eBay Dropshipping: All You Need To Know To Start

Are you looking for a low-risk, low-cost ecommerce business idea for extra income?

You might consider eBay dropshipping.

It’s a popular online business model that can potentially give you passive income without handling physical inventory and order fulfillment.

Best of all, you can start on one of the biggest online marketplaces – eBay.

If you want to learn how to dropship with eBay, keep reading.

In this eBay dropshipping guide, I’ll tell you everything from creating a seller account, choosing the right products, and increasing your sales.

Let’s begin.

What Is eBay Dropshipping?

eBay dropshipping is a business model where you list products on your eBay store without carrying the products themselves.

You must only choose a dropshipping vendor for the products you want to sell.

When you receive an order, you pass the customer’s information to your supplier. They will then package the customers purchase and ship it directly to them.

This makes dropshipping a low-cost and low-risk business – you don’t have to buy store inventory up-front and you don’t have to deal with storage, packaging, and shipping costs.

How Does eBay Dropshipping Work?

To help you better visualize this process, I’ll explain how it works.

eBay Dropshipping Policy: Does eBay Allow Dropshipping?

Yes, but you must keep in mind eBay’s specific dropshipping policies. There are two key points that eBay dropshippers must follow:

1. Dropshipping Supplier
   You need a legitimate supplier, which refers to a trade-only or wholesale supplier. You can’t dropship from another retailer on the platform or elsewhere.

2. Delivery
   As the eBay seller, you’re responsible for the safe and timely delivery of the customer’s order. It must be within the timeframe you specified in your listing even if you’re not the one handling this process.

Other than these eBay dropshipping policies, you must still follow general selling guidelines. You must adhere to the following:

• eBay User Agreement

• eBay Policy

• All applicable laws

• Intellectual property rights and other rights of third parties

Pros and Cons of Dropshipping on eBay

eBay dropshipping is not a one-size-fits-all business model. Let’s discuss its advantages and disadvantages to help you see if it’s right for you.

Pros of eBay Dropshipping

• Easy To Start
  You don’t need much technical knowledge or skills to setup an eBay dropshipping business. You can quickly start selling once you have a product and a supplier.

• Low Upfront Investment
  Because you don’t need to buy inventory, you don’t need a huge capital to start selling.

• Built-in Audience
  eBay has an active monthly user base, making it easier to reach your intended audience. This saves you time and effort on building your own customer base.

• Low Marketing Effort
  You can leverage eBay’s platform and brand to build trust and attract customers. You don’t have to invest heavily on marketing campaigns, although I still recommend you market your store outside the platform.

Cons of eBay Dropshipping

• High Competition
  Because eBay drop shipping has low barriers to entry, the marketplace already hosts several dropshipping sellers. The competitive nature can make it harder for a new store to stand out.

• Limited Branding and Customization
  Your eBay storefront doesn’t offer much branding and customization options. This can limit your chance to stand out and build a unique brand identity.

• Low Profit Margins
  Profit margins can be significantly low, especially on highly competitive categories. It can be challenging to find a balanced pricing strategy with many other eBay sellers offering the same products.

• eBay Listing Fees
  The marketplace has several selling fees, many of which can be quite confusing to navigate. These can eat into your profitability and might lead to losses if you’re not carefully checking your finances.

• Customer Service Challenges
  You don’t have direct control over your products and the fulfillment process. Meaning, customer inquiries and concerns related to these aspects can be challenging.

How Much Does It Cost To Dropship On eBay? 

Next, let’s discuss some actual figures. Here’s a quick look at the eBay dropshipping fees to expect:

The eBay marketplace has other selling fees you need to keep in mind, but these are the ones that matter for now.

Let’s quickly discuss each type of fee.

Insertion Fees

Insertion fees are pretty straightforward. You pay $0.35 in these conditions:

• For every listing you publish after your monthly free listing allowance

• For choosing a second category for your listing

However, it can go even lower when you have a subscription, which we’ll discuss later.

Final Value Fees

This fee covers the costs of selling on eBay, including payment processing. The platform deducts it from the total sales price.

The actual amount varies per category, but it’s usually a percentage of the total sales price plus $0.30. Here’s a handy guide on the specific categories and their fees.

Optional Listing Upgrades

When you list your products, you can buy add-ons and extra features to help them stand out.

Subscription Fees

Creating an eBay account is free. However, you pay for the maximum amount of every fee on the platform, such as insertion and final value fees.

