So you want to learn how to start a drop shipping business on eBay? Well, you’re in the right place. In this step by step guide, you’ll learn everything there is to know about building a successful and profitable eBay drop shipping business.
How Does Drop Shipping Work?
For those of you who don’t already know, drop shipping, also frequently referred to as product sourcing is an order fulfilment technique. The way it works is simple. Products are sold online, usually through selling channels such as eBay or Amazon and then sourced directly from suppliers, typically wholesalers or manufacturers.
There are many benefits of using a drop shipping model, the most attractive being the ability to launch an e-commerce business without having to invest large sums of money on inventory to resell.
Is Drop Shipping Allowed on eBay?
Drop shipping is simply an order fulfilment technique. Therefore, it’s absolutely allowed on eBay. In fact, thousands of current eBay sellers, including some well-known brands and established companies are already successfully drop shipping on eBay.
The model has become so popular amongst sellers that eBay has put together an article about drop shipping which confirms that it’s allowed on the platform. You can read it here.
How to Start & Build a Drop Shipping Business on eBay
Find a Supplier & Products to Sell
Before you can launch an eBay drop shipping business, you must first find a supplier. There are a range of ways to do this, some more effective than others. From using supplier directories to attending trade shows, contacting wholesalers directly, studying online forums or even hunting them down yourself on Google.
Directories are often the popular choice because they cut out the time consuming process of having to find and research suppliers manually. The directories put together a list or database of the best drop shipping suppliers on the net, and make it simple for users to quickly find one that suits their needs.
However, not all directories are a useful as they many initially appear, some also charge high yearly or monthly fees. It’s important to do your research before joining any directories that charge a membership fee.
Here at Wholesale Frog however, we have a free to use directory that is literally overflowing with reputable drop shipping suppliers. You can browse our directory for free and find a whole host of companies that you can immediately start sourcing goods from. Learn more here or visit the directory now.
Create Keyword Optimised eBay Listings
Once you’ve found a supplier and products to source, it’s time to start listing them on eBay. However, there’s more to it than simply copying the titles and descriptions that your supplier may provide. In order to stand out from the ocean of competition, you must create keyword optimised listings, and also set good prices (see section below).
Titles are the most important part when it comes to creating eBay listings. Titles are not only the first thing potential customers see when browsing eBay but they’re also used by eBay to determine when and where to display your listing within the search results. Good titles equal more views, click-throughs and ultimately sales. Make sure you include as many relevant keywords in your title as possible, and always use up the full allocated space.
Price Items Correctly
It’s no secret that price is a major factor in a customer’s decision to buy or not. The same rule applies when drop shipping on eBay. After taking eBay and PayPal fees into consideration, you should aim for a healthy but moderate profit margin. Don’t make the mistake of over pricing. I’m sure you’d rather sell an item 10 times over with a £2 profit than only once with a £5 profit. Keep your prices low to keep customers interested.
Process Orders Quickly
When a customer places an order, you then need to either forward or place that order with your supplier. Therefore, it’s imperative to process orders quickly to ensure they get to your customers on time. As a general rule, you should aim to process any orders the very same day. Remember, your supplier is the one who will prep and dispatch the items, if a customer places an order on Monday but you don’t process the order until Tuesday, it could result in the item being delayed. Don’t make the mistake of matching your suppliers shipping policy, if they deliver within 3-5 days, set your eBay shipping policy as 5-7 days to stay on the safe side.
Mange Stock & Prices Effectively
One of the biggest challenges when it comes to drop shipping on eBay is managing stock levels and price changes. Selling a product that has either ran out of stock or raised in price could result in a negative feedback. Therefore, it’s important to put an effective stock and price management system in place. Your plan should involve manually doing stock checks and having a close relationship with your supplier who should be able to provide you with stock/price updates. You should also learn how to deal with customers effectively if you do happen to sell an item that has ran out of stock.
Provide Great Customer Service
Customers are the life and soul of any business. Treat them well and they’ll continue to come back for more. Make sure you go that extra mile by informing your customers when their items have been dispatched, and following up with them after delivery to ensure they’re satisfied with the product. If they are happy with the product, you could also take the opportunity to kindly request feedback.
Never forget, the customer is always right, even when they’re wrong. Go above and beyond to resolve any issues or complaints quickly, and to the customer’s satisfaction. You’ll quickly discover that good customer service could turn even the most upset customer into a repeat buyer.