eBay | Strategies for Selling Your Products Online

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Though there are many different ways to sell products online, a popular channel is through eBay. In this article we will look at 1) what is eBay, 2) the business model, 3) how to sell successfully on eBay, 4) taking precautions, and 5) an example of a successful business on eBay.


The Company

eBay is an ecommerce website known for its online auction style sales. It is owned and operated by eBay Inc which is an American multinational company. It was founded by Pierre Omidyar in 1995 and is a prominent success story that emerged from the dot-com bubble. The company has grown to become a multi-billion dollar business that operates in over 30 countries.

The website traditionally allowed consumer to consumer sales over the internet through a bidding system. In recent times, the company has expanded its model to provide options such as classic shopping where you can ‘buy it now’ as well as other services such as classified advertisements, online ticket trades and online money transfers.

Traditionally, the person to person trading channel was limited to events such as garage sales, flea markets etc which had a limited neighborhood reach. Through eBay, this has become a more streamlined process and provides people wider access to products being sold off by a variety of users in many different, often far off places.

The Business Model

The Method

The business model popularized by eBay is simple. It is a consumer to consumer sales platform, where buyers and sellers are connected via the internet. Potential sellers are charged a small fee for to list items that they want to sell. These can then be viewed for free by potential buyers. Buyers can then place a bid on the item that they choose, again at no cost. Once bidding closes, the highest bid purchases the item much like any traditional auction.

Items are listed in categories, making it easy to locate any items of interest. Though the experience is largely free for buyers, sellers are asked to pay two fees.

  1. An insertion fee, which is charged when an item is listed and is based on the opening bid amount set by the seller
  2. A final value fee, which is charged when the auction is completed. This can be anything between 1.25 and 5 percent of the final sale price.

There may also be an additional listing fee, which eBay charges for additional features such as highlighted listing, featured items or other methods which bring the seller’s listing into a more prominent and featured position. This helps increase visibility and the number of bidders.

Once the bids reach the preset minimum price, the website will send the seller a notification and the buyer and seller can complete the transaction. eBay does not have any involvement in this final transaction and at no point does the company have physical possession of any listed items or any payments to be made. 

The Selling Options

1. Auction Style Listing

In this mode, the seller lists an item and receives bids on it. They can then sell to the highest bidder. There is also an option to list a Buy it Now price, which allows a user willing to pay a higher price to bypass the bidding process and the end date for the bidding. Listings appear in the appropriate categories of the seller’s choice and appear in appropriate search results.

Auctions can continue for anywhere between 1 to 10 days. Often, things like real estate auctions may last as long as 30 days. An insertion fee and a final value fee is charged with the option of choosing an advanced listing upgrade for an additional third charge. Feedback and problem resolution services are also accessible.

2. Fixed Price Listing

In this type of listing, a fixed price is advertised and there is no bidding. Buyers can purchase the item immediately. There is still an option to choose a Best Offer from among a few offers. Items appear in appropriate categories and search results. Listings last for between 3 to 30 days or appear until they are cancelled. These longer term listings are renewed every 30 days until the items are sold, the seller cancels the listing or eBay cancels it. An insertion and a final value fee is charged with the option to opt for advanced listing upgrades. Feedback and problem resolution services are also accessible.

3. Classified Advertisements

This mode works like a traditional classified ad. A price is stated, a buyer contacts the seller and the transaction is handled between the two. Usually, these ads run for a 30 day period or till the good is sold. It is automatically renewed every 30 days until it is sold or the listing is cancelled. An insertion fee according to the category of the item is charged every 30 days while the listing appears. There is no final value fee in these cases. There is the option to pay an additional fee for advanced listing upgrades. This is no access to the feedback or problem resolution service.

4. Motors National Listings

Within the US, an eBay seller can list vehicles for sale nationally. Often older or more unique cars are sold this way to increase the likelihood of attracting multiple buyers. These items can be searched for using ZIP codes. Sellers can sell the items through auctions, Buy it Now or the Best Offer format. These listings usually last between 3 to 10 days. There may a varying insertion fee per vehicle identification number or VIN and a successful listing fee. Users can also opt for advanced listing upgrades by paying an extra charge. Sellers have access to the problem resolution service, feedback and eBay vehicle protection programs.

Feedback Forums

Since the transaction of goods and payment is only directly between the buyer and the seller, there is always an issue of trust and reliability. In order to keep users coming back, eBay encourages the use of feedback forums to discuss positive and negative sellers or buyers and share stories. This information can help a potential buyer or seller make the decision to conduct their transaction via eBay. Though not foolproof, it is one way of reducing the risk of anonymous transactions. 


Tips from Sellers

Many actual sellers offer advice on how to sell successfully on eBay. This advice is practical and gleaned from actual experience. One such seller suggests the following tips:

