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The Complete Guide to Dropshipping on eBay from Scratch

One of the most popular online marketplaces among the sellers and dropshippers is eBay. This is a complete Guide to Dropshipping on eBay from scratch.

Dropshipping on eBay has its own business model that doesn´t include big investments, promotional campaigns, or deep marketing or design knowledge, and is basically available for everyone.

However, selling on eBay has many peculiarities, which you need to know before starting your dropshipping store there.

The biggest advantage of eBay and the reason why this platform is so popular among dropshippers is that an experienced seller or an aspiring dropshipper will need to have only a few things to start dropshipping on eBay, which we will show you in this post.

We will walk you through everything you need to know to start dropshipping on eBay:

  1. Why dropship on eBay?
  2. How To Start Dropshipping on eBay
  • How to create and set a selling account on eBay? 
  • PayPal account or eBay managed payments
  • Setting account on your supplier’s site 
  • Getting eBay Dropshipping Software DSM Tool
  1. Listing your first item 
  2. Tips for dropshipping on eBay
  3. Processing an order on eBay 
  4. Challenges faced by eBay new sellers 

Alright, let’s get started. 

Why dropship on eBay?

First off, eBay is the second largest marketplace in the world after Amazon, and it is constantly growing. It encompasses 183 millions of users for the beginning of 2020.

Originally, it was created for connecting buyers with online sellers of used or collectible items in auction-style listings, however, it changed towards the fixed “buy it now” price listings during the last decade. Nowadays it is possible to find almost everything on this online platform. 

Dropshipping, generally saying, is a business model, where the sellers don’t hold the inventory.

The dropshippers have the suppliers, whose products they sell in different marketplaces.

Once they receive a payment for the order, they buy this item from their suppliers and ship it to the buyer’s address. 

Dropshipping on eBay varies from Shopify dropshipping or Amazon-based one. In comparison with the other eCommerce platforms available for dropshipping, eBay presents an easy process of launching a seller account or/ and seller store (it’s two different things on eBay).

Since the company spent millions of dollars on marketing and already has millions of the buyers searching for the products on eBay, there will be no need to spend money on the advertisement campaigns and thinking on how to get traffic.

This is the main difference from the traditional model of Shopify dropshipping, which includes paying for advertising and building your own website on Shopify shop builder.

Besides, selling on eBay doesn’t obligate you to hold the inventory, unlike Amazon does. 

eBay dropshipping vs. Shopify dropshipping  vs. Amazon FBA

Hence, if you don’t have prior experience in online sales, marketing, advertising, designing the shops, exporting and importing the goods, you can start eBay dropshipping without second thoughts.

Especially, taking into account the low budget it requires. But  you would need to understand how dropshipping on eBay works then. 

Attention: eBay dropshipping is based on two concepts: 

  1. Online arbitrage, which consists in finding the right items to sell on eBay with cheaper prices on other selling platforms, like AliExpress, CjDropshipping, Costway, etc, and sourcing them from there on eBay. 
  1. eBay search engine optimization, aka SEO, which is the methodology of ranking your products on the first page in the search results on eBay. 
 Dropshipping on eBay

How To Start Dropshipping on eBay

To dropship on eBay, it will be necessary to set up: 

  •  A special selling account on eBay (you can’t dropship from the usual account there);
  • An account on your supplier’s site (for example, on Aliexpress, CJDropshipping, Chinabrands, etc.) 
  • A PayPal account 
  • An account on eBay dropshipping software DSM Tool (to automate the stock and inventory update).

How to create a selling account on eBay? 

To be able to dropship on eBay, you need to open an eBay selling account. It is a straightforward and super fast process.

Such an account will open for you the ability to sell on eBay along with the special features for the sellers, like the eBay seller hub, from where you will manage your business.

 In case you aren’t an eBay user yet, sign in the right eBay marketplace (i.g you can sell on eBay USA, Uk, France, Spain, Germany, Australia, etc.) and provide your correct name and phone number. 

If you have an account on eBay, you will need to click on the button Sell on the top right corner for creating it:

Well, once you click there, you will be asked to sign in eBay again and they will ask you to provide some data about your products. You can skip it since you will need to set the settings firstly.

So, it’s time to click on My ebay button > Account, and find the clickable phrase “Change automatic payment method”.

