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- Buying on eBay

Most of us have boxes, cupboards or even whole attics filled with junk. But one man's trash is another's treasure, so that trove of unwanted gifts, mistaken purchases and too-small clothes could be turned into cash.

Whether it's the bright-pink sweater from Auntie Doris, the laptop computer superseded by a newer model, or even the wedding dress you once treasured, if you price it right you'll find a market for it on eBay.

Check out the competition

Before you list your item, do a search for similar products. Look at start prices and descriptions to get an idea of what sells. If there are thousands of Barbie dolls starting at 49p, don't expect to start yours at £5. Equally, if you have something rare, like a first-edition book, don't sell yourself short.

To see what previous items have sold for, do a search - look for the search options box on the left of the page, tick 'completed listings' and click 'show items'.

Take a photo

It's free to include a photo in your auction listing, though if you want more than one picture, or you want your photo to show up on search lists as a 'gallery photo', there are charges. Paying the extra 15p for a gallery photo can be money well spent, however. Adding a photo shows people exactly what they are bidding on and should boost the number of bidders and the final sale price.

When you take the photo, a plain white background works well (unless you're selling something white!) and natural light often shows items to their best advantage.

What category?

To help you attract the maximum number of quality bidders, your item needs to be displayed in the correct category. If you have a beautiful antique bed for sale, it should be listed in the antique bed section, not within the beds category of the home & garden section. You may get more people browsing the ordinary bed listings, but they are unlikely to be specifically looking for an antique.

If you want the extra footfall, you can choose, for an extra fee, to list in more than one section.

The price is right

The higher the start price, the higher the listing fees you'll pay eBay, and the fewer potential bidders will be tempted to look at your wares. Research from the London Business School found that eBay traders make more money on auctions with a low starting price, by sparking 'auction fever'.

Digital cameras starting at 1 cent sold for an average $312, for example, but only $204 when they began at a higher price. If your auction ends at a price you are unhappy with you still have to proceed with the sale. Otherwise you'll have reneged on a legally binding contract. You're unlikely to get sued over a £2.50 pair of trousers, but you will get negative feedback from the disappointed buyer, damaging your chances of good prices in the future. No one likes a bad eBayer!

Reserves

The research also found that reserve prices cut the likelihood of a sale, although those that sell generally achieve a higher price. A reserve is a hidden minimum selling price, and if it is not reached you don't have to sell. eBay allows you to set a reserve of £50 or more, so this strategy will not work for smaller items.

Be aware that reserve prices will put some bidders off.

Buy it now

If you have a set price in mind you could try a Buy It Now sale, giving buyers the chance to buy immediately at a fixed price.

Alternatively you can include a Buy It Now option alongside an ordinary auction, as long as the auction start price is at least 99p. This gives buyers the chance to skip the auction process and buy immediately, although once the first bid has been received the Buy It Now option disappears.

- Find out more about Buy It Now

Fees

eBay fees depend on start price, final selling price, and whether you've added extra pictures, design features or a Buy It Now or reserve price.

The listing insertion fee is15p for start prices of 99p or less, 20p for those under £5, and so on, up to £2 for items over £100. Setting a reserve incurs a fee of 2% of the reserve price, up to a £100 maximum. This is refunded if the item doesn't sell.

Listing fees are not refunded, and neither are fees for listing upgrades such as Buy It Now, extra photos and listing design. You will be offered one free re-list if you don't sell first time.

If you accept payments via PayPal, eBay's email payments system, you may also be charged a fee.

- Find out more about eBay fees

Get the title right

Make sure you include as many potential search words in your title as possible. 'Chocolate brown silk nightdress nightie nighty' will come up in more searches than 'Chocolate nightie', for example.

If you have space, and the item warrants it, adding a word like 'gorgeous', 'fantastic' or 'exceptional' can influence buyers to view your listing first.

Always check spelling. Deliberately including a common misspelling can increase footfall to your listing, but don't miss out the correctly spelt word.

Be honest

Include as much information as possible and be specific about the age, colour and so on. It's better to tell the truth and get a lower price than to disappoint your buyer and attract negative feedback.

State your returns policy, postage and packing charges, whether you'll send recorded delivery, post abroad or insist on local pick-up, and other terms and conditions. Try not to overcharge on postage - it annoys a lot of eBayers.

Timing

Short auctions of one or three days can be a good idea for popular items. Few buyers will scroll through pages of laptops to see those ending in 10 days.

However, longer auctions can work well on other items, particularly if you time a 10-day auction to span two weekends, starting on a Thursday and ending on a Sunday. Consider seasonal issues. It's easier to sell summer clothes in May than in deepest December.

Never time an auction to end when your target audience might be busy elsewhere. Second-hand children's clothes should sell best after children's bedtimes - not at school pick-up time on a weekday.

Avoiding problems

Communicate promptly and politely with your bidders and buyers and email invoices quickly.

Never post anything until you have received payment and - if it is a cheque - made sure that it has cleared.

Always get proof of postage or send items by recorded post. If a buyer claims an item has not arrived, chase it up with Royal Mail. If they want to return an item, make sure they send it by recorded post, and don't issue a refund until you have received it.

Once you know payment has cleared, the item has arrived and the buyer is happy, leave positive feedback for them.

If you are unsure of anything go to the sellers' section of the eBay forum and ask a question.

Will the taxman want his cut?

This depends on whether you are 'trading'. If you are clearing unwanted clutter, or selling occasional personal items you've owned for a while, the taxman will not view you as a trader.

If you are buying or making things to sell at a profit, you are trading and will have to complete the self-employment section of the tax return, and pay National Insurance contributions and income tax on your profits. If your eBay 'business' has turnover of more than £61,000 (the 2006-7 threshold) you must register for VAT.