eBay dropshipping: a complete guide

For eBay sellers, dropshipping might well seem like a tempting option – it lets you offer a huge range of products, without having to go through the hassle of actually stocking and distributing them.

But the truth is a little more complex. While dropshipping on eBay is technically allowed, the ecommerce giant has some rules about the practice that mean you can’t just sit back and let others do all the work.

In this guide, you’ll find out more about dropshipping on eBay, so that you can work out whether it’s right for you and your business. You’ll also learn about the Wise Business account, and how it can help your business save money and operate internationally.

What is dropshipping?

Dropshipping has boomed in recent years thanks to the rise of online shopping. Sellers who dropship list products for sale that they haven’t actually bought. Then, when an order comes in, they themselves place an order for the product, and have it shipped directly to the buyer.

In other words, dropshippers are middlemen who never actually see the products they sell – they go straight from the supplier to the buyer. But, in theory at least, they make a profit while doing so.

Why do people dropship?

The main attraction of dropshipping is that it involves less work than traditional selling. You don’t have to bulk-buy the items you sell, you don’t have to store them, and generally speaking you don’t even have to ship them out to buyers. Instead, you can concentrate on aspects of the process like marketing.

However, there are drawbacks, too, as you’ll see later on in this article. And with eBay, you may well find that dropshipping has its own particularities in practice.

Is dropshipping on eBay allowed?

Dropshipping on eBay is allowed, as its own website makes very clear. However, you must take its conditions seriously. Dropshipping is only allowed if you fulfill orders yourself – and directly – from a wholesaler.

That means two main things:

1. You’re responsible for delivery, even though you don’t stock the product yourself
2. You cannot simply order something from another retailer like Amazon or AliExpress, and give them the buyer’s address. Instead, you have to work with wholesalers.

And what happens if you don’t abide by those rules? You might well face penalties from eBay. They could cancel your listings, penalize you in search, impose restrictions, remove your protections, lower your rating, and even suspend your account. You may also lose any money you make on such transactions¹.

Why is eBay strict about dropshipping?

You’d have to ask eBay directly for a full answer, but think about it from the buyer’s perspective - imagine you’ve ordered something from an eBay seller, and a couple days later it turns up in Amazon packaging.

It’ll probably make you feel like you’ve been cheated, as obviously you could have just bought it directly from Amazon yourself. Maybe you even avoided using Amazon deliberately, because you wanted to support an independent seller on eBay.

At its worst, dropshipping is simply a recipe for customer dissatisfaction. However, do it right – abiding by eBay’s rules – and it could work out great.

How to dropship on eBay

If you want to go ahead with it and start dropshipping on eBay, this is the process you’ll need to go through.

1. Set up a seller account. You don’t have to make a full eBay store although it’s a good idea if you’re serious about it all:

• be wise with the name you pick - something catchy might attrack more people
• make sure you have a tax ID ready with you - otherwise apply for one, as eBay might ask you for this
• choose your payment method
• Have a detailed profile about your shop and its shipping and return policies

2. Find the products and dropshipping supplier you want to work with. This is the crux of it – dropshipping relies heavily on the wholesaler, so you need to find good dropshipping suppliers, preferably with quality control. Make sure not only that they have the products you want to sell, but also that they’re willing to do dropshipping with you. Some may say no.

3. Keep in close contact with your supplier, and take responsibility for shipping. Even though you may never see the products yourself, remember eBay’s stipulation: you must be responsible for delivery. Talk to your supplier about this, and make sure everyone knows what their roles are.

4. Get listing on eBay. Once you’ve agreed things with your supplier, put the products up for sale on eBay. This is the point where your marketing nous will come into play – remember, you may well be up against other people trying to do exactly the same thing, with exactly the same products. So make sure your listings are accurate yet also distinctive.

One extra tip – talk to your supplier about putting your own business details on the products it’s sending out. Remember, the buyer has ordered from you, not the wholesaler, and this should be clear when the package arrives.

How not to dropship on eBay

Just for the purposes of clarity, here’s a quick reminder of what you’re not allowed to do on eBay.

• Don’t sit out the shipping process. eBay insists that you’re the one responsible for this – so whether that means working out an agreement with your supplier or organizing fulfilment via another company, make sure you are all over the process from start to finish.

• Don’t just list products on sale elsewhere and then buy them when you make a sale. As already said, a buyer who orders something from eBay and gets a delivery from Amazon, AliExpress, or wherever else, will feel confused, annoyed, and probably ripped off. And they’ll have a point – it’s not very ethical. It’s also clearly forbidden by eBay’s rules, and there are penalties for such cases.

• Don’t misrepresent the product. Of course this is a general rule of selling, but it’s especially important when you’re dropshipping. Your own involvement with the product is quite minimal – so it can be a challenge to get all the information you need from the supplier and relate that information fairly.

Dropshipping on eBay: is it worth it?

There are pros and cons, of course, and ultimately whether dropshipping on eBay is right for you or not will depend on your specifics. So here’s a brief overview of some of the factors to consider.

The positives

• eBay is enormous. If you want to tap into the largest online marketplaces out there, of course you should be looking at eBay. It’s huge. And if you’re not on eBay, you’re not getting seen by eBay’s customers.

• Dropshipping means low overheads. You don’t have to buy in the products you’re selling, which eliminates a heck of a lot of hassle – most of all the savings that come without having to buy stock or hire warehouse space.

• You only have to concentrate on a few parts of the process. If your business is more like a training exercise than a manifestation of your burning desire to sell a particular product, dropshipping has a lot of upsides, as it’s less difficult than doing the whole thing all at once.

• eBay can be cost-effective. The size of that customer base on eBay means that you may not have to shell out millions in marketing costs to ensure your products get attention. So even by dropshipping standards, eBay could prove an especially good option in terms of costs.

The negatives

• Other sellers have noticed eBay is enormous, too. The size of eBay has a disadvantage, and that’s competition. Dropshippers especially face the challenge of standing out among similar sellers – potentially offering exactly the same products as you. That doesn’t just mean you’ll need to write some brilliant copy to make your listing stand out – it also means your margins will probably end up razor-thin.

• Wholesalers aren’t that easy to find. Call up a random wholesaler and say, “Hey, do you wanna do some dropshipping with me?” and they may not be as thrilled as you’d hope. There isn’t much in it from their perspective, unless they’re reasonably confident you’ll have high sales. They might even ask you to buy stock in bulk from them – which, from your perspective, defeats the whole purpose of dropshipping.

• Delivery really is a responsibility. As eBay insists that you remain in charge of fulfilment, you'll have to take it seriously. But because your involvement in the rest of the process is so minimal, that might be pretty hard. If you’re organizing delivery yourself, do you personally have all the information that the delivery company requires? If you’re entrusting the process to your supplier, do you know enough to take charge if and when things go wrong? And how are you ensuring the delivery will be made on time?

• eBay is not your shop. If you’re really serious about online retail, eBay is a great place to start but not the same as having a full online shop. To create an online store with more of your own character in it, and to be able to build your own audience of loyal customers, options that offer more customization might work better.

Are there alternatives to dropshipping on eBay?

Yes, there are. You might want to consider dropshipping on Amazon – or, to make a full online store of your own, a platform like Shopify might be worth a look, from which you can plug into dropshipping platforms like Oberlo (which uses AliExpress).

Or, of course, you can stick with eBay and do something other than dropshipping: either buy stock the traditional way, or – even more traditional! – make it yourself.

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