eBay Dropshipping: A Beginner’s Guide to Building a Highly Profitable & Successful Dropshipping Business on eBay
When it comes to starting a dropshipping business, eBay is the platform of choice for most newbie sellers. Having personally generated over 250k in sales dropshipping on eBay, I’m living proof that it works. I’m also a prime example of how literally anyone, even those with limited experience can harness the massive reach of eBay to build a highly profitable dropshipping business.
I’m not the only one either. Thousands of sellers across the globe including many large retailers dropship on eBay, earning big bucks in the process. It’s by far the quickest and easiest way to get products in front of millions of credit card ready buyers, without spending a fortune on marketing.
In this free guide, you’ll learn everything there is to know about eBay dropshipping. From finding suppliers to choosing products and creating listings, I’ll take you through the entire process. Towards the end of the guide, I’ll also provide some real-life examples of profitable dropship products.
Dropshipping is an order fulfilment technique in which retailers sell products, usually through online channels such as eBay or Amazon, and then source them directly from suppliers, typically wholesalers or manufacturers. Unlike the traditional method of running an ecommerce business, dropshipping doesn’t involve buying products upfront or storing inventory. Instead, products are only purchased (from the supplier) after they’ve been sold to a consumer.
List Products for Sale
You (the retailer) list dropship products for sale on eBay, Amazon, Shopify or your own website.
Customer Places Order
When a customer places an order, they will pay the you (the retailer) the full amount directly.
Supplier Ships Product
You place or forward the order with your supplier, who then ships the product straight to your customer.
The days of having to invest thousands of dollars to start an ecommerce business are a thing of the past. With dropshipping, you can instantly start selling an entire range of products without spending a single cent on stock. You can also expand your range at a rapid rate without requiring constant cash flow. It’s the perfect business model for newbies to the world of ecommerce, as well as those looking to start a business with limited cash or time.
As stated in the first paragraph of eBay’s policy, dropshipping is allowed on the platform. However, sellers who use a dropshipping model are still responsible for the safe delivery of products and overall satisfaction of customers, regardless of where the item originated from. It’s also the seller’s responsibility to effectively manage returns and ensure products are in stock at the time of purchase, something which will be covered more in this guide.
Over the last few years, dropshipping has become somewhat of a sensation. With the rapid growth in popularity came changes to eBay’s dropshipping policy. Back when dropshipping was in its infancy, sourcing products from other retailers, a technique known as retail arbitrage, was common practice. Thousands of sellers were successfully dropshipping products from popular retailers such as Amazon and Walmart to eBay.
However, at some point in 2019, eBay took notice and eventually concluded that retail arbitrage adds no value to their platform. The marketplace had become bombarded with duplicate listing at highly inflated prices, while complaints of orders arriving in Amazon packaging soared. To combat the issue, eBay swiftly updated their dropshipping policy, which now states:
Thankfully, dropshipping on eBay is still allowed, but only when it’s done in the correct way. That means sourcing products from a genuine wholesaler or trade-only dropshipping supplier. It also means avoiding automated software programs which uses eBay’s API, more of which will be discussed later in the guide.
Is eBay Dropshipping Dead?
Absolutely not, eBay dropshipping is very much alive and kicking. In fact, thousands of people are earning full time income selling dropship products on eBay. The business model will always be a big part of the platform as it generates millions of dollars in revenue for eBay and attracts thousands of new sellers each year, including some major retailers. Building a compliant, sustainable and long-term eBay dropshipping business is not only possible, but very much probable. It’s simply a case of learning the policies and implementing the correct way of doing things. It’s important to remember that dropshipping is a business, not a get rich quick scheme. It’s going to take some time, learning and effort to get it right.
The Pros & Cons of Dropshipping on eBay
While dropshipping on eBay can be extremely profitable, it has a fair share of disadvantages, particularly when compared to alternative options such as dropshipping through your own website. To help you determine whether it’s the right business for you, here’s a side-by-side breakdown of both the pros and cons of dropshipping on eBay.
Now that you have a better understanding of how eBay dropshipping works and why it can be so profitable, it’s time for the exciting stuff – how to build a successful, sustainable and profitable business with it. Follow these simple steps and you’ll be on your way to running a booming eBay dropshipping business in no time.
