Is Upgrading to a Business Account Really Worth It?

[Anonymous]

Is Upgrading to a Business Account Really Worth It?

I'm planning to start selling on eBay and am considering subscribing to a store plan. However, I want to make sure I fully understand the differences before making a decision.

From what I understand:

• Private sellers get 300 free listings per month, and any additional listings only incur a one-time £0.35 fee but can be relisted indefinitely under GTC (Good 'Til Canceled).
• A Basic Business Store costs £27 per month, but only includes 250 free listings. On top of that, GTC listings count toward the monthly free allowance, meaning they reduce the number of new listings I can create each month.

If my understanding is correct, then why would I upgrade to a business account and end up paying more for fewer free listings? Am I missing something?

Would love to hear insights from experienced sellers!

[krafty-kreations]

I personally think they need to make it more beneficial to be on a business account, how can a private seller be getting more for free than what a business seller has to pay for?

I sell personalised cards and after each occassion has passed I end those listings for that occassion to save on costs where a seller on a private account can keep them listed saving the sales history etc.

[jonatjonatjonat]

Great point that. Business I work for is on one of the shop tiers (1,500 level) but even with that, we are constantly 'emptying the fridge' to try to stay under that 1,500. Then that final shop tier is just bonkers. The increase in cost to go from Featured to Anchor being £400!? Surely you'd have to be listing about 7,000 listings above Featured before it actually becomes financially worth it!

[555njp]

Similar for me. All mower parts etc. are seasonal so I’ll be delisting end of next month until February, otherwise I’m paying for a very unlikely sale.

[4_bathrooms]

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@cabletie555 wrote:

With respect to various mentions of the legal aspects, they seem to ignore the £1000 trading allowance:

https://www.streets.uk/about-us/news/selling-online-and-paying-tax/

Although other laws may also be applicable in some instances, eBay's rule about what constitutes a business seller isn't aligned with what HMRC says. You can buy or make goods as a private individual and sell them  in any situation that permits it so long as that aspect of your income is below that figure.  

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The trading allowance is not a legal threshold that determines whether a seller is a trader or not.  This type of confusion between a trader's obligations around declaring their income to HMRC and their legal obligations under consumer law leads to the number one attempted justification many traders use for conducting their trade via a private account; i.e. because they're declaring their eBay income they're doing nothing wrong.

HMRC use their "badges of trade" internal guidance to help determine whether undeclared income was the result of trading or not. However, that guidance does not have the force of law; it is merely guidance. Consumer laws do have a legal definition of what constitutes a trader:

"“Trader” means a person acting for purposes relating to that person's trade, business, craft or profession, whether acting personally or through another person acting in the trader's name or on the trader's behalf."

If someone is a trader as per the above definition they cannot legally sell via a private account regardless what their turnover is. That said, I doubt anyone really cares if a trader's turnover is below £1,000 - they're not going to be putting a correctly registered trader out of business. 

[4_bathrooms]

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@jonatjonatjonat wrote:

Great point that. Business I work for is on one of the shop tiers (1,500 level) but even with that, we are constantly 'emptying the fridge' to try to stay under that 1,500. Then that final shop tier is just bonkers. The increase in cost to go from Featured to Anchor being £400!? Surely you'd have to be listing about 7,000 listings above Featured before it actually becomes financially worth it!

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According to my own calculations the thresholds where the next shop level becomes better value are as follows:

• Basic shop: 90 listings: 90 x 30p = £27.00
• Featured shop: 140 listings: (140 - 90) x 10p = £50 (£77 - £27 = £50)
• Anchor shop: 8,700 listings (8,700 - 1,500) x 5p = £360.00 (£437.00 - £77.00 = £360.00)

Just look at that gulf in terms of cost and number of listings between featured and anchor! It almost suggests there's a tier missing.

[cobwebcottage]

Continuing on from the shop debate.

Get rid of the auction allowances ( or make them optional.

I would very much doubt that many businesses have time to faff about with 500 auctions per month ( featured shop) and would prefer the additional listings to sell stock. 

[jlovie]

For a featured shop, just give us the 2000 listings whether they're BIN or auction, instead of the current 1500 BIN + 500 auction.

[writesoon]

…or perhaps give UK businesses the same as they give the USA businesses who pay for a Basic shop -   10,000 fixed price listings a month! Then bona fide businesses selling lower price items might be able to compete better with the sea of ‘private’ sellers piling on their listings week after week. 

[spence0175]

Yes I too would love to have the choice. Auctions are a waste of time for me personally. 

