This is about the differences between an eBay business and personal account.

eBay Business Account vs Personal Account

As of 2022, there are more than 159 million active eBay users (mostly are US-based) and more than 19 million eBay seller accounts. Compared to the 2021 revenue, the 2022 revenue performance has seen a 5.8% year-on-year increase. It’s clear that eBay is one of the ecommerce giants on the web and it is a worthy option for anyone considering to launch a successful online business.

Before you start selling on eBay, you have an important decision to make. What type of account do you use to set up your eBay shop?

You have two options for the type of account on eBay that you can use for selling items via the platform: eBay personal account and eBay business account. Your choice is crucial because you want to maximize the features available when selling products so you can get more revenue on your eBay storefront.

In this guide, you will learn the features of setting up a business account or personal account on eBay. You will also learn the benefits and drawbacks of your account preferences to help you make a smart decision.


Personal Account vs Business Account: Overview

An eBay personal account is the best choice for anyone who joins the marketplace as a buyer and to sell on eBay as a hobby. This type of account enables you to list a minimal number of products on your eBay shop. A personal account is the best choice for anyone who does not intend to sell on eBay for business purposes.

On the other hand, an eBay business account is the best option for those who are serious about setting up an eBay business. Opening a business account on eBay is recommended if you want to set up an online store on eBay as your main source of income. Business account users are able to sell large quantities of products instead of casual selling, which is the case in a personal account.


Personal or Business Accounts on eBay: Differences

As already mentioned above, there are main differences when you choose a personal account or business account on eBay. But what are these differences?

One of the main differences when choosing a personal account and business account is the fee that you have to pay for each account type. Specifically, account holders on eBay pay for eBay insertion fees and final value fees.

If you only have a small sales volume on your eBay account, you can opt for a personal account to avoid the fees. On the other hand, switching to a business account or an eBay seller account, you can use your earnings from your eBay storefront to cover the fees for managing your account.

If you choose to open an eBay seller account, make sure that you take advantage of the perks for opening this account to sell large quantities of products that cover the cost of the account. Once you are serious about pursuing your online store on eBay, you can switch your personal account into a seller account. This type of account allows you to register your new business on eBay and set up a legal business.


How to Determine If You Need an eBay Business Seller Account


When to use business seller account

Can’t decide if you should open an eBay personal account or a business account? Take note of these indicators to help you decide on the right account type to set up for your eBay store.


1. Reselling

If you engage in reselling activities on your eBay storefront, it is recommended that you choose a business sellers account. This type of account on eBay allows you to achieve bulk sales if you are dealing with large sales quantity.
Want to learn more about reselling on eBay? Check out the comprehensive guide by our team at ZIK Analytics

2. Sales Quantity

Speaking of the selling criteria, dealing with large quantities of orders mean that you need to set up a business account to sell large quantities of products. With a personal account, you won’t be able to handle large quantities of products. There will be selling limits for this account type and the number of product listings you can add.

If you are an eligible business account user, you can reduce the various fees that are added to your account and the products you’ve listed. As an eBay seller, you also have opportunities for business expansion because of the reduced selling limits to your account.

3. Manufacturer

If you manufacture your own products, getting an eBay business account is imperative. Business accounts have more sales opportunities and can leverage the features available on eBay to generate more eBay sales. On the other hand, personal accounts have lower restrictions on the number of products you can list. These restrictions are much lower if you are a new account owner.

4. Selling Assistant on eBay

If you’re selling assistant eBay, it’s important to fulfill a certain selling criteria. Those who are working as a selling assistant must register for an eBay business account. The process of selling products for others on eBay works the same way as selling products for your own ecommerce business. Whether you own the eBay shop or not, you need to have a business account.

This type of eBay account enables you to list an unlimited number of products for your eBay store.

5. Buying Items for Your Business

You can use your eBay business account to purchase products on eBay and then resell them on this same platform. You can use various keyword and product research tools to identify the best products to sell on eBay for your ecommerce business.