1. Choose Products to Sell
Choosing the type of products you want to sell is the first step towards building a dropshipping business on eBay. Although it’s not necessary, focusing on one particular category, preferably a category which interests you, is recommended. However, don’t limit yourself by choosing a very small and specific niche. One of the biggest advantages with dropshipping is being able to sell anything you want without risking upfront cash, so why limit yourself to a very small niche? You have the flexibility to create as many listings as you want, regardless of how much cash flow you have.
Find a starting category to focus on, but leave the door open for expansion later. For example, if you’re a bit of a fitness fanatic, selling gym equipment may be your calling. If you have a passion for the outdoors, camping gear could be your starting point. Either way, selling products which you have a basic knowledge of will give you a competitive advantage when it comes to creating listings, setting prices and answering customer enquiries. You’ll also have some insider knowledge on what products are hot right now within that particular category.
Choose a category which interests you but is not a small, limited niche
Avoid products which are more likely to develop faults e.g. electronics
Search eBay for products which generate a lot of sales and interest
Study the competition on eBay to determine how difficult it will be to compete
2. Establish a Brand Name
Once you’ve decided on the type of products you want to sell, it’s time to come up with a name for your business. Having a good brand name is particularly important if you plan to open an eBay shop, as it needs to be memorable and catchy so that customers can easily return later. Here’s a few tips to help you come up with the perfect name for your business:
Keep it short, sweet and easy to remember
Use relevant, descriptive and self-explanatory keywords
Looking to build an automated eBay dropshipping business?
As dropshipping has become more popular, so has the rise of automation software. Most dropshipping software programs offer an all-in-one solution for finding, listing and automatically repricing dropship products on eBay. Therefore, manually finding suppliers, listing products and managing inventory is becoming a thing of the past. With software, you can build a highly scalable, sustainable and lucrative eBay dropshipping business quicker than ever before.
The next step in your journey towards building a dropshpping business on eBay is to find a reliable supplier to source products from. There are numerous ways to find such suppliers, some of the most common and effective include:
While each method has it’s own benefits, using a supplier directory is often the common choice, mainly because it eliminates the time consuming process of manually searching for suppliers. Essentially, the directory complies a list of the best suppliers in one easy to browse database. Think of it like Google, but specifically for finding dropshipping suppliers.
Here at SourceLow, our very own supplier directory is completely free to use and packed full of reputable dropshipping suppliers from multiple locations around the globe. Whether you want to sell clothing, toys or pet supplies, finding a suitable supplier is as simple as doing a quick search. You also won’t need to worry about middlemen or hiked up prices either, as you can start trading with the suppliers directly to lock in the lowest prices.
If you don’t already have an account, the next step is to join eBay. The eBay site you should join will depend on where your supplier is located. For example, if your supplier is located in the UK, you’ll want to set up an account on the UK version of ebay which is ebay.co.uk. Alternatively, if your supplier is based in the US, you should join the US version at ebay.com.
Setting up an account is fairly straight-forward. Simply head to the relevant eBay site, click the Register link in the top left Menu and then follow the onscreen instructions. A business account is recommended, however it’s fine to use a personal account when first starting out, you can always upgrade to a business account at a later date.
By this stage, you should have a name for your business, a supplier to source products from and an eBay seller account. The next step is to start listing products. Simply navigate to eBay and login to your account. Once inside, click the Listings tab in the Menu. On the following page, click the Create Listing button and select Single Listing. Once you’re on the listing page, you can start inputting the details of the product on offer.
When it comes to titles, most dropshippers go down the route of copying their suppliers. However, titles are the most important part of an eBay listing, not only are they used to determine what searches your listing will appear for, but they’re also the first thing buyers see when browsing eBay. Therefore, it’s important to create unique, descriptive and keyword-rich titles. Think about the phrases customers will use when searching on eBay, or try using a keyword suggestion tool such as Google Keyword Planner or WordStream to spark some ideas.
The more keywords you include in the title, the greater chance your listing will appear in search results. In the above example, my listing will appear for several different variations of key-phrases including ‘ultrasonic pest repeller’ ‘plugin in pest repeller’ ‘ultrasonic insect repeller’ and so forth. I’ve also included some descriptive keywords such rat and mouse. If these keywords were not in my title, it’s highly unlikely that my listing would appear for such searches.