If you have a big business, it makes sense to subscribe to one of eBay’s selling plans to help you save more money.

Here’s an overview of the financial benefits you’ll receive from each plan.

Step-by-Step Guide To Start Dropshipping on eBay

1. Create an eBay Seller Account.

To start creating your account, head to eBay and click Register. Ensure to choose the Business eBay Store option, then provide the necessary details.

After you create your account, you must register as a seller. The platform will ask for additional information, depending on whether you have a sole proprietorship or a registered business.

Important: This step should only take around 15 minutes.

It’s better to do it now rather than later, as eBay may delay your payment if you start selling first and then go through the verification when you want to withdraw your balance.

List Your First Items (Manually).

Before you automate your listing and order fulfillment processes, consider listing a few products manually.

Not only will this help you familiarize yourself with the platform’s interface, but it will also prevent your account from looking suspicious to eBay.

I recommend going slow – a few items at most every day or every other day – instead of listing all products at once. After a couple of weeks or so, you can connect your dropshipping software for eBay to automate product importing.

2. Build Your Feedback Score. 

Your feedback score on eBay is a vital indicator of your reputation as a seller. Here are some tips to build a strong feedback score:

• Excellent Service
  Offer prompt shipping and responsive customer support. Positive buying experiences lead to positive feedback.

• Effective Communication
  Respond to buyer inquiries and concerns promptly and professionally.

• Accurate Listings
  Ensure your listings accurately describe the product’s condition, features, and any potential drawbacks.

• Resolve Issues
  If any problems arise, address them promptly and offer efficient solutions.

3. Find Profitable Products To Sell.

What To Dropship on eBay

When looking for products to dropship on eBay, check the demand, profitability, and competition. 

In general, the most popular categories for dropshipping products on eBay are the following:

• Consumer electronics

• Home

• Pet supplies

• Toys and hobbies

• Fashion

Of course, you can explore other categories that suit you better. Here are some few tips to keep in mind when selling items:

• Decent Profit Margins
  Choose products where you can place a decent markup to achieve your desired earnings. Ensure you factor in all expenses, including eBay fees and shipping costs.

• In-Demand Niche Products
  Focus on a niche that has consistent demand. Research market trends and consumber behavior to identify products that already has an audience. 

• Easy To Ship
  Smaller items are relatively easier and faster to ship, ensuring you can provide timely deliveries to your customers. Moreover, bulky and fragile items can incur higher shipping costs and more risks during transit.

• Quality and Low Return Rate
  Select products that have good quality and low return rate, which indicates customer satisfaction. This can help you maintain a positive seller rating.

What Products To Avoid Dropshipping on eBay

Ensure you only choose products that comply with eBay’s policies.

eBay prohibits or restricts certain items and categories to promote a safe and legal platform. Steer clear of the following categories:

• Adult items

• Supplements

• Animal traps

• Bullion

• Collectible currency

• Cosmetics

• Counterfeit products

• Gift cards

• Weapons

• Illegal drugs and drug paraphernalia

• Hazardous materials

• Government items

• And more…

Check eBay’s complete list of prohibited and restricted products policies to be sure.

Some of these are still legal to sell on the platform provided you adhere to further restrictions. I don’t recommend going through the trouble, especially when you’re dropshipping.

It’s best to stick to safe categories to avoid the risks of account suspension. 

eBay Product Research Methods: Finding Winning Products

How do you find winning products?

You can simply browse eBay’s bestselling page or use tools to help you with product research. I compiled the best methods below.

I recommend putting all product ideas on a spreadsheet, where you can also input data like sales volume, demand, etc.

4. Choose a Dropshipping Supplier.

Once you have your winning products, it’s time to look for reliable suppliers. Here are some tools to help you find the best eBay dropshipping suppliers.

Remember that a successful dropshipping business relies heavily on the supplier.

When looking for a supplier, look for these qualities:

• Good user reviews

• Product quality

• Reasonable shipping times and costs

• Dropshipping integration tool

• With terms and policies that align with eBay

5. Calculate Your Profit Margin and Price Your Product.

One of the biggest challenges of eBay dropshipping is offering competitive prices while ensuring healthy profit margins. 

Nevertheless, I’ll help you walk through it.

First, you want to determine how much exactly a product costs you by factoring in the following:

• Supplier’s price

• Shipping costs

• eBay’s marketplace fees (the ones I listed above)

Because eBay’s category and final value fees can be confusing, you can use an eBay calculator to help you view your costing more accurately.

Next, you want to determine the market price.

