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A Comprehensive Beginner’s Guide to eBay Dropshipping (2023)

by Amelia Pahm
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A Comprehensive Beginner's Guide to eBay Dropshipping - OneCommerce

Are you interested in starting an online business on eBay, but don’t want to invest a lot of money upfront? eBay dropshipping might be the perfect solution for you.

With eBay dropshipping, you can sell products without stocking them, which means you don’t have to worry about storing, packaging, or shipping the products.

In this comprehensive guide, we’ll provide an in-depth overview of eBay dropshipping, its key advantages, and how to get started. So, whether you’re a seasoned entrepreneur or just starting, keep reading to learn more about how you can start your own eBay dropshipping business.

Let’s start!

💡 Recommended reading:

What Is eBay?

eBay is an online marketplace that provides a massive platform for businesses to reach a global audience, allowing people to buy and sell a vast range of products, from electronics to fashion items.

For entrepreneurs and small business owners, eBay offers an opportunity to expand their reach beyond their local market and tap into a global customer base.

The eCommerce giant is also a popular destination for individuals looking for unique and hard-to-find items. The site’s extensive selection of products and competitive pricing make it a top-of-mind source for collectors, hobbyists, and bargain hunters alike.

Overall, the longevity and success characteristics give eBay the ability to adapt to changing market conditions and customer needs. As e-commerce continues to grow and evolve, eBay remains a relevant and valuable resource for buyers and sellers around the world.

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What Is Dropshipping?

Dropshipping is an e-commerce business model where you can sell products without stocking them. 

With this model, you can sell products to customers without stocking inventory. Instead, you can partner with suppliers who will ship the products directly to your customers without worrying about the costs associated with storing, packaging, or shipping the products yourself.

The dropshipping model-OneCommerce

In addition, because you don’t have to invest in inventory upfront, you have the flexibility to test out new products and see what sells without the risk of overstocking. This allows you to be more agile and responsive to changes in the market.

💬 From this definition, we can conclude:

eBay dropshipping is a business model where you sell products on eBay without having to stock or ship them yourself, but instead rely on third-party suppliers to fulfill the orders for you.

👉 Explore our expertise in dropshipping!

Now we understand the concept of both words in the “eBay dropshipping” term. The next question here is:

Does eBay Allow Dropshipping?

YES, eBay does allow dropshipping.

However, eBay has specific policies that must be followed, such as: “You need to have the item in possession before listing it”, or “You must have the item in your possession before you list it on eBay”, and more eBay dropshipping policies rules which will be dived deeper later on this article.

Advantages Of eBay Dropshipping

eBay dropshipping is an incredibly attractive model for entrepreneurs with many benefits. Besides being a low-risk, low-cost way to start an online business, here are some additional reasons why eBay dropshipping is what you need right now:

  • Low startup costs: Unlike traditional retail businesses, you don’t need to invest in inventory or manage a warehouse. By partnering with suppliers who ship the products directly to your customers, you can start selling products without investing in inventory upfront.
  • More time to focus on growing your business: You can focus on marketing and growing your business instead of worrying about storage, packaging, or shipping costs.
  • No need for a physical storefront: By running your business entirely online, you can save an enormous amount of money on rent and utilities. This makes eBay dropshipping an excellent option for entrepreneurs who want to start a business without the need for a physical storefront.
  • Flexibility: eBay dropshipping allows you to be more agile and responsive to changes in the market. Since you don’t need to invest in inventory upfront, you have the flexibility to test out new products and see what sells without the risk of overstocking.
  • Wide range of products: Through eBay dropshipping, you to offer a broad range of products without worrying about storage. This means you can sell products that have high demand without needing to worry about stocking them. Additionally, you can experiment with different product categories without the risk of overstocking.
  • Global audience: With over 185 million active users worldwide in 2023 according to MarketSplash, eBay provides a vast platform for businesses to reach a global audience. By leveraging eBay’s vast audience base, you can build your brand and expand your reach beyond your local market.
  • Scalability: As your business grows, you can partner with multiple suppliers and sell a wider range of products.

How to Start Dropshipping on eBay In 5 Steps

If you are interested in starting a dropshipping business on eBay, here are the steps you need to follow:

Step 1: Register for an eBay account

The first step to using eBay is to register for an account, which can be done in a straightforward process that only takes a few minutes.

Register for eBay to start eBay dropshipping

Once you are registered, you have the option to create either an individual or a business account.

  • An individual account is best for someone who is looking to buy or sell personal items.
  • A business account is ideal for those who are looking to sell items as a business.

eBay account options

After selecting which type of account is best for you, you will be asked to provide your personal information, such as name, address, and email. Once you complete and verify your account through email shortly after, you can start using eBay’s services to buy and sell items with ease.

Step 2: Find a product and supplier

The second step to start an eBay dropshipping business is to conduct thorough research to find a product that will sell well in the market. You need a supplier that can consistently provide high-quality products at competitive prices.

One tip to start your search is by using dropshipping platforms such as AliExpress, SaleHoo, and many others, where you can easily find a list of reliable suppliers. 

However, you should not solely rely on these platforms but also consider other sources such as trade shows and industry-specific directories.

❗When selecting a supplier, you need to keep in mind:

  • It is important to consider various factors that will impact your business success, including the quality of the products, cost, reliability, and shipping times.
  • You should not compromise on the quality of the products as it will affect your customer satisfaction, and in turn, your business’s reputation.
  • Ensure that your supplier can provide you with a competitive price so that you can make a reasonable profit margin.
  • The reliability of your supplier is crucial as any delay in product delivery can lead to unhappy customers and loss of business.
  • Shipping times are also an important factor to consider, especially if you are selling internationally, as it can impact customer satisfaction and reviews.
💡 Best dropshipping ideas for eBay dropshipping business (and general business):

Step 3: Select a payment provider

Choosing the right payment provider for eBay dropshipping is an important decision that can affect your store’s performance and profitability. Here are some of the best payment providers for eBay dropshipping:

This is eBay’s own payment processing system that allows you to accept payments directly from buyers without leaving eBay.

