Selling through online marketplaces
The main benefits of selling through online marketplaces such as eBay and Amazon and advice on how to get started selling
An online marketplace is a website or app where you can sell goods in return for a fee or commission. You are responsible for listing your products and sending them to the buyer following their purchase. The marketplace provider will manage the processing of your transactions. It will also take a percentage of sales on any item sold on its platform.
Two of the biggest online marketplaces are Amazon and eBay which offer opportunities for small businesses trading online. There are also a number of growing marketplaces including Etsy and Folksy that can offer opportunities for niche traders.
This guide highlights the main benefits of selling through an online marketplace and explains how to start selling on certain platforms/marketplaces.
Watch the video below of Chris Dawson, TameBay, explaining the challenges and opportunities of selling on eBay and Amazon during an Invest Northern Ireland selling online webinar.
Advantages and disadvantages of using online marketplaces
The benefits and challenges of using online marketplaces such as Amazon or eBay to sell your products over the internet
Online marketplaces allow you to sell goods without setting up your own online store. Selling through online marketplaces provides a flexible business opportunity with relatively low start-up costs. eBay and Amazon are examples of well established marketplaces.
The potential advantages to be gained by joining an online marketplace will vary between industries and businesses, and indeed between buyers and sellers.
Advantages of online marketplaces for your business
- it provides an additional channel to market and sell your products
- the platform offers reduced marketing costs compared to other sales channels
- it allows new opportunities for overseas sales - there has been noted online marketplace growth in the categories of homeware, pets, fashion and sporting goods
- they are popular with customers and offer a convenient way to compare prices and products from a single source
- being part of an established online marketplace provides a level of trust between you and the buyer
- impartial reviews of your products and service may give new customers the confidence to buy
- they offer opportunities to establish new trading partnerships with traders and suppliers, either within your supply chain or across supply chains
- they provide greater transparency - availability, prices and stock levels are accessible in an open environment
- it is possible to operate a round-the-clock - time constraints and problems with varying international trading hours are removed
Disadvantages of online marketplaces for your business
There are a number of significant benefits to selling on marketplaces however there are potential drawbacks that may need to be considered.
- Marketplaces can charge commission on every sale and fees can vary from site to site. Before selling your products on a marketplace, make sure you understand the marketplace's pricing structure. See fees for selling on Amazon, and fees for selling on eBay.
- The online stores may impose restrictive terms and conditions in terms of how you can communicate to customers.
- There may be marketplace limitations as to how your business can brand its online presence.
Getting started on eBay
The basics of get started selling products on eBay including creating an account and listing and the different fees and rules
eBay is one of the largest online marketplaces. Many retailers use eBay to sell items. Although initially created as an auction site, eBay now allows vendors to sell items at fixed prices (Buy It Now).
eBay is a marketplace for a wide variety of goods, and it can be used to reach buyers in the UK or worldwide. As a business seller on eBay, your fees are based on what you sell, how you set up your listings and whether you subscribe to a shop.
eBay offers separate shop subscriptions to make selling easier and more cost efficient for your business:
- no shop - no monthly subscription fee, pay per listing
- basic shop - pay a monthly fee that includes a certain number of free listings
- featured shop - pay a higher monthly fee that includes more free listings
- anchor shop - pay a higher monthly fee that includes unlimited listings
You will usually be charged an insertion fee for each listing and also pay a final value fee when your item sells, based on the total transaction value including postage per item. PayPal will also take a percentage of the sale which will vary, but will be approximately 3 per cent of the gross sale value. Find out more about business seller fees
Example of fees charged
Fees vary according to the value and type of item being sold, but as an example, an item sold with no shop at a Buy It Now price of £10 would attract a 35 pence insertion fee, plus a £1 final value fee (10 per cent of £10). There would also be a PayPal fee for 3 per cent. This would make the total cost of selling your item on eBay cost £1.60. You will also need to factor in the price of posting the item and any packaging costs.
