Setting up an eBay shop

Most people know eBay as a place to buy used items - but it is also an important eCommerce resource. At Rangewell we understand the potential of eCommerce on eBay  - and we can help you find the funding you need to make the most of it.

If you are in retail, you will already be acutely aware that the future is online. While traditional retail shrinks, eCommerce is booming. Covid and lockdown may have actually accelerated this process - when governments issued stay at home orders, brick-and-mortar retailers were forced to close and almost all of our daily habits had to change. 

But the eCommerce boom is not limited to the giants of the field like Amazon. Small businesses - and even start-ups - can share in the phenomenal growth of the sector. 

Online spending in the UK now amounts to over £1.1billion every week, and as businesses strive to meet consumer shopping preferences, eCommerce is becoming even more vital to business growth.

However, setting up your own dedicated eCommerce site means a huge investment in money and time. Using an online platform - the digital equivalent of a marketplace - will let you set up your digital stall, and enjoy the benefit of their popularity and marketing to bring customers to you.

There are several platforms which can help you set up an online shop - but one of the most popular is eBay.

About eBay and eBay shops

Most people have visited eBay to browse if not to buy. It is a multibillion-dollar business with over 183 million active buyers in 190 countries. And the eBay website is an online auction and shopping website in which people and businesses can buy and sell a wide variety of goods and services worldwide. The website is free to use for buyers, but sellers are charged fees for listing items, and again when those items are sold.

Users can browse through categories like Antiques, Boats, Clothing, Cars, Computers and more. When they see something they want, they can click on the auction title and view the details, including pictures, descriptions, payment options and shipping information. 

If they place a bid on an item, you enter a contract to buy it if you win the auction. All auctions have minimum starting bids and some have a reserve price- a secret minimum amount the seller is willing to accept for the item. If the bidding doesn't reach the reserve, the seller doesn't have to sell.

Auctions are, of course, exciting and this excitement can be lucrative for the seller. But in addition to auctions, you can put fixed-price items on eBay that make shopping there just like shopping at any other online marketplace. 

As a seller, it is very easy to get started by listing individual items for sale on eBay in the appropriate category. This can help you discover the level of demand, the scope of the eBay audience and the numbers of potential buyers for your products or services. Being able to offer items to people ready to buy and who are looking at eBay for them can mean rapid sales and steady turnover, and can be the ideal way to discover the potential of eCommerce for your business.

The big advantage is that eBay will take care of all payments from the customer and provide you with a relatively problem-free source of revenue.

The next step up from selling individual items on eBay listing is an eBay shop.

An eBay Shop is a shopping destination where your buyers can learn about you and business, browse your items and buy from you. There are more than 25 million visits to eBay UK every month. Your shop can capture a proportion of those visitors - meaning a potential marketplace for your business in the millions. 

There are about 53 million people in the UK so with 24 million visiting eBay regularly the marketplaces penetration of the UK suggests that half of the eligible adults in the country shop on eBay or at least browse the site. It is a huge audience that you cannot afford to ignore. You don’t have to have a shop to sell as a business on eBay, but having one means a number of benefits, including reduced insertion fees and full access to tools to manage your listings and monitor your business performance.

People who go on to eBay searching for what you sell can find your shop on the eBay marketplace. When it comes to the actual listings, there’s only one real difference between eBay shop and regular sellers: a “Visit store” link in the “Seller Information” section. Visitors who click on that will go to a full eBay shop, where you can list all your products.

To most customers, unless they click that “Visit store” link, an eBay shop is indiscernible from a regular seller. However, if they click the link, you end up on a page that lets you list all your products. It will still be an eBay page but it can carry your brand and reflect your business, and all the items on it will be yours. 

There are 3 different levels of Shops with different benefits - and different costs - and the level that suits you will depend on your experience and the number of items you want to sell. Most people start with a Basic shop and work their way up as they become more experienced - the main difference between the levels is the volume of business they are suited for. 

Can you be a start-up on eBay?

It is very simple to start a business with an eBay shop. You can choose a basic shop, work to make the most of your presence online and call in stock from a supplier as you need it - dropshipping. It means that you don’t need to pay upfront for stock, avoiding warehouse costs and picking, packing and postage.

Many eCommerce businesses have started in this way. But you will need to invest in your business and, although you can make sales in this way, on your promotion online to bring in customers. You may still need to secure funding to cover your costs - but remember, start-up businesses are difficult to secure funding for. Many lenders will simply not advance funds to any business that does not have a record of a year or two successful trading.

The good news is that, at Rangewell, we can often help you arrange funding for an eBay start-up, based on your own sound business plan and some funding of your own.