Benefits of Business Sellers vs Personal Accounts

The above list provides information on what you can do with a business account on eBay. However, there are additional benefits that you can enjoy if you are among the millions of business eBay sellers.

The following are the main benefits you can enjoy with a business account on eBay.

  • You can get reduced selling limits. The lifting of the limit on your free listings on your business accounts means that you can sell large quantities of products. As a result, you are not capping your income potential from this eBay store option.
  • You have access to business account tools and promotions. If you have a business account, you can access seller tools such as the Promotions Manager. You can use this tool to gain better eBay sales control. Use this tool to come up with customized discounts and coupon codes for your eBay shop. This tool enables you to attract more buyers and generate more sales from selling products on eBay.
  • You can access better customer service. Business accounts get better access to customer support than personal accounts do. This is one of the perks to creating a business account since you can get your issues resolved in a prompt manner. eBay sellers also get the upper hand when filing a claim versus your buyers.
  • You can get lower taxes. While you pay additional taxes, you qualify for tax deductions if you have a registered business and a business account type. Business account sellers on eBay also qualify for sales privileges during times of crisis.
  • You can get legal protection for your business. If you are a registered business and have a legal business name, this qualifies you for legal protection on your business. All your invoices and sales will be linked to your business and you qualify for tax benefits and other perks of a business owner.
  • You can establish your own brand. If you are serious about selling items on eBay as your primary income source, you can take advantage of branding your eBay storefront. Creating a brand sets you apart from other business eBay sellers to attract more buyers to your online store.

Potential Drawbacks of an eBay Business Account

  • While there are advantages to choosing an eBay business account, you must also be aware of the potential downsides to choosing this type of eBay account.
  • Filing and processing taxes can be complicated. If you have a registered business with a legal name, you must file your own taxes for your business. This process can be complicated and might require you to hire someone to handle your taxes for you. You must consider the additional fees of hiring a tax professional.
  • You must pay extra fees when you own a business account on eBay. There is an extra $50 for eBay sellers, which are paid monthly. Therefore, you have to sell large quantities of products if you want to maximize those fees charged to your account.

The Bottom Line

It’s evident that there are differences between personal and business accounts on eBay. Take time to examine the benefits and drawbacks of each option so you are well-informed when making important decisions when you choose to sell on eBay and start a business.

If you are still unsure, you can start by creating a personal account and then switch to a business account if you want to focus on business expansion.

FAQs on eBay Personal Accounts vs Business Accounts

Can I convert my personal account to a business account?

Yes. If you have a personal account, because you initially did not plan on selling on eBay, you can switch to a business account if you want to create an eBay storefront. To make the switch, go to My eBay. Go to Personal Information > My Account > Edit (next to Account Type).

Choose the Business option once you are on the Account Type page. Click Continue and then enter your business name. Apply the changes you’ve made by clicking on Change to Business Account button.

How much is the fee for a business account?

The basic plan for an eBay business account is $19.95 per month, if you opt for an annual subscription. This type of account will give you up to thousands of free listings per month. On top of the subscription fee, there are other fees that you must pay if you have an eBay business account.

Take time to learn about the various eBay fees depending on the eBay store option you’ve chosen.

How many items can you list on eBay for free?

Every account owner can list up to 50 items on eBay for free. If you want to sell large quantities of products, you can upgrade to a business account to get higher selling limits on your account and get more eBay sales to your online store.

Meanwhile, new sellers have a listing limit of 10 items or a value of no more than $500 per month.

Is it better to sell on eBay as a business?

Yes, especially if you want to maximize the earnings you can make from your online store. A business account provides you with more tools and capabilities to unlock your earning potential and make it a reliable source of income.

Do I have to report eBay sales to IRS?

This is not specific tax advice, however in general if you are able to generate sales from your eBay shop, then it will be classified by the IRS as business income. Therefore, you need to include those earnings in your tax declaration. For information to your specific situation, please contact your accountant or financial planner.