EBay is the largest online shopping destination in the world with over 94 million active users and operations localized in over thirty countries. EBay Australia is often the first destination for anyone wishing to buy online in the country because selling on eBay is cheap and easy. Starting and running an EBay business is a task that requires research and planning. As with any business, it is very necessary that you research your market well before conducting any business activity.
Take your time to research your product of interest both on eBay Australia and the wider internet. If there is an item similar to your product of interest consistently listed with no bids, ask yourself why. It will help you understand why such a product has no bids and if you should think twice before selling it.
One of the key reasons why EBay is so popular is because of its minimal start up fees and costs. Just anyone can start an eBay account at the minimum fee of a few cents per listed item. There are many booster options that can make you cash for minimal to no effort, but it’s advisable that you choose only the essentials.
Although these options are cheap, but you should not be overwhelmed by them because they can add up unnecessarily. Do not forget to weigh other options. eBay will charge you an extra 25c per photo but using an image from outside eBay Australia is free. You also need to understand that Auction Time on EBay is a daunting experience.
Auctions are well-known to inflate and/or sometimes never reach your desired selling price. But to keep things consistent and get top ratings, go for the Buy Now option. Although Buy Now will add an additional 10c to your listing, it will ensure that you get consistent sales as long as you are reasonable about your pricing.
It’s very important to state that shipping is expensive and can often be the most costly component of your business. You have to research everything possible about shipping before starting any business venture to determine suitability. Also consider the different postal services available- Australian post, Toll Australia, DHL …etc. Think about drop shipping from cheaper alternative countries.
For instance, reports have it that it is less costly to ship from Hong Kong to London than it is to ship from Australia to any equivalent country. Always calculate the costs and understand your shipping costs inside out. You may also want to check out the flat rate package boxes co-promoted by eBay and Australia Post. Feedback in this business is very important. Getting positive feedback tells your customers that you are reliable.
These are the key attributes of any successful business. Always put yourself in your customer’s shoes and think about how they would like to be treated and deliver. Always remember that even though eBay is often used by home-based businesses, you are a business so you must register your business and do the needful.
18 Steps on How to Start an Ebay Business in Australia
Table of Content
- 1. Understand the Industry
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 6. Know the Possible Threats and Challenges You Will Face
- 7. Choose the Most Suitable Legal Entity
- 8. Choose a Catchy Business Name
- 9. Discuss with an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Legal Documents You Need to Operate
- 12. Raise the Needed Startup Capital
- 13. Choose a Suitable Location for your Business
- 14. Hire Employees for your Technical and Manpower Needs
- 15. Write a Marketing Plan Packed with ideas & Strategies
- 16. Develop Iron-clad Competitive Strategies to Help You Win
- 17. Brainstorm Possible Ways to Retain Clients & Customers
- 18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
Statistics has shown that EBay is the most frequented shopping website by Australian consumers but the rising popularity of shopping forum OzBargain has buttressed the point that power in terms of ecommerce is truly in the hands of shoppers.
Reports also stated that more than 7.8 million Australian shoppers aged 14 and older visited eBay in an average four-week period between July 2015 and June 2016. This compares to close to 3.8 million Australians who visited Amazon in an average of four weeks in the same period.
Kogan.com is the third most frequented shopping site, according to the research, with 1.35 million visitors in a four-week period, followed by Groupon (1.32 million), Scoopon (977,000) and CatchOfTheDay (971,000). Approximately 8.3 million Australians are now buying things online in an average four weeks, which represents an increase of 37% on 2012 levels.
But then EBay and Amazon increased their unique monthly audience by 5% and 17% respectively over the same period, which indicates established players in the market are not seeing the growth in their audiences match overall sector growth. With half of Australia’s adults having an eBay account, and 8.8 million listings added via eBay mobile each week, there is a huge data set to be pored through.
Since 1999, eBay has steadily changed the way Aussies shop, but it was a very different site fifteen years ago when sales were predominately through auctions and people flocked to eBay for quirky, collectible items. Today, 85% of all products on eBay Australia are brand new items, being sold primarily by businesses at a set Buy It Now price. Reports have it that Australian sellers have continued to capitalize on the global export market with 78% of eBay Australian sellers exporting, compared to only 2% of all registered businesses in Australia.