Uploading product images is fairly straightforward. You don’t need to take your own photos as you can simply use your suppliers images. Just right-click your mouse button when hovering over the image on your suppliers website, then click Save Image in the drop-down menu. Repeat the process until all images are saved to your PC, then upload them to eBay. Try not to use the same main image as your supplier (if possible) to further stand out from the crowd.
Item specifics are simply the characteristics, details and specifications of a particular item, such as size, weight and colour. Don’t underestimate the power of item specifics, eBay uses them when customers filter search results. For example, if a user searches for a mens tshirt, the results can be filter by size. If you haven’t input a size item specific, your listing won’t appear in the results. Therefore, you should add as many item specifics as possible, but double-check to make sure they’re accurate. Thankfully, eBay does a good job of automatically adding certain item specifics for you.
Descriptions are just as important as titles. Although it’s tempting to use your suppliers description, you should take the time to write your own description, or at least rewrite the original description. Using unique descriptions will give you a huge advantage over your competitors, as they will be unable to duplicate or copy your listing. Doing so would be a copyright violation which can be reported to eBay. You’ll also be able to further increase your chances of being discovered in search results by sprinkling relevant keywords throughout the description.
It’s no surprise that price is the most important factor in a consumers buying decision. Therefore, keeping your prices as low as possible is essential. After taking eBay and PayPal fees into consideration, you should aim for a healthy but moderate profit margin. Don’t make the mistake of overpricing. It’s better to sell an item 10 times with a £2 profit rather than just once with a £5 profit. Low prices will attract more customers and ultimately generate more sales.
While not essential, try to undercut your competition where possible, even by a few cents. If you’re running promoted listings (more on that later), you’ll have more flexibility to aim for a higher profit margin.
Note: Selling fees will vary depending on which eBay site you’re selling on. The quickest way to calculate your exact selling fees and profit margin is by using a free eBay fee calculator.
f) Create Essential Policies
If you’re a new seller, you’ll have to create a few essential listing policies. Don’t panic though, it’s very simple to do and a one time job. Once set up, you can use the same policies for all future listings. The 3 policies you need to create include a postage policy, returns policy and payment policy. Simply click the Create link next to the relevant policy on the eBay listing page, then complete the details within the pop-up window.
Multi-Buy is a relatively new eBay feature which allows you to offer customers a discount when they purchase one or more of the same item. It’s an extremely effective way to encourage buyers to purchase a higher quantity and increase sales by up to 10%, as it clearly displays the savings to be made when doing so.
There are 2 ways to create a multi-buy offer, either individually while creating a new listing or in bulk via your eBay seller back-office. If you want to offer different tiered discounts for each of your items, it’s best to create a multi-buy offer while creating listings. If you would like to have the same multi-buy offer for all listings, you can do this in bulk, after creating your listings. Learn more about multi-buy offers and how to create them here.
Taking the time to create unique, professional and keyword-rich listings is the key to success when selling on eBay. While other sellers tend to use the same standard descriptions, images and item specifics as their supplier, creating your own unique content will enable you to significantly stand out from the crowd.
Use the full allocated space to create keyword rich titles
Write unique product descriptions and include relevant keywords within
If possible, use a different main image than your supplier
If no brand name exists, use your own company or brand name
Set a low but reasonable price and undercut the competition if possible
Offer a 30 day return policy to give buyers piece of mind
Offer a warranty period to further encourage users to purchase
6. Promote Your Listings
Promoting your listings is a sure fire way to instantly boost traffic and increase sales. While promoted, your listings will appear in prominent locations throughout the eBay site, including at the top of search results and on the listing pages of similar item. You’ll only pay an additional fee, calculated as a percentage of the final selling price, after the item has sold. Therefore, you can try out promoted listing without having to risk any upfront cash.
Promoted Listings can be created in 1 of either 2 ways, either individually while creating a new listing or in bulk for all existing listings. You’ll have full control over which listings to promote, as well as the fixed percentage you’re willing to pay if a sale is generated. Lean more about promoted listings here.
