free hosting is crap...paid hosting is good and cheap. .co.uk is £3 a year. If you want success then don't skimp on costs as these things come cheap anyway!
Someone I know asked me to do them a website ages ago, and they have ended up doing it themselves with free hosting and some free site building software. Looks OK other than the page is FULL of adverts, which are nothing related to them at all...crap and makes the company look cheap!
eBay is defo your best bet to start with, then.....when things get going properly look into an online shop, but even then..... anyone can have an online shop....its having a good one thats been developed well and with good SEO that makes the difference. Not forgetting the most important part.....MARKETING! No good if you have a shop full of products to sell, but no visitors to the site!
I do marketing for a range of online retailers and make one or two of them around £30k of turnover each a month and iv only just started!!