 Dropshipping on eBay

There you will need to set which payment method you will use for paying seller fees and eBay Money Back Guarantee reimbursements using PayPal, Debit card, or Credit Card. You will need to provide there then the data for the chosen payment method. That’s all.

If you want to sound more professional from the beginning, you can use the store’s name instead of your personal name or a nickname. To do so, open Account > Personal Info > User ID > Edit and set the necessary name.

Pro-tip: Unlike other platforms, you can use the same eBay account for selling and buying the items.

It allows you to get extra feedback. Invest 10-20$ dollars on buying the stuff on eBay auction (the cheaper, the better).

The sellers might leave you the positive feedback, as a result, your eBay reputation will rise. 

Setting business policies on eBay 

Business policies are important because using them makes you transparent with your potential buyers about how they can pay you, will you be accepting returns and how long will they receive their package, aka Payment, Return and Shipping policies.

It is recommended to get to know each website you are planning to use as a supplier since the information in your eBay policies, like shipping terms or return terms, can be different for them. You can apply different policies for different listings. 

Click on My eBay button, then go to the Selling section > Business policies. You will need to click on the button Opt in to be able to start using them. 

 Dropshipping on eBay

Dropshipping on eBay : Shipping policy 

Here is the place where you show your buyers the terms and way of the shipping for your items. Sourcing the products from a supplier, pay attention to his shipping terms, handling time and fees.

For example, if you begin to list the items from Chinese suppliers like AliExpress to eBay US, you can set 5 days handling time (time of processing the order).

It will be important to choose the shipping way that includes “from China/Hong Kong/Taiwan”.

You need to keep in mind that these shipping terms need to cover the shipping time of your seller on AliExpress. For example: 

 Dropshipping on eBay

Regarding the shipping fees, AliExpress sellers (in general, every supplier) offer different shipping methods, some of them are free, but some delivery options are paid. Sometimes it is better to choose the paid shipping method since it is faster, for example, the reliable shipping solution is ePacket.

If you will use the automated software for listing the item, various software, like DSM Tool, will include shipping fees into your listing’s final price.

But if you will create the listing manually on eBay, you need to remember to include the shipping fees into your shipping policy.  

It’s important to specify with your suppliers which countries they don’t ship to. You will need to exclude the same locations or countries in the shipping policy on eBay.

 Dropshipping on eBay
Return policy 

First of all, it is advisable to check the return conditions on your supplier´s page. Then you can choose one of the next options on eBay: 

  • No returns
  • 30-day buyer-paid returns
  • 30-day free returns
  • 60-day buyer-paid returns
  • 60-day free returns

Pro tip: by choosing the option where you offer the returns, eBay can reward you with better visibility in eBay search results. 

The return policy can be the next: 

 Dropshipping on eBay

But it is up to you which return policy to use. You can also use multiple return policy depending on your suppliers. 

Payment policy 

In order to protect the buyers and sellers, eBay offers only payment methods that offer strong protection, such as the following:

  • PayPal
  • PayPal Credit
  • Credit card or debit card processed through the seller’s Internet merchant account
  • Payment upon pickup

Among the above-mentioned payment options, PayPal is recommended for the dropshippers since it offers protection from the scammers. 

 Dropshipping on eBay

Overall, eBay is working on adding more payment options with its new managed payments. 

PayPal account or eBay managed payments 

At the point when a purchaser buys something from you, you have to get paid by one way or another.

Most of the transactions on eBay are being processed by PayPal, however, until the end of 2021 eBay should move to its own payments processing system. 

Consequently, until it happens, you need to have a business PayPal account. You can create it on the official PayPal website following the given there instructions: 

Unfortunately, it would be necessary to pay the PayPal fees. They vary on your and your buyer’s location. To verify the exact fee for different locations is possible on PayPal site.

For example, if a US-based seller will sell an item to a US-based buyer, he will pay 2.9% + 30 cents per sale as fees to PayPal.

If you are a seller from Europe and you have international, let’s say Chinese supplier AliExpress, for your store on eBay US, you will pay 4.4% + 30 cents.

The same fees will be applied for the US located sellers on eBay US who made a sale for the international (non-US) buyers. 

