Britons with businesses that rely on Ebay generated aggregate sales of £2bn last year, more than the annual turnover of some big UK retailers, including WHSmith, the website's UK arm said on Tuesday.

The number of Britons with a full-time or hobby business using the auction site as a sales channel had grown 160 per cent to 178,000 in two years, Ebay said.

To many, Ebay is just a sprawling digital car boot sale, where they can offload an unused exercise bike or buy concert tickets when an official box office has sold out. But for a growing number of users it has become a platform for a small e-commerce business. They include a Derbyshire pensioner who has bought a French villa on the proceeds, and a young Welshman whose phone accessories business turns over £2.3m annually.

"Ebay-based enterprises have been growing strongly over the last two years. Whole families are earning a living from the website," said Jonathan Reynolds, of Oxford's Said Business School. "They are turning their houses into warehouses and developing increasingly complex supply chains. Ebay has provided a fillip for start-ups by reducing the financial risk of launching a business."

Mark Lewis, country manager for Ebay in the UK, said the site had "northwards of a million" sellers last year offering items that ranged from music memorabilia to prints by the graffiti artist Banksy. He said: "On the sell side, it is very easy to set yourself up. Take-up of your products can be fast."

However, low barriers to entry also mean competition is intense and Ebay-based businesses must be agile to survive. For example, when Jamie Murray set up BCM, a south Wales-based electronics retailer, he specialised in game console memory cards. "But that market got saturated," he said, "So a year ago I pushed into other areas such as Bluetooth headsets for mobile phones." Mr Murray said his turnover last year was £2.3m.

Ebay traders may, meanwhile, have mixed feelings about worldwide fee changes announced on Tuesday. The news comes as the US-based business reduces front-end costs while raising the charges for successful deals. Mr Lewis said that in the UK, the listing fee for an item costing £30 would fall by 5p to 10p. But commission for a sale at that price would rise from 5.25 per cent to 7.5 per cent, equivalent to a 68p increase.

Mr Lewis said the changes would be "essentially neutral" for Ebay in income terms but that "they will benefit sellers, who can list more items". He said sellers who generated strongly positive feedback from buyers would benefit from fee discounts of up to 40 per cent and have their wares displayed prominently.

However, a trader in contemporary art who uses the auction website complained: "The most onerous thing is the charge for selling an item, not the listing fee."