintage items such as china and glassware, clothing, toys, books and collectables. Specialist directories of car boot sales across the UK include:
  • The popular second-hand bargain website Preloved, which includes listings of previously owned and vintage fashion and household items, also lists forthcoming jumble sales in the UK where items of second-hand clothing, household goods, collectables and bric-a-brac can be sourced (www.preloved.co.uk/classifieds/whats-on/jumble-sales).
  • House clearance services, which clear houses in preparation for sale, provide another useful source of stock, including furniture, mirrors, china, glass, old musical instruments, vintage clothing, dolls houses and toys, paintings and books. The UK House Clearance Association publishes a directory of house clearance firms across the UK at www.ukhouseclearanceassociation.org/reputablehouseclearance.htm.

Applying for a trade credit account 

Typically, wholesalers and other trade suppliers require new trade customers, such as start-up eBay traders, to pay for stock at the time of purchase. However, many offer trade credit accounts to regular, established customers.

eBay traders will usually be asked to provide the following information when applying for a trade credit account:

  • The full name and address of the business, including any trading names.
  • The trading status of the business (sole trader, partnership or limited company).
  • Company registration number and registered office address, if appropriate, as well as the invoice and delivery addresses, if these are different.
  • Details of two trade references and permission to seek bank and credit references.

Wholesalers and other suppliers usually carry out credit checks on any new customers applying for a trade credit account. This includes taking up references, reviewing published accounts (if available) and checking public registers such as County Court Judgments.

Second-hand dealer's licence 

eBay traders intending to sell second-hand items will need to check with their local authority to see if they are required to apply for a licence or register as a second-hand dealer. The situation varies depending on where in the UK the trader is based.

If registration or a licence is required, eBay traders must keep a record of all transactions, including the date the items were purchased, a description of the items, quantity, and name and address of their supplier.

Go to www.bolton.gov.uk/business-licenses/second-hand-goods-licence for an example of one local authority's policy in relation to second-hand dealers' licensing.

Consumer contract regulations 

Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs), eBay traders who accept orders from consumers (meaning anyone acting for purposes unconnected with their business or profession) must provide them with specific pre-contract information, such as their pricing, payment and cancellation terms when listing their items. This applies whether the sale has been made via an auction listing or a fixed-price 'Buy It Now' listing.

The statutory pre-contract information required under the CCRs should be set out in the Business Seller Information section that will appear automatically on all the eBay trader's listings.

In general, the CCRs provide consumers ordering items online with a statutory 14-day cooling-off period starting from the day on which they receive the items, during which time they can cancel the order, return the items and receive a refund. However, there is no statutory right to cancel an order for digital content once it has been downloaded, or for personalised items, or an item that has been made to order, unless the item is not as described or not fit for purpose.

The statutory pre-contract information that eBay traders must provide to consumers includes:

  • The eBay seller's trading name, address and telephone number, including their company registration number if they operate a limited company, and their VAT registration number if they are registered for VAT.
  • Clear images and descriptions of the items they supply, such as details of an item's name, brand, the materials it is made from, its function, colour, size or dimensions, its weight, quality, or any marks, blemishes or damage in the case of second-hand items. (This information is also required in order to comply with the eBay User Agreement.)
  • Details of the time limit and procedure for cancellation of the order, including an explanation that there is no right to cancel an order for personalised items, such as wedding gifts that include the couple's name in the design, made-to-measure furnishings or personalised clothing or jewellery. If digital content such as e-books, audio and video recordings or computer software is supplied, an explanation should be given to stipulate that once the consumer has downloaded the content or broken the seal on the item, they will lose their right to cancel.
  • Clear details about prices and payment terms, including VAT, if applicable (eBay provides prompts to sellers when they list items that suggest a suitable auction starting price which they can choose to attract buyers).
  • Clear details about delivery arrangements. eBay provides prompts to sellers when they list items that suggest appropriate methods of delivery such as Royal Mail first class post, and requires sellers to indicate how quickly they will dispatch items, for example within two working days of receipt of payment.

