Net profits

Posted on 7 May 2009 at 15:51

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These high fees are slightly offset by 'postage credits', which Amazon gives back to you as a percentage of the postal charges it levies to buyers. These are added to your seller's account. However, it's still an expensive way to sell. You'll find a detailed breakdown of Amazon's fees at http://tinyurl.com/amazonfees.

EBay charges sellers for sales, too, although its classified advertising for local services is free. This fee structure is large and complex. To give you an idea, if you set a starting price of less than £100, you'll pay a minimum of 10p for listing the sale. The site also levies a final value fee if your item sells. Depending on the item type, this can be anything from 5.25 per cent to 9.9 per cent of the final price. You'll find full details at http://tinyurl.com/ebaysellfees.

If you don't want to pay to sell something, you can try a classified listings site such as Craigslist (www.craigslist.co.uk). The site is basic, but it's hugely popular and costs nothing to use. Alternatively, find your local paper's website; many offer free classified ads to readers.

Setting up an online shop

Setting up an online shop and running a successful business are two very different things. Any idiot can set up a store online - we did, as you'll see - but marketing that store, securing sales and keeping your customers happy is much harder.

If you want to start selling online as a trader, all you need is an idea, some stock and an outlet. We can't help you with the idea or the stock, but we can give you some hints on the outlet.

Both eBay and Amazon Marketplace offer extensive facilities for traders. On both sites, you can use the services to set up a virtual shop and begin trading right away. Of course, that's a simplistic spin on what can actually be a huge effort, but as we said, setting up the shop isn't the difficult bit. If you want to be successful as a commercial online seller, however, you're going to have to put in the effort and research what the merchant services offer. You'll find more about eBay's business tools at http://pages.ebay.co.uk/businesscentre and Amazon's tools at http://tinyurl.com/amazonbusiness.

Amazon and eBay really serve only as additional outlet channels to traders and don't offer any control of the marketplace. As well as respecting trading laws - more on those later - you'll also have to adhere to whatever terms, conditions and rules these operators have set out. Some of these are highly restrictive. EBay, for instance, maintains a long list of 'prohibited' items that it won't allow to be sold on its site, even if they're legal to sell. It's quite legal in the UK to sell and buy fireworks online, for instance, but eBay won't allow it.

If you do encounter restrictions that limit what you want to sell online, then going it alone may be a better option, and this isn't as difficult as you might think.

Remember we said that any idiot can set up an online shop? Well, we did just that using an off-the-shelf application called Actinic Express (www.actinic.co.uk), which costs £58 including VAT for the first month, and £23 per month thereafter. It took 10 minutes to create a rudimentary online store, complete with a working checkout to process credit-card orders.