On the average, eBay’s retail exporters ship to 29 destinations, while traditional exporters only ship to three. Its important to note that the primary export destination is the US but by contrast, Jan Mayan – a tiny little Norwegian island in the Arctic Circle with a population of only 18 people, has bought 26 items from Australian based eBay sellers – more than 1 Australian export item per person.
Statistics also has it that Australians are the biggest night owls shopping the latest out of all states, while West Australians apparently missed the late night memo, opting for early morning shopping and ramping their activity up before 7am.
Also when it comes to buying products, over the last 15 years Northern Territory eBay users have come in as the biggest spenders, throwing out the most money per item, whilst Queensland’s regional city, Toowoomba has consistently been the country’s most active town, buying more items than anyone else in the whole of Australia.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
There are so many reasons why a product might not have a lot of competition, like high shipping costs, supplier and manufacturing issues or poor profit margins, which is why you have to search for products that have competition, as it’s a sign that there is high demand and the business model is sustainable.
The nature of this business means there is little to no personal interaction with customers, rather all the interactions happen online. As such, the most basic example of a preferred client is someone who pays for products promptly and offers honest, positive feedback.
Have it in mind that the best clients in this business are the ones who are up front about questions regarding your products so they are not surprised at what they get and leave poor online feedback based on expectations that did not match the reality of what you were selling.
As easy as this business might seem, it is a business venture for those who already use eBay extensively. You need to understand that EBay is like any other market, and success requires being competitive in a market filled with other sellers. That been said, you have to be very familiar with how other sellers price and describe similar products to your own. The business is also ideal for those who enjoy a flexible schedule and are motivated self-starters.
3. Decide Which Niche to Concentrate On
If you know nothing about the niche you entered in this business, you won’t be able to recognize anything fishy about the quality of the products, the process, the pricing, or anything related. So choosing a niche you understand very well will give you an additional hand over your competitors especially if they are yet to invest the same amount of research or personal experience.
You need to find out what you’re interested in, because selling what you know will help you in answering questions of potential buyers. To further explain this, imagine selling laptops without knowing anything about them and someone asks you what RAM are your laptops, or if your product comes with a Windows 8.
The potential buyer would most probably take you for a scam and never consider buying from you. Also note that selling Polaroid films now nobody has the corresponding cameras anymore would not make you millions, instead sell things that are currently trending.
Don’t forget that it can sometimes be more profitable to sell to a smaller market because there is not as much competition. For instance, if you sold iPhone’s, you would have to get them at a very good price to stay competitive because everybody sells them nowadays.
- The Level of Competition in the EBay Business
It is not advisable to enter a market where there’s no competition, because those aren’t markets at all. The best way to know if people are buying things is to look for people selling things. Where there are sellers, there are buyers.
But finding a market that has no competition at all is almost impossible these days, so don’t try to re-invent the wheel or create a new market just because you think people would want to buy something. Don’t sell what you want to sell, start selling what people want to buy. You have to understand that the EBay business is very competitive and you can stake a claim in the industry by looking for undeserved and untapped market segments around the world.
If you do this, you will be bringing in a proven product that’s selling like crazy, to potential buyers who are highly likely to desire it but haven’t been bombarded with the product yet. Note that even with intense competition, you can still get lots of sales by making better offers than your competitors, using better sales copy and just being better at advertising and marketing than your competitors.
4. Know Your Major Competitors in the Industry
- xa-electronics Home & Garden
Part of what makes eCommerce work so well is that many companies in this space use a different type of supply chain management to connect consumers with the products they love. Back in 1995 when eBay was founded, no one ever dreamed it would become the world’s largest virtual marketplace for buying and selling.
eBay was an idea for collectors to connect and find the exact items they desired to grow their personal collections. Today, eBay is not only a gigantic global marketplace, but people are using the platform to build businesses that create a part-time or full-time living.