Under the CCRs, eBay traders who accept orders from consumers online must also make a cancellation form available. There is a model cancellation form that can be used, which is available at www.legislation.gov.uk/uksi/2013/3134/schedule/3/made. If the consumer uses the cancellation form provided online, the trader must confirm its receipt to the consumer and acknowledge the cancellation of the order.

eBay provides guidance for business sellers about selling practices, which includes creating a returns policy, and can be viewed at www.ebay.co.uk/help/policies/selling-policies/selling-practices-policy?id=4346.

Other consumer protection legislation 

Under the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Protection (Amendment) Regulations 2014, it is an offence for an eBay trader to mislead or otherwise act unfairly towards a consumer, for example through misleading promotions or pricing, such as implying that delivery costs are included in fixed prices for goods when they are not.

Under the Consumer Rights Act 2015, consumers can claim a full refund within 30 days of purchase if items they buy from an eBay trader are not of satisfactory quality, not as described or not fit for purpose. A replacement can be offered instead of a refund, but the customer is entitled to insist on a refund. However, most disputes are resolved personally between buyers and sellers, or via the eBay Money Back Guarantee scheme.

The eBay Money Back Guarantee scheme requires buyers to contact sellers within 30 days if they are unhappy with their purchase. Sellers have up to eight days to respond to a consumer's complaint, and if the matter cannot be resolved, the consumer can escalate the case to eBay customer support and require eBay's Resolution Centre to intervene in the dispute. If the item was either not received by the consumer or was not as described, eBay will refund the consumer via PayPal. Go to https://pages.ebay.co.uk/ebay-money-back-guarantee/how-to-help.html for more details.

Information for business sellers covering their consumer protection obligations under the law is available at www.ebay.co.uk/help/policies/selling-policies/business-seller-policy?id=4710.

Business protection legislation 

The Sale of Goods Act 1979 stipulates that goods supplied in business-to-business sales (such as sales to other eBay traders or retailers) must be of satisfactory quality, as described and fit for purpose.

The Business Protection from Misleading Marketing Regulations 2008 make it a criminal offence for eBay traders to make unfair comparisons between their own eBay Shop and products and those of other eBay traders or retailers who supply similar products.

Privacy and data protection legislation 

eBay traders must also comply with the Privacy and Electronic Communications (EC Directive) Regulations 2003, which govern the use of electronic marketing communications, such as e-mail, SMS and picture and video messaging.

Under the Regulations (and in order to comply with the eBay User Agreement), eBay traders must not send any unsolicited marketing messages, for example by e-mail or SMS text, to a recipient unless they have previously received the sender's consent. The recipient must also be offered the option to opt out or unsubscribe, and this option must be included in every subsequent message that is sent.

For more information, go to https://ico.org.uk/for-organisations/guide-to-pecr/cookies-and-similar-technologies/.

To comply with the Data Protection Act 2018 (DPA 2018) and the GDPR, any personally identifiable information or data that the eBay trader holds about their customers or employees should be stored securely and used only for the lawful purpose for which it was collected.

In addition, eBay traders must have a data protection policy and notice that clearly explains how personal data collected and held by them is managed and used.

Guidance from the Information Commissioner's Office (ICO) about complying with data protection legislation is available at https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/.

eBay provides guidance for sellers about complying with the GDPR at www.ebay.co.uk/help/selling/selling/gdpr-obligations-selling-ebay.

Arranging deliveries to customers 

eBay traders usually need to arrange delivery of items ordered by customers by parcel post or courier service.

eBay provides a delivery estimator to help calculate postage costs. Traders who make excessive postage charges could have their account suspended by eBay.

eBay recommends that traders include an invoice or package slip with deliveries.

eBay enables traders to buy and print labels for Royal Mail and also for courier delivery via Shutl, which arranges eBay deliveries by various delivery services such as myHermes, DPD, UPS, CollectPlus and UKMail. Go to https://shutl.com/uk/ebay/rates for postage rates.

Go to https://sellercentre.ebay.co.uk/business/buy-print-postage for more information about buying and printing postage.

Some eBay traders can offer an option for customers to 'Click & Collect' at 1,000 Argos and Sainsbury's stores across the UK and at CollectPlus eBay collection points. In order to be eligible for this service, traders must offer free delivery within five days by various carriers, including Royal Mail, Parcelforce and several courier firms specified by eBay.