One of the biggest challenges with dropshipping on eBay is managing stock and price changes. Selling a product which has ran out of stock or raised in price means you’ll need to cancel the order and risk negative feedback or account defects. Therefore, it’s important to have an effective stock and price management system in place. Your plan should involve manually checking your suppliers inventory on a frequent basis. In some cases, your supplier will be able to provide you with data feeds or frequent stock/price updates. Talk with your supplier to work the best way to manage stock and price changes.
Manually checking stock and prices is easy when you have a small number of listings. However, as you began to scale and grow your business, using automation software is by far the better solution. With multiple dropshipping software programs to choose from, many of which are compatible with eBay, finding one which is compatible with your supplier shouldn’t be a difficult task. Furthermore, most software programs are able to add compatibility with certain suppliers upon request. For more information, please see our comprehensive list of the best eBay dropshipping software solutions and how they work.
When a customer buys an item, you need to forward or place that order with your supplier. As a dropshipper, you lack control over the order processing and dispatch times. Therefore, it’s absolutely vital to process orders as quickly as possible to ensure the items arrive on time. As a general rule, you should aim to process orders the very same day. Remember, your supplier will prep and dispatch the items. If a customer places an order on Monday, but you don’t process it until Tuesday or Wednesday, it could result in the item being delayed.
While the primary purpose of using dropshipping software is to monitor prices and stock, many have the additional capability to automatically process orders on your behalf. As you being to scale your business and generate sales, using software to place orders can save you a huge amount of time. Refer to our list of the best eBay dropshipping software for more information.
Customers are the life of any business. Treat them well and they’ll come back for more. Go that extra mile by informing your customers when items have been dispatched and follow-up with them after delivery to ensure they’re satisfied. If they’re happy with the product, kindly request feedback. If they’re not, make the effort to resolve the issue quickly. Never forget, the customer is always right, even when they’re wrong. Go above and beyond to resolve any issues or complaints. You’ll quickly discover that good customer service can turn even the most frustrated customer into a repeat buyer.
One of the biggest reasons why newbie dropshippers fail is because they give up too easily. It’s important to understand that while some items may underperform or generate slow sales, many will become hot sellers. The key is to find those hot sellers and weave out the under-performing listings until eventually, you’ll have a range of products which generate consistent sales.
If you don’t seen an instant avalanche of sales, don’t give up. Keep listing products and expanding your product range. Try, test and try again. As you begin to gain positive feedbacks, sales history and healthy seller stats, your listings will start to naturally appear more in search results. Stick with it and over time you’ll eventually gain the tsunami of sales you’ve been seeking.
Case Study: Finding Profitable Dropship Products on eBay
In this over the shoulder case study, we’re going to find profitable dropship products on eBay. Let’s imagine I’ve decided to start selling giftware on eBay UK. I’ve found a suitable UK based dropshipping supplier using SourceLow (wink, wink). That supplier is Puckator Dropship, one of the UK’s leading dropshippers of giftware.
After spending some time cross-checking a collection of their products on eBay, it didn’t take long to discover a profitable item. It’s a Gothic skull dragon figurine. After searching on eBay, I discovered a seller who has sold the very same item over 30 times for the price of £8.87:
As per my calculations, the total price to purchase this item from my supplier (Puckator) including shipping costs is £6.42. By undercutting the competition and selling this product for £8.85, I’d pocket a profit of £1.10 on every sale. If I can achieve a similar sales volume as my competition, I’d earn over £30.00 profit from this one single item. Keeping in mind, I have full control over pricing and the option to aim for a higher profit per sale, particularly when running a promoted listing.
As I continued to browse Puckator and eBay, I found many more profitable dropship items, including the following:
These are just a few examples of products which people are already successfully dropshipping on eBay. Keep in mind, there’s literally millions of items and thousands of dropshipping suppliers to choose from. Take the time to find those fast-moving, hot selling products which generate consistent sales and you’ll be on you’re way to eBay Power Seller status in no time.
Demo: Finding & Listing a Dropship Product on eBay
In this short demo, I’m going to take you through the process of finding a dropship product and listing it for sale on eBay UK. I’ve decided to use the supplier Banggood, a leading China based dropshipper with over 100k products and multiple distribution warehouses across the globe including in the UK.
