Think of dropshipping, and eBay might not be the first thing that springs to mind.
You’re more likely to consider selling on Amazon, or better still, starting your own Shopify store for dropshipping. And that makes sense because these are where the really big bucks are.
But despite its lower profile (and despite a somewhat rocky history with dropshipping), eBay dropshipping still has lots going for it. The best way to think of it is as a gateway to life as an e-commerce entrepreneur. You may not get a 6 figure lifestyle dropshipping on eBay, but 4 or 5 figures is definitely possible.
And, compared to selling on Amazon or starting your own e-commerce store, eBay offers some advantages in terms of simplicity and cost.
So, let’s take a look at everything you need to know about eBay dropshipping:
- Is it really dead?
- What are eBay’s dropshipping policies?
- How much does it cost?
- Is it profitable and what are the drawbacks?
- And what are the tips for success as an eBay dropshipper?
Is eBay dropshipping dead?
There were certainly a lot of talks a couple of years ago about dropshipping on eBay being dead. The reality, however, is a bit more complicated.
“Dropshipping” on eBay is not all it seems
Back in the mid-2010s, a lot of so-called “dropshippers” started doing something pretty unfair:
- They found products on retail sites like Amazon and Walmart.
- They advertised these products on their eBay store, just at a higher price.
- When a customer purchased from them, they ordered the product to be delivered to the customer from Amazon or Walmart and pocketed the difference in price.
eBay customers were even receiving their products in Amazon branded boxes sometimes, with receipts showing the real amount the “dropshipper” had paid.
Unsurprisingly, the customers were unhappy. And so was eBay. Their brand was being damaged.
eBay says enough is enough
So, a couple of years ago, eBay drastically changed its rules for what dropshippers on eBay were allowed to do.
This is when lots of articles and videos popped up saying “Dropshipping on eBay is dead.”
In reality, this couldn’t be further from the truth.
That’s because what was going on before was not genuine dropshipping. It was pretty much a scam.
eBay is very much alive for real dropshippers
For real dropshippers, eBay is still a good place to be. It sees huge volumes of commerce going through its marketplace. In the last 3 months of 2019, goods worth $22 billion were bought and sold on eBay.
This is a market that’s simply too big to miss out on. Sure, the long-term growth potential is smaller than on other marketplaces. But on the other hand, eBay is pretty straightforward to get started on and it’s low risk.
You can make a decent living dropshipping on eBay for sure. There are just a few things you’ll need to understand, starting with eBay’s dropshipping policy.
What’s allowed to dropship on eBay?
Having been stung by so-called “dropshippers” before, eBay put in place some pretty detailed policies. So, if you want to give dropshipping on eBay a try, you’ll need to understand this stuff first.
Let’s break down 3 key points from eBay’s policies that relate to dropshipping.
1. eBay policy for dropshippers: buying from wholesalers
The first key point is that you can only dropship from wholesalers. This has clearly been put in place in response to the scams that had been happening on eBay.
As a dropshipper, you’re only allowed to purchase your products from wholesalers, or, of course, directly from suppliers. This point is clearly emphasized in eBay’s dropshipping policy, which states:
“listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer is not allowed on eBay.”
But you can still dropship if you are getting your products from a wholesaler or supplier.
So, if you’re thinking about getting started as a dropshipper on eBay, remember that you’ll have to source the products from a wholesaler or supplier. If you’re new to this, check out this list of 24 great suppliers and wholesalers for dropshippers. Sourcing your products from any of these would comply with eBay’s policy.
2. eBay policy for dropshippers: guaranteeing delivery time
The second key point is that you have to be able to guarantee delivery within 30 days. This applies to all sellers, not just dropshippers.
This timeframe is pretty standard, and to be honest your customers will also be expecting delivery within this timeframe, if not faster.
Just bear this point in mind when you’re finding suppliers. You should mention this explicitly, and also check out their track record by reading reviews. Late delivery will mean not only angry customers, but it could mean a fine from eBay too, or the loss of your Top Rated seller status.
3. eBay policy for dropshippers: responsibility for delivery
According to eBay’s policies, you are responsible when things go wrong with the delivery or product. Here’s what the policy says:
If you use drop shipping, you’re still responsible for the safe delivery of the item within the timeframe stated in your listing for the buyer’s overall satisfaction with their purchase.
There are 2 key terms to understand here:
1. “Safe delivery of the item within the timeframe stated.” This means it’s your job is to ensure the item is delivered (all in one piece) to the customer by the date you promised. This can be a challenge as a dropshipper because you are not the one actually doing the delivery. So, be sure to find out how quickly your supplier can process orders and which delivery provider they use.
2. “The buyer’s overall satisfaction with their purchase.” This basically means, is the customer happy with the product they receive? Does it match the description and images you provide on eBay? And does the quality match their expectations?