Though, when eBay managed payments will be obligatory for all sellers or if you will enroll in it, these fees will be different. For example, you will no longer pay 30 cents fees per transaction to PayPal. eBay fees will be different as well. 

eBay fees 

Dropshipping on eBay means dealing with different costs. The main eBay fees are the following: 

Insertion (listing)  feesYou get 50 free listings per month, when you overcome this number, eBay will charge you 35 cents for most of the product categories. 
Final value fees (selling fees) These fees are a percentage of an item’s total sales price. You pay them only when you make a sale. It’s 10% for most sellers or even lower. 
Listing upgradesThese are optional fees for eBay pro features, like international site visibility, etc. 
Fees in select categoriesCertain categories, i.g. motor vehicles, real estate, industrial items, have extra fees.

It’s really not that bad since using a dropshipping automated software, like DSM Tool, the fees are calculated and included in the final price of your listings.

There is a special term for that “Break Even”. It’s a  percentage used in the calculation of the final price and it includes all extra fees (PayPal fees, eBay fees, taxes, etc.)

On the other hand, eBay takes over responsibilities for driving traffic to their platform, what we, eBay sellers, use without investing additional money. 

Setting account on your supplier’s site 

You need to have an account on your supplier’s site from where you will order products for your buyers. There are many sites from where you can dropship.

For example, in other tutorials or videos about dropshipping on eBay, you can see that the sellers source items from such websites like Walmart, Home Depot or Amazon.

These sources are indeed popular as well, but these websites are not as beginners friendly and are less favorable in the eyes of eBay. That’s why we recommend starting with dropshipping from AliExpress.

You can dropship from AliExpress using any buyer account, so you can simply go to Ali Express, sign up and you’re done.

But for the purpose of automation for your dropshipping business, it is recommended to also set up an AliPay account.

You can set up AliPay by entering the My Aliexpress section and clicking on My Alipay -> Account.

When it is done, log in to AliPay and then under Settings -> Manage Your Cards add your credit card details. It will allow you to pay for a dropshipping order in one click.

Getting eBay Dropshipping Software DSM Tool

DSM Tool is an eBay dropshipping management software that helps to automate many of the tasks that the dropshippers do manually dealing with only a few listings, but can’t do by themselves when they develop their stores.

For example, this software controls the stock and prices changes on your suppliers and applies these changes to your listings on eBay.

If there will be no more available items in your supplier’s store, DSM Tool will detect it and set 0 for your listing quantity as well. It supports not only Aliexpress but also 50+ different popular suppliers. 

Besides, it has many other useful features for eBay dropshippers: from analyzing your store statistics and helping to manage your business to automatization of the feedback messages to your customers.

You can start with a free account on DSM Tool official site. Click there on sign-in button and provide your name and email to start:  

 Dropshipping on eBay

Well, now when all accounts are set, you are ready to create your first listing.  

Listing your first item 

Firstly, you need to have the item you would like to source on eBay. There are two main methods used by eBay dropshippers for product sourcing: snipping products method from other dropshipping sellers and finding trending products by yourself or with the help of the special tools. 

The trend hunting method, the 2nd one, is shown in detail on here: 

Secondly, when you have the item you want to list and you’ve checked the reliability of your seller (feedback, seller starts, etc), you are ready to start listing. 

To create the first listing on eBay manually, log in your account on eBay, click on the button “Sell” at the top of any eBay page.

Since you are the new seller on eBay, they can ask you to provide more details for verification, for example, the phone number and the address.

Sometimes they ask to provide them with an ID document, it’s better to do it as many new sellers get their accounts closed due to not verified data. 

Then eBay will ask you to tell them what you are selling. Copy the title of your item from the supplier’s page, paste it there and click “Get started”

On the next page, you’ll see all the listing options. They are self-explanatory. Copy-paste the information from your seller’s page there and upload the photos. 

This video walks you through them:

However, there are ways to save your time on creating the listings every time manually on eBay, for example, you can use the eBay automated dropshipping software which will do all these steps for you in a matter of a minute.

You will need just to choose the item and paste this link to the lister of DSM Tool and click “List” button:

Then DSM Tool will pull all available information from the source page to your future eBay listing: 

Tough, you will be available to adjust some of the listing options. Here are the reasons why you should do that. 