Research your item and the rules of selling
Before you start selling, you should do some research into the products you are selling - setting a starting price, selecting a listing format and choosing a category. This will help you create a good listing and get the best price for your item. You should compare your item with active and completed listings on eBay. Listing research tools such as Terapeak can help you to understand your market. . .
Create your listing
When you're ready to sell an item, eBay can help you create your listing with recommendations based on research of similar listings. The recommendations are designed to help you sell your items faster and at better prices.
Click Sell at the top of most eBay pages to start creating your listing. Depending on your item category and which listing form you use, you'll have a variety of listing options:
- if you're selling an item associated with a product that's in the eBay catalogue, you can add product details from their catalogues to your listing
- you can create an auction-style or a fixed price listing
- listing upgrades such as highlighting, font, and picture enhancements make your item stand out
Create a seller account
To become a seller, you need to:
- confirm your phone number (on eBay.co.uk) or verify your identity (on eBay.ie)
- specify an automatic payment method for paying your seller fees and eBay Money Back Guarantee reimbursements
- make sure your feedback profile is public
- you will also need to setup a PayPal account
Manage your listing
Once you've got your listing up and running, you can check it to see how it is performing. You do this from the Selling section of My eBay. This is available when you sign into your eBay account. You can also:
- set communication preferences to let eBay know how and when you want to receive alerts or notifications
- set seller preferences about picture hosting, receiving payments, postage and returns
- set member-to-member communication preferences to say how buyers can connect with you
- set general preferences for searches, My eBay preferences, and more
Make sure you answer any questions you receive about your listing. This will help you to sell your item by establishing good rapport with potential buyers. When buyers give you positive feedback, you become a stronger seller on eBay. It's also possible to change your listing.
Set up your Q&A
You may have to answer questions from your buyers before, during, and after a sale. It's important that you respond quickly and thoroughly. This keeps the buyer interested in your listing, saves you time, and you are more likely to get positive feedback when the transaction is complete. Your Q&A can be made up of answers generated automatically from your listing, answers you create yourself, and stock answers about eBay policies. Up until the end of the listing, you also have the option of whether buyers can contact you directly.
Selling effectively on eBay
How to successfully sell your products on eBay including getting your items found by potential customers and how to increase your schemes
Before you start selling on eBay, make sure you have done some research, especially about setting a starting price, listing format, and category. This will help you create a good listing and get the best price for your item.
To start selling, click the Sell button at the top of most eBay pages. eBay will help guide you through the process of listing your item step-by-step, including helping you find the best category. Selecting the right category is important as it helps buyers find your listing. Before you sell on eBay you must:
- be a registered member
- become a seller
- have a PayPal account
My eBay lets you track your buying and selling activity, send and receive secure emails, and update your account information.
There are four main sections in My eBay:
- buy - tracks items you're bidding on, made offers on or didn't win.
- lists - contains all your lists, including items you're watching, your wish list, saved seller list, saved search list, and any custom lists you've created.
- purchase history - contains all the items you've bought in the last three years.
- sell - tracks items you're selling or have previously listed for sale.
It is very important that you ensure you quickly respond to any questions or emails you receive. You can also use My eBay to check what's selling well and what's not.
How to get your items found
For a number of years now, Best Match is the default method with which eBay shows listings on search result pages. The objective of Best Match is to show the most relevant, best value items from sellers that will create the best experience for the buyer. There are a number of things you can do to increase the visibility of your items including:
- Offer different postage options - offering certain postage options helps ensure your items appear more prominently in search listings. You could offer at least a 48-hour postage service, at least a one day dispatch or a 24-hr postage option (you can charge more for this).
- Build your reputation - your reputation also determines how prominently you appear in search listings. Your reputation can affect the fees you pay with eBay giving top sellers better rates. It will take a while to establish a good reputation so be patient.
- Item titles - these are vital for best match search. You get 80 characters so make it comprehensive and truthful.
- Item specifics - these are important for search. They help people find your items.
