The best way to make money online today is through eBay dropshipping. Most online sellers use eBay as a starting point to sell products to millions of buyers worldwide.
Our eBay dropshipping guide discusses dropshipping on the platform, the challenges faced, how to combat those challenges, and, most importantly, how to start dropshipping through eBay successfully.
Table of Contents
What is Dropshipping?
Dropshipping, or product sourcing, is buying stock from a supplier and collaborating with them to send products directly to your buyers without handling them yourself.
eBay allows drop shipping, where you can now fulfill orders from a wholesale supplier.
However, one thing you must remember is that even if you are drop shipping, you still have the responsibility of ensuring items are delivered safely to your customers and within the stated time frame.
Moreover, you also have to ensure buyers’ overall satisfaction with their purchase.
Benefits of Dropshipping
Dropshipping has plenty of benefits, and we outline several of them below. Check them out.
- Minimum risk—If there’s one massive benefit of dropshipping, it is low risk. Drop shippers only buy goods as customers buy them. Dropshipping also doesn’t have minimum order quantities. For instance, if a customer only purchases one product from your store, you only need to pay for that product. Dropshipping is a great business model for new and experienced entrepreneurs looking to experiment or try a new niche.
- It is automated – You can automate most of your dropshipping efforts using dropshipping marketplaces like eBay or Shopify. Adding the products you want to sell in your store only takes a few clicks. And when a buyer places an order, it only takes one or a few clicks to process the order. Therefore, since managing such a business is easy, you’ll have more time to focus on marketing your business and providing the best customer service.
- Low costs – Dropshipping allows you to sell a manufacturer’s product instead of a product you’ve designed. Therefore, you tend to pay wholesale pricing. You might also benefit from incurring low shipping rates, although it depends highly on where you’re dropshipping. That helps to keep costs very low for your business and eventually gain good profits from most sales.
- Time-saving—Dropshipping significantly saves time since you only need to concentrate on a few administrative tasks, such as marketing and customer service. The manufacturer carries out the most time-consuming tasks, such as packaging, shipping, and carrying inventory, which is quite expensive.
- You have the option of choosing plenty of products – Dropshipping provides you with the option of choosing from millions of products in a wide range of niches. You must look through the marketplaces and add products to your store. The good thing is that you can also sell proven products instead of trying to create your very own.
What is eBay?
eBay is an online auction website that allows people to sell products.
Like other eCommerce websites like AliExpress and Amazon, eBay’s user base has steadily increased for years.
For example, in Q2 of 2019, the platform saw a rise of up to 182 million users.
Due to the high number of users on the platform, it has dramatically attracted online sellers trying to find customers for their products.
You can find, bid on, and buy almost anything on eBay. Sellers post products with a starting bid—the lower the price, the more likely a customer will bid on it.
Although the sale is landed after the specified number of days set by the seller, sellers can add a “Buy It Now” option on their product page to control the product’s price.
It also allows customers to buy without having to bid on a fixed price.
How Dropshipping on eBay Works
eBay has millions of products, but it would surprise you that most sellers on the platform never actually handle or keep stock of the items they sell.
They source their products from a separate online seller, often at a wholesale price, and then list the same sourced product in their own eBay store.
Most sellers use the exact images, product titles, and descriptions their dropship suppliers provide.
Once a sale is made, a drop shipper fulfills the order through their dropship company, which then supplies and ships the item to the customer.
Since the goods are shipped directly to the customer, the drop shipper acts as a middleman between the buyer and the supplier.
They source products in bulk and then sell them at a reasonable retail price on eBay.
eBay allows drop shipping as long as the seller guarantees delivery within 30 days of the end of the listing.
Although the shipping time and item quality are not directly in the seller’s control, eBay gives them full responsibility.
Anyone who has an eBay seller account has the opportunity to start dropshipping on the platform.
You can begin by deciding what products you want to sell and sourcing them from a wholesaler or supplier who guarantees quick and reliable shipping.
One thing you have to keep in mind, though, is that you will see small returns with just a few sales. The best way to succeed with dropshipping is volume.