Tips for dropshipping on eBay 

As it was mentioned at the beginning of this article, the important part of eBay dropshipping is the eBay SEO optimization. It includes: 

  • Price Optimization
  • Title Optimization
  • Images Optimization
  • Item specifics optimization
  • Product description optimization 

You need to pay attention to each of these components to raise the visibility of your listing on eBay search results and get your first sales. Here are some tips on how to do it: 

  1. Hence, edit the title of your listing. Include more trending keywords (the more, the better). You can use additional tools for that to find out which keywords are trending (though, DSM Tool has a title optimization based on eBay search results that helps). 
  2. Include as many specifications as possible. Don´t forget about size and dimensions. 
  3. Make sure you chose the right shipping and return policy for Chinese suppliers or local suppliers. It will affect the shipping time shown in your listing.
  4. Don’t use the photos with the logo of other shops, water-marks, or with low resolution. 
  5. Use a comprehensive item description, not too long.
  6. Apply the design template for your listings, it will make them more eye-catching.  

Processing an order on eBay 

Soon or later, you will get an order on eBay. Congratulations! Don’t hesitate to start processing your order as soon as you confirm you got a payment from your buyer. 

Login the account on your supplier’s website (from where you took this item), according to the examples from this article is AliExpress, but it can be any other supplier. Add this item to your cart there, pay for it, and when you will get a form with the address, provide the exact address of your buyer. 

If there is missed information in the shipping address that your buyer left on eBay, it is better to contact him to brush the doubts aside.

That’s ready! Now mark the item as shipped on your Orders on eBay. Besides, it can be a good idea to send your buyer the message that you shipped the item. Providing good customer support is quite important on eBay or other selling platforms.

Once you receive the tracking information for this order on AliExpress, add the tracking number to this eBay order and send a message with the tracking to your buyer. 

The dropshipping software can cover you in it. If you will have an account in such a tool, you will get a notification when the sale will appear on your eBay account.

They also help with fulfilling the order via automated copy-paste of the buyer’s information and sending the tracking number.

Moreover, you can set the automatic messages which will be sent to your buyer once you will receive the order and once your buyer will confirm the order was delivered. 

Challenges faced by eBay new sellers 

Everything sounded not so complicated until this moment. But you need to know that you will need to prove eBay your reliability with starting the business there and it will be connected with a few limitations: 

  1. Processing your first orders you can notice that PayPal holds money for them. Yes, unfortunately, new sellers get in the so-called PayPal Jail for a period of three months. The holds will last for one of three options: 
  • 3 days  from the confirmation of the item delivery; 
  • 7 days from estimated delivery time;
  • 21 days after the buyer paid for an order. 

As a consequence of it, it’s better to have another payment method which you can use to pay for the products on your supplier’s site at the beginning.

Besides, by getting a better reputation on eBay, you can be relieved of those payment holds. 

  1. Listing limits will be the next challenge for new eBay sellers. After creating your selling account on eBay, it will be limited to 10 items with no bigger than 500$ value. It means that you will be able to list 10 items only (including the variations) and all of them can’t overcome 500$ value. It’s important to understand that it was created to check your credibility and buying an eBay plan will not change it. But by getting positive buyer feedback, sales, and showing an active selling performance, you will be able to request increasing your eBay selling limits.
  1. eBay VeRo violation is probably a new term for you. The Verified Rights Owner or VeRO is an eBay program that allows owners of intellectual property (IP) rights to find and report the eBay listings that violated their rights. Listing the items from the brands without special permission will violate the eBay VeRo, and, as a consequence, such an eBay selling account can be suspended. The list of such brands is updating constantly on eBay, you can consult them before listing your product. Although, the easiest way to avoid VeRo violations will be to use the dropshipping software that protects your account from such brands. The above-mentioned monitor DSM Tool also has this feature. 

Conclusion 

As you can see, dropshipping on eBay is a quick way to get involved in eCommerce.

Starting to dropship on eBay doesn’t need big investments, marketing campaigns, deep design and analytics knowledge, and much time.

You can start even today! The most important knowledge for building a successful eBay store, which is online arbitrage and eBay SEO, mostly are based on the experience, but you can learn them after opening an eBay selling account. 

This post was written by the DSM Tool eBay Expert Team. DSM Tool is an innovative All-in-one dropshipping software that helps to automate the daily drop shipping routine for eBay and Shopify sellers. We love to share our experience to guide dropshippers to success. 

Samwel Dollah

I was looking for ways of making a living working online from the comfort of my home,few years in am able not only to work from home but also help others achieve their dreams too. I am a full-time eCommerce expert dropshipping business ,Niche research and Facebook ads Expert.

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