How to Start an Online Auction Business

by Contributor

Online auction sites are an increasingly popular medium for purchasing everything from used pots and pans to valuable fine art. Virtually anyone with some time and start-up money can start an online auction business. Depending on how much work you put into your site and the level of demand for your products, your online auction business can ultimately provide a nice supplemental income or can become a profitable, full-time job. Read on to learn more.

Learn about the online auction system. Most popular online auction sites offer detailed tutorials for those interested in using the system as buyers or sellers. You must become familiar with the site's rules and regulations before starting a business. For hands-on learning, buy a few inexpensive items that you can later sell, or closely watch a few auctions. The few days you spend mastering the system will pay off when you sell your first item.

Decide what to sell. Choose items that you find interesting and that have broader appeal. If you're an avid reader, sell rare books. If you love to shop for your grandchildren, set up a virtual children's clothing store. You'll be most successful if you sell products that you know something about, enjoy acquiring and like to discuss.

Research the competition. Determine who else is selling similar items on the auction site and their level of success. If the products you want to sell aren't moving, perhaps they have little appeal or maybe current sellers set reserve prices to high, poorly present goods or have problematic payment or return policies. If others are doing well, study their listings and implement their best practices. If there's no market for your goods or if the market is saturated, consider filling a related niche that's underrepresented.

Register as a seller. You'll have to create a user or store name and provide secure personal information. At this time you may want to sign up for a PayPal account as well. Thoroughly read all terms and conditions before completing registration.

Start small. Before you make a large personal investment, test the waters. Try selling a few inexpensive items or some things you have around the house but don't need or use. This will allow you to practice listing, marketing and fulfilling orders. Through trial and error you'll learn what works and what doesn't before you spend a lot of time and money.

Create listings that appeal to customers. Include high quality images of your items, categorize items appropriately, provide detailed and accurate descriptions, and clearly explain payment methods, shipping options and return policies. Most popular sellers charge a flat rate for shipping and accept numerous forms of payment including major credit cards and PayPal which is, by far, the most popular.

Be patient. Very few online auction business take off overnight. It may take a while to attract buyers and build a customer base. Evaluate your business regularly and make improvements based on customer feedback and personal observation.


  • check Protect yourself and avoid scams. Many sellers only accept PayPal to ensure receipt of payment. Some sellers accept personal checks, but this is risky and most only ship items upon successful deposit.
  • check Get positive feedback. After each transaction, buyers and sellers can leave feedback based on their experience. Buyers rate sellers on promptness of shipment, quality of item, accuracy of item description and other transaction-related items. You must provide excellent customer service to maintain a high feedback score. Your overall score will be publicized to all potential sellers who can read all customer comments. If your score is low, you will not get much business.
  • check Give feedback. Take a few minutes to leave customer feedback after each transaction. You can choose to sell only to customers with high feedback scores to avoid possible payment problems.


  • close If you sell prohibited items like prescription drugs and recalled products on popular online auction sites, you may lose your right to sell and may be reported to the appropriate authorities.

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