Dropshipping allows you to net a few dollars per transaction. However, some factors can make or break a dropshipping strategy.
They include pricing, marketing efforts, and timing.
One significant benefit of a dropshipping store is that you don’t have to have the products you sell before listing them.
After sourcing a reliable supplier for your order fulfillment, you must create your eBay listings and decide when to post them, how to market them, and how to price them.
After listing your products on the eBay platform and making some sales, the next and most crucial step is to build and maintain a good reputation.
Fulfill your clients’ orders at the right time and deal with any issues that arise promptly.
Advantages and Disadvantages of eBay Dropshipping
Like any other business, eBay dropshipping has advantages and disadvantages, which we’ll outline below.
Advantages
- eBay dropshipping is easy – eBay dropshipping is relatively easy because all you have to do is create an account and set up your first listing. You don’t have to face the struggles and costs of setting up your online store or eCommerce website.
- Minimum marketing requirements – When you make your listings on the platform, they will be seen by millions of online buyers, saving you time and money on marketing, paid traffic, and SEO.
- You get plenty of traffic with less effort. eBay has a vast audience, which ensures you make sales quickly and get the best prices for your products.
Disadvantages
- You’ll incur listing fees – eBay charges a small fee per listing, though the first 50 listings are free. There is also a 10 percent fee on your total sale price, known as the “final value fee.” Since eBay already has very slim profit margins through dropshipping, the costs can quickly add up, so you always have to remember that the key to making good money by dropshipping is volume.
- Limited customization—eBay dropshipping is a great way to start an online business. However, limited customization options for your listings and shop make it challenging to stand out from competitors.
- You need to monitor the business frequently – When dropshipping on eBay, you must ensure that you stay on top of your listings to maintain the vast volume required to make good money on the platform. Luckily, online tools are available and specially created to help you streamline the listing process.
Excellent Tips on eBay Dropshipping
Below, we’ll discuss some excellent tips on eBay dropshipping.
Strive to Minimize the Workload
Always remember that high volume is the key to gaining a competitive advantage and making good money on the eBay platform.
This is mainly because profit margins are minimal, mostly just a few dollars per sale.
Many sellers try to ensure they use a short time to sell as much as possible. Therefore, a high sales volume means more work, as you must process and fulfill each listing individually.
To streamline the process and reduce the workload, you must find products you can list as multiple items.
Doing this will help you make the listing just once and provide free time to handle fulfillment and returns if there are any.
To avoid any re-listing, set a longer duration for the eBay listings.
Price Control
One of the primary reasons most buyers go to eBay daily is that they know they will get competitive prices on the products they want.
This is a considerable challenge for drop shippers since the final sale price is bound to fluctuate, and the supplier charges a fixed rate regardless.
What’s more, there is a listing fee to list products on eBay, and a percentage of the final sale price is added to that, which can go up to 10 percent and severely cut into your meager profit margins.
Luckily, there are several ways to maintain your profits. When doing eBay dropshipping, you can set a “Buy it Now” listing showing your products at fixed prices. This allows you to earn the profit you desire.
Another advantage of using the “Buy It Now” option is that the insertion is fixed, which typically results in a lower price, whether you create multiple-item or individual listings.
You can try to set up a reserve price to enable buyers to bid for your high-profit potential products.
The reserve price is the minimum price that you, as the seller, are willing to accept for an auction item.
However, using reserve pricing causes the insertion and final value fees to vary, so you must adjust the reserve price appropriately.
The reserve pricing feature enables better profits. However, it frustrates online buyers because it usually needs to be visible to customers.
If you want to control your profit margins properly, set a high starting bid to cover the fixed costs.
You also have to ensure that you factor in the supplier’s prices, which include shipping and taxes.
Other factors to consider include the eBay listing and final value fees. The fee calculator can help you calculate the potential costs for your listings on the eBay platform.
Product Availability
Many people use eBay dropshipping since it eliminates the need to keep an inventory, although this can sometimes come with some setbacks.
