Cliff Ennico on Starting an eBay Business in a Recession

The following is a guest post by Cliff Ennico, author of The eBay Business Answer BookThe eBay Seller’s Tax and Legal Answer Book and his latest, The eBay Marketing Bible.

The key to surviving and thriving in a difficult economic environment is to build a “portfolio career” of several activities, each of which generates revenue and all of which when added together give you a decent living.

As part of a “portfolio career” you might want to consider selling things on eBay, the world’s leading online marketplace.  You wouldn’t be alone:  roughly 800,000 people in the U.S. alone make a full-time or part-time living selling on eBay, and most of them are not “professional” merchants.  Even a sideline business on eBay can generate anywhere from $20,000 to $50,000 in just a short time, if you make all the right moves.

Here’s how to do it.

First, find the right stuff to sell on eBay. Don’t sell what everyone else is selling.  eBay is a great marketplace for “niche” merchandise that’s hard to find in local retail stores.  The inventory that will sell best on eBay are:

  • items you know a lot about – eBay buyers will flood your e-mail inbox with questions about your merchandise, and you have to be able to answer them in “real time” (also, becoming an “expert” on the things you sell can help you generate traffic to your listings and build a recognizable “brand” on eBay);
  • items for which you can find reliable sources of supply – take the time to find producers, wholesalers and “drop shippers” who aren’t already on eBay, and offer to help them build an e-commerce distribution channel – to find such companies, a good place to start is;
  • items that aren’t available everywhere, and for which there is considerable demand (for example, supplies and replacement parts for typewriters that aren’t commonly sold in “big box” retailers such as OfficeMax and Staples); and
  • items that aren’t already being “sold to death” on eBay – competition is fierce in many eBay categories, and often the key to success is to focus on narrow “niches” that the big sellers have overlooked.

Next, open an eBay Store. An eBay Store is a mini-web page on the eBay site where you can post all of your auction and fixed-price listings on eBay, as well as “store inventory” items that are available only from your eBay Store.  For as little as $16.95 a month, you can list dozens of items for sale.  eBay offers a lot of marketing tools for eBay Store vendors:  you can send e-mail newsletters to your regular buyers, create a “blog” where you can talk about your merchandise with buyers, and (best of all) generate search engine traffic from buyers who aren’t even on eBay.  Have you ever searched for merchandise online, and somebody’s eBay Store popped up in the top 10 search results?  Enough said.

Last but not least, set yourself up as a “real” business. Too many eBay sellers view their online activity as a “hobby,” and you can miss out on lots of great tax deductions by not treating your eBay selling as a “real” business.  When selling professionally on eBay, be sure to:

  • get a federal tax ID number from the IRS – a local accountant can fill out the necessary form, and probably won’t even charge you for it;
  • register with your state tax authority for sales, use and other local taxes – to find the website for your state tax authority, go to — then, when you get there, click on the “forms and publications” link and look for your state’s “business registration” form;
  • consider forming a limited liability company (LLC) for your eBay business – “Worldwide Widget Enterprises, LLC” looks a heckuva lot more impressive than “I’m just a guy who does this to earn a little beer money”;
  • create a professional looking “terms and conditions of sale” document and post it in all your eBay listings and your eBay Store – a local business lawyer can help you with this for a fee of about one hour of the lawyer’s time; and
  • visit Cathi Aiello’s eBay store “Allegro-Accounting” for bookkeeping and accounting solutions created specifically for eBay sellers.

You should also consider listing your merchandise on, and other e-commerce venues, but BE CAREFUL:  eBay will not allow you to link to your other e-commerce sites, because they don’t want you directing traffic to their competition.  However, if you create an “About Me Page” when setting up your eBay Store, you are allowed one link to your own personal website where people can learn more about you and figure out if you are an established, reputable seller.  And if that website just happens to have a link to your Amazon store . . .

Cliff Ennico is an internationally recognized expert on entrepreneurship, speaker, and author of 14 books, including The eBay Business Answer Book, The eBay Seller’s Tax and Legal Answer Book, and The eBay Marketing Bible (the last co-authored with Cindy Shebley).  An instructor for eBay University, Cliff is a frequent keynote and workshop speaker on e-commerce topics, writes a weekly newspaper column entitled “Succeeding in Your Business” for Creators Syndicate, and contributes regular articles for Entrepreneur magazine and the Small Business Television Network. He also maintains a popular website at

Be sure to come back tomorrow for a guest post by Cindy Shebley, co- author of The eBay Marketing Bible.


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