Thanks for subscribing!
Keep your eyes peeled on your inbox for our next newsletter 😊

eBay Dropshipping: A Beginners guide to starting a dropshipping business on eBay

Nahar Geva

15 Dec 2021

If you have thought about starting an eBay dropshipipng business, but have not quite had the resolve to get started (due to a lack of knowledge, or understanding) - this guide is for you. In this guide, I will share with you all the tips, strategies and pitfalls that I have personally experienced as I took my own eBay dropshipping store from $0 to $5,000 in profit in 8 months.

 

Don't want to read the article? WATCH The Video Below

 

 

Article Overview

What is dropshipping

Which suppliers can be used for dropshipping

eBays Dropshipping Policies

What do you need to start?

How to dropship on eBay

Step 1: Open your eBay Account

Step 2: Open up a PayPal or Payoneer Account

Step 3: eBay Product Research

Step 4: Listing your product on eBay

Step 5: Fulfilling your dropshipping order

 

What is dropshipping

 

what is dropshipping

 

Dropshipping is an order fulfilment method where a store doesn’t keep the products it sells in stock. The process can vary, but below is a general birds eye view of how this process works.
 

  1. First, your customer places an order from your eBay store.
  2. Next, you send the item to the customer from your dropshipping supplier.
  3. Your supplier then ships the item directly to your customer, without you EVER having to handle the product

 

We will touch on the finer details of each of these steps in this article, but basically that is the entire process. You are literally able to start a (basically) no money down business, where you are selling products to customers without ever having to stock, handle, pack or ship the products yourself!

 

What are the recommended suppliers for dropshipping on eBay

 

Truthfully, there are SEVERAL eBay dropshipping suppliers that you can use to make this method a success. Each supplier comes with their own pros and cons, and it will come down to your own trail and error as to which supplier(s) you decide to move forward with in your business.

It is important to note, that not all of these suppliers comply with the eBay dropshipping policies, however there is ALWAYS a way to make any of these suppliers work - you just need to understand how to communicate with your eBay customers and suppliers to avoid raising any red flags with eBay.

While that might sound a bit daunting, being able to do this successfully will be the difference between a successful dropshipping business and is a floundering one. Being able to find gaps in the market where others don't is the reason that I am able to make a healthy living as an eBay dropshipper and run a successful eBay business.

To give you some of the common suppliers that we have worked with ourselves, they would be:
 

Walmart

 

Walmart to eBay

Walmart is a great, local dropship supplier to use if you are dropshipping in the US. Walmart offers quality, affordable products and can ship items out to your customers quickly. You can also do things to increase your profit margins by taking advantage of their free shipping options when you join Walmart Plus.

We like Walmart as a supplier as we can have a bit more confidence in shipping times. This is something that eBay looks at quite closely , so it is important to have a supplier that offers reliable shipping whichever supplier you go with.
 

Home Depot

 

 

Home Depot to eBay

 

 

Similar to Walmart, Home Depot allows you to have more confidence in your shipping time and quality and is an overal reliable supplier. Also similar to Walmart, your margins are not going to be as high as using some of the other suppliers who have a longer shipping time such as AliExpress.

 

AliExpress

 

AliExpress to eBay

 

AliExpress can be used as a dropshipping supplier world wide. They allow you to dropship to countries like the UK and Australia, and come with a much higher profit margin.

 

The issue with using AliExpress as your supplier is that the shipping times can be quite long, meaning that you will need to manage your customers expectations by setting accurate shipping policies.

 

The tradeoff of higher margins to slower shipping times is something that you need to consider when using AliExpress as a dropshipping supplier. The important thing to note is that you can definitely make this option work, so long as you keep your policies tight and communicate with your customers regularly to ensure that they are aware of the progress of their order.

 

Harbor Freight

 

Harbor Freight to eBay

 

They are based in the US, and are not commonly used as a supplier. this means that there is a much lower competition than some of the other, more known suppliers.

 

Zooplus

 

ZooPlus to eBay

 

This supplier is commonly used for eBay dropshippers in the UK. Zooplus is an online pet product supplier that ships all over the UK. If you are a UK dropshipper, they are a fantastic choice as they will allow you to have healthy margins with reasonable shipping times.

 

Wholesale Suppliers

 

Other than all of the above, you can look for a wholesale supplier which will also give you a bit more of an edge on the market. The important thing here is that they are harder to find and take a bit more research, but once you are able to find a wholesale supplier that you are comfortable working with - you will be able pull in healthy profits with your dropshipping store.