- Photos - you can have up to 12 photos per listing for free on eBay. Photos should be well lit with a focus on the product. You need to ensure you adhere to eBay picture standards - at least one image per listing, one side at least 500 pixels.
You should ensure to send the sold goods promptly. eBay allows you to notify buyers their item has been shipped and add a tracking number. This is best practice and encourages positive feedback. You should also make sure you package the goods well - it is important to the customer that their goods arrive safely.
Dealing with problems
Most eBay sellers will at some point have to deal some problems from their buyers. You may from time to time need to process refunds and returns. You will want to aim for 100 per cent customer satisfaction. In the instances that someone is not happy and wishes to return or exchange an item, you should ensure the process is resolved professionally and as quickly as possible.
If you are a business seller on eBay who accepts returns, you are required to give the customer a minimum of 14 days to return the item. Many sellers offer returns above and beyond this. You should make it clear in your returns policy whether you or the customer pays for the postage if an item is being returned. If a buyer believes the item's description was misleading, you are liable for paying the return postage. This process is automated.
If there is a dispute about an item that you have sold, you should try and resolve the problem directly with the buyer. If the problem cannot be resolved it may have to go through the eBay resolution process. Buyers claiming they have not received their item or the item they received was not accurately described will use the resolution process as their main method for settling the transaction. As a seller you have eight days from the day a buyer opens a case to resolve the issue.
Increasing your eBay sales
Once you are an established eBay seller there are numerous tools available to help you increase your sales.
- Turbo Lister - this is a free listing tool to help you create professional-looking listings and upload thousands of items in bulk.
- Selling Manager - this is an online tool designed for medium-volume sellers to help manage and track listings on eBay.
- Selling Manager Pro - this tool is useful for high-volume sellers, to help you create listings, manage post-sale activities and manage your inventory. This service costs £4.99 per month.
With eBay shops you get a fixed number of inclusive listings at no extra cost, the ability to organise your inventory as well as a place to display all your listings in a personalised shop window with a unique website address.
There are three separate eBay shops to choose from:
- basic shop
- featured shop
- anchor shop
Completing the sale with your buyer
To receive positive buyer feedback, you need to ensure you complete the sale professionally. There are numerous ways to do this:
- keep good communication with your buyer
- be sure you receive payment before you post your item
- pack it well - use bubble wrap or newspaper to protect the item from transit damage
- leave the buyer feedback
Getting started on Amazon Marketplace
The basics of how to get started selling products on the Amazon marketplace including the steps you need to take
The Amazon marketplace allows you to sell new, used, collectable and refurbished items to Amazon's large customer base. Third party sellers make up approximately 40 per cent of total sales alongside Amazon's own stock.
Before actually selling your items it is important to consider a number of factors.
Decide what you want to sell
There are more than 20 product categories open to all sellers. Each category may have certain rules and conditions that apply.
Choose a selling plan
Amazon has two selling plans - Pro and Individual - giving you flexibility to sell a single item or many items. With the Pro plan you pay a monthly subscription fee to sell an unlimited number of products. The Individual plan has no monthly fees, but instead you pay 86 pence per item sold plus a percentage of the sale (this will vary depending on what category you are selling in, but on average is 15 to 20 per cent). Professional sellers do not pay an item fee, but still pay a percentage of the sale.
Register and start listing
to register on Amazon you need to create your account on Seller Central. This is Amazon's web interface where you will also manage your selling account.
Complete your profile
You will need to prepare a seller's profile. A good seller's profile will have:
- a logo - approximately 120 pixels wide
- an 'about' section used to describe the seller
- a shipping information section, including information about carriers and shipping times
- a return and refund section
Selling on Amazon Marketplace
How to sell on Amazon marketplace, including uploading listings, various fees and the Buy Box
Amazon Marketplace allows retailers to sell to Amazon's huge customer base. You can list items alongside Amazon's own stock.
