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Posted on 7 May 2009 at 15:51

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Online sales can be extremely profitable, but get it wrong and you could end up out of pocket. Scott Colvey offers some tips for making money on the web.

There are many reasons why you may want to sell some of your stuff online - clearing out the loft, offloading unwanted gifts, or perhaps because you fancy yourself as a modern-day Del Boy who wheels and deals on the web. Whatever the reason, the one overriding incentive is the chance to raise some cold, hard cash.

Although the idea may be appealing, the reality can be daunting. Where do you start? Should you post auctions on eBay, or is Amazon Marketplace likely to get you a better price for your goods? Those outfits charge you a commission to sell goods; are the free options a better bet? Maybe it's better to stomach any charges levied by the bigger players in order to reach the widest possible audience? Or should you go it alone and set up your own shop?

Clearly, then, there's more to online selling than simply taking a photo of an item, slapping a price on it and hoping that someone will snap your hand off. In this article we'll tell you everything you need to know to become a successful online seller, whether you're just looking for a quick way to turn unwanted gifts into much-wanted cash, or creating an online storefront for your back-room business.

A quick buck

If you're a casual seller who simply wants to turn a few items into cash quickly, then eBay (www.ebay.co.uk) is likely to be the first place you turn to. For many situations, eBay is probably the most effective place to sell.

Founded 14 years ago, eBay now has over 230 million registered users worldwide, with 14 million of those active in the UK. The site calls itself "the world's online marketplace", and will undoubtedly allow you to reach a huge audience quickly and effectively.

However, while the market it aggregates may be huge in number and global in spread, eBay can seem overwhelming to newcomers. The very process of registering to use the site can be offputting to some users, and it's worth bearing a few things in mind.

First, selling via eBay isn't as easy as you may have been led to believe, at least to begin with. It requires patience and concentration to get to grips with the seemingly endless rules and procedures, not to mention eBay's Byzantine fee structure for sales.

The company also requires everyone selling on eBay to offer PayPal (a third-party service that eBay acquired in 2002) as a payment option for buyers. You don't have to sign up for a PayPal account to register for an eBay account, nor do you have to be a PayPal account-holder to buy anything on eBay, but it is a prerequisite if you want to sell items. The mechanics of PayPal represent a whole new world of pain.

Ways to sell on eBay

EBay may have started life as an online auction service, but over the years it has evolved into much more than that. Indeed, eBay has spent so long courting traders that almost half of the sales listed on eBay are no longer amateur auctions, but commercial transactions - traders selling to the public, in other words. So statistically, at least, eBay is these days as much a commercial marketplace as a public auction site.

Auctions are just one of several selling 'formats' available on eBay. It's possible to use the site to offer goods for sale at a fixed price (with no bidding), or auctions can be augmented with a 'Buy It Now' option that lets shoppers bypass the bidding process by agreeing to pay an up-front amount. It also offers traditional property and classified listings that do not place buyers and sellers under any obligations. Finally, there's the option to sell multiple items and wholesale lots, which will appeal to traders.