eBay Dropshipping: Complete Review of Why and How to Dropship on eBay

eBay Dropshipping
Oct 27, 2022

The Ultimate Guide to eBay Dropshipping: Everything You Need Learn and Know About Dropshipping on eBay

Whether you're curious if you should start dropshipping on eBay or searching for how to improve your current dropshipping sales, this article provides detailed info on:

  • how dropshippers on eBay create sustainable businesses, 
  • how you can get started dropshipping on eBay, and
  • information to help decide if you should dropship on eBay. 

What is the eBay dropshipping business model?

planning an eBay drop shipping business
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Dropshippers on eBay also face unconventional business workflows in fulfilling orders:

  • Instead of shipping items and owning inventory, dropshippers place orders for their customer from a supplier who ships the item for the dropshipper. 
  • A dropshipper purchases items and receives tracking numbers with bulk purchase orders, CSV files, online ordering tools, or eBay dropshipping software. 

Aside from the above caveats, an eBay dropshipping business model is similar to any other eBay store. Communication, good customer service, eBay listing optimization, and store promotions are all vital to your success.

Dropshipping on eBay often requires numerous sales to profit, which requires dropshippers to publish an abundance of items on eBay. However, if a dropshipper finds unique products and acquires a good deal with the supplier to achieve a large profit margin, they may consider building a brand around those products.

How to start dropshipping on eBay

After you've sourced the products you want to sell, dropshipping on eBay is as simple as creating and optimizing listings and processing orders with good customer support.

Get started selling on eBay by setting up a seller account

If you still need to, go to eBay.com or your country's eBay site and create a seller account.

Before you can list products, you'll need to enter personal and business details, banking information for your payment, and credit card information to pay eBay's selling fees. eBay will walk you through what info they need.

Find profitable products you want to dropship on eBay

finding products to dropship on eBay
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Use eBay Seller Hub's internal product research system, "Terapeak Product Research," to find top-selling products and categories. eBay's product-research tool gives you an exclusive look into their platform and that your success contributes to theirs.

Pro Tips: 

  • Don't sell products with possible high return rates or damaged delivery. (e.g., electronics, glass items, etc.)
  • eBay may hide your items from search results and monitor your account if you use arbitrage integrations.
  • Many first-time dropshippers will list the same products as others. Search the title of an item on eBay and see the competition before choosing. If you want to sell the same thing, change the title and the photos to stand out, avoiding upsetting eBay.

Whichever niche or supply you choose, ensure you can provide general info about the product in customer service messages, even if it requires you to read the description for them or do a Google search. Just don't sell anything you don't understand.

Look for the right dropshipping supplier

You don't control the fulfillment process, so you must choose a supplier carefully, keeping ordering and shipping in mind.

When buyers have seamless transactions, sellers with the best service are listed higher in reach results and promoted more often, allowing you to move even more merchandise.

Find a supplier who can provide the following:

  • Tracking numbers by either:
  1. Direct integration with eBay
  2. CSV files (Use an orders manager to upload tracking numbers in bulk)
  • New products and update existing item data with either:
  1. Direct integration to eBay or your eBay software
  2. A live or static CSV file of new inventory and updates
  • The location of the warehouses. Use the location as:
  • The eBay listing's "Item Location" (for shipping time estimates)
  • If your supplier uses multiple warehouses, note only the states, regions, or countries of the warehouses in the description.

Suppliers to avoid:

  • Do not use integrations that sell products from other websites.
  • eBay does not allow this dropshipping method.
  • Don't settle for the most accessible suppliers. Instead, take time to explore and discover suppliers that will work with your business.

Setting a price for your product

dropshippers on eBay offer competitive prices
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No matter what you are selling, you will most likely have other sellers offering the same or similar items. 

Your price needs to be comparable with eBay's lowest prices, so you'll need to find the right supplier to make this profitable. 

Not to mention, if you have a lot of competition, eBay's Promotion and marketing methods can help you achieve the sales you need; but these require funding or paying extra fees to eBay.

Consider test-creating eBay listings from items you could sell around your house. Try the promoted listings and sign up for an eBay store to test how the marketing features work. Knowing these parts of selling on eBay will help you estimate a realistic profit margin to pay for marketing.

List your items on eBay

You may be lucky to find a supplier who directly integrates with eBay. In this case, new listings publish to your eBay account through the supplier's system.