A lot of individuals these days choose to use eBay as a hobby and a venue to sell personal items or collectibles they have accumulated over decades, while a handful come to eBay because a major life event has taken their health, their job, or their money.
This selling and buying platform is a flexible way to earn money on your own schedule from home, with zero financial investment, and profits are only limited by the amount of effort a seller puts into the business. There are no barriers to entry on eBay as anyone can start selling immediately.
It’s also very important to state that EBay’s uniqueness rests in its accessibility and ease of use. A lot of home business opportunities are structured with start-up costs, lengthy training, and home parties. EBay is available to anyone who has stuff in their house to sell, a computer with an internet connection, and the desire to learn.
Anyone with the desire to succeed can start an eBay business completely free of charge, and start making money in a few weeks. But before you start an eBay business, you must first understand that eBay doesn’t sell ready-to-run businesses. It simply means that there is no particular “start a business” link to click on, no particular amount that it “costs” to start an eBay business, and that there are no libraries of training manuals or catalogues to help you on your way.
This business is not a get rich quick affair or a multilevel marketing organization; you don’t sit at your kitchen table, learn the ropes, decide to do it, get a list of products and leads, then start the race to success, and all on a Monday Morning. EBay is a venue where sellers can offer their wares and buyers can browse through and buy them. Nothing more, nothing less.
5. Decide Whether to Buy a Franchise or Start from Scratch
There are few EBay Business franchises in Australia and buying a franchise is the best way to start up an EBay business because an existing EBay business will have perfected its operations over time. When you buy a franchise, you will have to inherit a business with streamlined and documented systems making it very easy for you to learn the ins-and-outs of the business, and get to know the business through the seller and any experienced staff who’ll stay with the business.
Another major advantage of inheriting staff is that you don’t need to employ and train them. This will save you time, money and energy that you can channel elsewhere in the business. But make sure you identify early on if there are any staff morale issues that need addressing, or if staff are resistant to new ownership and the changes this might bring.
It is advisable that you try talking to the staff and find out if they are happy in their roles, if there is anything that would help them do their jobs better, and what concerns they might have about a new owner coming in. If you show your staff that you’re interested in them and open to discussion, it will go a long way to show that you’re happy to have them, particularly if they have strong loyalty to the previous owner.
6. Know the Possible Threats and Challenges You Will Face
Running an EBay Business in Australia, just like any other known business has its own threats and challenges. A lot of people patronize EBay because of the convenience, which is why you should strive to avoid any threat or rather take care of them immediately they surface.
- Differentiating yourself from competing EBay business
- Naming your EBay
- Securing the permits needed to operate an ecommerce business
- Developing incentives for people to join your EBay
- Gaining experience
- Marketing Plan
7. Choose the Most Suitable Legal Entity
Whether you’re a first-time entrepreneur or a seasoned business owner, choosing the right structure for your business can be a daunting task. There are multiple options, all with different pros and cons. A lot of entrepreneurs just skip this important decision altogether, effectively merging their personal and business interests and leaving themselves at risk.
If you’re serious about going into business, then you need to get serious about properly structuring it. When it comes to starting a business in Australia, you really should consider a Pty Ltd Company structure. Note that this is a legal entity that is separate from you personally.
If things go wrong here, your business mistakes are unlikely to destroy your personal financial assets. But for this to work successfully, you must keep your personal assets separate from your business assets – separate personal and business bank accounts, family home in your name not the Company’s, etc.
The major disadvantage of using this legal structure is that the ongoing costs are relatively high – and the formation costs can also be large. The least expensive option for incorporating your Pty Ltd Company is $660 through Incorporator.com.au (which includes the ASIC registration fee). Bear in mind that some accountants charge 2-3 times this amount – so choose wisely. Then annually you’ll need to file a company tax return with the ATO and update your ASIC registration details.
The cost of an accountant to prepare and submit your personal and company tax returns can run between $1,000 and $2,500, depending on the complexity of the return and whether your accountant is located in a major Australian city or regional town. But a Company structure does give you some ability to structure your earnings from the business in a most tax-effective way. In addition, you’ll need to pay the annual ASIC Review Fee, which was $243 in 2015.
