Trading on Amazon and eBay is something that millions of people do. These two selling platforms alone are responsible for regular people to go into business for themselves that would never previously had considered it.
Many people start out by having a clear out at home and selling off their old clothes and bric-a-brac on eBay to give them a little cash boost that they can put forward to spending on holiday or updating their wardrobe.
Many people then get hooked and will try their hand at trading on the side in the evenings and at weekends around a regular job or family commitments. Millions of people have gone on to generate a very healthy second income or even a main income from eBay and Amazon trading.
The simplicity of setting up an Amazon or eBay business account has also made it easy for millions of people to give selling online a go. With eBay maintaining around 100 million active users, it is hardly surprising that many solo-entrepreneurs decide to take advantage of this ready-made marketplace of hungry shoppers looking for a bargain.
The key to selling is your keywords
Like most e-commerce platforms, your use of keywords on Amazon and eBay is the key to getting your goods listed in customer searches. When you sell on either Amazon or eBay you will need to list your product and you will be asked for some keywords to enter.
Many new sellers are in such a hurry to get their products listed that they often forget about the ‘small-print’ and quickly breeze over their listing details without too much thought. However, your keywords are what Amazon and eBay use to help people find your product.
On Amazon, for example, you can go back to your listings inventory and click on ‘edit your product’. Look at your product listing and you will see a ‘Keywords’ tab. This is where you should enter your product keywords so that Amazon knows where to show your product.
But what ‘keywords’ should I be using?
What keywords you choose for your product can make or break how well your product sells on either platform. Remember that there are millions of product listings for sale in both of these marketplaces, so you need to use keywords that are not only relevant to your product but will also be the keywords that people will use to search with.
So for example, if I am selling aquarium cleaning kits, I will use keywords such as:
These are keywords that I believe people will be searching for on Amazon and eBay. There may be many more keywords that you can find to use for aquarium cleaning kits, but you need to make sure that the ones you use directly relate to your product.
Your aquarium cleaning kit is ideal for cleaning out fish tanks, but it would do a terrible job of cleaning a car, so you should steer clear of using vague keywords related to ‘cleaning’ that may not get your product up in front of your target customers.
Top product listing tips from Amazon
Amazon does provide excellent seller support services. It can often be very useful to go and read some of their tips and advice for selling on Amazon because you can take their useful tips and apply it to your own e-commerce site if you also sell your products directly from your own website.
Here are just some of the tips about using keywords on your product listing that you can use on both your Amazon and eBay listings to help improve your search results.
Keywords are an important tactic
So, can using keywords make or break your listing? The answer is yes and no. Keywords are an important tactic to getting your listing right and an important tool to use to get your product in front of your target audience. However, you also need to make sure you put just as much care and attention into other areas of your product listing if you want to attract a sale.
Using the right keywords on your product listing will help you get your product noticed, but to effectively out-perform your competition trying to sell the same product using the same keywords you need to make sure that your product looks good and jumps off the page.
You don’t actually need to employ the services of a professional photographer to take photos of your stock. By using some common household items as tools to help you take great product photographs you can actually create great stock photographs on the cheap.
Use a desk lamp for lighting your product: Illuminating your product will help to remove dark shadows and can brighten your picture when shooting in a dark environment.
Use a makeup mirror: If you find shadows difficult to remove or using a lamp directly on your product is too bright, then use a makeup mirror on a rotatable stand to angle and diffuse your lighting to get rid of shadows.
White card background: Shoot your product against a flat white card background. This will help to diffuse any reflective light and give you a clean background that isn’t distracting to the eye.
Use a tripod or camera stand: Whether you are using a hand-held camera or even your smartphone to take your product photographs, you can lose some detail with minute movements from your breathing, handshaking or even heartbeat. By using a fixed camera stand or tripod you will eliminate any movement for a better quality shot.
The legal side of your eBay or Amazon business
Under the new allowances from HMRC, individuals with trading income under £1,000 don’t have to declare or pay tax. This is great to know if you are just starting out as an Amazon or eBay trader and want to test the market first before you fully commit yourself.
This is also useful to know if you want to start your trading business slowly on the side of other employment. You can start off by selling off your old clothes and household clutter without worrying about having to register as a business or declare your earnings until it reaches this threshold.
Should you earn more than this amount you will have to declare it, but you can still take advantage of the £1,000 allowance.
Registering your business
Once your trading business takes off and you are earning over the £1,000 threshold, you will need to register yourself as self-employed with HMRC and complete a self-assessment for tax purposes each year.
As a sole trader with an eBay or Amazon trading business, you can register as a professional business on both platforms. This is a good move because being a professional business trading on these platforms will instil more confidence in your potential customers and encourage them to trust you with their money.
You will have to consider which business structure is going to suit you best if you are going to take your trading seriously and make it your main source of income. For example, there is a big difference between being a registered sole trader or owning your own limited company.
You can read about why having a limited company is more advantageous than being a sole trader if you want to consider the differences before you start your trading business.
You only need one person to form a limited company
If you choose to form your own limited company to trade under, Companies House only require one person to register that company. This means that you can run your Amazon and eBay trading business as an individual and still benefit from the advantages that a limited company can give your business, including protection of your own personal assets such as your home, car and personal finances.
To form your own limited company you will need just one director and one shareholder. The same individual can hold both posts, so this means that you can set up your own company and have total control over it without needing to involve anyone else.
Forming your own limited company is very beneficial for a small business owner that may prefer to work alone or doesn’t want or need to have a business partner. The flexibility that you get with a limited company also means that should you want to take on a partner, more directors or employ staff to help you grow your business, you can do this at any point in the future.
As long as you are aged over 16 years old and not an undischarged bankrupt or a disqualified director, you can set up your own limited company.
Building customer trust
Trading on Amazon and eBay as a registered limited company will also mean that you will command more trust and respect as a professional business owner. Your business image counts for a lot in a marketplace where customers are buying from someone behind the face of Amazon or eBay.
Building customer trust in your business is crucial in a competitive marketplace so trading under a limited company that is registered with Companies House and is listed on the Public Register of Companies can make all the difference between a customer choosing you over one of your competitors that isn’t a registered business owner.
Why not take a look at how inexpensive it is to form your own limited company and what benefits you will gain from choosing this form of structure for your business. The easiest way to register your own company is through a government recommended formations agent such as us. With our years of knowledge and experience in company formations, we can have your own limited company up and running usually within a day!
If you need some help or guidance about setting up your business, please do not hesitate to contact our friendly team of formations experts who are here to help.