Items for delivery via Click & Collect are subject to maximum weight limits and parcel sizes. Some categories of goods are excluded because they are potentially hazardous or do not comply with Argos business policies. For more information about delivery via Click & Collect, go to https://sellercentre.ebay.co.uk/business/click-collect.

Buyer feedback and feedback score 

Receiving positive feedback from buyers is an important aspect of eBay trading, as it demonstrates a reputation for reliability and good value, as well as allowing traders to access enhanced eBay features and qualify to list increasing numbers of items each month.

Following a sale, buyers are automatically prompted to leave a positive, neutral or negative feedback rating and a short comment. This is used to calculate the trader's Feedback Score, which is based on the number of positive ratings they have received and appears in brackets beside their user ID.

Buyers and other sellers usually prefer to deal with traders who have high levels of positive feedback, so in turn this usually results in more business for highly rated traders.

Top-rated seller status 

Traders meeting certain criteria can apply for Top-Rated Seller status, which is a marketing tool that enables traders to sell more by highlighting their positive feedback and sales volumes.

Minimum Top-Rated Seller status criteria include being registered as a business seller for at least 90 days, meeting requirements for defect and late delivery rates and having at least 100 transactions and minimum annual sales of £1,000 (www.ebay.co.uk/help/selling/seller-levels-performance-standards/seller-levels-performance-standards?id=4080).

Taxation and registering for VAT 

Many eBay traders start up as private sellers, and if they only sell items occasionally without an intention of making a profit, they are not liable to register as self-employed and for tax self-assessment with HM Revenue & Customs (HMRC). Since April 2017, private sellers can now earn up to £1,000 per year without being liable to pay tax on their earnings under a new tax-free allowance introduced in the 2016 Chancellor's Budget.

However, business sellers with an income of £1,001 or more who are regularly selling items via eBay with a view to making a profit must register for tax self-assessment with HMRC and declare their income and expenses.

Many items sold on eBay are subject to VAT, and eBay traders must register for VAT as soon as their turnover reaches the mandatory VAT registration threshold. Different rates of VAT apply depending on the nature of the goods being supplied. For example, most goods are subject to VAT at the standard rate (currently 20%), but some items, such as children's car seats and children's clothing, are subject to VAT at the reduced rate (currently 5%). For more information about VAT rates, go to www.gov.uk/vat-rates.

eBay traders who are registered for VAT must charge VAT at the appropriate rate on items they sell, although it may be possible to account for VAT on second-hand items under the margin scheme for second-hand goods, which allows a business to account for VAT only on the difference between the purchase price and the sale price (the margin).

Various VAT-accounting schemes are available that can be used as an alternative to the standard methods of accounting for VAT and can help certain types of business such as eBay traders save time and money. There is a specific VAT scheme available for retailers. Go to www.gov.uk/vat-retail-schemes for more information.

In general, eBay traders are also liable to pay VAT on their eBay fees, which are calculated at the rate charged in the trader's home country, for example the UK.

However, because eBay is based in Luxembourg and not in the UK, under European Union (EU) VAT rules known as the 'Reverse Charge Mechanism', traders who have provided eBay (the supplier) with details of their VAT registration number do not have to pay any VAT to HMRC, but must account for the VAT to HMRC on their VAT return under the Reverse Charge Mechanism as if they were themselves the supplier and the transaction had taken place in the UK.

For more information, go to https://sellercentre.ebay.co.uk/business/about-vat and www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a.

Running the business from home 

Start-up eBay traders intending to trade from a home base should inform their mortgage company or landlord and check that they are allowed to do this under the terms of their mortgage or tenancy agreement.

The Small Business, Enterprise and Employment Act 2015 amended the Landlord and Tenant Act 1954 to allow tenants to run a home-based business from a rented residential property under a specific 'home business tenancy' granted by their landlord, as long as it is the kind of business that someone could reasonably be expected to run from their home. Go to www.landlordsguild.com/consenting-to-carrying-on-a-home-business for more information.