 

eBay Policies on Dropshipping

 

eBay has a fairly firm stance on dropshipping. While a lot of people believe that dropshipping on eBay isn't allowed, that isn't exactly the case. Instead, eBay allows dropshipping in a specific set of circumstances. According to eBay, dropshipping is allowed if you "fulfil orders directly from a wholesale supplier". You as the seller are directly responsible for the timely delivery of the item from your supplier, and are responsible for handling and processing returns.

 

Sure, if you are running an eBay dropshipping business, you may flirt with these policies a little - and ship from retailers rather than wholesalers like we do. The ability to navigate these policies effectively is why dropshipping can be extremely profitable!

 

How do I get started

 

All you really need to get started is a computer with internet access. The costs associated to get started are extremely low compared to a traditional business. You essentially only need:

 

  • $0 for stock (as you are dropshipping)
  • $0 for advertising (Because eBay has their own buyer pool)
  • $30 per month for software (Zik has a 7 day trail, check it out here!)
  • $100 for cashflow to cover incidentals

 

So you are basically able to get this business started with as little as $130, making the barrier to entry extremely low.

 

How to dropship on eBay

 

Now we will take you through all the steps to start your eBay dropshipping business.

 

Step 1: Open your eBay Account

 

Your first step is to open your eBay account.

 

To do this, we will go ahead and click register on the top right hand corner of eBay. We will fill in all of our contact details such as our first name, last name and our password details.

 

Creating an eBay account

 

Make sure that all the information that you provide is accurate, so that you won't have any issues getting paid.

 

When you open up a new eBay store, you are limited to 10 items. Because of this, you will need to be picky about what kind of products you list on your store to get started. Your initial goal when you get started is to do everything you can to increase your seller limit. Doing this correctly will mean that you will be able to start scaling your store sooner rather than later.

 

Step 2: Open up a PayPal or Payoneer Account

 

Next, we connect our payment method. You can either chose to connect to PayPal or Payoneer.

Connecting to eBay Managed Payments

When you are inside of your eBay dashboard, go ahead and click on "get started"

 

Getting started

 

You will be asked to register for Managed Payments, and will need to follow the following steps.

i. Connect a Payoneer Account

 

Here, you will need to sign up for Payoneer, or link your existing Payoneer account. You can either set up an individual or a company account.

 

ii. Sync eBay and Payoneer Profiles

 

eBay will ask you to sign in to Payoneer so that you can link your accounts. Go ahead and sign in, and the process will automatically sync both accounts.

 

Sign In

 

Here, you will need to link both profiles together.

 

iii. Add a credit card or debit card for seller charges and costs

 

This is needed incase you have insufficient funds in your account, so that you can settle bills with eBay to cover things like eBay fees or customer refunds.

 

iv. Submit your request

 

Now that you have completed the steps above, you will need to submit the request so that Payoneer can verify your request. eBay will get in touch with you once you have been approved. NOTE: It can take some time for this process to be approved, so we generally like to advise to get this process started sooner rather than later so that this is processing in the background while you are continuing with the rest of the steps.

 

Submit your request

 

The benefits of eBay Managed Payments

 

We love this payment method as it gives our buyers more options to purchase from our store. Managed payments give buyers the option to pay with Apple Pay, Google Pay and even Crypto Currency! Signing up for this option means that you will be able to cast a wider net over your buyer pool, making more sales!

 

Payouts are initiated within 2 business days, and the fee structure is much more simple than PayPal. We have found on our own stores that the fees reduce to around 12.7% which is significantly better than Paypal!

 

 

Step 3: eBay Product Research

 

Being able to conduct eBay product research and mine for profitable products consistently is the hallmark of a successful eBay seller. Being able to find and list hot products at will is literally what makes eBay dropshipping profitable!

 

We are going to show you exactly how we are able to do this using ZIK Analytics.

 

 

Finding competitors stores to reverse engineer

 

Now keep in mind, when you start dropshipping on eBay, you can use a variety of suppliers to source your products. We touched on the common ones that we love to use at the start of this article. In our example we are going to show you how we do product research using a company called Harbor Freight. While this example is specific to Harbor Freight, the principles we show you here can be applied to any other supplier.

To get started we simply, go to the "product research" tab.

 

Product Research

 

Next, we set our settings to our specific criteria. This will depend on the marketplace that you are selling on, as well as your shipping policies (which will dictate how long the buyer is expecting to receive the item).