  • Research Your Item: Before listing your item, go through existing eBay listings of similar or the same item and see how much they sell for and how often they sell. You can also check other forums such as Amazon.com to compare prices.
  • Use Low Starting Bids: When an item has a low starting bid, it costs less to list it and it also encourage people to actually bid on it. If the item to be listed has the potential to draw in bids, then the starting point can be much lower than your expected final price. Otherwise, it should be kept low but closer to the minimum selling point.
  • Use 10 Day Listings that begin on A Thursday: When this method is used, the 10 day listing ensures that two weekends are included in the auction period, increasing the likelihood of browsers.
  • Offer Free Shipping: Through free shipping, you can build a certain level of goodwill. Additionally, you can offer delivery confirmation to ensure that the item has reached. Insurance can be offered for more expensive items but it can be offered as a customer paid for service.
  • Offer Money Back Guarantee: This can be offered only if the item does not match a description and not for buyer mistakes or a change of mind.
  • Choose Auction Title Carefully: Instead of listing the actual name of a product, it is a good practice to use keywords that relate to it, or that may attract potential users of the item.
  • Write Thorough Descriptions: Ensure that you write a detailed but relevant description of the product with any flaws or positive aspects clearly stated. More keywords can be used here but only so that they make sense and there is no unnecessary keyword stuffing. You can also use highlighted or bold text to emphasize key description aspects.
  • Refuse Problem Bids: Don’t accept bids from people who may become difficult such as a buyer with negative feedback, someone who hasn’t been paying smoothly or even in some instances, foreign bidders.
  • Use Photos: Pay a little extra and add a photo gallery to allow people to browse photos and assess the condition of the item.
  • Answer Questions: If you receive queries, try to answer them even if they are repetitive or annoying. An FAQ section can be added to the description if a particular query is coming up often.
  • Be Amiable: Instead of being all business, it is a good idea to foster an easy going persona. A buyer who connects personally may be more likely to actually make a purchase or a bid.

How To Boost Your eBay Listings

Tips from Buyers

In addition to useful tips from sellers, some frequent buyers also offer advice on what attracts them to a particular listing. One such buyer suggests the following:

  • Use Title Line Intelligently: Since there is competition to sell items, the title can become a differentiating factor. In addition, the correct use of keywords can help successful search engine searches. A successful title may include information such as item identification or alternate names, brand names or artists, material or medium, subject matter etc.
  • Research Similar Listings: Different categories of items may have their own particular terminology that you can learn and use. The correct use of words may attract a specialist buyer who would pay good money for an item rather than everyday buyers. It is also not a good idea to list items that have not been selling well.
  • Use Accurate Categories: Use your research to place the item in the appropriate category or categories. This small step can make a substantial difference in the bid amounts.
  • Write Informative Descriptions: Ensure that the description does justice to the product. The best way to do this is to list down relevant information in a logical order. Some of the necessary information should include the item description, a strong title, who the maker, brand, artist or author is, any other identifiers, details of the medium or material, dimensions, the condition of the item and any other special features or history. All relevant dates, any patents, locations or other information printed on an item should be included. Only photos should not be used to give all this information. Many buyers will not ask for details via email etc, but will move on to other items. So make sure that all relevant information is given. It is also necessary to avoid the use of words such as awesome or rare since they usually signify amateur buyers.
  • Check Spelling: Incorrect grammar and spelling can not only put off potential buyers but also result in search engines overlooking the items. Special attention needs to be given to the keywords in the caption.
  • Keep Photos Relevant: The most relevant photo should be placed before the others to ensure that the buyer does not need to go through multiple photos to reach the right one.
  • Keep Things Simple: It is a good idea to assume that bidders are in a hurry and cannot go through everything you post. Necessary information and photos should be presented clearly and cleanly. Any other information about shipping, terms or other advertising is secondary and can follow relevant information.
  • Avoid Fancy Displays: It can be tempting to attempt to create a pretty eBay shop, but it is a better idea to avoid flash animations or large slow loading graphics. Any larger images should be resized to ensure that they load quickly. Also avoid music.


The eBay business model relies heavily on the trust buyers and sellers put in each other. Unfortunately, this trust is not always justified and there are instances of mishaps. To try to mitigate these risks, the following steps can be taken by both buyers and sellers:

1. Confirm Your PayPal Address

This small step takes very little time but ensures that your PayPal shipping address matches your credit card address. This makes eBay safer since if someone manages to access your PayPal information, any items bought can only be shipped to you. In addition, sellers will prefer to sell to you if you have a verified account.

2. Check Supplier Reputation

Especially in expensive purchases, it is a good idea to check the supplier’s reputation and reviews.

3. Research Products

Some products are easy to copy and counterfeits may be sold in place of the original. Ensure that you are aware of any required documentation or authenticity guarantees. Designer clothes, accessories and sports memorabilia are particularly likely to be in this category.

4. Always use PayPal

PayPal is an added level of security. If the sellers does not ship the item then PayPal will return your payment

5. Use Delivery Confirmation

As a seller, always try to use delivery confirmation to ensure that the item has reached the buyer.

6. Read all the Information Provided

Despite long descriptions, make sure you read all specifics and are aware of shipping and return policies. Long descriptions may have hidden details of product quality etc that could save you the trouble of returning the item.

The Worst Mistakes to Make on eBay


An industrial machine dealer from New Jersey, Machinery Values started the year 2001 with the threat of going out of business looming. The CEO, Gene Valitt was afraid the 30th anniversary celebration would turn into an out of business event. Employees had shrunk from 70 to 35 and revenues have substantially decreased as well. Following a recession, business in the industry was at an all-time low. The breakthrough came when the COO started considering what to do with unused inventory. This was about $250,000 worth of metalworks equipment as well as a collection of odds and ends. It was good material but not worth spending budget on advertising it to potential clients. Instead, they came up with the idea of cleaning and photographing it to sell on eBay.

Not only did everything sell out, the company began bringing in as much as $20,000 in a month. The company did away with the catalogues they use to print several times a year at substantial costs and instead started marketing through eBay. A few years later, the company brings in over $1 Million a year from eBay, which is about 15percent of its total sales. New customers have discovered the company via eBay and has brought traffic to their warehouse. Through direct and indirect sales, the company gets 30 to 40 percent of its business from eBay. Business that has saved the company.

Through understanding of the business model and the sales process, and a bit of trial and error, eBay can be used successfully to create an online ecommerce business or simply to get rid of things that you no longer need!

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