Ecommerce

Is Dropshipping on eBay Worth It in 2021?

When thinking of a successful online store, dropshipping is the first thing that comes to our mind. But the nifty question is “Where can I start dropshipping?”

Many people are trying to find their fortune and thanks to 179 million active buyers, it’s no wonder many sellers turn to eBay as their marketplace of choice. In this article, we are going to the pros and cons of dropshipping on eBay and tips and tricks of doing it.

What is eBay?

eBay is an e-commerce platform where you can offer your items online and like many other platforms such as Amazon, AliExpress, and Shopify, the number of users has been increasing quickly.

On eBay, you can purchase or sell your products, from sports shoes to expensive jewelry. In the modern world, many merchants are transferring from traditional stores to e-Commerce shops.

Dropshipping on eBay is not all you think

Let us take a step back to when it was 2013. A lot of so-called “drop shippers” start an unfair and demoniac process;

  1. Fiirst, they find their retail sites like Amazon
  2. They advertised these products on their eBay store, just at a higher price.
  3. when the customer comes and purchase it, they order the product and deliver it from Amazon to the customer with different price.

Because of these tricky actions, eBay decided to limit the number of drop shippers working on the platform and also fire any person who wants to not obey the program. For that reason, dropshipping from Amazon to eBay is not permitted and You cannot advertise a product on eBay, bought it from Amazon, and then dispatch it to your eBay consumer.

What to do to get permission for dropshipping?

If you are trying to be a real drop shipper, you have to follow eBay’s policies to avoid any cheating;

  • Buying from wholesalers

The most important key point is that you can only dropship from wholesalers. This has come directly in eBay’s dropshipping policy;

“listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer are not allowed on eBay.”

So, if you are thinking about getting started as a drop shipper on eBay, remember that you have to be a member of a supplier or wholesaler.

  • guaranteeing delivery time

The next point is that you should be able to guarantee delivery within 30 days. This is the golden standard frame time and customers are ok with waiting until this time. Late delivery will mean not only angry customers, but it could mean a fine from eBay too, or the loss of your Top Rated seller status.

  • Responsibility for delivery

According to eBay, you must be responsible when the process goes wrong, either with the delivery or the product. Here is what policy says:

“If you use drop shipping, you’re still responsible for the safe delivery of the item within the timeframe stated in your listing for the buyer’s overall satisfaction with their purchase.”

The term “Safe delivery of the item within the timeframe stated” means that you have to ensure all the products are delivered to the customer safely and at the given time. This somehow struggling because you are not the person who is going to deliver.

Another which is important to mention is “The buyer’s overall satisfaction with their purchase.” What do we have to do according to this statement? Here, you have to Make sure that the descriptions and images on your product listing are true and accurate. The best way is to order a sample from your supplier and do the product description and photos yourself.

How do avoid abandoning eBay?

Although some issues are not necessary to happen or not in traditional drop shipping, it converts your business from a successful one to a complete failure. To keep your ranking on eBay and encountering its limitations, keep these tips in your mind;

  • Be always punctual

This is very important because online buyers and also eBay generally expect better service than other direct marketing buyers. If shipments are delayed for whatever reason, negative feedback and reversals in payment charges may seriously damage your prospects for success.

  • Monitor your stock issues

You have to monitor all stock problems in the marketing on eBay carefully. Sales of eBay are contracts and “backorder” or “cancelation” cannot be allowed due to non-disposable situations.

If you won’t deliver the item promptly to the buyer who orders it, you will get a “non-performance violation”, a process that can be started by purchasers only ten days after an auction is complete and they haven’t received their order yet. You need just a few of these to have your account suspended by eBay.

  • Be aware of product quality

In an online drop shipping environment, purchasers expect to receive a product that is the same as what they have seen in the photo and what they have read in the description.

As result, you must select a wholesaler and a product catalog that will not change stock or suppliers without telling yourself. If you can’t satisfy this requirement, sell only with fixed-price listings (i.e. Buy It Now), or try to find another supplier as soon as you can. On the other hand, you will be shut down by eBay.

What happens if you deny obeying?

Imagine you don’t meet these requirements for dropshipping on eBay. As a result, you will be hit with one of these punishments;

  1. Lower selling rating
  2. Restrictions on buying
  3. Loss of buyer protections
  4. Account suspension

To avoid this happening, you have to understand all eBay’s policies before you get started

How much does it cost to dropship on eBay?