After spending some time browsing the Banggood website and cross-checking several products with eBay, I’ve stumbled across a potentially profitable item. It’s an automatic fish food dispenser, available to purchase for £10.75 with free 3-5 day shipping from the UK warehouse. As an active member of the Banggood dropship program, I’m also subject to a 5% discount, meaning my total cost price for this item would be (£10.75 – £0.53) £10.22.
After a quick search on eBay, I discovered this very same fish feeder selling for £14.99 with a total sales volume of 7 units. Many other similar items were being sold for between £15 and £20 with a healthy sales history of 10 or more, indicating that automatic fish feeders are a fairly popular item to sell on eBay.
After using a Free eBay Fee Calculator, I’ve concluded that my total profit would be £2.62 ( 17% margin) if I was to undercut the competition and list the fish feeder for £14.97 with free shipping.
Although £.2.62 may not sound like a lot of profit, if I was to sell 10 of these every month, this one product would earn me £26.20 per month. Now image if I had 100 or more products which generated similar profit margins each month. That equals a very comfortable, lucrative and reliable income.
Keep in mind, undercutting the competition is not absolutely essential when selling on eBay, particularly if you’re running promoted listings. Selling this product for 15.99 would generate a £3.51 (22%) profit, while a price of £16.99 would earn a £4.38 (25%) profit. Trying and testing to achieve the most lucrative selling price which attracts maximum sales and a healthy profit margin is a must. It’s better to generate more sales with a small profit than only a few sales with a large profit.
Now that I’ve found a profitable product, it’s time to create a new listing on eBay. The quickest way to do this is by clicking the Sell It Yourself link on the existing eBay listing:
To get that edge over the competition, I’m going to create a unique and keyword rich title for my listing. After using a free keyword suggestion tool, as well as eBay search, I’ve came up with the following title:
The title contains relevant and descriptive keywords which users are likely to search for when browsing the eBay marketplace. I’ve also included multiple keywords to cover the potential use of the item for aquariums, standard tanks or ponds. Therefore, whether the user is searching for ‘pond fish feeder’ or ‘aquarium fish feeder’ my listing should appear in results for both.
Next, I’m going to upload the product images. To do this, I need to first download them from my suppliers website. In most cases, you can simply right-click on the images and save them to your PC. However, if the right-click function is not enabled, you’ll need to contact your supplier to request the images. I’ve taken the extra time to save each image to my PC using relevant keywords before uploading them to eBay. I’ve also decided to use a different, but equally eye catching main image.
While not absolutely necessary, the next step is to write my own description. Unique description will give you a competitive advantage over other sellers. In this case, I’m going to keep it short with a brief introduction paragraph, some key features and a small list of specifications. You may also want to include a short overview of what’s included in the package.
The next step is to input as many item specifics as possible. In most cases, particularly when using the Sell it Yourself link to create a new listing, eBay will automatically add the item specifics for you. Be sure to add as many as possible and double-check any that eBay may have automatically included.
Now that I’ve input the required information, I can go ahead and click List and my product will be available to buy on eBay. To further increase my chances of generating sales, I’m going to set-up a multi-buy offer and promoted listing separately. More details on multi-buy and promoted listing can be found in the Start Listing section of this guide.
eBay Dropshipping Alternatives
We’ve established that eBay dropshipping can be highly profitable when done the correct way. However, that doesn’t mean it’s the best option, particularly for the long-term. Dropshipping through your own website a sure-fire way to establish full control over your business and secure it’s longevity. eBay can bring in quick sales, but building your own website should be your eventual goal. Thankfully, drag and drop software programs make it easy to anyone to create a low-cost ecommerce website, without needing to know coding. Please see our list of the best online store builders for more information.
Other alternatives to eBay including dropshipping on Amazon, through a Facebook store or on other popular online marketplaces. To learn more, please refer to our guide on 5 effective ways to sell dropship products. Ultimately, to generate maximum sales and profit, you should be selling on eBay, Amazon, your own website and any other selling channels.