However, many of the best direct-to-warehouse suppliers provide a CSV file of their current inventory. For these suppliers, you can use bulk eBay listing tools to: 

  1. Import items
  2. Increase prices by profit margin percent
  3. Make changes in bulk
  4. Optimize eBay listing SEO
  5. Tag and track suppliers 
  6. Use new CSVs to update the current inventory

Forward the customer's and order information to your dropshipping supplier

If you are, once again, lucky enough to integrate directly with eBay, new orders should sync to the supplier automatically. Then, shipping tracking updates should be automatic or take just a few clicks.

But for eBay dropshippers with regular warehouse suppliers, use an eBay orders manager to:

  1. Export Orders data to a CSV
  2. Use the CSV to create a purchase order for your supplier
  3. When your supplier sends you a CSV of shipping tracking numbers, upload the file to the orders manager to update eBa

Here's what you should know before you start dropshipping on eBay

research dropshippnig on eBay to learn and plan
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Good dropshippers help eBay's marketplace by providing products that may not reach eBay otherwise. Also, dropshipping allows sellers time to provide better customer service and create eBay listings instead of shipping orders.

However, while suitable suppliers usually provide on-time shipping, eBay knows that you only partially control shipping times and returns, so self-maintaining inventory is ultimately encouraged by eBay.

eBay's requirements and policies for dropshipping

eBay encourages dropshipping with reputable suppliers like manufacturers and warehouses. 

However, eBay prohibits products from other online marketplace websites like AliExpress & Walmart. eBay will restrict and suspend accounts for arbitrage selling practices.

eBay listings and store fees

eBay allows most sellers to list several items for free every month. But as an eBay dropshipper, you'll likely exceed this limit. 

Also, eBay Final Value Fees incur after every sale, depending on the items' category. 

But, with an eBay Store, you can list more items for free and with a discount after you've exceeded your limit. Additionally, some eBay Store subscriptions receive discounts on Final Value Fees. 

Also, you'll need the features of an eBay Store to market and manage your items successfully. For eBay dropshippers, Store Subscription fees are easily justified when you take advantage of eBay Store features.

Pro Tip: Use this eBay Fees Calculator to 

Follow these tips for success with eBay dropshipping

using eBay dropshipping software to sell products online
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Getting started dropshipping on eBay requires planning and setup time. But daily business will flow like a well-oiled machine once you publish products and arrange workflows to process dropshipping orders and promote your items. 

We've listed some of the most valuable strategies for eBay dropshippers below to help you formulate the most efficient and presentable dropshipping business you can.

Use an inventory management system to make your inventory process more efficient.

Inventory management for eBay dropshipping begins with your eBay Selling Limits. Every eBay account is allowed to publish a sellable inventory at a specific total monthly-sales amount. 

For example, 

  • A new store limit is $2,000 (potential) monthly sales and 100 listed items. 
  • I get a product from the supplier and will sell it for $20. 
  • Problem: I will reach my selling limits if I publish this listing with 100 quantities. (100 x $20 = $2,000 | plus 100 listed items)

So, as a dropshipper, you want every listing to impact selling limits as little as possible so you can publish more listings. 

To hide your supplier's inventory, 

  1. Set the eBay quantity to no more than 3 (Bonus: low inventory on eBay increases search rank and impulse purchases)
  2. Use eBay listing software to restock the eBay quantity from the supplier's stock when the listing sells.

Alongside an inventory control feature to hide your supplier's inventory, other inventory automation abilities can include: 

  • Update supplier inventory automatically with your supplier's online CSV file
  • Create Bundle listings with automatic stock based on the included items' quantities.
  • Sync inventory across multiple eBay accounts (Great for testing different listing formats in other countries) 

With this technology, managing eBay dropshipping inventory is made simple and efficient with little effort from you.  

If you want to be successful, you must build strong relationships with dropshipping suppliers

successful dropshippers on eBay have good suppliers
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Like anything good, we must create it or let it grow. Relationship with your dropshipping suppliers is no different. Create good first impressions and learn the supplier's workflow, allowing your business partnership to grow as orders get fulfilled.

 Make sure you have a good working relationship with your supplier and: 

  • Be precise and prepared with any questions. 
  • Only consume a little of the supplier's time.
  • Help make the fulfillment process as easy as you can from your end.
  • Estimate handling times before listing to ensure you can add tracking numbers on eBay before the handling time expires.

Good friends give each other discounts. Be a good mover of products and easy to work with; your success will grow as you progress.

Pay attention to copyright infringements and eBay restrictions

Only sell a name-brand product if the brand provides your business explicit distribution licensing, and you have verified your rights to distribute the product with eBay seller support.

Also, ensure you read eBay's dropshipping policy for any details that may affect your selling abilities. 

If you have samples, take your own pictures of the products

Other dropshippers often overuse default images from a supplier. Not only does this lower the value of the item due to all the similar listings, but eBay's AI will see this and may take action. 