8. Choose a Catchy Business Name
- World Treasures
- Vast shop
- Unity EBay Centre
- Finders Keepers EBay
- Vikings Store
- Lifelong EBay
- Uncle Treasure EBay
- New designs
- Life EBay
- Beyond reach Closet
- Plus Size
- Awesome Parlour
- Green Light
- Sand Dollars
- First Chance
- Second Image
- Online Boutique
- Simply EBay
- Denim Clothes
- Sunshine Drop
- Whale circle
- EBay Nation
- Value Village
- EBay World
- Clothes for Kids
- Cottage EBay
- Crayons Children
- Divas online store
9. Discuss with an Agent to Know the Best Insurance Policies for You
Indeed you might think that the most important risk in starting or running an eCommerce business is whether or not you make enough money to survive. It is a pretty good point, as the survival of your business really depends on bringing in sufficient cash and remaining profitable. But when it comes to losing money, there are bigger risks to consider.
For instance, what happens if one of your customers is killed, seriously injured or suffers a serious illness as a result of one of the products you have sold? Indeed it might be the responsibility of the manufacturer or the wholesaler, but that is not always the case, especially if you are importing the goods yourself.
Also another risk to consider is the damage or theft of your contents and stock, or damage to your property if you are operating your business from a leased premises. Note that in this business as long as you are the importer of a particular product, you are seen to be the manufacturer of the product irrespective of whether you had anything to do with the manufacture.
So if a product you have imported results in the death, illness or injury of another person, you could be held liable. Such an event could lead to a claim against you for lots of money, especially in the event of death or permanent disablement. You have to protect not just your business but yourself from unlikely scenarios. The insurance you may need in this business may include…
- Internet liability insurance
- Product Recall
- Transit (Inc. Marine Transit)
- Machinery Breakdown
- Deterioration of Stock
- Employee Dishonesty
- Business Interruption
- General liability Business insurance
- Advertising agency insurance
- Creative insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
To protect your business name from being used by someone else, you can register it as a trade mark. A registered trade mark under the Trade Marks Act 1995 gives you the exclusive legal right to use, license and sell your intellectual asset in Australia. The owner of a trade mark can apply for its registration.
You need to understand that safeguarding your trade mark will protect the identity of your goods, and prevent others from imitating your brand. Having a registered trade mark can be your most valuable marketing tool and can help build the value of your business.
A registered trade mark can provide legal protection and stop others from trading with it. Note that a trade mark is protected in all Australian states and territories for an initial period of 10 years, after that time you can renew your registration. You can apply for a trade mark through the IP Australia website.
But before you apply for a trade mark, you can search IP Australia’s Australian Trade Marks Search System to make sure the trade mark you want to use is available. This search will provide you with both currently registered trademarks and trademarks which are being applied for.
You can also apply through TM Headstart (pre-application service) to help you assess the chances of your trade mark being successfully registered and receive a response from a trade mark examiner within five working days. The minimum cost to apply for a trade mark is around $250 for each class. Most small businesses often only need one or two classes. IP Australia’s Choose Wise video series can help you understand classes of goods and services.
11. Get the Necessary Legal Documents You Need to Operate
When starting a new business, it is very necessary to find out what registrations and licenses apply to your business. Obtaining the right licenses and registration is fundamental to your business. They allow you to operate without fear of closure from non-compliance.
The documents or processes you need to adhere to in this business will depend on the size and scale of your EBay business. When starting a business in Australia, apart from your taxes, you will need to register your business name or your company. Indeed there are two ways to register a business in Australia.
- Contact a private service provider
There are a good number of private service providers (PSPs) that use software that has direct access to ASIC’s systems. PSPs can manage your company application for a fee.
- Lodge a paper form directly with ASIC
You can register your company directly with ASIC by completing Form 201 – Application for registration as an Australian company. You must complete all information on the form and sign it. Include the fee (use a cheque or money order) when posting your application. Once your application has been processed you will receive…
- An ACN (which you can use to apply for an ABN)
- Certificate of registration.