The following FAQs provide instant answers to the most commonly asked questions related to dropshipping on eBay. If you have any additional question which is not covered here, please contact us directly or refer to our other guides on dropshipping and ecommerce. Be sure to also check back regularly as we continue to add more content and information.
Is eBay against Dropshipping?
Absolutely not. The problem lies with retail arbitrage only. The process of sourcing products from other retailers, particularly Amazon is flawed. At first, it wasn’t much of an issue for eBay. However, as the popularity of retail arbitrage dropshipping grew, problems became apparent. eBay became overloaded with thousands of duplicate, overpriced and poor-quality listings, most of which were being sourced directly from their biggest competitor – Amazon. It caused much confusion for eBay buyers, who would purchase products on eBay but receive them in Amazon packages, often with receipts disclosing a lower price. Naturally, this led to many customers complaining to eBay, leaving negative feedbacks or opening disputes.
Let me make it clear, eBay has nothing against dropshippers who do things the right way. Sourcing products from a genuine wholesaler or trade-only dropship supplier means you can offer competitive, true retail prices. You also won’t need to worry about complaints. Reputable dropshippers will use unbranded packaging without including paperwork, a process known as blind dropshipping. Your customers will never know where the item came from. As far as the customer is concerned, the item came directly from you. Some dropshippers can even include your own logo or branding the packaging.
They certainly can. That’s the beauty of dropshipping. It doesn’t matter where you’re physically located, you can sell to customers in any part of the world. For example, if you want to sell on eBay UK, simply find a UK based supplier. If you’d rather sell in the US, find a US based supplier. You could be in the north pole and still sell products on eBay, your supplier handles the entire order fulfilment process, from packaging to shipping and delivery, rendering your physical location irrelevant.
How much does it cost to start dropshipping on eBay?
It depends on which eBay site you wish to sell on. The cost to list a product for sale on eBay varies depending on which country you sell in, however it’s generally very low. You also have the option to open an eBay shop for a fixed monthly fee which comes with exclusive benefits including a set number of free listings. Aside from that, the only other fee you pay is a final value fee after a product has sold, currently around 10% plus PayPal fees.
Is dropshipping on eBay legal?
Absolutely. Dropshipping is a completely legal and legitimate business model which is allowed on eBay as per their policy. Reputable companies have been using the dropship model for decades, long before it became a common practice. Now considered an established and proven business model, dropshipping will only increase in popularity.
It’s highly unlikely that eBay would ever outright ban dropshipping. I’d say impossible, but I’m a big believer in that nothing is impossible. It would make no logical sense for eBay to ban dropshipping, particularly when they generate tens of millions of dollars in revenue from it.
Is it better to dropship on my own website?
Building your own ecommerce website takes a lot of time, money and effort. eBay on the other hand gives you a platform to instantly start accepting orders. It also has millions of eager buyers. Cutting yourself off from this massive pool of buyers would not make sense. While having your own e-commerce website is certainly something to consider for the future, eBay is by far the best starting point for newbie sellers.
Can I dropship from Amazon to eBay?
Unfortunately, dropshipping from Amazon, or any other retailer for that matter, is no longer allowed on eBay. Doing so could result in your account being suspended or heavily restricted. Therefore, it’s highly recommended to only dropship from genuine wholesalers or trade-only dropship suppliers. By working with genuine trade-only suppliers, you will not only avoid being flagged by eBay, but you’ll also be able to offer much more competitive prices.
How do I manage eBay returns when dropshipping?
Managing returns when dropshipping on eBay is actually very simple. Instead of having customers return items to you, simply forward the customer a return label or instructions on how to return the item directly to the supplier. When the return has been received, the supplier will refund you, and you then refund the customer. If a customer opens a return request on eBay, make sure you contact the customer asap to avoid them sending the item back to you.
Building a successful dropshipping business on eBay is more than possible, it just takes time and effort. Choose the right products to sell, find a reliable supplier and create unique listings, you won’t go far wrong. When the time feels right, invest in automation software to streamline and scale the business more rapidly. Once you’ve fine-tuned your product range and started to generate consistent sales, consider creating your own website using a low-cost online store builder. Alternatively, branch out by selling on a second platform such as Amazon or Facebook. Your eventual goal should be to sell on multiple platforms, rather than on eBay, or any one channel exclusively.