Ebay Dropshipping for Newbies: A beginners guide to drop shipping on eBay
Updated: Dec 17, 2019
What is Dropshipping?
Drop shipping is a business model where you sell items, usually online without ever holding inventory. You list these items for sale online when a buyer purchases an item, you process the order through the supplier and get the item delivered straight to the customer. This means you never handle the packages physically because everything is done online. When you list the items, you will list the item at a higher price than the supplier so when the item sells, you pocket the difference, minus any processing fees.
What is dropshipping on eBay?
It is exactly as explained as above, you list the items on eBay and when it sells on eBay, you then go and process the order with your supplier to send to the buyer on eBay.
The benefit of eBay is that there are millions of customers that come to shop on eBay and you can use that traffic to generate sales.
What is Shopify?
If you search for drop shipping on Google or YouTube, more than likely you have come across Shopify as it is heavily advertised. The whole business model is based on advertising so this is why it is the more 'popular' business model. Popular because influencers get really high commission pay outs, this pushes them to advertise it heavily. Popular does not mean best though, Shopify is a completely different platform than eBay and it is a common misconception that eBay and Shopify are similar just because the term drop shipping is used.
Shopify is a platform where you build your own website. You then have to find a product or products to list on to your website. The main obstacle is though, no matter how good your website is, if no one finds the website, how will you get sales? This is where you have to spend money on advertising, most commonly on Facebook and paying Instagram influencers to send traffic to your website. I go through a details explanation about the differences between eBay and Shopify drop shipping in the video below.
Pros and Cons of Shopify and eBay?
So let's go through 5 Pros of Shopify and eBay Dropshipping
Pros on eBay:
Millions of customers ready to buy
eBay is a trusted brand
Very low startup costs
eBay is ready to use, no need to build website
Much more simple to grow
Pros on Shopify:
You own your traffic, competition will not show
Higher profit margins as there is no competition
Easier to up sell to customers
You can get returning customers
You own the platform
Some of the obstacles may be that Shopify may require you to spend thousands on advertising before actually find a winning product and winning advertising strategy. Although it may seem easier when you watch YouTube videos, know this, that those who are showing you are experts and have a huge amount of experience. Yes you can learn from them but you should not expect the same results as them straight away. The same goes for eBay, experts will have better results and will be able to spot winning items due to experience however you do not have the obstacle of spending thousands on advertising but you will sacrifice on smaller profit margins on eBay.
So should I go with eBay or Shopify?
Both are great long term business models however the choice is of preference.
What I can say is eBay does not have any startup costs so you can use eBay to understand more about drop shipping and then use the profits on eBay drop shipping to finance your Shopify adverts in the future
What do I need to get started on eBay drop shipping?
The 2 main things you will need are a Paypal account and an eBay account.
Paypal is the payment service used on eBay to process payments, its pretty simple to setup and you can search for Paypal online to get started.
You will also need an eBay account too, again, very simple to set up, just go online and setup an account for free
Should I start drop shipping straight away?
No. People are so focused on getting rich quick that they try to make so much money without even understanding eBay. I highly recommend that you list a few items from around your house first and list them to be auctioned off. There are 2 ways to list items, auction which is the bidding system on eBay or buy it now, where you put a set price on an items and people buy at the set price. I recommend that you sell some items via auction first, just to season your account a little, understand how the eBay platform works and then show eBay that you are a reliable seller. After a few weeks of selling auctioned items and making a few sales, eBay will no longer monitor your account under the microscope and will let you get on with your selling.
What about Paypal Holding funds?
It is true that on new eBay and Paypal accounts, Paypal will hold your funds for up to 21 days.
After 21 days the funds are released. This whole process lasts for up to 90 days. After this 'Payal Jail' is over, you will get access to your funds immediately. In the meantime, you may need access to a small amount of funds to process orders or you can use a credit card and then pay the balance off as soon as the funds become available. Watch the video below for more details about Paypal holding funds.
How do I find products to drop ship on eBay?
Well there are plenty of different product research methods and I myself have provided some information already.
First decide what type of drop shipping you want to do.
These products are easy to sell however it is also in a grey area of eBay's drop shipping policy where they state you should not be using retail suppliers. People do it anyway and continue to do so, these products are delivered fast and easy to find and sell
Aliexpress to eBay dropshipping is something that is proving hugely popular lately because you can contact many suppliers on Aliexpress to drop ship from them. Although the products will be sent out from China, you can still get some really healthy sales. Your revenue will not be as much as retail dropshipping however it will balance itself out because the profit margins are substantially higher. You can get more details about Aliexpress to eBay drop shipping here.
Finally there is wholesale drop shipping on eBay from China which is the most compliant way of drop shipping on eBay. Ebay specifically state that you can drop ship on eBay using wholesale suppliers. Also using wholesale suppliers helps you get more competitive prices than Aliexpress and faster shipping times so overall this is has been proving to be the method of drop shipping that most people are looking to do on eBay now. You can get more information about wholesale dropshipping on eBay here.
Watch the video about this blog post below