Making an eBay Business Plan

You have tried selling items on eBay and you realized after a while that you could earn a steady income with this home-based business. You have followed easy techniques and made them work for you, plus you have an understanding of how eBay works.

You don’t need to be a professional when going from “casual seller” to starting your eBay business, as long as you know how to do things properly.  It is now time to take things further by registering it legally. Have basic knowledge about taxes, increasing your inventory and eventually setting up an eBay Store.    An eBay business plan is essential.  

Earning a Living through eBay

Setting up an eBay Business

The fundamental element when setting up an eBay business is math. Make sure you do an inventory of your chosen items and sum up how much you are going to make from them. Add the cost of your goods and expenses, including all eBay fees. Be organized financially by updating your files with spreadsheets and Quick Books.

Update this daily to keep up with the numbers. Remember that running hundreds of auctions will entail hard work on your part. Be sure that you are up to the job.

Give one or two days to set up the auction and dedicate another couple for the shipping process.  Make sure you have enough space for your inventory and packaging. Also, you will need to find ways of promoting your service since potential buyers just don’t stumble upon your listings.

You can set up endorsements on your email, make message boards on your personal website, make use of listing enhancements or interact with repeat bidders and/or former buyers.

Choices for your company

1 – Sole proprietorship

This means you are the only one who owns and governs the business. This is the most popular method of setting up a company. You will report income and expenses on your income tax return and are solely the one responsible for lawsuits, if anything goes wrong.

2 – S Corporation

This type of business structure has less than 75 shareholders and an added liability protection.  Whatever profit you gain is shared by all and the losses are shouldered by all as well. Reports of income and expenses will be on each income tax return.  However, it is necessary to form a corporation and fill out the annual corporation tax return, making you spend more.

3 – Limited Liability Company

An excellent choice for eBay sellers is the LLC or Limited Liability Company.  It is a little of both worlds, liability protection like a corporation but tax application as simple as sole proprietorship. It is easier to form and maintain an LLC than set up a corporation.

Consult experts for advice regarding your eBay business, like a Certified Public Accountant and/or a business lawyer.

Keeping up with the paperwork

This is how you will know where your money went and how much income you made. You should make use of spreadsheets or an actual accounting program to keep tabs on your business.

Insurance

It may not be sufficient for you to rely on the insurance policy you have for your home.  Be sure to ask your insurance agent about inventory protection, equipment replacement cost and additional insurance for conducting business out of your home. 

Yes, an eBay business plan is essential.   That really is no different than any other serious business.