Handling Your eBay Business Professionally

By Marsha Collier

How you conduct your eBay business can demonstrate to your customers that you’re a responsible person. You need to present a professional appearance when you meet your client, and you should have a professional attitude in your dealings.

Being professional also means anticipating possible problems. In addition to being very clear about financial issues with your clients (especially fees and the realistic selling value of your clients’ merchandise), you may want to consider getting additional insurance to cover the merchandise you’re holding in your home.

You may also want to consider designing a few forms to reinforce your clients’ awareness that this is your business and that you know it well. For example:

  • Inventory form: This form lists the entire inventory you receive from the client and should include as detailed a description of the item as your client can supply. Also, include the minimum amount (if any) the client will accept for the item — this will be your reserve price if necessary.
  • Sales agreement: Professional consignment sellers who expect to remain in business have their clients sign a sales contract. Read on for some good suggestions about what to put in your contract. It’s also a potentially wise investment to have a lawyer look at your contract before you use it.

The below includes quotes from several contracts that have been used over the years. They cover many things that you might overlook when you put together your own contract. This, of course, is not a full agreement, but it provides some of the salient points not to forget. Be sure to include an explanation of the consignment process:

  • The Consignor will bring item(s) to the Seller, who, upon both parties signing this contract, will take possession of the items for the duration of the sales.
  • Acceptance of any item consigned will be at the Seller’s sole discretion.
  • The Seller will inspect the item(s) for quality and clean if necessary (a fee may apply).
  • The Seller will take quality photographs and write an accurate description of item(s).
  • The Seller will research eBay for similar items to ensure proper pricing.
  • The Seller will start the listing(s) and handle all aspects of the sale including correspondence with bidders.
  • The Seller will collect payment from the winning bidder (“Buyer”) at the end of the auction and will ship the item(s) in a timely manner, once funds have cleared.
  • The Seller will follow up the sale by contacting the Buyer to make sure the Buyer is satisfied with the transaction.
  • Once the Seller and Buyer are satisfied with the transaction, payment will be made to the Consignor.
  • The Seller will keep the Consignor aware of the sales progress by telephone or email and by supplying the Consignor the listing number(s) to track the item(s) themselves.
  • The Seller will return unsold item(s) to the Consignor upon payment of outstanding fees.

It’s also a good idea to provide the consignor with a statement of items sold, summarizing the total purchase price, all fees, and the amount the consignor receives.

  • Outline your fees: “The Consignor will be billed the actual rates and fees as incurred for all services, to include the Seller’s 00% Commission. Any services or upgrades requested by the Consignor will carry the exact fee and will be deducted from payment, or after three (3) failed auction listings, will be due to the Seller payable in cash. If the auction sells, these fees will be subtracted from the winning bid before the Consignor receives payment.”

In addition to specifying your nonzero commission, be sure to include a copy of current eBay fees: listing, options, reserves, PayPal, and final value fees.

  • Outline the terms of your commission: “The Seller’s commission for this service is a percentage based on the final selling price. If an auction does not sell, the Consignor is only responsible to pay the applicable insertion and reserve-price auction fees. An Unsold Reserve fee of $0.00 [fill in your amount] will be due to the Seller for a reserve-price auction that does not sell.”
  • Be sure you don’t guarantee the item will sell: “If an item does not sell, the Seller will re-list it two additional times. The Seller may contact the Consignor to discuss combining individual items into lots to attract buyers. The Consignor’s verbal consent, or email consent, will be documented in the Consignor’s file and will serve as a revision to this contract. After a third unsuccessful listing, the Consignor will be billed for the fees associated with all three listings, plus a $5.00 surcharge. Items will be returned to the Consignor upon payment of those fees. Items not claimed within 14 days from the end of the final listing will become the property of the Seller.”
  • Protect yourself and your eBay reputation: “The Consignor of said item(s) consents to the sale of said item(s) based on the terms described in this agreement. The Consignor also attests that said item(s) are fully owned by the Consignor and are not stolen, borrowed, misrepresented, counterfeit, etc.”

You might also mention that you will only sell the item if eBay policies allow the item to be sold.

“The Seller will do everything possible to secure the safety of the Consignor’s item(s); however, the Seller is not responsible for any damage to the item, including fire, theft, flood, accidental damage or breakage, and acts of God. The Consignor releases the Seller of any such responsibility for any unforeseen or accidental damage.”

You can choose to protect yourself additionally, because reputation on eBay is paramount. You can opt for a small-business rider on your homeowner’s insurance that covers merchandise in your home up to $5,000 in value. It’s an inexpensive addition to your policy — definitely worth looking into.

  • Ending a sale prematurely: “If such an instance arises that the Consignor demands the item(s) to be pulled, the Consignor will pay a cancellation fee of $75. Items will not be surrendered to the Consignor until this fee is paid in cash.”
  • Protect yourself from possible shill bidding: An important line you should add protects you from possible shill bidding. How about something like this: “The Consignor also agrees not to place a bid on an auction that the Seller has listed for the Consignor (hereafter ‘Shill Bid’) on eBay, nor to arrange for a Shill Bid to be made on the behalf of the Consignor by a third party. If the Consignor or an agent of the Consignor submits a Shill Bid on an auction listed by the Seller, the Consignor agrees to pay all fees, commissions, and penalties associated with that auction, plus a $75 fine, and the Seller may refuse to grant consignment services to the Consignor in the future.”

Again, it is strongly recommended that you get professional advice before, during, and/or after putting together your own contract or agreement. Protect yourself and your business.