Here, you have some responsibility. Make sure that the descriptions and images on your product listing are accurate. The best way to do this is to order a sample from your supplier and do the product description and photos yourself. Then there is the question of defective goods. You’ll need to be able to provide a replacement or refund, so make sure you have negotiated this with your supplier.
Overall, both of these points emphasize the importance of finding a reliable supplier. Prioritizing cost over quality and reliability could get you into a lot of hot water.
4. eBay policy for dropshippers: the consequences
If you don’t meet these requirements for dropshipping on eBay you could be hit with one of these punishments:
- A lower seller rating. This will make it harder to attract new customers.
- Restrictions on buying. You might be banned from selling certain products.
- Loss of buyer protections. This means eBay will no longer back you up if you get into a dispute with a customer.
- Account suspension. In this case, you won’t be able to sell on eBay while your account is suspended.
So, make sure you fully understand eBay’s dropshipping policy before you get started. And, even more importantly, take your time to find a good supplier who can ensure you meet all of these requirements.
How much does it cost to dropship on eBay?
There is a simple answer to this question, which is: not much. At least, it is definitely cheaper than selling on Amazon in terms of fees.
And, because you get up to 200 listings for free, it is possible to get started dropshipping on eBay for virtually nothing. You can get a rough idea of how much it will all cost using eBay’s fee calculator.
So that’s the simple answer.
For a more comprehensive answer to the question of how much it costs to dropship on eBay, we need to understand the eBay seller fees properly.
For most product niches, you’ll be paying 2 basic fees to eBay.
- First, you pay an insertion fee. This is a charge for putting your listing up on eBay.
- Then you pay a final value fee when you make a sale. eBay takes a percentage of the total value of the sale, including shipping costs.
Let’s go into a bit more detail on these fees.
eBay insertion fees - how much will I pay?
As we’ve already mentioned, you get up to 200 free listings on eBay every month (or 250 if you use eBay’s Manager Payments service). So, if you stay within this amount, you won’t have to pay anything.
Once you have used up your free listings, you then pay $0.35 per listing. And that’s pretty much it, just remember these points.
- This is a fee for creating the listing. So, even if your item doesn’t sell, you won’t get the fee back.
- If you list the same item in two or more different categories, you pay the insertion fee for each category your item is in.
- You pay the insertion fee every time you relist an item.
eBay final value fees - how much will I pay?
The amount you’ll pay in final value fees as a dropshipper depends on the type of product you are selling. Let’s take a look at the fees that will apply to most dropshippers, then look at one exception.
eBay final value fees for most dropshipped products
Most products that are dropshipped - including top trending products in 2021 like yoga mats, wireless charging stations, and dog jackets - fall under eBay’s fee structure for “most products.”
For these products, the following fees apply:
- A $0.35 insertion fee
- A 10% final value fee. This means eBay will take a 10% cut of the total value of the product you sell, including shipping. So, let’s say you dropship a yoga mat for $40, and shipping is an additional $5. In this case, you’re going to pay eBay $4.50.
There is a cap on the total final value fee you have to pay, but it is set at $750 for these products. The product and shipping would need to have a value exceeding $7,500 for this cap to apply, so it’s not going to be relevant for most dropshippers on eBay.
eBay final value fees for athletic shoes
One product category that enjoys lower fees on eBay is athletic shoes. Clearly, this is a niche that eBay wants to encourage on its marketplace, so it has created some great conditions for dropshippers selling sneakers. These conditions include:
- zero insertion fee if the price is $100 or more,
- 0% final value fee if the price is $100 or more. If the price is under $100, you pay 10% just like other product categories.
There are a couple of other categories with different fee conditions, but it’s highly unlikely you will be dropshipping bass guitars, commercial printing presses, books, or food trucks. If you are, you can check out a full breakdown of the fees here.
Other fees on eBay
There are 2 other types of fees you’ll need to factor in when you dropship on eBay.
eBay fees for payments
First, you’ll need to think about payment processing, eBay’s managed payments scheme launched in 2018. As this announcement on managed payments explains, it becomes compulsory in 2021. Once you are on the managed payments scheme, the final value fee increases to 12.55% for most product categories. This basically covers the cost of Amazon handling your payments.
On the other hand, with eBay managed payments you will no longer be paying fees to Paypal.
eBay fees for upgrading your listing
Second, you have the option to “upgrade” your listing in a couple of ways.
You should also definitely consider upgrading at least some of your listings. As a new seller, it can be hard to get your products in front of shoppers. Once you have more traction, you can increase your profitability by cutting back on some of these upgrades.
You can have the listing appear in bold on the page so it stands out. You can also add “Gallery Plus”, which lets users see a larger image during their search.
But there are fees for these services.
- For auction-style selling, adding bold costs $2 per listing for items under $150 and $3 for items over $150. To add gallery plus, it costs $0.35 per listing for items under $150 and $0.70 for items over $150.
