ebay basics: what you need to know to begin
Online auctions, eBay specifically, are the perfect example of the viability of supply-side economics, the conjecture that supply creates its own demand. There has been very few items that I have listed on eBay that haven’t sold at all; even the most obscure or used items almost always have an audience. Even broken items can be sold. When deciding what you should list on this site, don’t hold anything back. List everything you no longer want; this may include used clothes, coupons, items you may have received for free, or even information. These are all things that people are looking for on eBay right now.
An example of a My eBay seller account homepage.
This is the only major online auction site still in existence; most other auction sites are specific in the nature of items sold or restrictive in accepting sellers. With that being said, there are huge opportunities for sales on eBay. You can create a viable business on eBay, but this section is mostly devoted to the beginner, casual seller.
NOTE: There may be some people reading this section to find out how to circumvent a possible account suspension or limitation. Disciplinary actions that may be taken against an account will be discussed later on.
Registering with eBay
You will need to set up how to pay your seller fees. You can
choose PayPal, credit / debit card, or bank account. Also, you can
mail a check at a later date.
There are a few things to consider when you create an account on eBay. You will need a valid credit card number and possibly a bank account. You will set up one of these to pay your seller fees, which are relatively low. The listing fees on eBay have gone down in recent years, but for some categories, the Final Value Fee has risen (this is a percentage of the final purchase price that eBay takes as their commission). Some websites really concentrate on the account creation process, but it isn’t really that hard.
The Role of PayPal
The main thing you have to do on conjunction with creating you eBay account is to also create a PayPal account. Sellers are now required to offer either PayPal (http://www.paypal.com/) or credit card payments as the only options for most auction categories. Yes, this is a particularly bad policy that eBay has, but there isn’t much you can do to get around it. You have to accept one of these, and you can also probably slip in other payment methods (such as cash, check, or money order) into the auction description or payment section later, but you can no longer only use these methods. There are other online payment services you can use besides PayPal, but they aren’t nearly as good and should usually be avoided. Unless you already have a credit card merchant account, you won’t really be able to use this option. These credit card processing services have monthly and per transaction fees and sometimes require minimum transaction amount per month and other restrictions. You may even be required to purchase a processing machine.
The Current PayPal Fee Schedule (as of 5/2009)
| Personal account | Premier/Business account | |
|---|---|---|
| Send money(Excluding Mass Payments) | Free | Free |
| Sending money through Mass Payments | N/A | 2% up to a maximum of $1.00 per recipient |
| Withdraw Funds | Free for bank accounts in the U.S $1.50 for physical check |
Free for bank accounts in the U.S*$1.50 for physical check |
| Receiving Balance/Bank Funded Payments | Free | 1.9% to 2.9% + $0.30 USD |
| Receiving Card Funded Payments | 4.9% + $0.30 for
U.S. domestic payments (limit of 5
transactions per 12 month period) 5.9% + $0.30 for cross border payments (limit of 5 transactions per 12 month period) Fees for cross border payments |
1.9% to 2.9% + $0.30 USDFees for cross border payments |
| Currency Conversion Fee | 2.5% added to the exchange rate |
2.5% added to the exchange rate |
| Chargeback Fee | $10.00 unless you are protected by Seller Protection Policy | $10.00 unless you are protected by Seller Protection Policy |
These fees apply to U.S. users only. For Canadian fees, click here. For European fees, click here. Otherwise, click here.
The PayPal account home page.
PayPal itself is a pretty versatile and good payment service in general. The fees tend not to be very high per payment and the customer can use any major credit card or bank account to pay. The problem with PayPal is that it has a virtual monopoly on the U.S. online payment market, and it sometimes can abuse that position. I feel that most transaction disputer heavily favor the buyer.
An example PayPal dispute. Unfortunately, PayPal generally makes
decisions with very little evidence and that favor the buyer.
I once sold a pair of brand new tennis shoes to a customer; once he received them he falsely contended that they were not new, and he demanded a full refund plus shipping costs for sending it back. Without any evidence at all, PayPal decided in his favor. Because it was an international order, I had to eat the shipping costs plus issue a full refund. When I received the item back, it was in a grocery bag instead of the original shoe box I had sent them in. I have only been involved in a handful of transaction disputes throughout the years and hundreds of items I have sold, but so far they have all been decided in the buyer’s favor. I decided to test out this system once by using my friend’s eBay account to buy one of the items on my account. As the buyer, I filed a dispute with PayPal contending that I had not received the item. PayPal required no more evidence for either side besides a short statement before deciding in the buyer account’s favor. As the seller, I was not even able to submit the supporting evidence I had. Fortunately, transaction disputes are rare, and you shouldn’t be deterred from using the service because of this.
What is required to open a PayPal account? You will need a credit card number and a bank account. Additionally, if you want to use their Money Market service (gives you a variable rate of interest on the balance in your account), you will need to supply your social security or Tax ID number. PayPal also offers a special debit card connected to your account if you meet certain qualifications. I believe you need to have at least a Premier level account and you have to have been a member for 60 days. The benefits include 100% protection against unauthorized charges (this level of protection isn’t guaranteed with most standard debit cards), 1% cash back when you sign for a purchase, and instant access to your PayPal account. I recommend you get this once you qualify for it.
Signing up for an account. For auctions, Premier is necessary
although you may also choose Business for account type.
The PayPal debit card gives you 1% cashback on every purchase, credited
to your account immediately.
Once you have created you eBay and PayPal accounts, you will be set up to start selling items.
You can withdraw your funds to your bank account, via check, or to a
prepaid debit card.
Use the Navigation bar on the right to view the other sections on eBay and Online Auctions.
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