 

In our example, we have our settings as:

 

  • Shipping location: United States
  • Listing Type: All
  • Condition: Brand New
  • eBay Site: eBay.com
  • Date range: 30 days (So we can see broad data)

 

Next, we visit our supplier store (in our case, Harbor Freight), and we search for various brand names stocked by our supplier inside of ZIK.

HOT TIP: When looking at your suppliers website, try to find the "top picks" or the "hot sellers" as we know that those products should also have demand when you list them on eBay.

 

Harbor Freight Website

 

In our example, we see the "Pittsburgh" tool brand as a hot seller on Harbor Freight. We therefore copy the brand name, and enter it into the product research search bar in ZIK Analytics, with the word "tools" at the end. This is because we are specifically drop shipping tools, so this will disambiguate our results from any products that we aren't specifically looking to sell.

 

Pitsbrugh tools

 

The next step is to scroll to the bottom of the screen, and hit the filter to look at "dropshippers only"

 

Dropshippers only

 

Now, ZIK will show you all the dropshippers who are using your supplier.

 

The logic behind this method is that we will be able to use the supplier brand search inside of ZIK Analytics to find other dropshippers who are successfully dropshipping from this same supplier. By doing this, we can reverse engineer their stores to find other successful products that we can list to our own stores.

 

Selecting competitors to analyze

 

We generally like to look at suppliers with lower feedback rates, because it means that we can compete with them.

 

When we look through the list, we found a seller with 40 feedback and another with 355 feedback, who are making sales, so we want to find out more about them. To do that, we go ahead and hit the "scan seller" button in ZIK to find out the various products that they have listed to their store.

 

Scan sellers

 

 

We know that this seller has 128 active listings with 243 sold items and $13,617 sales earnings. We can see that this seller has some fantastic statistics. We therefore look at their products and look through for the products that they have listed that have good statistics.

 

We generally like to look for products that have the following statistics

 

  • No less than 5 sales in last 30 days
  • No more than 5 competitors (beginners)
  • No more than 15 competitors (advanced)

 

Looking through this competitors products, we can see a few products that meet this criteria. A great tip for when you come across competitors like this, is to try and be random about the products that you select to add to your store (assuming that they meet your criteria). This is because if other sellers are doing the same method as you, you might end up listing the same product.

 

From our list, we found this hose pipe that has great stats that meets our criteria.

 

Dropshipping product

 

Sourcing your product from your supplier

 

Now that you found a product that you want to list, you need to source the product from your supplier. If ZIK doesn't have your supplier listed natively in the application (such as the case with Harbor Freight), we simply find the product by clicking on the "search by image" button.

 

Search product by image

 

Doing this allows us to find the exact product that we are looking to list on eBay from our supplier Harbor Freight, for a much cheaper price.

 

eBay Arbitrage

 

How to calculate profit?

 

Being able to accurately calculate your profit is extremely important if you are to become a successful eBay seller. We use the following formula to do this:

 

Dropshipping Profit = Sale Price*Fee Modifier - Purchase Price - Shipping Price - Processing Fee

 

Where:

 

Sale Price = $54.84 (From what other sellers are listing for)

Fee Modifier = 0.86 (This is a constant that we use which deducts 14% from our selling price to account for eBay and Payment Processor fees)

Purchase Price = $34.99 per the listing on Harbor Freight

Shipping Cost = $$6.99 (Free shipping when you use Walmart Plus)

Processing Fee = $0.30 (Fixed fee for any transaction)

 

That's a massive $4.88 in profit when dropshipping on eBay, assuming you are selling your product for $54.84!

 

That may not seem like a significant amount, but if you are doing this consistently with a large amount of products, I am sure that you can see how this dropshipping business can scale.

 

Step 4: Listing your product on eBay

 

Next, we will be listing your product on eBay.

 

To do this, we go into our seller hub, and click on "create listing"

 

Create a listing

 

Here, we simply copy and paste the title of our competitors product into the "tell us what you are selling" section. Doing this will allow eBay to pull up the details for that exact product, including the item specifics, and other important item details so that you have a base to work off of when you list your item.

 

Simply click on "use this product" and you will be taken to a new screen where you get to flesh out your listing. Here are the important things to fill out.

 

Title

 

It is extremely important to fill out your title so that it is keyword rich so that it appears more readily in the eBay search engine. It is important to build out titles using keywords that are commonly searched because it will give you more visibility.

 

You can copy some of the keywords from your competitors title, but make it your own by utilizing the ZIK Title builder tool here.