They should also contact their local authority to find out whether they will need change-of-use planning permission to run a business from home. This will be particularly important in certain circumstances, for example if an outbuilding is to be converted and used permanently for storing items for sale. Landlords and local authorities may be unwilling to grant permission if, for example, there will be nuisance to neighbours caused by unreasonable noise, or parking problems due to frequent deliveries.

Anyone running a business based at home will need to find out whether they will become liable for business rates. The Valuation Office Agency has information about rates for a home-based business in England and Wales at www.gov.uk/introduction-to-business-rates/working-at-home. Guidance for Scotland is available at www.mygov.scot/business-rates-guidance/working-from-home and guidance for Northern Ireland can be found at www.nibusinessinfo.co.uk/content/rates-and-your-business-premises.

In England and Wales, anyone running a business from home who only uses a small part of a residential property for business purposes (such as a bedroom used as an office), and who sells goods by post rather than to people visiting the property, will not usually have to pay business rates. For more information, go to www.gov.uk/introduction-to-business-rates/working-at-home. Similar rules apply in Scotland and Northern Ireland.

It is also essential to have adequate insurance cover both for the home and for business purposes.

Workplace health and safety 

Unless they employ someone and depending on their work activities, eBay traders may be exempt from compliance with health and safety law. Under the Health and Safety at Work etc. Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015, self-employed people such as eBay traders whose work activities do not pose a risk to other workers or members of the public are exempt from compliance with the Health and Safety at Work etc. Act 1974.

Under the Management of Health and Safety at Work Regulations 1999 and equivalent legislation in Northern Ireland, all employers, including those who are self-employed, must carry out a risk assessment of their workplace and work activities. They must also provide employees such as anyone who is employed to help with packing or deliveries with adequate health and safety training. The HSE publishes a guide to carrying out a risk assessment at www.hse.gov.uk/risk/controlling-risks.htm.

Although most self-employed eBay traders do not usually employ staff, for their own safety and comfort, it is good practice to carry out a risk assessment at their office or storeroom. The Health and Safety Executive (HSE) publishes a guide to carrying out a risk assessment at www.hse.gov.uk/risk/controlling-risks.htm. Go to www.hse.gov.uk/self-employed/index.htm for more information about health and safety law in relation to the self-employed.

Go to www.hse.gov.uk/msd/dse/index.htm for more information and guidance about working with display screen equipment, which may be useful for eBay traders who spend a significant amount of time working online.

Trade bodies and networking groups 

There are several useful discussion and networking groups for eBay traders, including:

Membership of a trade body can provide a wide range of individual and business benefits.

Relevant bodies include:

  • IMRG (www.imrg.org), which represents online retailers of all sizes, including start-up micro-retailers. Membership benefits include networking opportunities, access to data about online retailing and guidance about trading overseas. Details of membership fees are available on request from IMRG.
  • The British Independent Retailers Association (bira, https://bira.co.uk), which provides advice and guidance to a wide range of specialist independent retailers. Membership benefits include a tax and legal advice helpline, discounts on training, insurance and office stationery, and access to finance through the bira bank. The annual membership fee starts at £205 (excluding VAT) for retailers with an annual turnover of up to £200,000.

Promoting the business 

Opportunities for an eBay trader to promote their listings include:

  • Creating professional-looking, eye-catching listings and purchasing upgrades to increase the visibility of listings.
  • Encouraging buyers to leave positive feedback in order to build reputation and qualify for enhanced Top-rated Seller status.
  • Opening an eBay Shop and holding regular sales and promotional deals, as well as notifying regular buyers of new stock.
  • Creating a Facebook business page to encourage customer referrals. Facebook pages can be customised with the eBay trader's name, logo and other information, and regularly updated with photos, articles and notification of bids ending soon. Go to www.facebook.com/business for further information about how to use Facebook for business promotion.
  • Uploading images to social media and photo-sharing websites such as Twitter (https://twitter.com), Instagram (www.instagram.com) and Pinterest (www.pinterest.com). Go to https://twitter.com and enter 'eBay' in the search box for examples of other eBay traders doing this.