[spence0175]

That would be a dream…

[the_book_seekers]

• Basic shop: 90 listings: 90 x 30p = £27.00
• Featured shop: 140 listings: (140 - 90) x 10p = £50 (£77 - £27 = £50)
• Anchor shop: 8,700 listings (8,700 - 1,500) x 5p = £360.00 (£437.00 - £77.00 = £360.00)

I'm not following your calculations on where next level shops become better value. Re the basic shop I agree its 90 listings. But the featured shop I make it higher than 140 listings.  £77 - £27 = £50. £50 divided by 0.10p = 500. 500 +250 (basic shop) = 750 listings.  (140 - 90) x 10p = £5 not £50. 

[rainbowtrax]

Yes, it's 750 - which is still a huge jump to reach Anchor level. Careful timing of listings is needed to get the most value from ebay's crazy tiers.

The whole fee structure needs a complete overhaul to reach anything even approaching a fair and level playing field - either for business v private or between different categories or comparing UK fees to any other ebay site. But pigs might fly.

Tbh, ebay are a good decade behind the times even still having upfront listing fees, it's all very noughties. Most of the competitor sites abandoned that model ages ago and that's one reason why so many competitors have managed to gain a foothold. For example, ebay threw away a huge chunk of their record and CD sales years ago when Discogs rose up on the wave of the free to list model and decimated ebay's music categories. But no one's listening and ebay are content to just milk every last drop from the business sellers who remain instead of actually doing something to regain some of the lost market share. I'm sure most other categories are much the same.

Surely the sensible way to go is to have the same reasonable FVF percentage across all categories and all types of seller, with shops available on a pay per feature basis for business sellers so you can choose the bolt-ons that suit you and get something for your money but are not prohibited from steadily increasing the size of your ebay inventory. All we seem to be hearing are sellers who would list more of their stock on ebay if the upfront per listing costs were not so prohibitive. This is worst for sellers of one-off items who have to pay a listing fee for every individual item every month as opposed to sellers of new multi-quantity items who only pay one listing fee per month for listings that can sell hundreds or thousands of individual items.

[555njp]

Yep, spot on.

[writesoon]

I think  there is VAT on the shop fees. That would mean the basic shop cost £32.40 and the Featured £92.40

[guymafo]

As I’ve said before I’d like to know why private sellers on a basic shop subscription for £19.99 get 400 listings, that rollover, giving an annual allowance of 4,800, yet a business seller pays £32.40 for 250 and the useless auction allowance, no rollover, annual total 3,000. 

GM

[555njp]

Or simply why on earth is there even an option for private sellers to have a shop!

A shop to me implies a site for trading and something that will be restocked regularly with fresh goods.
With the possible exception of serious, long term collectors with thousands of individual lots, a shop is not suited to an occasional clear out and gives the wrong impression.

EBay don’t help by pushing sellers to sell more stuff either. So naturally having sold off all the unwanted household stuff, some private sellers get the bug and go looking for more to sell turning them into traders.
That is pretty much how I started 20 years ago, but chose the legal business-seller route.

[papso22]

And it seems lots of business sellers confuse getting a shop subscription with upgrading to a business account.

[cabletie555]

"The trading allowance is not a legal threshold that determines whether a seller is a trader or not."

I would say that HMRC is a part of the government and what they say is a summary of the law as it currently interpreted and applied. Typically  there are numerous pieces of legislation that apply, old and new, and also things like human rights laws which might give people rights as consumers but also to trade and conduct commercial activity, which can sometimes say conflicting things. I have seen other legal advice online confirming this, buying or making items to sell on a small scale does not automatically make you a business seller, that's only eBay's distinction. You need a court decision to rule on any particular case. There is no HMRC advice given to those obtaining their income from theft, fraud or other illegal methods, it wouldn't be mentioned if it wasn't allowed. And what is the practical benefit of buying from a business seller on eBay vs a private one - either is required to provide a refund or replacement to the satisfaction of the customer in the event of any problems. In fact on a few occasions I have wanted to cancel a purchase minutes later and the business sellers will often say (when they eventually reply) the order was automatically sent to our warehouse you'll have to post it back when it arrives, while a private seller will help out as soon as they can. eBay ensures the customers rights are observed in all cases. For returning unwanted but not faulty items that have already been sent, business sellers are obliged to accept with the buyer paying the return shipping cost - but if that option isn't available you can simply resell the item for pretty much the same result minus fees - providing you don't have someone then incorrectly trying to call you a business seller for reselling the new item you recently purchased.

[1956glyn]

Is it just me?     I never look in a members shop Business or Private.

[the_book_seekers]

No. I never look either.