How Shelf Companies Lost Their Appeal and What to Do Now
Also known as a ready-made company or an off-the-shelf company, a shelf company is a pre-registered business you can buy and customise.
Boasting a prestigious business address is not uncommon for most ecommerce businesses — having a virtual address can display a credible image if you’re trading online, particularly if you’re selling goods on one of the major ecommerce players, such as eBay. If you’re interested in setting up an eBay business account but unsure where to begin, follow these 6 tips and you’ll be the owner of an eBay business account soon.
Tip 1: Select the Right Options on Sign-Up
Before contemplating an eBay business account, you must ensure you have a sustainable foundation — an attractive business name, licence acquirement (check your local government regulations) and compilation of an effective business plan.
Once you’ve finalised the fundamentals, you’ll have two account options on sign-up: “regular” and “business”. In order to register an eBay business account, click on the “create a business account” link at the top of the registration page. An eBay business account allows you to use your company name and branding in all of your customer communication. Additionally, you’ll be eligible to apply for discounts on eBay fees.
Tip 2: Adhere to eBay’s Terms
Under the Unfair Commercial Practices Directive (April 2008), a UK business cannot claim to be a private individual for the purpose of selling their services and products. For the importance of transparency, eBay states that an eBay business account should be operated in the following situations:
- You are selling products/items that you have purchased with the specific intention of reselling the products/items
- You make your own products/items to sell, with the intention of making a profit
- You are a Trading Assistant
- You purchase products/items for your business on eBay
However, you should operate a private account if you’re selling your own unwanted items or you are purchasing goods on eBay for personal use.
Tip 3: Provide the Correct Details
When setting up an eBay business account, you’ll need a UK postal address or a UK landline telephone number as well as a bank account that accepts direct debit instructions. Your address and landline will be used to confirm your registration. The bank account allows eBay to receive seller fees when you sell items.
If your business is VAT registered, you should provide your VAT registration number so you can avoid paying VAT on seller fees.
It’s free to set up an eBay business account as eBay will only invoice you on a monthly basis to collect your seller fees. You can select a variety of methods for receiving customer payments but it’s advised to set up a PayPal account so you can send PayPal invoices via eBay. A PayPal account also makes it easier for buyers to pay you as well as being a highly secure platform.
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Tip 4: Create Your First Auction
Thankfully, creating your very first auction is not too difficult. Simply upload a few clear photographs of the product in question (ensure you have many angles as buyers like to see as much of the product as possible). Proceed to add as much detail as possible in the description box in order to provide the buyer with detailed product descriptions so that they’re comfortable with the added knowledge when making a purchase. Remember, you should try to answer as many “potential” questions about the product as possible as it not only helps with customer satisfaction but you’ll be more likely to sell the product.
As well as specific descriptions of the product itself, you must inform buyers of the opening price of the product, shipping fees, and whether or not you’ll accept returns. Well-communicated information and transparency will increase your customer feedback score and attract positive customer feedback.
Customer scores
When you receive a customer score of 10, you’ll earn a yellow star. As you continue receiving high scores, your “status/reward” will increase; for instance, you could reach a silver shooting star for a score of 1,000,000 or more. In order to receive this score, you have to maintain sound housekeeping and ensure you ship products in a timely and safe manner, respond to customer feedback (both positive and negative), and request customer feedback after an item has been delivered. To increase productivity, you can use eBay’s automated feedback reminder without the need to manually customise a message.
Tip 5: Open an eBay Store
There are three types of subscription for UK sellers: “Basic”, “Featured” and “Anchor”. These cost £25, £69 and £399 a month respectively.
There are specific standards you’ll need to meet if you want to climb the proverbial seller rankings table. For both a featured shop and anchor shop, you must have a seller level of “above standard” or “eBay top-rated seller”.
From there, you can personalise your shop. This can be done through the “Quick Shop Setup” which will be made available as soon as you subscribe to your shop. Once set-up is completed, you can use the “Quick Shop Tune Up”. This can be found through:
My eBay > My Subscriptions > Manage My Shop > Start Quick Shop Tune Up.
On Tune Up you’ll be able to edit the following features:
- Display settings (billboard image, shop logo, shop description)
- Theme and display (shop theme, left navigation bar settings, listing frame, eBay header style, featured items)
- Shop categories and sub-categories (go to My eBay > Account > Manage my Shop > Shop Categories > Add category to get started – you can change categories as many times as you like)
Both Setup and Tune Up provide marketing recommendations that are popular with other sellers. If you’re new, there may be listing and selling allowances to monitor your practices, which are “accounts-based”, “category-based”, and “item-based”. In order to increase any of your allowances, contact eBay and ask if you can receive them. If they initially refuse, you can try again after 30 days. Check your allowances in My eBay > Selling.
Tip 6: Know the Tax Implications of an eBay Business Account
Your eBay business account will be treated like any other business enterprise, and therefore the tax implications will not be significantly different to your conventional business model. For this reason, it’s vital that you keep accurate records for all your product sales, costs and expenses associated with your eBay business account.
Record all the above financial activity and submit your records to HMRC (and subsequently to Companies House if you operate via a limited company).
You must be VAT registered if you want to charge VAT on your products/services. Unless the company qualifies for VAT exemption, eBay charges VAT at 15% on all seller fees of any business that is situated within the EU. The price displayed on your listings must be inclusive of VAT.
Remember…
You’ll have to treat your eBay business account as a bona fide business, adhering to licences, tax implications and a solid customer feedback score.
Your eBay business account can be registered in your company name if you trade through a limited company. Display your company name and logo on all customer communications (emails, invoices, receipts etc.) as this will increase brand awareness. On your Member Profile, eBay will display the heading “Registered as a Business Seller” which will also enhance your credibility and business image.
To find out more about setting up an eBay business account, contact our virtual office team, today.