One huge mistake that most drop shippers make is not being able to ensure the availability of the items they list on eBay.
This is a big mistake that really frustrates online buyers and eventually drives away potential repeat customers. In the long run, this creates many hardships for eBay drop shippers.
To avoid selling items out of stock, you should check your supplier’s inventory frequently to see which products are in stock and which will soon be leaving their stores due to low quantities.
You can collect daily reports from your suppliers to help you maintain an excellent reputation for your customers.
When customers notice that you are quick and reliable in fulfilling orders, they tend to return most often.
The most important thing to remember as an entrepreneur is that your business needs to have a good reputation for being different from your competitors.
Dissatisfied customers can quickly put you at risk, permanently kicking you out of the eBay platform.
Products Fulfillment
Once you’ve listed your items on eBay, the next step is ensuring you keep your customers happy by fulfilling orders quickly and efficiently.
Reputation is everything on the eBay platform because millions of sellers compete daily.
Therefore, you must always ensure you are on the right track when fulfilling orders.
The most significant disadvantage or challenge of fulfillment is that it needs to be in your hands.
It is because, while you can send a customer’s order to the supplier, they must follow through and ensure it is done on time.
If your supplier is unreliable, you must move on quickly and find another source for your products.
The best way to know the right supplier is always to try to ship the items quickly and update you on the status of your orders.
They also let you know of any potential delays or issues so that you can relay this information to your customers.
You need to know that issues are always bound to arise, so you must keep in contact with your customers and suppliers to reduce negative feedback.
Be on the Lookout for Unreliable Suppliers
Many suppliers are online, but how do you spot an unreliable one?
This is a huge mistake that most drop shippers make, as they need to properly check or evaluate the suppliers they choose before attempting to sell on the eBay platform.
Making this mistake when dropshipping on eBay can lead to better results in late deliveries and dropshipping poor-quality products.
Remember that customers only go to the supplier they want. They look to you to provide them with the items they paid for in a timely manner and with proper quality.
Even if it isn’t your fault and the supplier makes a mistake, the only person the customer sees is you. Therefore, the customer will react accordingly with negative feedback or complaints to eBay.
Services like online directories can help you save time by providing lists of reliable and high-quality pre-screened suppliers.
Building the Right Relationships
One way to ensure high profit margins while dropshipping on eBay is to gain repeat customers.
So, what exactly can you do to help your online buyers keep returning?
The best way is to build and maintain excellent relationships with them.
To build the strong reputation of your online eBay store, you need to start with what we’ve just mentioned above.
Ensure every item you’ve listed is available, work with reliable and honest suppliers, and fulfill the order promptly.
If any issues arise, ensure you respond to your customers promptly and professionally.
Don’t respond harshly or in a bad emotional state, even if the customer is angry and talking rudely.
Remember that bad feelings always fade, but bad reviews never go away.
Always strive to ensure you give your customers the best experience, and you will see how fast you’ll build a loyal base of returning customers.
Product Listings
Timing is crucial when it comes to product listings. When setting up an auction on eBay, two things, including the day and time of the week, can significantly impact your sales.
The most obvious solution when doing eBay dropshipping is ensuring you time your eBay listing around peak traffic hours. High traffic can attract plenty of potential buyers.
This, in turn, can get you plenty of sales faster with high-profit margins.
The downside to this strategy is that listing your products during these peak times also means a lot of competition and limitations on potential buyers. They won’t be able to bid on your listings due to the site’s slow speeds.
Therefore, it becomes challenging to make money when your customers cannot get to your listing in time.
The key is to try and balance the timing of your eBay auctions. To do this, consider the right time to list your products.
Consider the target demographic that might be most interested in your product.
Then, check the time when such customers do their online shopping.
Product Tracking
You often need to ensure your eBay customers can track their packages easily.
You can share your UPS, UPS, or FedEx tracking numbers.
The most challenging part is if you ship an Amazon order and it gets delivered with Amazon logistics.
Amazon logistics are only fulfilled by Amazon, not UPS, FedEx, or others. They usually have a tracking number that begins with TBA and is followed by 12 digits.