- For fixed price selling (eBay calls these “Good ‘Til Cancelled Listings”), adding bold will cost you $4 per listing for items under $150 and $6 for items over $150. Meanwhile, the prices for adding gallery plus are $1 per listing for items under $150 and $2 for items over $150.
There are other services available, such as setting a minimum price for your product - you can find details of all eBay listing services and their price in this article by eBay.
Is eBay dropshipping profitable, and what are the drawbacks?
OK, we’ve had a look at the policies and fees for eBay dropshipping. What about the ultimate question - is it profitable?
Let’s take a look at some of the benefits of eBay dropshipping, then we’ll consider some of the downsides.
The benefits of eBay dropshipping
Let’s look at 4 benefits of dropshipping on eBay, starting with the biggest.
1. Minimal investment required to start dropshipping
By far the biggest benefit of eBay dropshipping is that you can start with virtually no investment. As we’ve seen, you get 200 or 250 free listings to kick you off. This means you’ll only be paying eBay a fee when you actually sell something.
So, compared to selling on Amazon or starting a Shopify store, eBay is cheaper in terms of start-up costs.
2. Low risk
Because you are dropshipping, you’re not going to be buying stock. And with minimal start-up costs for selling on eBay, there’s really not much you can lose if your first dropshipping venture isn’t a hit.
You’ll have to create a listing that is accurate and clear, and you should consider investing in upgrading some of your listings.
But, once you’ve done these, there’s not a huge deal else to consider at first. Again, in comparison to Amazon or Shopify, eBay wins in terms of simplicity.
4. Presence on a marketplace where $22 billion sold every quarter
Finally, don’t forget that millions of Americans are active on eBay every year, and they’re spending literally billions of dollars. Capturing even a tiny fraction of those sales can be your springboard to e-commerce success.
The downsides of eBay dropshipping
While getting started may be low risk and low cost, there are plenty of disadvantages to dropshipping on eBay too.
1. Very high competition
Because the barriers to entry are so low, there’s a lot of competition on eBay.
There are an estimated 1.3 billion items listed on eBay. This means there’s a good chance other sellers will be selling the same items as you. Worse still, if you’re sourcing your product using dropshipper supplier software, others are probably dropshipping those exact same items on eBay already.
All of which means you’ll need to keep your prices very low, which can hit your profitability. Plus, there may be dirty tricks involved, with competitors buying your products then placing bad reviews or making returns, which will damage your listing place and make you harder to find.
2. They’re eBay’s customers, not yours
It’s pretty hard to build brand loyalty on eBay (or Amazon for that matter). And loyalty is critical for profitability. Return customers are much more profitable than new ones, because there’s a lower investment in marketing required.
But how do you build a loyal customer base on eBay? With no option to get your logo on the box, customers won’t associate the product with you, but with eBay. So you get no credit if it’s a good experience, but you carry all the responsibility if it’s a bad one.
Finally, there is also the fact, according to research on eBay and Amazon, that eBay is less trusted by shoppers. Is this really a brand you want to be connected with?
3. Up to 10% of any sale goes to eBay
After eBay’s fees and the percentage taken by your dropshipping supplier, there’s not going to be much left for you. This becomes especially problematic when you have to keep your prices low due to high competition.
Tips for success in eBay dropshipping
After weighing up the benefits and drawbacks, the best approach is to treat eBay as a testing ground for your dropshipping venture. You could use it to have your first try at dropshipping to see if you enjoy it. Or it could be a useful platform for trying out new products.
For example, one smart strategy would be to trial products on eBay, and if they prove popular enough, switch them over to your Shopify store. In the long run, you’re going to make a lot more profit and have a much better chance of building brand loyalty using Shopify.
So, there’s the tip for the overall strategy for eBay dropshipping. What about more specific pointers? Here are a few to try out.
- Take a course. As with all e-commerce activities, the more you learn the better you’ll get. And you might avoid some costly mistakes early on. For example, you could try out this course from Dropshipping Titans focused on eBay dropshipping.
- Find the right software. Platforms like Oberlo only work for Shopify. So try Inventory Source. It has an integrated supplier network, and you can dropship items from suppliers on a range of platforms, including eBay.
Dropshipping on eBay - the Takeaways
Understanding the advantages and disadvantages is key with it comes to successful dropshipping on eBay.
On the one hand, it’s a large marketplace that is easy, quick, and affordable to get started on. On the other hand, high competition levels and low customer loyalty mean it’s tough to turn a profit or make a significant income.
So, the best approach is to treat it as a testing ground. Take advantage of the low barriers to entry and get set up with some experimental products. Once you have a few sure-fire hits under your belt, transfer them to a Shopify store that you run yourself, where you can really turn big sales into big profits.
If you’re looking for inspiration on which products to start dropshipping on eBay, check out these 21 trending products for dropshipping in 2021.