What is eBay? An In-Depth Look for Small Businesses

Founded in 1995, eBay has grown from a modest auction site into one of the world‘s largest e-commerce platforms, with over 175 million active buyers globally. For small and medium-sized businesses, eBay provides a major online sales channel boasting opportunities as well as challenges.

A Look at eBay‘s Growth and Business Model

eBay connects buyers and sellers through auction-style listings and fixed price sales. As an intermediary, eBay generates revenue through the following fees:

  • Insertion fees to list an item
  • Final value fees as a percentage of the final sale price
  • Optional upgrades like promoted listings
Year Active Buyers Gross Merchandise Volume
2021 159 million $87.5 billion
2022 175 million Projected $100+ billion

Over its 27 years, eBay has seen tremendous growth in active users and sales volume. It has expanded internationally, now facilitating cross-border trade valued at $90 billion annually.

For small businesses, eBay offers access to its enormous buyer base. However, competition can be high, and businesses must strategically leverage eBay‘s various seller tools and services available.

Key Benefits of Buying and Selling on eBay

eBay offers significant advantages for both buyers and sellers:

For Buyers

  • Wide selection of over 1.5 billion new and used listings
  • Often lower prices than brick-and-mortar retail
  • Convenient search and checkout
  • Money-back guarantee through buyer protection programs

For Sellers

  • Exposure to vast built-in audience of buyers
  • Turn unused inventory or household items into revenue
  • eBay seller protection when policies and guidelines are followed
  • Mature e-commerce platform with established trust and recognition

However, there are also notable disadvantages, especially for sellers:

  • High competition means working hard for positive reviews and sales
  • Listing optimization is essential to stand out among rivals
  • Inventory and order management can be demanding
  • eBay and PayPal fees make profit margins tighter

Steps for Selling Successfully on eBay

Small businesses can absolutely find success on eBay by:

  • Establishing compliant processes for listing, fulfillment, returns
  • Building positive seller rating with great customer satisfaction
  • Monitoring best practices as eBay makes periodic updates
  • Cross-promoting eBay listings on other sales channels

Follow these key steps outlined in our "eBay Selling Strategy Guide for Small Business Owners" ebook:

  1. Sign up for a Business or Anchor Store subscription for premium features
  2. Enhance account credentials by adding banking/tax details right away
  3. List efficiently with mobile app and bulk uploading tools
  4. Optimize titles, descriptions using high-ranking keywords
  5. Cross-promote listings across Google, Facebook, Instagram


Selling on eBay has risks but substantial upside for small businesses targeting new buyers and revenue channels. With strategic setup and management, the established platform offers a low-barrier entry point to e-commerce.