Buying and selling with online marketplaces
How to get the most out of sites like eBay, Shpock, Vinted and Gumtree. What are your rights when using these platforms?
Whether you want to grab a bargain or make some extra income from selling unused belongings, online marketplaces can be a simple, cost-effective way of buying and selling.
Sites like Shpock and Vinted are gaining users, while more established platforms like eBay and Gumtree remain as popular as ever.
Whether you’re a buyer or a seller, here are some tips to help you stay protected while making the most out of these online platforms.
Staying safe while using online marketplaces
As with any online space, there are risks that scammers will use these platforms to scam you out of your cash.
Here are some general tips to help you stay safe when using these online auction and community selling platforms:
Sellers
It’s always a good idea to communicate with potential buyers using only the messaging and chat services provided by each platform.
Avoid placing your contact details in your profile or product description
No matter how nice a buyer seems, you should never dispatch an item without receiving payment first if that’s how the sale process works on the marketplace you’re using.
Be very wary about requests from a potential buyer to end an auction early.
Buyers
Make sure you understand what the site you’re using can actually do in the event that something goes wrong (e.g. you pay for something that never arrives)
Do some quick research on the seller – check their profile, rating and transaction history
Check the seller’s returns policy before you commit to buying anything
Only provide the minimum necessary personal details to your seller (e.g. your address for shipping and postage)
Your consumer rights when buying products using these websites
The protections you can expect when shopping on auction sites and online marketplaces will depend on the seller.
If you’re buying from a professional trader (an individual or business that makes and/or sells products for a living) then you have the same legal rights as you would if you bought a product from a shop or a retailer’s website.
If you bought items from a retailer that you wanted to return because they are faulty or you’ve changed your mind, there are a number of things you can do:
If you spent more than £100 on your credit card, then you’re automatically protected under Section 75 of the Consumer Credit Act and can speak to your credit card company about getting a refund
If you paid for your purchases using a debit card you can make a chargeback claim with your current account provider
These rules will apply whether the item you’re buying is brand new or second-hand.
You will be entitled to return the item within 14 days of delivery if you bought from a business seller. You can typically tell if a seller is a professional trader as their profile will include phrases like ‘registered business seller’.
If you’re buying an item from a private seller then you will have fewer protections. Your only legal rights are to be entitled to expect that an item is described accurately, and that the seller has the right to sell it.
Read our consumer retail rights guide for more details.
Tips for sellers
Selling through auction sites and online platforms
Using an online auction site or community website to sell items you no longer need can be a great way to earn some extra cash. Given the difficult circumstances many people are facing right now, that’s no bad thing.
However, there are some basic things you should be aware of in order to make sure you can sell safely, and with the lowest costs.
The basics
To sell your item on one of these sites you typically need to set up a profile, so you can oversee your transactions. Selling an item on an auction site like eBay will usually require making a listing for your item.
This can involve giving it a title, writing a detailed description of your item, adding a photograph, placing it in a category which includes similar items and deciding on the starting bid.
You will also have to enter the location of your item, decide how much to charge for delivery (or whether you will allow the buyer to collect it themselves) and your preferred method of payment.
If your item sells then it is down to you to organise payment and delivery with the successful buyer. Some platforms offer more security around the process of overseeing how items are paid for and sent to the buyer than others.
Seller fees
Online marketplace and auction sites make their money in different ways. EBay no longer charges private sellers a fee in most listing categories unless they sell more than 300 items a month. It still charges for extra features that help to promote an item on sale.
Vinted also doesn’t charge you a fee for listing an item for sale and charges for features to improve the visibility of listed items.
Auction sites dos and don’ts
Here are a few do's and don'ts when it comes to selling on auction sites.
We cannot guarantee they will help you make your fortune, but they could be the difference between your item selling and suffering the ignominy of re-listing for the third time.
Dos
Do be honest when describing your item and include details of any damage.
Do use PayPal for a safe and convenient way to receive payment on eBay.
Do make sure you list your item in the right category.
Don'ts
Don't be tempted to overcharge for postage as it will put off buyers.
Don't use an out of focus, low-resolution photograph for your item.
Don't bother setting a reserve price for your item if it’s an option on the marketplace you’re using - it puts buyers off.
For more seller tips, read our guide on making money using auction sites.
Do sellers have to pay tax on the income from their sales?
If you occasionally sell a few items that have been at the back of a cupboard at home for a few years, it’s very unlikely that you will need to declare any income you receive to the taxman.
However, if you regularly make or buy products to resell with a view to making a profit then this counts as ‘trading’. You will have to register with HM Revenue and Customs (HMRC) and declare your income.
How you sell your products does not matter. Whether it’s through an online auction site, a high street market stall, or at car boot sales, you will need to declare your income for tax purposes.
You’ll have to file tax returns, with any profits potentially subject to tax. If the money coming from your sales exceeds £81,000 a year, then you’ll also have to register for VAT.
If you’re a professional seller, it may also be a good idea to conduct all your business using a business bank account. This will help you when it comes to bookkeeping, filing a self-assessment form, and paying any corporation tax that may be due.
The best business bank account will differ depending on your banking needs. Different business accounts come with varying features, and you need to see which are available to your business.