- Corporate key, which is a unique number for your company. You will need your corporate key to create an account online and update your details.
12. Raise the Needed Startup Capital
You can start an EBay business without any startup capital (money). All you need are good suppliers to be successful in this business. But you still will be needing funds, and it can be challenging raising capital to launch a business idea. Ways to get funding may include;
- Personal savings
- Business loans
- Social investment
- Credit cards
13. Choose a Suitable Location for your Business
If your EBay business needs a storefront, choose an attractive location in your city’s business district. Choose tasteful, conservative furnishings; hire friendly and engaging staff that can set new clients at ease. But most times you really won’t need a business location but a storage facility. Locate one big enough for a considerable inventory and with a staging area in the back room where you can get merchandise priced and ready for resale.
14. Hire Employees for your Technical and Manpower Needs
One of the key advantages of starting and running an eBay store is that you don’t need much equipment. You need only three key things to start this business: a camera, a computer, and a package scale. The computer you probably already have, but the camera needs to be good enough to take quality pictures. It should have a macro setting so that you can take close ups. The postal scale allows you to weigh your packages and calculate shipping charges.
The major skill you need to build an eBay business is marketing skills. This is because anything from choosing a sensible username to writing evocative descriptions of products involve the same skills that go into traditional advertising and marketing. Also experience using eBay as both a buyer and a seller can go a long way in helping you make the transition to entrepreneurship.
Also being conversant with PayPal (particularly familiarity with having a business account) can help you understand how to receive and process payments via the most popular eBay payment method. Note that advertising your services via social media as well as more traditional methods (such as sending newsletters to previous buyers) can help make sure you have a steady stream of both new and returning business.
Have it in mind that a huge majority of eBay entrepreneurs run on their own stores because a lot of them sell from their own homes and conducting business entirely on their own means that there is no requirement to split profits. But getting a partner or building a team of sellers depends on you conducting more business than you can reasonably conduct on your own. When it gets to that, it may make sense to find a partner or build a team with special roles.
While it is much more common to simply find a partner and both of you operate under the same banner, it is possible to build a team in which members specialize in certain roles such as procuring items to sell, writing promotional copy, or shipping items to customers.
The Service Delivery Process of an EBay Business
Indeed one of the key attractions of being an eBay entrepreneur is that your daily activities will vary and do not need to be conducted in any particular order. But note that a typical day in this business often involves a great deal of research about what you intend to sell, including how other sellers describe the product, how much they charge for it, and how much it will cost to ship it.
Have it in mind that this research helps you creatively describe and competitively price your product in order to stand out from the competition. Other daily activities include confirming payments that were completed, answering seller questions, and shipping products within the specified time frame of your listing.
Also it is very crucial that you maintain a steady stock of things to sell. It may entail attending local auctions and garage sales as well as buying wholesale products so you can “buy low, sell high.” The very nature of eBay means that determining how much to charge customers is more art than science.
For example, the very best auction prices are always lower for items than what customers can find in a store—this is part of their incentive to shop online. But, the price must be competitive with other eBay sellers while also insuring that you bring in substantial profits.
Note that the final component of this equation is that many auctions offer a “buy it now” price. This option allows sellers to jump pass the traditional auction process and immediately buy the product. This price, too, should be lower than the MSRP of an item while still competitive with what you think a final auction price may end up being.
Also have it in mind that finding a good supplier or suppliers is a very important part of your business, because here is where your money has to be invested. It’s advisable you search the web for drop shippers or wholesalers, people who sell larger quantities of products at good prices.
Note that drop shippers are companies you don’t have to buy products from; you just have to send them an order when somebody buys a product from you, and they in turn send it directly to your customer, without you ever seeing the product. Indeed this can greatly facilitate your work because there’s less for you to worry about, as there is no shipping charge etc.
15. Write a Marketing Plan Packed with ideas & Strategies
In achieving success in this business, you’re going to work on attracting visitors to your store so they can later become customers. This isn’t easy, but it’s worth doing, and it’s worth taking the time to do it right. Ways to market your EBay business may include….