If you can take original photos of the items you're selling, your listing will be unique enough to help avoid being limited or hidden by eBay's system. Plus, when you take good product photos, you significantly optimize the listing SEO and trust with buyers.

If you still need to get sample items, it may be worth modifying your listings' main product photo (Gallery image). Changing this image could be as simple as cropping the photo and inserting a watermark for your brand.

The importance of customer support

dropshipping on eBay requires excellent customer service
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Your customer support puts personality behind your store, making it a reliable living entity. 

Always maintain excellent communication and service to every buyer and prospect (within reason). Good dropshipping customer service will: 

  1. Bring customers back to your store - can create 40% of your total sales.
  2. Increase eBay Feedback - helps eBay favor you in search results and promotions.
  3. Build trust with buyers and eBay - eBay watches your response time and monitors your replies.
  4. Lessen the number of eBay Cases - automatic eBay order updates and shipping tracking alerts decrease the number of cancellations and "where is my item" cases.

Automate customer service as much as you can. eBay automation saves time and can achieve the work of an entire team of customer service professionals while you work on promoting or publishing more listings.

eBay automation tools are vital in providing support that will sell your brand repeatedly. A quick checklist of automation could include the following: 

  1. Use an Autoresponder to answer common pre-sale questions automatically.
  2. Thank the buyer for their order and send the order information.
  3. Inform them when the order ships with a tracking number.
  4. Track shipping progress and alert the buyer of delays from the carrier and when the item is delivered. 
  5. Check back in with the buyer after they have received their order. If all is well, encourage the buyer to leave you feedback on eBay.

Bonus: Remember that you can cross-promote and provide coupons in almost all situations! Ensure you abide by eBay's spam policy and generate more repeat eBay sales. 

Pro Tip: Find a message template for every eBay selling situation and customize them with this → free email template builder

Pro Tip: Never say the word "dropship." Its like a high-end retailer saying they're just a "distributor." It over-simplifies the job and can lose buyer confidence. Instead, consider explaining that you are a retailer who workds with several warehouses to hold and ship your products.

Promoting your listings on eBay is a great way to increase sales

ebay drop shipping sales strategies
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eBay provides all the tools you need to advertise your store and products without external advertising systems. 

While some of eBay's promotion features are easier to use with third-party eBay software, there is much you can do to promote your items on and off eBay. 

Some of the top listing optimization and promotion strategies for eBay dropshipping include: 

  • eBay Promoted Listings - Pay an extra set fee to eBay if the item sells through an eBay ad in search results, on other listings, standard eBay promotional emails, and other eBay ad placements like search engines and websites. 
  • Custom eBay Mobile Descriptions: The short description on the eBay App and mobile devices affect shoppers and how search engines index your product. You can customize this with listing software to include SEO keywords and essential listing details. 
  • eBay Coupons - Create coupons that you can send with your listings to your buyers in message automation and when resolving customer conflicts. 
  • Item Specifics - Use your supplier's item details to create custom Item Specifics on your eBay listing to boost the search rank. The more info about your item, the greater your chance of being displayed in search results. 
  • Custom eBay SEO - eBay automatically adds your listing's title as the "SEO Title" and "SEO Description" (what displays on Google Search results). However, you can customize this to include keywords, model numbers, and promotional text for better SEO and click-through rates. 

eBay offers more features and tools to advertise your listings; however, the above are great for dropshipping on eBay because of the low-cost entry, helping you keep your profits.

Pro Tip: Manage and edit the above suggestions with an advanced eBay listings manager

Upload your listings with different variations

Try listing the same items in separate listings with different images, descriptions, eBay categories, and titles, and even try publishing listings in foreign countries. 

Publishing the same item multiple ways allows you to test which listing format and location sell best. Follow these guidelines to create a perfect listing and make more eBay dropshipping sales: 

  • Make each listing unique so as not to violate eBay's duplicate listing policy.
  • Use the same SKU for each item's eBay listings.
  • Sync the listings' inventories (by using the SKU to identify them)
  • Download Order and Listings Reports (CSV files) and analyze which SKUs sell or get viewed the most on which listings (Usually done with an Excel or Google Sheets workbook).

Once you have a month or two of data, remove the low-performing listings and repeat with more items.

Advantages of eBay dropshipping

why dropshipping on eBay is a good investent
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Once your eBay dropshipping business is set up and growing, it provides an additional source of income and can last a long time. After a while, you can fully automate it by hiring virtual assistants to do the work for you.

