eBay Dropshipping Tips – 3 Basic Steps to Dropship on eBay
eBay remains the most attractive marketplace for many first-time sellers. Most times people who are new to eBay usually ask questions about dropshipping on eBay. Some of those questions point to, how to get things to sell on eBay? What is the cost to dropship on eBay? In this eBay Dropshipping Tips, we are going to discuss what eBay dropshipping cost is like and other basic things you may need to know about eBay dropshipping.
3 Basic eBay Dropshipping Tips
Before we proceed with the eBay dropshipping tips, it is important you understand what is dropshipping really about? This will help you determine whether it’s the right model to adopt for your online store or not.
In a simple term, Dropshipping is a product order sourcing strategy. A retailer fulfillment model of selling products without keeping stock.
For instance, a merchant order stock from a supplier and work with the supplier to deliver the product directly to their customer without handling the products themselves.
Dropshipping business is different from the traditional retailer business. In a traditional retailers business, the seller purchase products in bulk from a manufacturer or supplier, keep the product inventory. But, in Dropshipping business, inventory keeping is eliminated, the manufacturer creates the product, keeps inventory, and ships the products directly to the buyer on behalf of the merchant.
Understand eBay Dropshipping Policy
eBay dropshipping works only on one condition. That’s, following eBay’s dropship policy. So, to really understand how this online retail model works, you need to study the eBay dropshipping policy carefully. eBay put in place well-detailed policies to guide drop shippers on things to do and things not to do.
eBay dropship policy technically allowed dropshipping products directly from a supplier. This simply means eBay allows direct dropshipping from the manufacturer or a wholesaler. On the other hand, only products sourced from a wholesale or manufacturer can be listed and promoted on your eBay.
eBay doesn’t allow dropshipping from other retailers’ websites like Amazon, AliExpress, and Walmart that ship directly to customers. The dropship policy banned re-selling products from another retail website or marketplace.
Dropshipping is still much allowed on eBay, this is different from what you may have heard about eBay banning dropshipping. No such policy exists on eBay, the policy clearly states, dropshipping is allowed, where you fulfill orders directly from a wholesale supplier only. Faulting to this policy will result in removing or lowering your listings in their eBay search results.
The first step is to source products from a manufacturer or a supplier at a wholesale price. Then, list the sourced products on your eBay store. Your buyer places an order from your eBay store. Your eBay store sends the order to your dropshipping supplier. Your drop shipping supplier prepares your customers’ orders and ships the order directly to your customer.
Set Up an eBay Seller account.
You need an eBay Seller account to get started with dropshipping. However, there are different eBay sites for different countries. All you need is to make sure you sign up with the right eBay site with respect to your target audience.
Pros and Cons
Just like any other business policy, eBay dropshipping policies have their own pros and cons. Hence, it’s important we look at it carefully.
- It’s easy to start without a setup cost
- Need less Marketing promo.
- Get more Traffic with Less Effort.
- Pay a Small Fee per Listing.
- Less Customization option
- Constant Monitoring Needed.
eBay Fees for Dropshipping
There are two types of fees that is applicable for eBay dropshipping:
eBay listing Fee
eBay listing fee can be referred to as eBay insertion fee. This fee is charged on every product listing beyond the zero insertion fee offered by eBay. eBay offers 200 zero insertion fee listings per month. Any listing beyond the zero insertion attracts a $0.35 fee per extra item listing.
But since most eBay drop shippers don’t reach 200 zero insertion special for beginners. We can say that the cost to dropship on eBay is zero.
eBay Final Value Fee
eBay’s final value fee is known as the selling fee. The final value fees are paid as a percentage of the total sales cost of the items. This fee is only payable at month-end after sales, and it’s about 10% or lower for most sellers.
The next fee to look into in eBay dropshipping is the processor fees. eBay uses PayPal as its payment processor. PayPal is an online bank processor that processes payments from buyers to sellers on eBay.
So if you are using the eBay platform as your marketplace, you will need to create a PayPal account. Your PayPal account is where your customers pay in money for the products they are buying, PayPal then deducts the transaction fee known as the processor fee from the sale price. The PayPal processing fee is about 2.9% for payment within the US while other payments outside the US are 4.4%, which is deducted before sending the money to your PayPal account.
The currency fee is another fixed fee PayPal charges besides, but the fee amount varies based on the currency types. PayPal usually charges a fixed fee of $0.30 for the transaction made in US Dollars. For more information on the exact fixed fee for other currencies, click PayPal’s page for each currency.