How selling on Amazon works
Selling products on eBay involves a few basic steps:
- You upload your listings - you can add your offers to the Amazon catalogue using feeds, spreadsheets, and other tools.
- Customers can see your products on Amazon.com - there are features available to help customers make quick and easy purchases.
- You ship products to customers - Amazon notifies you when customers place an order. You can let Amazon do the shipping for you - or handle shipping yourself.
- Amazon transfers payments to you - Amazon deposits payment into your bank account at regular intervals and notifies you that your payment has been sent.
Amazon Marketplace has two tiers for sellers. One tier - Sell a little - is if you sell fewer than 35 items per month. The second tier - Sell a lot - is if you sell more than 35 items per month.
Sell a little
When you choose Sell a little, you have maximum flexibility to sell when and if you want without any commitment. This pricing plan consists of three different fees. These are charged per-item and when the product is bought:
- Per-item fees - sellers pay a referral fee on each item sold. This fee depends on the category the item belongs to. It will be charged on the total sum paid for the item by the buyer, including all applicable taxes and customs fees.
- Referral fees - as a seller, you pay 75 pence per item sold.
- Variable closing fees - this fee depends on the category the item belongs to and the destination of the order.
Sell a lot
Under Sell a lot, you can get maximum value if you sell in volumes above 35 items per month. It's ideal if you're selling regularly online. Pricing for Sell a lot includes the following fees:
- A monthly subscription fee - as a Sell a lot seller, you pay £28.75 per month, instead of paying the per-item fee of 75 pence per item sold on amazon.co.uk.
- Referral fees - sellers pay a referral fee on each item sold. This fee depends on the category the item belongs to and it will be charged on the total sum paid for the item by the buyer, including all applicable taxes and customs fees.
- Variable closing fees - this fee depends on the category the item belongs to and the destination of the order. It is only charged for items in the following category: Books, Music, Video and DVD items.
Winning the Buy Box
The Buy Box is the box on a product page where a customer starts the purchase process by adding an item or items to their shopping basket.
A key feature of the Amazon platform is that the same product can be sold by several sellers. If multiple sellers offer the same product in new condition, they may be eligible to compete for the Buy Box for that product.
There are a number of steps to increase your chances of winning the Buy Box status.
Selling through niche online marketplaces
Aside from the bigger online marketplaces such as Amazon and eBay, there are niche marketplace options for selling your products.
Etsy is a marketplace for craft and creative businesses. Etsy provides a marketplace for crafters, artists and collectors to sell their handmade creations, vintage goods (at least 20 years old), and both handmade and non-handmade crafting supplies. There are no membership fees with Etsy. It costs 16p to list an item for four months, or until it sells. Once you sell your item, Etsy collects a 3.5 per cent fee on the sale price. There is also a 4 percent plus 20p payment processing fee.
Folksy was created with the aim of showcasing the work of UK designers and makers. On Folksy you can sell handmade and craft supplies but not vintage items. Folksy currently only supports sellers who are living and working in the UK.
When selling on Folksy, it costs 15 pence for each item listed (excluding VAT) and each listing lasts for 120 days. You also have the option of signing up for the Folksy Plus account where you have unlimited free listings. When a sale is made, Folksy charges a 6 per cent commission.
In order to get paid for an item, you need a PayPal account. Once you've sold an item you will be emailed automatically by Folksy to confirm an order has been placed. This will tell you the buyer's details and the details of the item they have ordered. You should also receive an email from PayPal to state that the item has been paid for.
Other online marketplaces
There are hundreds of other online marketplaces, auction sites and classified listing sites, each with different attributes and audiences. It's important to choose one that's best for your business, and you'll need to consider the type of goods that sell on the site, whether it is appropriate for your audience and the costs involved.
Some to consider include:
- Not On The High Street .com - online marketplace for unique gift products
- Gumtree - free listings
- Craigslist - free listings
- Preloved - free lisings
- Depop - listings app
There are a many others that specialise in specific products such as cars, clothing and electronics.