Dropshipping on eBay

Dropshipping on eBay seems like the perfect business model. A dropship business does not have to stock and maintain an extensive inventory; in fact, there are a wealth of Dropshipping Wholesalers who will connect you to suppliers and inventories beyond your wildest dreams. Of course eBay, for its part, makes a dropshipping model enticing as well. The eBay marketplace is the largest online and will connect you with instant traffic, demand and customers.

With the rise in popularity of dropship businesses on eBay, however, the viability of such operations has come into question. Factors such as access to inventories, competition and fullfilment are often difficult for those launching dropship businesses on eBay. A dropship business on eBay, like any other business venture, will not experience overnight success (contrary to what those selling dropship catalog memberships or tools want you to believe). Research has shown that there are strategies and characteristics common to those dropshippers who have experienced success on eBay.

Is eBay the Right Marketplace for Dropshipping?

EBay plays host to more than 100 millions users – retailers, wholesalers, manufacturers, distributors, consumers and researchers. It is the world’s largest eCommerce hub and an excellent medium through which to quickly test or sell products. The company itself recognizes the preponderance of dropshipping businesses in its community and has some suggestions for its dropshipping members:

Beware of Dropshipping Scams: Just like any other place online (search engines) that you find interest in dropshipping, eBay has its share of dropshipping scams. Beware of anyone on eBay that offers to sell access to dropship inventories or successful how-to guides. EBay does not, to our knowledge, validate any of these providers.
Dropshipping directories: To avoid dropshipping scams, you’ll find encouragement on eBay for dropship business owners to seek out partnerships with verified third-party dropship directories, such as Worldwide Brands, Salehoo, DropshipDesign & Doba. These are the most popular for use by eBay dropshippers. These companies provide access to verified dropshipping wholesalers with dropshipping programs that have been (for the most part) validated as legitimate product suppliers.
Do your homework: Check out eBay Seller Tools and eBay Powersellers to read about tools for eBay sellers, Dropship Business Best Practices and successful eBay merchants.

How to Use eBay for Dropshipping Success

There are those with strong opinions on both sides of the matter; some have experienced a great deal of success dropshipping on eBay, while others are convinced that scammers and competitive forces have rendered it nearly impossible to dropship products on eBay. The fact remains, however, that there are many who have been and are still successful dropshipping on eBay and there are some elements unique to eBay that make it an attractive venue for dropshipping businesses.

First and foremost, it’s a great place to test products. You’d be hard-pressed to find a marketplace, online or offline, that offers you the ability to test products and marketing methods on eBay. Your findings can be used to adjust your products/inventory focus, tweak your listings on eBay or expand into other eCommerce areas, such as Yahoo! Merchant Solutions (Yahoo! Stores) or an eCommerce website.

The following are factors you should test for with eBay stores:

Products themselves: What is selling and what isn’t? eBay offers a tool (for a price, but a great investment) called Terapeak with aggregates 90 full days of sales history, giving you access to sales, pricing and keyword data for more than 500 million closed listings. It is an invaluable tool for any dropshipper, eBay or not.
Best practices: Wee what successful dropshippers are doing on eBay. You won’t want to emulate another business model entirely, but it will likely save you a good deal of time in trial and error.
Marketing tactics: Successful auctions (and profits) don’t just happen. There is a strategy for reaching the customer and securing high closing rates and retail prices. See what keywords and keyphrases others are using and how the products are positioned.

The information gleaned from primary and secondary research tactics such as these will help you to formulate a successful strategy to test and market dropship products on eBay.

What to Dropship on eBay

If and when you do proceed with dropshipping products on eBay, beware of the eBay dropshipping pitfall: taking the easy way out. There are a number of dropshipping directories which will allow you access to popular products for dropship businesses on eBay. These directories sign up dropship business owners in droves on hopes of experiencing quick success with their ‘turnkey eBay dropship business’ programs.

It is often tempting to grab popular products, such as laptops, other electronics, clothing or jewelry from dropship catalog access programs and use push-to-auction technologies to create quick auction listings. This is so tempting because it’s easy and it makes a dropship business owner feel accomplished..dropship product listings can be created in literally five minutes.

The problem with this strategy is that it is very short-sighted. Not only do these practices create auction listings that look exactly like every other auction listing (haven’t you wondered why all of those digital camera listings look exactly the same on eBay?), but it saturates the particular market niche with more competitors, thereby increasing price competition and likely lowering the success rate of each individual dropshipper (assuming that market size and purchase volume go unchanged). Take some time to consider where you’ll experience the most long-term success and go there.