The challenging part of such deliveries is that you must log in to your Amazon account and track them since your eBay customers usually need help tracking their shipments.
You must also note that eBay considers Amazon’s TBA tracking numbers invalid. Proving that an item was delivered to your customer will be challenging in a dispute.
Therefore, the best way to ensure that you can track your shipments is to work with suppliers directly.
However, if you must use Amazon to drop ship products on eBay, you can convert Amazon’s TBA tracking numbers into ones that eBay considers valid.
A Step-by-Step Guide on eBay Dropshipping
Here is a step-by-step guide on how to start dropshipping on eBay.
1. Finding a Reliable Supplier
To succeed as an eBay drop shipper, you must ensure that you provide the best customer service and are linked to a reliable supplier.
You have the option of sourcing local suppliers or finding online wholesale suppliers.
Here are some things to consider when looking for the right supplier:
- The shipping methods offered by the supplier. Check also if the supplier provides an expedited shipping method.
- The shipping period of an order – You should avoid suppliers who cannot guarantee product delivery times, as they can put you at significant risk.
- Check if the supplier can ship products worldwide. Some suppliers can only ship products to specific countries, which can highly limit your customer base.
- Check how the supplier conducts quality control. Remember, poor reviews result from inferior quality products.
- Check if you can use the supplier’s source materials, such as photos, product descriptions, and specifications. Professionally taken images can significantly increase your sales since they easily attract customers.
After you have decided on the suppliers you want to work with, contact them to inform them that you want to become a retailer of their products.
Also, make sure that you ask about their dropshipping policies.
How to Select the Right Products
This may be the first or second step, depending on your preferences.
Whether you already know the niche products you want to sell or need to research the best-selling products, you must ensure you select the right products.
Organic tea, printed socks, sports bras, and baby carriers are suitable for dropship on eBay.
There are also plenty of other great products to sell on eBay.
Therefore, the best approach is to conduct thorough research and select high-quality products from reliable suppliers.
Create Your eBay Seller Account.
Creating your eBay seller account only takes a few minutes. However, you must consider essential steps that most online sellers overlook.
First, consider checking eBay’s seller information center. It has helpful links and guidelines for setting up your store.
The second thing that you need to do is ensure that you wisely choose your eBay account name.
Avoid choosing offensive or crude usernames since they might drive customers away and violate the eBay username policy.
Select catchy names since they attract customers and lead to good sales.
eBay typically requires your tax ID when setting up a seller account.
If you need to learn how to apply for a tax ID in your state, you can try a quick Google search, which might provide you with the correct information.
The fourth step in creating your seller account is to set up your payment method.
Although payment methods vary by country, all U.S. sellers must have PayPal or merchant credit card accounts.
The last step is to set up your profile page with information about your store and policies, including shipping and return policies.
You must also provide a detailed background and credentials since they are helpful for most niche markets.
How to Create Your Listings
You can use the information provided by the supplier to create your product listings. Make sure to create an eBay listing for each product.
To determine the price of a product, its timing, or whether it is on auction or “Buy It Now,” you can research the eBay platform or other places like Amazon and well-known retailers online.
How to Properly Manage and Maintain Your Business
You will want to start making money once your listings are set up on your eBay store.
It would help if you began building a positive reputation, and one way to do this is to ensure you fulfill orders as quickly as possible.
Also, contact your supplier daily or weekly to ensure everything runs smoothly.
If some products are out of stock, replace them with any new products regularly.
Another thing to ensure you properly manage and maintain your business is responding to your customers promptly.
If there are any complaints, make sure you respond quickly and professionally.
Also, strive to provide a positive experience that will help build loyalty with your customers and encourage them to keep coming back.
The Bottom Line
eBay dropshipping is a great initiative to consider if you want to start an online business and gain experience as you go.
However, it would help if you were prepared for challenges that may arise as you run your business.
Be open to learning new things, conduct thorough research regularly, and ensure your buyers have the best customer experience.
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