Saturday, January 21, 2012

Why Credit is Important When Starting An Ebay Business

When starting an online business, including an Ebay business, it is important to have an established line of credit available for your use. This line could be in the form of a credit card, a personal loan, cash or a home equity loan. You will need the funds to be able to purchase items from a wholesale vendor if you want to make the most money on Ebay.

Selling stuff from around your house can be a great start, but it is just that. . . a start. Once you run out of items to sell from your house, your Ebay business will slow to a screeching halt. That's when you can start selling stuff from family and friends, however, that is extremely time consuming compared to actually trying to figure out a product that you can buy in bulk from a wholesaler and resell. When you run out of their stuff, then it's time to evaluate where your interests lie and find a wholesaler who can help you achieve your dream.

Once you have a product (or products) in mind, you will need to contact a wholesaler or distributor to buy your items at the lowest costs. In order to do that though, you will need to make sure that you have good credit. You can get a free credit score and a credit report very quickly online. It's always a wise idea to know up front what type of credit you have simply because most vendors are going to be concerned about whether or not you have the ability to pay.

When dealing with a distributor or wholesaler, you will need to fill out an application and provide references as well as bank account information. If you already have good credit, even if you have never done business online or don't have any vendor references, the distributors will more than likely give you a starting line of credit. Sometimes they ask you to pay via cash, check, or credit card for a few months to make sure you are legitimate. When they see that you are paying them regularly, they will then establish a line of credit with you.

If you already have vendors you have been dealing with, you can use those vendors as references to establish a line of credit. It doesn't hurt to keep up with your credit score by getting a credit report periodically to make sure all is well and no one else has accessed any of your information.

Once you have worked with your first vendor online, it's much easier to find other wholesale products and get decent lines of credit for future sales and earnings on Ebay.