eBay is a very popular marketplace with many loyal customers and great potential for people to grow their online businesses. It's a highly attractive marketplace for a lot of sellers whether they are just starting or are already selling on other platforms.
If you're planning on starting your own dropshipping business on eBay, it's a highly attractive opportunity for new entrepreneurs.
Since you don't need as much start-up capital as you would with a regular store, eBay dropshipping could be a way for you to test out this type of eCommerce model.
In this article, I will show you how to do eBay dropshipping, including the pros and cons and if it's actually worth it or not.
What is Dropshipping?
Dropshipping is a business model where you don't stock any inventory. You simply place a listing on your online store, add photos and a description. When someone buys from you, you order from the supplier and they send it to your customer on your behalf.
Dropshipping is a popular business model for new eCommerce entrepreneurs because it’s relatively low risk and easy to set up. There are also no upfront costs or minimum orders, so it’s easy to get started.
Dropshipping can be a great way to test out new products and niches without incurring huge costs. However, it’s important to remember that dropshipping is not a get-rich-quick scheme.
Successful dropshippers have to work hard to build a brand and stand out from the competition. But for those who are willing to put in the time and effort, dropshipping can be a very lucrative business.
What is Dropshipping on eBay?
eBay dropshipping is a type of e-commerce business in which products are sold directly to consumers on behalf of a supplier on their eBay store.
This type of business model is often used by businesses that don't have the time or resources to manage their own inventory. In most cases, eBay dropshippers will use a third-party fulfillment center to store and ship products to their customers.
This can be an especially helpful way to run a business if you're just getting started and don't have the space or manpower to handle inventory yourself. Perhaps the most appealing aspect of eBay dropshipping is that it's relatively low risk.
Since you're not holding any inventory, you don't have to worry about being stuck with products that don't sell. Of course, this also means that there's less potential for profit, but if you can find a niche market and build a loyal customer base, dropshipping can be a very successful business model.
Is Dropshipping Allowed on eBay?
Dropshipping is allowed on eBay, but there are a few requirements that must be met in order to use this business model on the site.
Sellers must have a valid Dropshipping Agreement with their supplier.
This agreement outlines the terms of the relationship between the two businesses and ensures that both parties are aware of their responsibilities.
Sellers must clearly indicate on their listings that they are using a dropshipping fulfillment method.
This ensures that buyers are aware that their orders will be fulfilled by a third-party supplier, and not by the seller themselves.
Finally, all listing photos must be provided by the supplier; sellers are not allowed to use generic stock photos or images that they have downloaded from the internet.
eBay has strict guidelines around dropshipping, but as long as sellers meet all of the requirements, they are free to use this business model on the site.
How Does eBay Dropshipping Work?
Here are the steps on how to do eBay drop shipping:
1. Set up an eBay Seller Account.
The first thing you'll need is an eBay Seller account. First, go to the eBay homepage and click on the "Sell" link. This will take you to the registration page where you will be prompted to create an account.
You will need to provide your name, address, and phone number, as well as create a username and password. Once your account has been created, you will be taken to your Seller Dashboard for your eBay store.
As there are different eBay sites for various countries, be sure to sign up on the site that corresponds with the country that you wish to target.
2. Do Product Research and Find a Dropshipping Supplier
Once you find products that you’d like to dropship, the next step is to create an account as a retailer. You’ll do this with the suppliers of the products you have chosen. Finally, you will have to contact them and see if they allow dropshipping to your customers.
Keep in mind that in order to protect your brand, you need to make sure that the supplier is willing to include a label with your business name and address on it. This will let the customers know that it was sent by you.
3. Start Listing Your Items
It's important to take the time to upload high-quality images of your products. Poor-quality images will deter potential buyers from considering your items, so make sure to take clear, well-lit pictures from different angles.
In addition, it's important to write detailed and accurate product descriptions. Be sure to include all relevant information, such as dimensions, condition, shipping details, and so on. By taking the time to create strong listings for your online store, you'll be more likely to attract serious buyers and make successful sales.
When you mark up your price for retail, make sure it's high enough to make a good profit but low enough to remain competitive. It's important to remember that the goal is to make as much money as possible on each sale, not to simply sell as many items as possible.
4. Forward Your Customer's Details to the Supplier
When you make a sale, the next task is to forward your customer's information to them.