- Facebook Ads
Facebook is the largest social network in the world with 1.71 billion monthly active users. Facebook is a great place to market your EBay Business. It is believed that what makes Facebook’s advertising system so different than the rest is that it works based on “contextual data,” not on “query-based data”.
Have it in mind that “query-based” advertising is when people type a search term (i.e. a query) into Google and are shown a relevant advertisement, followed by the search results. The largest and most well-known query-based advertising company is Google AdWords. The downside to Google AdWords has become its high price point, which has risen in recent years.
Contextual data advertising simply means you can choose who you want your advertisements to target based on context. Facebook is one of the most popular contextual data advertising services because you can get very specific with your targets. The key to effective Facebook advertising is finding the right audience to target.
- Leverage relevant, persuasive and actionable text
- Make use of a relevant and striking image
SEO is the process of attracting traffic from a search engine like Google to your store. Note there are a lot of components to SEO, which includes:
- Know the keywords you want to rank for through keyword research.
- Optimization of your pages for your chosen keywords.
- Build backlinks to your store.
If your store is ranked higher on search engines, people will be more tempted to click on it, and your store will receive traffic you didn’t have to pay for. SEO is like free advertising for your store, just by being in the right place at the right time.
Have it in mind that these tasks are not easy to achieve, but they are not difficult either. The easy part is actually conducting keyword research and optimizing your site’s pages, while the hard part is competing against other websites trying to rank for the same keywords when your website is new and has little built up authority.
- Content Marketing
Content marketing is simply a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience to drive profitable customer action.
Note that content marketing adds value to each step of a customer’s interaction with your brand which guides them through a sales funnel. The very first step to making content marketing work for your store is to create a buyer’s journey, and buyer personas. Note that both will give you the structure you need to then develop the content.
16. Develop Iron-clad Competitive Strategies to Help You Win
Advertising and promoting your business or winning competitors is not just a task for big companies or businesses; but an agenda even the smallest of businesses should take seriously. So as the owner of your business, you have to devise possible strategies to win your competitors and achieve business success.
- Make your customers happy
- Give them something off the board
- Define your brand and make your site inspiring
- Choose a competitive advantage
17. Brainstorm Possible Ways to Retain Clients & Customers
You attract customers by using the marketing techniques mentioned above: basically, a matter of conscious branding, meticulous communication, and deliberate Search Engine Optimization. Note that retaining customers involves a combination of honest descriptions, fair pricing, and open communication. Even veteran eBay users are very careful of running into scams and fraud, which is why you have to present yourself as an honest and fair seller, it can help set you apart among the competition.
- Choose the right tools
- Make it simple
- Protect their ideas and interest
- Wow your customers
- Follow them up
- Provide some personalization
18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
We all can agree that the online shopping industry is a highly competitive one, and while running a web-based venture can be extremely profitable, it needs a lot of hard work and a helping hand to ensure profitability.
Effective item descriptions and relentless marketing help make sure that buyers are attracted to your store while honest communication and quick shipping makes sure that they trust your services and return to your store. You have to start first by choosing an attractive name for your store.
Try not to overthink it, but don’t overlook it either. We suggest you choose the right name for your brand, a name that can help your customers identify you easily. Some of the marketing of your eBay store that will ultimately help you achieve brand awareness begins with your listings.
For example, the header of each listing should include things like the colours, logo, and branding of your store. Item descriptions should include links to your store’s home page as well as to different categories within your store, meaning that everyone who stumbles onto one of your listings is just a click away from your entire online store.
You can take advantage of the marketing tools that eBay provides, which includes email marketing, flyers, and cross-promotional opportunities. You can also develop a robust description of your business within your profile and link to your store or profile when engaging in discussions on eBay discussion boards.
Outside of eBay itself, make sure to include your store name, address, and logo in communication with buyers and other interested parties, and don’t forget to use Search Engine Optimization so that people searching the internet for something particular will find your store. Item descriptions and relentless marketing will go a long way in making sure that buyers are attracted to your store.