Set up a Drop Ship Business on eBay

With a drop ship business, your success depends on selling products which are then shipped directly from a manufacturer or wholesaler to your customer. Your profit depends on the difference between the wholesale price and the retail price (what you sell it for). You can run your business in a variety of ways (physical store, catalog, website) but this article will focus on doing it through eBay.

Steps

  1. Create a seller account on eBay. Part of your investment in this business will be in listing fees on eBay.
  2. Research drop ship companies, also known as suppliers. Choosing suppliers that are in the same country as your intended customers will likely make shipping easier. Use a directory or other drop ship source such as Worldwide Brands, Doba or SimpleSource - they do the work of finding legitimate suppliers for you.
    • Watch out for scammers who pose as suppliers but are really just middlemen themselves. They'll take their own cut of the profits, thus reducing yours. If they require a regular fee for using their service, consider that a very bright red flag!
  3. Decide what you want to sell. It's important to check whether there's enough demand (and not too much supply) for the products you want to sell. Here's one way to find out:
    • Go to eBay
    • Click "Advanced Search"
    • Enter product (e.g. Art decorating lamps)
    • Sort by "Price Highest First"
    • Select "Completed listings only"
    • Click "Search"
    • Make note of the best selling products
  4. Establish an account as a retailer with the supplier. E-mail, call, or send a letter asking how to become a retailer of their products and ask if they will drop ship to your customers. You'll also want to find out if they'll put a custom return label (with your store name and address) on the shipments, so that the customers assume you sent it.
    • Don't be surprised if the supplier you contact for a retail account requests a tax ID. In order to purchase products at a wholesale cost, many will require this information.
  5. List the items on eBay. Upload images and descriptions from the suppliers' websites. Make a detailed, professional looking listing. For better results, provide your own descriptions and pictures of the product you're selling (if you have samples). The price should be low enough to compete against similar items, but high enough to give you a good profit, once you account for listing fees.
    • Read Advertise Effectively on eBay and List Items on eBay for tips.
  6. Contact the distributor when your items sell. Give them your customer's shipping address. They will send the product directly to your customer. Follow up to make sure the shipment came on time, and as described.

Tips

  • This may not work on new PayPal accounts because PayPal now freezes funds for 21 days on new accounts until the item is received by the buyer.

Warnings

  • You will probably have to pay taxes on the profits you make through this business. See Minimize Your eBay Businesses Taxes.
  • Make sure you keep close track of how many items a supplier has. If you sell an item that they ran out of, the shipment will be delayed, and your customer will not be very happy with you. That leads to negative feedback, which leads to fewer sales.

Related Articles

  • Sell on eBay
  • List Items on eBay
  • Advertise Effectively on eBay
  • Minimize Your eBay Businesses Taxes
  • Sell a Commercial Business
  • Use Mail Drop
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