You don't need to invest anything upfront

At the bare minimum, the only investment is your free time to set up shop. Spend attentive time speaking to suppliers, researching products, and learning the eCommerce game. It can be helpful to employ third-party eBay software to give your business a jumpstart and save some setup time, but it is unnecessary. 

The essential tools you need to start dropshipping are available on eBay Seller Hub. You can even advertise on eBay and only pay if an ad sells an item.

Use eBay to reach a wide audience of potential customers

When listing an item on eBay, you immediately position it to be exposed to potentially thousands of shoppers at little or no cost to you. Optimizing your eBay listing details will assist in reaching as many as possible.

eBay also provides specialized versions of the eBay marketplace to various countries. So, if your supplier is international, see if they have a warehouse to make local sales on other eBay Sites and expand your brand's reach. 

Save money by cutting marketing costs

With eBay, you don't need to spend any upfront money to advertise your products. When you list items correctly, eBay's specially designed marketplace will begin selling the products for you. 

You can aid eBay in selling your item by employing enticing opportunities for buyers, like low inventory (as mentioned above) or eBay Offers strategies.

Furthermore, you can let eBay create ads for your items and only pay if an ad sells the item. eBay's Promoted Listings Standard offers dropshippers a fixed advertising fee for every listing, meaning you can precisely know how much advertising conversions will affect profit. 

Dropshipping businesses can be scaled with minimal risk

With no upfront cost and no inventory or licensing, dropshipping on eBay is one of the lowest-risk, scalable investments ever to exist.

A dropshipping business can grow exponentially by requiring only consistency in service, new items, and promotion when in operation. As you continue, you make more contacts, befriend more suppliers, and build a following and a brand, positioning you for many more significant opportunities for your business.

Disadvantages of eBay dropshipping

An eBay dropshipping business is scalable, with many great opportunities in time, but the time it takes to scale into a highly-profitable business can take time. 

You can always invest in speeding growth and providing the best customer support, but dropshipping success depends on your products, pricing, and suppliers more than anything else. 

Finding the right dropshipping supplier is hard

Finding a good supplier takes work. 

You are held accountable for anything that goes wrong

eBay does not care about supplier setbacks or mistakes; you are responsible for any delays, lost shipments, and returns.  

Getting ahead of issues and communicating with the buyer before they complain can reduce the chance of loss, but you will still incur occasional losses when these situations arise. Ensure you maintain a budget for returned and lost items, as they will be your responsibility.

There is a lot of competition out there

You will face many other sellers within your category and product niche with the same goals as you. While eBay's website proves to have a good market share, you will need to work diligently to set your listings and store apart from other sellers.  

The profit margin is quite low

Due to high pricing competition, usually, the only way to profit enough to live on is to scale your number of sales or make the best supplier connections available. 

When you begin, the return is small, so you will need the patience, drive, and foresight to be consistent with your eBay store.

FAQ: eBay dropshipping

 Let's tackle some common questions merchants have about dropshipping on eBay. 

Is eBay dropshipping a good way to make money?

Yes, dropshipping on eBay can be lucrative, but this is only the case with the right suppliers and if you can scale your business growth.

Is dropshipping on eBay worth it?

eBay dropshipping can be worth investing in with either a long-term goal to build an eBay store that sells many products, if you have an established brand, or if you have investment capital to give yourself a headstart and find the perfect supplier.

How much does it cost to sell items on eBay using the dropshipping method?

The startup cost is zero. It only costs time to set up an eBay account, find a supplier, and list and advertise items. 

Costs incurred to grow your store are minimal. eBay dropshippers pay some of the lowest prices for eCommerce tools, advertising, and business management in eCommerce.

How can I find the best eBay dropshipping suppliers?

Finding the best suppliers can often come from making eCommerce contacts and probing different suppliers in search of specific products. If you hear of local trade shows, stop by to talk to vendors about new products to sell. 

Also, the best suppliers and warehouses will only work with established stores, so you must settle for less-reputable suppliers to prove you can move merchandise before approaching these big, hidden players.

Inventory-sourcing professionals find and broker deals with suppliers on your behalf, or you can search for supplier lists. Investigate links on websites to find manufacturers, search merchants on AliExpress, and befriend individual vendors.

Before you begin searching, save a list of requirements with everything you need to make selling as smooth as possible. Use the list when speaking with prospective suppliers, ensuring everything is clear about the business partnership.

About the Author

Aaron Fitch

Aaron is a 3Dsellers teammate, veteran eBay seller, website developer, media producer, and affiliate marketer, living in Texas, USA.

Fun fact: Aaron once sung the 90's hit song, "Closing Time" to police as they escorted him out of a mall for performing without a permit.

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