Getting paid

eBay makes it easy for you to get paid when someone buys from your shop. There are several ways to take payment:

• PayPal: Your amount due will automatically be deducted from the PayPal account that you select for automatic payments. PayPal is a popular payment method, but can hold your funds for up to 21 days to ensure a smooth transaction.
• Automatic credit card payments processed through your seller's Internet merchant account
• Direct pay from a checking account. 

The benefits of an eBay shop

1. A unique, personalised and customised section of eBay for your listings to be presented to potential buyers.
2. Your own brand, including a colour scheme, logo and format for your shop - this will help it become more memorable and recognizable to other eBay users, particularly buyers.
3. A free monthly allowance of fixed price and auction-style listings.
4. A header at the top of all of your item descriptions that includes links to some of your shop pages 
5. Access to many additional advertising and marketing tools.
6. An email mailing list with promotional emails, newsletters, and more which can include links to some of your current listings so people can essentially buy your items right from their email inboxes.
7. Greater prominence to your listings within the search results on Google, Yahoo and other search engine websites - increasing your site visitors.

Shop subscription benefits and fees

You don't need to have a Shop subscription to sell as a business on eBay. However, an eBay Shop can help you reach the right customers, manage orders and build your brand. Your buyers can learn about you and your business and can browse your items through a customisable shopfront, and you can benefit from reduced fees. A basic shop will cost from £25 per month, although you my soon find that you are selling so many items that you will wish to upgrade to an ‘Anchor’ shop with unlimited fixed price listings 

What can you sell?

Your choice of products has a crucial role in the success of your online business. eBay is particularly good for electronics, clothing and homeware - but the simple truth is that if you can sell a product in your bricks and mortar store, you should be able to sell it on eBay.

You can focus on a single product line, then expand your offering to multiple lines depending on your sector, budget and available resources. 

The costs of running an eBay shop

An eBay shop may be a good way to test the potential of eCommerce without the costs of a bricks and mortar retail business. The costs of setting up your shop will depend on the subscription level you choose, but  the main cost of running it will be that of buying in stock. 

The cost of stock may be kept to a minimum with some lines and in some sectors, keeping a very small inventory and ordering direct from suppliers, but you may be faced with a need to carry a reserve of stock. Depending on what you sell, this could mean an investment of thousands of pounds.

Fortunately at Rangewell, we have a team of eCommerce experts who understand the challenges you face when it comes to funding - and know the solutions that are available.

Funding for eBay businesses

Traditional retailers are well catered for by traditional lenders, and can call on loans to support cashflow and to buy in stock secured on a number of assets - from the premises they operate from to the goodwill that they have built up.

ECommerce businesses have much lower overheads but tend to suffer from cash flow shortages as traditional lenders and banks don’t cater to the sector. Their underwriting processes have simply not developed as quickly as the eCommerce sector.

At Rangewell, we take a more entrepreneurial approach. We have developed an understanding of the sector and can provide a range of solutions.

The most popular of these is a line of credit. A business line of credit is a flexible funding product that enables businesses to draw on funds as and when needed. It’s typically used for immediate expenses rather than long-term investments and acts very much like an old-style overdraft.

A line of credit provides a pre-approved reserve of credit that you can call on as you need to at short notice. It’s a good option for eCommerce businesses that need short-term cash to cover expenses, for example, online ad costs and new inventory.

When orders and cash comes into the business, you can pay off what you have borrowed - which means that the cash you have taken out and repaid is ready to be taken out and used again.

You pay interest only on the amount used - ensuring you avoid fixed costs and commitments which are unavoidable with a traditional term loan.

This type of funding has another important advantage. It helps keep pace with the growth of your business, because the more business you do, the more cash you generate, and the quicker you can repay the amounts you take out.

As your business grows, you can apply to extend the line of credit you can call on - ensuring that you can bring in stock to meet the demand your eBay presence generates.

The level of funding you can arrange for your eBay business will depend on the level of custom you can demonstrate. If you can show a record of successful selling and, ideally, growing demand for your products, the lenders we approach on your behalf should be able to feel confident that your business has the scope to repay the funding they provide. 

Why you need financial solutions from Rangewell

The eCommerce market is growing fast, and most lenders are unable to keep up with the potential it offers.

At Rangewell, we know that your eCommerce business is a new type of venture - but we understand the potential that it offers - and the kind of funding that you need. We understand that eBay can provide a sound business environment, with huge potential for profit. As experts in all aspects of business funding, we know the lenders who share our understanding and can help you secure the funding you need from them.

Whether you are just setting out in eCommerce, or you are an established trader ready to make the most of the potential your business has started to display, we can find the lenders who will work with you to provide the funds you need.

We are on your side. Our knowledge can not only help you secure the funding you need for your eBay business - it can help you pay less for it too.