The next question is “who much budget do we need to start the business on eBay?” because you get up to 200 listings for free, it is possible to get started dropshipping on eBay for virtually nothing. But for more complex businesses, we will consider all the possible fees on eBay;

  • Insertion fee

As a principle, you are free of paying an insertion fee until your list of items exceeds 200 (or 250 if you are using eBay’s manager payment service). Once you have used up your free listings, you then pay $0.35 per listing. This fee is too high, so you have to remember two tips;

First of all, this fee is for creating items and it doesn’t matter if you are successful in selling or not. You won’t get the fee back.

Second, if you have the same item in two or more categories, you have to pay an insertion fee for each category you are inserting the item. So, avoid duplication as much as you can.

  • Final value fee

The amount of final value fee which you have to pay depends on the type of product you are selling. For most of the items, the amount of final value fee is 10%. This means that eBay will take a 10% cut of the total value of the product you sell, including shipping. For example, if you dropship a collection of cups for 100$, and an additional 20$ for the shipping fee, you have to pay 12$ to eBay, respectively.

There is a limitation of 750$ for the final value fee, and to reach this amount, the sum of the product price and shipping fee should exceed 7500$. As a result, most products are covered by this method.

An exception: eBay is trying to encourage merchants to sell sneakers and athletic shoes so this category has better conditions for drop shippers. Based on that, if you are selling sneakers equal to or more expensive than 100$, no insertion fee is needed to pay and the amount of final value fee is 0%.

  • Payment fees of eBay

The next thing is to think about the payment process. As eBay’s managed payments scheme launched in 2018, the final value fee increases to 12.55% for most product categories. This covers the cost of Amazon handling your payments.

  • Fees for upgrading your listing

As a new seller, it is hard to keep your products in front of shoppers. For a better view of your listing, you can have them in bold on the page so it stands out. You can also implement “Gallery Plus”, which lets users see a larger image during their search. There are two main services you can choose for your payment;

  • Auction-style selling

Adding bold: 2$ for items less than 150$ and 3$ for items more than 150$.

Gallery Plus: 0.35$ for items less than 150$ and 0.70$ for items more than 150$.

  • Fixed prices selling:

Adding bold: 4$ for items less than 150$ and 6$ for items more than 150$

Gallery Plus: 1$ for items less than 150$ and 2$ for items more than 150$.

The advantages of dropshipping on eBay

  • Low risk for businesses

Because you are dropshipping, you will not be going to engage in buying products, so you will not lose anything if nobody wants to order your items, Furthermore, the costs to start up a business on eBay is low for a nice store.

  • Low investment required to start
  • The biggest benefit of eBay is no initial investment is required. When you are inserting your listings on eBay, you will not be going to pay anything. Nonetheless, you will only be paying eBay a fee when you sell something.

  • Simplicity

The only thing you should do on eBay is to create a personal account and arrange your list of items accurately. After that, you have to upgrade your goods periodically and it seems not much work to do. In comparison to Amazon or Shopify, eBay wins in terms of simplicity.

  • More than 100 million people are purchasing on eBay

There is no doubt that eBay has millions of visitors worldwide and they are spending billions of dollars. So why not trying to capture even a tiny share of this market?

The downsides of eBay dropshipping

  • High competition

Because of low barriers on eBay, there is a lot of competition. There are an estimated 1.4 billion items on the platform and many sellers are selling the same items as yours. So the best tip is to keep your prices as low as possible and next thing, you should never involve in dirty tricks which some merchants may use them.

  • No direct connection between seller and customer

It is very difficult to build brand loyalty on eBay, which is the most important element in trading. To be honest, according to research on eBay and Amazon, eBay is less trusted by shoppers.

  • Up to 10% of any sale will go to eBay

After eBay’s fees and the percentage taken by your dropshipping supplier, there is not going to be much left for you. This can be more on your nerves when you are also trying to keep the prices low at the same time.

Tips to have a better drop shipping experience

After weighing up the benefits and drawbacks, it is time to test your knowledge on the ground. Here are a few to try out;

  • Take a course

As with many other businesses, the more you learn the better you will get. you also might avoid some costly mistakes early on. If you search on the internet or social media, there are some useful lessons to gain experience.

  • Find your desired software

For getting a nice outcome, efficient software is needed. You can try Inventory Source. It has an integrated supplier network, and you can dropship your products from suppliers on eBay and even more.

  • Upgrade your communication level with customers

Nothing is more powerful than having a large network of merchant-customer connections. You should know interacting with users will increase your reputation and people can trust you easier.

  • Be ready for returns

In all stores, there are always some products which cannot satisfy the customer. In this position, your performance needs to be responsible to buyer’s demands and kindly accept the return.

Conclusion

Although dropshipping on eBay is not as easy as on Shopify, it could be highly profitable if you know how to use the mechanisms. If you want to achieve more info, try to contact experts who have been on eBay for years and ask for a consultation.

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