In short: Success on Amazon and eBay comes from choosing the right products, knowing your full costs, writing clear listings and offering reliable delivery and service. Treat it as a real business: keep records, register with HMRC when your trading income goes over £1,000, and watch the £90,000 VAT threshold.
Amazon and eBay let you reach millions of buyers without building your own shop. But competition is strong and margins can be thin. These tips will help you start on a solid footing.
1. Choose products carefully
Look for products where you have an advantage: a good supplier, specialist knowledge, or something handmade. Before you buy stock:
- search both marketplaces to see how many sellers already offer the same item
- check sold listings on eBay to see real selling prices
- avoid restricted or regulated categories until you understand the rules
- check you have the right to sell branded goods
2. Know your real costs
Work out your profit per item after every cost:
- product and packaging
- marketplace selling fees and payment fees
- delivery and returns
- storage or fulfilment fees (for example if you use Amazon's fulfilment service)
- advertising on the platform
- VAT, if you are registered
Fees change and differ by category, so check each platform's current fee pages.
3. Write listings that sell
- Use a clear title with the words buyers search for.
- Add good, bright photos from several angles.
- Give exact sizes, materials and condition.
- Be honest about faults. It saves returns and bad feedback.
4. Pick the right selling model
- Amazon suits branded or popular products. You can ship yourself or use Amazon's fulfilment service.
- eBay suits used items, collectables, spare parts and niche products, as well as new stock.
Many sellers use both, but start with one and learn it well.
5. Look after your customers
Fast dispatch, tracked delivery, quick answers and fair returns protect your seller rating. Both platforms reward good performance with better visibility. Remember that UK consumer law gives buyers rights, including for most online purchases.
6. Keep proper records
Record every sale, fee, refund and expense from day one. Download your platform reports monthly. Good records make tax returns easier and help you see which products really make money.
Tax basics for online sellers
- Hobby or business? Clearing out your own unwanted things is usually not trading. Buying items to resell, or making items to sell for profit, usually is.
- Trading allowance. Individuals can earn up to £1,000 a year in gross trading income tax-free. If your gross trading income is over £1,000, you must register for Self Assessment.
- Register on time. Register for Self Assessment by 5 October after the end of the tax year in which you started trading.
- Platform reporting. Since 1 January 2024, online platforms such as Amazon and eBay must collect and report information about many of their sellers to HMRC. This does not change the tax you owe, but it means HMRC can see platform income more easily.
- VAT. You must register for VAT if your taxable turnover over the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days.
7. Think about your business structure
Many people start as sole traders. As profits grow, some form a limited company. A company is a separate legal person, which limits your personal liability, and may change how you are taxed. It also brings duties such as annual accounts and a confirmation statement. Speak to an accountant about which structure suits you.
8. Do not rely on one channel
Platforms can change fees, rules or suspend accounts. Building your own website and email list gives you a second route to customers.
How Form My Company can help
Ready to trade as a company? Our Digital Package costs £290, including the £100 Companies House fee and VAT. Our Fully Inclusive Package adds VAT and PAYE registration. A Registered Office Address keeps your home address off the public register and away from your listings.
Frequently asked questions
Do I need to pay tax on eBay sales?
If you are trading – buying or making items to sell for profit – you may owe tax. Selling your own unwanted belongings is usually not trading.
Do Amazon and eBay report my sales to HMRC?
Since 1 January 2024, online platforms must report information about many sellers to HMRC. This does not change how much tax you owe.
When do I need to register for VAT?
When your taxable turnover over the last 12 months goes over £90,000, or you expect it to in the next 30 days.
Should I sell as a sole trader or a limited company?
Both are common. A company limits your personal liability but has more admin. An accountant can help you decide.