• See how much your competitors are selling the product for.

• Figure out how much your customers are willing to pay for the product.

This can be time-consuming, but considering all these factors can help you find your rhythm faster as a new dropshipping seller.

Note: This is not a one-time process. You must continually analyze your competitors and sales data to adjust your pricing accordingly.

6. Integrate Your Store with eBay.

To diversify your sales channels and unlock more marketing potentials, I highly recommend setting up a separate online store.

Choose Your Hosting Plan.

The right hosting plan enables you to maintain a consistent website performance, security, and accessibility. You want a plan with the following features:

• Sufficient storage and bandwidth

• Consistent server performance

• Industry-compliant security

• High uptime guarantees

Consider providers like BlueHost and HostGator, which are both popular platforms for beginners and advanced users alike. They offer value-for-money plans that can scale with your business as it grows.

Choose an E-commerce Platform that Integrates with eBay.

Your own online store helps you build a brand and create a professional image. However, you must choose the right online store builder, then manage it well to reap its benefits.

At the least, it must integrate seamlessly with eBay so that you can automate most of the processes.

You have various options, but for this job, I recommend learning how to sell on Shopify. 

This platform can easily connect to your own eBay store, streamlining the order management, inventory, and fulfillment processes.

7. Create and Optimize Your eBay Listing.

Once you have your products ready, it’s time to create a listing that can attract potential online buyers and increase your sales.

For an optimized eBay listing, follow these tips:

• Research Keywords.
  Identify keywords or search phrases your target audience is likely to use when searching for products on eBay. You can get ideas from the platform’s search bar or third-party research tools.

• Create a Compelling Title.
  Create a title that accurately describes your product. It should include key information like the brand, size, quantity, color, etc.
  Ensure you also incorporate the most relevant keywords into the title.

• Use High-Quality Images.
  Product listing images should be high-quality and accurate representations of your product. It’s best to upload multiple photos with varying angles, close-ups, and real-life settings.

• Write a Detailed Description.
  Write a product description that converts by listing all relevant details, including dimensions, materials, specifications, and its unique selling point.
  Don’t forget to incorporate your keywords naturally into the copy.
  You can look at product description templates to get ideas on what works. However, make sure to personalize it and add your branding.

Add Your eBay Business Policies.

Your listings should clearly display your business policies, including:

• Shipping policies

• Return policies

• Payment policies

Keep your policies concise and easy to understand.

8. Promote Your eBay Store.

Although eBay has a built-in audience of 138 million active shoppers worldwide, you must still promote your store to reach customers.

Here are some ways you can increase visibility and sales.

Get Your eBay Store To Rank on Search Engines.

If you want organic traffic, consider targeting search engines like Google when doing keyword research.

Note: eBay is its own search engine, so you must research keywords separately on both platforms.

To rank on search engines, you can start a blog and use content marketing strategies. Then, find a way to direct oncoming traffic to your eBay store.

Create a Multi-Buy Offer for eBay Customers.

With multi-buy, you can offer two or more products in one bundle at a lower price or lower shipping costs, attracting buyers looking for a good deal. 

Bundling your products help you save on shipping and import fees while increasing your sales. It’s one way to learn how to offer free shipping on eBay without taking a big hit on your profits.

Use eBay Promoted Listings.

eBay’s Promoted Listings feature helps you increase your visibility on the platform’s search results page.

It’s a built-in advertising tool for boosting your products’ exposure, but you must target the right search phrases to maximize your ad spend.

Leverage Social Media.

Take your eBay store to platforms like Instagram, Facebook, and Twitter, depending on which one your audience uses.

Social media networks like these can help online sellers form a more personal connection with customers while building a brand identity. 

Explore Email Marketing.

With email marketing, you can create a more direct connection with your customers. It allows you to personalize your messages and segment your audiences for a more effective approach.

I would argue that you should do this from the beginning for a higher chance at achieving eBay dropshipping success. Here are some ways it can help:

• Improves brand recall

• Fosters brand loyalty

• Keeps your audience engaged

Best of all, email marketing is fairly cost-effective to launch and maintain.

All you have to do is send valuable and engaging mail, such as newsletters, announcements, and interesting content related to your niche.

9. Fulfill Your eBay Orders.

Manual Fulfillment

This method requires a more hands-on approach as the customer’s order won’t move unless you forward the details to your supplier.

Once your supplier processes the order, you then update the information manually on eBay and provide the tracking information to your customer.