You can access all your transactions and payouts in one place and save on fees. Managed Payments supports various payment methods, such as credit cards, debit cards, Apple Pay, Google Pay, PayPal, etc.

However, Managed Payments is not available in all countries yet and may have some limitations on certain categories or products.

  • Payoneer:

This is a popular digital payment platform that works well with eBay dropshipping.

You can link the Payoneer account to your eBay account and receive payouts from eBay directly to the Payoneer account. Payoneer also allows withdrawing funds from Payoneer to a local bank account or use them to pay suppliers.

Payoneer supports over 200 countries and 150 currencies and offers low fees and high exchange rates.

  • PayPal:

This is the most widely used online payment service that used to be the default payment provider for eBay.

You can still use PayPal as a payment provider for eBay dropshipping if you prefer it or if Managed Payments is not available in your country yet.

However, PayPal charges higher fees than other payment providers and may have some issues with dropshipping, such as holds, disputes, or bans.

💡 How to set up your payment provider for eBay dropshipping? Follow these steps:

Step 1: Go to your Seller Account in My eBay or Seller Hub.

Step 2: Look for “Payment methods for seller fees” and select “Change”.

Step 3: From the dropdown menu, choose your preferred payment provider.

Step 4: Enter your information:

  • For Managed Payments: select “Register” and follow the instructions.
  • For Payoneer: select “Continue” and log in or sign up for a Payoneer account.
  • For PayPal: select “Continue” and log in or sign up for a PayPal account.

Step 5: Confirm your details and save your changes.

Step 4: Create a product listing

Creating a product listing is an essential step in a successful eBay dropshipping business. For this step:

  • You should first gather all the necessary information about your product, such as features, dimensions, and materials.
  • Then, you need a compelling product description that highlights the benefits of your product and how it can solve your customers’ problems.
  • You should also consider using high-quality images that show your product from different angles and in use.
  • Additionally, you can include customer reviews to build trust and credibility with potential buyers.

By taking the time to create a well-crafted product listing, you can increase the likelihood of attracting more customers and ultimately making more sales!

So, don’t rush this step, and make sure to put in the effort to create a listing that truly represents your product and business.

Step 5: Maintain good customer service

Finally, it is of paramount importance that you do not overlook the significance of maintaining exemplary customer service.

Providing prompt responses to customer inquiries and going above and beyond to offer excellent service is crucial to building trust and loyalty with your customers.

To achieve this, it is recommended that businesses answer all questions about their products promptly, provide accurate information, and process orders with the utmost efficiency.

One more tip to consider implementing customer service surveys to gain a better understanding of where improvements can be made. Throughout these steps, we can ensure that your customers will feel valued and respected, which is essential in building a strong and enduring customer base.

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How Much Does eBay Dropshipping Cost?

When it comes to eBay dropshipping, the costs can vary depending on several factors. The biggest reason is it depends on the type of products you sell. If you are selling high-end, luxury items, you can expect to pay a higher fee to eBay than if you were selling more affordable products.

eBay does charge you a commission fee for each item that you sell on their platform. This fee can range anywhere from 5% to 10% of the total sale value.

For example: if you sell a product for $100, you could be charged anywhere from $5 to $10 in commission fees by eBay.

Over and above that, the suppliers you work with can also impact the cost of your eBay dropshipping business. Some suppliers charge higher fees than others for their products, so it is important to research and choose a supplier that offers competitive prices.

eBay Dropshipping Policy

Finally, it is important to note that eBay has specific policies regarding dropshipping. Make sure you familiarize yourself with these policies before starting your eBay dropshipping business.

As we answered in the “Does eBay allow dropshipping” section, eBay supports dropshipping as an additional fulfillment method for sellers, as long as it meets the following requirements:

✅ Allowed

  • The seller can use third-party fulfillment to deliver their owned inventory if certain conditions are met:
    • The seller is always clearly identified on packing slips and invoices.
    • They make sure that the item is safely delivered according to the terms listed
    • Third-party providers are required to sign a contract that prohibits them from using or sharing any eBay order information for any purpose other than fulfilling the specific eBay order.
  • The seller is listing items on eBay that are fulfilled by a third-party wholesaler after making an agreement to sell specific items.
❌ Not allowed

  • The seller is attempting to sell items they do not own or have the rights to.
  • The seller purchases items from retail sites or other sources before reselling them on eBay.

Activity that doesn’t follow eBay policy could result in a range of actions including but not limited to: administratively ending or canceling listings, hiding or demoting all listings from search results, lowering seller rating, buying or selling restrictions, loss of buyer or seller protections, and account suspension.

All fees paid or payable in relation to listings or accounts on which eBay takes any action will not be refunded or otherwise credited to your account.

Moreover to these policies, you should also consider other factors such as the shipping time, returns policy, and customer service so that you can provide excellent customer service that will build a loyal customer base and grow your business in the long run.

Final Thought

In closing, with its low startup costs, a wide range of products, and global audience, eBay dropshipping holds the potential to be highly profitable if executed correctly.

All you need is to follow the steps outlined in this guide and stay up-to-date with eBay dropshipping policy and regulations. A successful eBay dropshipping business that generates a steady income will be built.

With these strategies in place, we wish you the best of luck on your journey to grow your eBay dropshipping business and achieve long-term success!

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