Bear in mind that even though your supplier is responsible to package and ship your item, it is your responsibility to make sure the item is sent within the required time frame that eBay requires. This will be stated clearly in your listing.
As an option, if you’re having a hard time finding a supplier that will agree to dropship for you, you could buy items in bulk and then send them to a fulfillment center. A fulfillment center can pack and ship your items for you including the monitoring of your inventory.
That's it! Sounds simple enough doesn't it?
eBay's Dropshipping Policies and Requirements
eBay has had some issues with dropshippers in the past. Some bad players in the market have ruined it for the ones that were legitimate. In this case, eBay has put in place some policies and procedures to keep drop shippers on eBay in check.
Let’s break down the key points from eBay's policies and procedures related to dropshipping.
eBay Dropshipping Policy: Dropshippers Who Buy From Wholesalers
First off, you are only allowed to dropship from wholesalers and suppliers on the eBay Network. This rule was put in place thanks to scams that were occurring on eBay.
People were putting listings on eBay for the purposes of dropshipping but were using other retailers or marketplaces. If you don’t want to get kicked off eBay make sure you only deal with wholesalers and retailers on the eBay platform.
You can read more about Ebay's Drop Shipping Policy here.
eBay Dropshipping Policy: Guaranteed Delivery TIme
As an eBay seller, it is important to abide by eBay's policy on guaranteed delivery time. This policy protects buyers from unfulfilled promises and ensures that they receive their items in a timely manner.
By adhering to this policy, eBay sellers can build trust with buyers and establish themselves as reliable sellers. Furthermore, failure to meet the guaranteed delivery time may result in negative feedback, which can damage a seller's reputation.
Following eBay's policy on guaranteed delivery time is beneficial for both buyers and sellers. It creates a positive buying experience and helps to build trust between buyer and seller.
When you are dealing with a wholesale supplier, it's important to make sure that they are aware of this policy and that they can meet the delivery time. Be sure to communicate with your supplier and confirm that they can ship the item within the required time frame.
eBay Dropshipping Policy: Guaranteeing Safe Delivery
If things go wrong with the delivery of your products to your customer, you are responsible for this.
Online sellers on eBay are responsible for these two components:
You must ensure the safe delivery of the item within the given timeframe. This means that your item must not only be delivered within the timeframe specified but it must also arrive in one piece and is not broken.
Since you are dropshipping and not touching the item yourself, this can be a challenge because you are putting all your trust in the supplier.
The other component is the overall satisfaction of your customer. Customers will evaluate the products with eBay’s feedback and rating system see want to make sure they get a good score.
To do this you must ensure that the product matches exactly what was shown in the photographs that you have provided in the ad. Your product must also meet your customers’ expectations.
One lead to ensure this is to pour the product yourself. You could then take all your photos, test the product and evaluate yourself. Obviously, this is going to cost you more money, but as the item is a low-cost item this could benefit you greatly. You’d also be able to test out how responsive the shipper is, if the packaging is adequate and if it arrived on time and in one piece.
eBay Dropshipping Policy: When things go Wrong
If you deviate from these requirements which likely will be no fault of their own but the shippers, the following can happen.
A Low seller rating. This is going to make it harder to get new customers.
Buying restrictions. You may not be able to buy certain products anymore
Loss of buyer protections. You will lose support from eBay if a customer dispute is generated against you.
Account suspension. This one is pretty black and white. If you’re suspended, you simply can’t do anything.
It’s important that you go through the eBay drop shipping policy so a fully understand what the DOS and don’ts are. As you can see your business really depends on the efficiency, accountability, and dependability of your wholesaler or retailer shipping out your product.
How Much Does it Cost to Dropship on eBay?
Having a dropshipping business on eBay is actually pretty cheap. It’s less expensive than selling on Amazon in regards to fees.
You can actually start dropshipping on eBay for practically nothing because your first 200 listings are free.
To understand eBay's fees in detail check out their eBay fee calculator.
If you want to get more information and details about fees on eBay see eBay’s selling fees policy.
Typically, there are two basic fees that you’ll pay to eBay.
Insertion fee. This is the fee for getting your listing up on eBay.
Final value fee. This fee is based on the percentage of the total sale and shipping costs of your item.
Pros of Dropshipping on eBay
Now that you have a good understanding of what an eBay dropshipping business is, let’s go over the pros and advantages.