Insurance 

An eBay trader requires several types of insurance cover, including:

  • Public and product liability insurance, which covers the trader against claims for compensation from customers, suppliers and members of the public injured or adversely affected as a result of the trader's activities or by use of products supplied by them.
  • Professional indemnity insurance, which covers an eBay trader against claims of breach of privacy or confidentiality, for example for breaching the Data Protection Act 2018 and the GDPR or the Privacy and Electronic Communications (EC Directive) Regulations 2003.
  • Employers' liability insurance, which is mandatory as soon as the trader employs staff.
  • Legal expenses insurance, which provides cover for defending or pursing claims arising from contractual disputes with wholesalers and other suppliers or eBay traders or to defend employment tribunal cases.
  • Building and contents cover (typically provided as an extension to an existing home insurance policy for home-based eBay traders), which provides cover for the premises, office and IT systems, equipment, supplies and stock against accidental loss or damage, fire, flood and theft.
  • Cyber-security insurance to cover the eBay trader for the cost of computer system restoration and recovery of compromised data as a result of cyber attacks and to compensate customers or suppliers affected by data breaches as a result of a cyber attack.
  • Cover for business interruption and loss of trade, for example if the eBay trader cannot use their laptop or PC due to power failure or prolonged internet outage or as a result of fire, flood or theft at the premises.
  • Cover for use of any vehicles for business purposes, which must include a minimum of third-party cover. Cover can also be obtained for goods stored in the trader's vehicle.
  • Adequate goods-in-transit insurance to cover any items, typically those worth more than £250, which are dispatched to customers or delivered by courier.

Specialist insurance for online traders is available from insurers and brokers such as Insurance Octopus (https://insuranceoctopus.co.uk/business-insurance/internet-traders-insurance/) and PolicyBee (www.policybee.co.uk/insurance/online-retailers-insurance.html).

Legislation 

This section provides an at-a-glance alphabetical list of the legislation that eBay traders must comply with. Professional advice about the impact of legislation should always be taken before making any business decisions.

  • The Business Protection from Misleading Marketing Regulations 2008 make it a criminal offence for eBay traders to make unfair comparisons, for example between their own eBay Shop and products and those of other eBay traders, online outlets and retailers.
  • Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs), eBay traders who accept orders from consumers (meaning anyone acting for purposes unconnected with their business or profession) must provide them with specific pre-contract information, such as their pricing, payment and cancellation terms when listing their items.
  • Under the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Protection (Amendment) Regulations 2014, it is an offence for an eBay trader to mislead or otherwise act unfairly towards a consumer, for example through misleading promotions or pricing, such as implying that delivery costs are included in fixed prices for goods when they are not.
  • Under the Consumer Rights Act 2015, consumers can claim a full refund within 30 days of purchase if an item they buy from an eBay trader is not of a satisfactory quality, not as described or not fit for purpose. A replacement can be offered instead of a refund, but the customer is entitled to insist on a refund.
  • To comply with the Data Protection Act 2018 (DPA 2018) and the General Data Protection Regulation (GDPR), any personally identifiable information or data that the eBay trader holds about their customers or employees should be stored securely and used only for the lawful purpose for which it was collected.
  • Under the Health and Safety at Work etc. Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015, self-employed people such as eBay traders whose work activities do not pose a risk to other workers or members of the public are exempt from compliance with the Health and Safety at Work etc. Act 1974. However, eBay traders whose work activities could pose a risk to other people, such as part-time staff employed to help with packing, must comply with the Act.
  • Under the Management of Health and Safety at Work Regulations 1999 and equivalent legislation in Northern Ireland, all employers, including those who are self-employed, must carry out a risk assessment of their workplace and work activities. They must also provide employees such as anyone who is employed to help with packing or deliveries with adequate health and safety training.
  • The Privacy and Electronic Communications (EC Directive) Regulations 2003 regulate the use of electronic marketing communications such as by e-mail or SMS text. They also regulate the use of internet tracking software (including website cookies).
  • The Sale of Goods Act 1979 stipulates that goods supplied in business-to-business sales (such as sales to other eBay traders or retailers) must be of satisfactory quality, as described and fit for purpose.
  • The Small Business, Enterprise and Employment Act 2015 amended the Landlord and Tenant Act 1954 to allow tenants to run a home-based business from a rented residential property under a specific 'home business tenancy' granted by their landlord, as long as it is the kind of business that someone could reasonably be expected to run from their home.