 

Condition

 

Select Brand New

 

Images

 

We want to make sure that our images put our best foot forward. We generally like to use the images from our supplier as they have tried and tested these images so they know that they are proven to help the product sell.

HOT TIP: Try and make your main image stand out by editing it a little. You can do things like add a border around it, or add a little bit of text or something similar. This will make you stand out from the other sellers who simply reuse the supplier images.

 

NOTE: Most suppliers wont have an issue with you selling on their products as you are making sales for them, but it is always best to confirm that you are allowed to copy their images to list onto eBay

 

Item Specifics

 

This section is extremely important, as eBay uses these item specifics and marks them up as structured data, meaning that doing this right will allow your item to show up in the Google search engine as well!

 

It is extremely important to fill out all sections of the item specifics, as online buyers will review this section to help them make up their mind about the purchase. Reducing the barriers to purchase will be the difference between making the sale or not.

 

Description

 

For the description, you can copy and paste this from your competitor, but make it your own. A hot tip is to use some of the keywords that you find using the ZIK Title builder in your description, so that eBay has even more data points relating your listing to those keywords.

 

We also love using images in our description, as it gives the buyer a better understanding about what the product is that we are selling, again reducing any barriers to purchase.

 

 

Pricing your product

 

We know that our competitor is listing this product for $54.84. To break into this market and gain some traction, we will slightly under price them. We only make a slight adjustment to their price as we don't want to start a war, pricing ourselves to the bottom!

 

For our case, we adjust our price to $54.55

 

Dropshipping product pricing

 

Fill out your shipping policy

 

You will need to fill out your shipping policies to match the shipping time of your supplier. In our case, Habor Freight is quite specific about their shipping times, so we set our shipping to match the 5-7 day delivery time period for this product per the suppliers website.

 

Fill out your return policy

 

This is more of a personal decision, but to get the best exposure in eBays search, we generally try and have a longer return period if possible. The best way to mitigate risk here, is to look at what your suppliers return policy is and match that.

 

If you are open to a bit more risk, you can set your return period a bit longer than your suppliers return period which opens you up to customers returning the product after the return date, but gives you a competitive advantage over other eBay sellers and drop shippers who only match the suppliers return period.

 

Step 5: Fulfilling your dropshipping order

 

Congratulations, Your order has sold!

 

You are now amongst a select group of online sellers who have actually made money on eBay, so well done on taking action!

 

Your next step is to ship your item to your buyer. To do this, you simply get your customers details from the "order received" section, and copy the customers details.

 

You will also need to send your buyer a message, thanking them for their order and let them know that you are working on getting it out to them as soon as possible.

 

To full the order, you will go through the cart and process the order just like you would any other purchase, but instead of putting in your address - you put in your buyers address.

 

Once you have done all of this, make sure to use your contact details, including your phone number and email so that confirmation updates from your supplier go to you, not your buyer.

 

Ordering and fulfilling dropshipping product

 

Simply check out and pay for the item, so that the supplier ships the product directly to the buyer.

NOTE: Some suppliers have the ability to request a "blind invoice" so that no details are sent to the customer. If your supplier does offer this, always ask them to apply it to your order.

 

Once you have placed the order, send the buyer another message to let them know that you have processed their order, and will update them with the tracking details shortly.

 

Once your supplier provides you with the tracking details, you can simply add that tracking detail directly to eBay so that the buyer will be updated and will be able to track their order inside of eBay.

 

tracking ebay products

 

To add the cherry on the top, we also like to message our buyer one more time, letting them know that the item has been shipped, and give them the tracking details as well as the carrier information so that they have another communication from us, letting them know that we have been vigilant with their order.

 

NOTE: These messages might sound like overkill, but eBay rates your eBay seller account based on various factors, with one of them being how responsive you are with your customers. We do this to keep our buyers on side, and to feed eBay with as much information about us being an active, responsible eBay seller as possible so that they can reward us with more sales.

 

Final Thoughts

 

So, we've taken you from a complete beginner, to having your first sale drop shipping on eBay. Thank you for coming along on the journey with us as we set up and validated our online store.

 

This business model is one of the best in terms of the low startup costs, and low barrier to entry, and as you have seen from our example - it is extremely scalable. With that said, it does take a lot of work to understand how to navigate the ever changing landscape of eBay - especially their view on drop shippers. If you plan on taking this online business seriously, it will go a long way to surround yourself with like minded individuals. That is why, all of our members get access to our private VIP group, which has a host of coaches and other tools that will help you along the way on your journey.

 

The great news is, we are currently offering a 7 day trail, which you can take advantage of below!