Low Startup costs
You will need to buy a lot of stock in advance like with other methods
Easy to Get started
Because you don’t need inventory, it’s easy to get started. You only need to set up your seller account and find a supplier
eBay is a massive marketplace so getting eyeballs on your product should be relatively easy.
Low Cost of Marketing
Marketing costs for eBay dropshipping can be lower than with a traditional dropshipping store.
Since you are not spending a lot of money in advance, it’s very easy to switch from one product that is not selling to a different one without losing too much of your money.
You can do this anywhere. A lot of people that have full-time jobs do this on the side. All you really need is a laptop and a few hours of your time.
You are not limited to one product and can start to scale with other products. Just be careful if you’re switching suppliers as you need to maintain your high level of customer satisfaction
Cons of Dropshipping on eBay
Now let's look at the cons or disadvantages of eBay dropshipping
Competition on Ebay is incredibly fierce. There are lots of Sellers especially ones from China that have very low prices and cheap shipping. This is why doing research is essential as you’ll need to get in early if you want to be successful with this business model
Not Easy to Find a Dropship Supplier
Not many suppliers are willing to do dropshipping with you. It’s also going to be difficult to establish relationships with them as many are not aware of the drop-shipping model. Some might only want to sell in bulk, and you might not be able to buy individual products to sell online.
If you break eBay's rules, you could get banned from the platform.
You are Responsible if Things go Wrong
Since you are placing 100% confidence in your supplier/shipper, if something were to go wrong it’s all on you. eBay won’t go after the supplier but will hold you responsible. This is why it’s essential to have a good relationship with your supplier so they can make any corrections if something were to go wrong and are willing to do so
You Don't Own eBay Customers
When you dropship on eBay you don’t own your customers. Every time you make a sale all you’re doing is building eBay's brand.
Customers will not be aware of your brand aside from some tiny eight invoices for a leaflet that your supplier may leave on your behalf which gets discarded pretty quick and forgotten.
Because there’s so much competition on eBay, you’re going to constantly have to adjust your prices. On top of that, you’ll have to pay fees to eBay which takes away even more of their profit.
To make good money on eBay means you need to sell a lot of products. So the focus here will be on volume more than margin.
You can’t take a vacation without checking up on your eBay business daily. You’ll have to constantly monitor your products, prices, and inventory.
Is Dropshipping on eBay Worth it?
Dropshipping on eBay can be worth it if you’re able to sell a lot of products on your online store.
You won’t make much money if your sales volumes are low. This is because of high competition and fees.
The other key aspect to success on eBay is to ensure that you have reputable suppliers. A bad supplier can damage your reputation and Alt and we get your seller account banned.
Dropshipping on eBay has a relatively low start-up cost which makes it very attractive for new entrepreneurs that don’t have much capital. The rest is quite low so in that sense, it can be worth it to give it a try. Just be aware that you’ll need to do a lot of product research first to ensure that whenever products you focus on have a chance to do well.
Tips for Success with eBay Dropshipping
Now that you’re aware of the pros and cons you’ll be better prepared to dropship on eBay than most people. If you’re unsure about whether to dropship on eBay, your own Shopify store, or dropshipping on Amazon, the good thing is that you can first test a product on eBay. If the product does well, you could move this to your own Shopify store where you won’t be subject to the danger of violating eBay's policies.
You could also take a course that teaches eBay dropshipping. One well-known course is Dropshipping Titans. This focuses entirely on selling on eBay.
You can try out software like Inventory Source. This includes integrated supplier networks where you can do dropshipping from a range of platforms including eBay.
Is There an Alternative to Drop Shipping via eBay?
Yes. The most common type of dropshipping is done on a platform like Shopify. This is likely the one that you know about already if I won’t go into too many details of how this is done.
What’s good about Shopify, is that you can build a brand and you will own your customer. This means you can do email marketing, retargeting campaigns, and build a good social media following. With eBay, you can’t do any of this. In the end, building a brand with your own store is much more sustainable and long-term.
To get trained on dropshipping with Shopify, there are many dropshipping courses to choose from.
Conclusion and Final Thoughts
So there you have it. You now know how to set up a dropshipping business on eBay and are aware of the policies and pros and cons.
Just remember that with any online business there is always risk involved. Fortunately dropshipping on eBay doesn’t carry much financial risk in the beginning so even those with little money can get started.
Set yourself a budget that you will be willing to lose. This way, if things do fail you won’t be putting yourself in a bad situation. Aside from that, there is no reward without risk.
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