Although it can be tedious, manual fulfillment might be the only option when you choose a supplier platform that doesn’t integrate directly with eBay.

Automatic Fulfillment Through the Dropshipping Supplier

Should you follow my tip above and choose an eBay dropshipping supplier with eBay integration, you only have to sit back once orders come pouring in.

When you receive an order on eBay, the details automatically go to the supplier. They can then process and ship it faster, minimizing delays and effort on your part.

Automatic Fulfillment Through a Third-Party Tool

Some third-party tools and software allow you to integrate your eBay store and dropshipping supplier when the earlier option is not available.

You can use apps like the AutoDS, which forwards the order details to your supplier.

10. Monitor Your Performance and Scale Accordingly.

Although eBay dropshipping is always touted as a source of passive income, you must still do your part in maintaining your store.

You must keep track of key metrics to make more informed decisions and shape a successful eBay business.

Here are some examples of valuable data to monitor:

• Sales volume

• Conversion rate

• Website traffic

• Return and refund rates

• Shipping times

• Profit margins

Pay Attention to Customer Experience.

As an eBay dropshipper, you still have to provide exceptional customer service by doing the following:

• Respond to inquiries promptly.

• Resolve eBay customer concerns efficiently.

• Provide personalized service.

• Handle returns and refunds effectively.

When you strive for a positive user experience, you create a loyal customer base. You can encourage repeat purchases and more word-of-mouth recommendations.

To streamline your customer service efforts, you can use tools like the AutoDS eBay Customer Service Management System.

Track Your Marketing Efforts.

How do you know if your marketing strategies are working?

Measure the effectiveness of your ads and other campaigns by analyzing the following metrics:

• Click-through rates (CTR)

• Conversion rate

• Return on investment (ROI)

• Traffic sources

By seeing what works and what doesn’t, you can better allocate your marketing budget and optimize your campaigns.

Optimize Your Products.

By collecting and analyzing data, you can further optimize your eBay dropshipping store. You can add or remove products accordingly, improve customer experience, and use high-performing keywords in your other listings.

Monitor Market Trends.

Ensure you stay on top of emerging trends in your niche to gain a competitive advantage.

You must also pay attention to any changes in customer preferences and consumer behavior. This allows you to align your product offerings and marketing strategies with your customers’ changing needs. 

Frequently Asked Questions (FAQs)

How To Dropship on eBay Without Getting Banned?

You must follow eBay’s seller and dropshipping policies to avoid getting banned. Here are some steps to do to maintain a good standing on the platform:

• You must choose a legitimate dropshipping supplier or wholesaler and not a retailer.

• You must bear the responsibilities of a traditional seller, such as handling customer service and ensuring the timely delivery of your products.

• Choose quality products to avoid getting returns too often.

• Review the platfrom’s policies regularly.

• Offer outstanding customer service to maintain a positive seller rating.

Can You Dropship on eBay From AliExpress?

Technically, no. eBay has explicit rules against dropshipping from another retailer, but it allows dropshipping from wholesale suppliers.

However, you can use AliExpress to find eBay dropshipping suppliers that comply with this rule. Many sellers on the platform also sell products wholesale.

How Much Can You Make Dropshipping on eBay?

The amount varies based on the following factors:

• Your product offerings

• Profit margins

• Sales volume

• Marketing strategies

• Customer satisfaction

It also depends on your pricing strategy. You must accurately calculate your profit margins after you pay eBay fees to keep this dropshipping business model sustainable.

Is eBay Dropshipping Profitable?

Dropshipping on eBay is low-risk and profitable. The secret to making a living through this business, though, is sourcing low-cost items and selling them via the marketplace for a higher markup. 

How Much Does It Cost To Dropship on eBay?

Alongside the cost of each product, eBay dropshippers must pay extra fees to sell through the marketplace, including:

• Listing fees – up to $0.35 per listing after the 250 free allowance per month

• Final value fees – up to 13.5% of a product’s sale price + $0.30 per order

• Subscriptions – starts at $4.95 monthly

What Is Amazon, eBay Dropshipping?

This business model can mean either of the two things:

• Dropshipping from eBay to Amazon

• Dropshipping from Amazon to eBay

To put it plainly, it means sourcing products from one platform and selling them on another.

The Bottom Line

Are you ready to start your own dropshipping business on eBay?

With this how to: dropshipping on eBay guide, you now know the best way to start this great business model and keep it running.

Make sure you thoroughly learn how to start a dropshipping business to have all the tools you need a successful eBay dropshipping business.