How to Make Money Dropshipping on Ebay

Use Ebay to setup a e-tailer shop that offers you the opportunity to drop-ship products.

Establishing yourself as a successful retailer on Ebay means dealing with many of the same retail issues that any other online retailer has, including maintaining an adequate product inventory. Unless you have a large amount of funds and a warehouse available, keeping a large inventory on hand isn't possible. However, profit often comes with volume sales, so when a high inventory is desirable, you can do away with the upfront costs of product purchases and inventory costs by becoming a drop-shipper. As a drop-shipper, you can offer the product for sale in your Ebay shop without having the product in your possession. The manufacturer or distributor handles shipping, with the cost of doing so covered by the buyer.

Things You'll Need

• Industry trade magazines
• Retail account with product manufacturer or distributor
• Public relation materials

Instructions

1. Contact the manufacturers of products that you wish to sell through your Ebay shop. Ask the manufacturer if they offer drop-shipping for their products. You can locate manufacturers through trade magazines covering their participating industry, or by searching manufacturer lists provided by online sites like the Drop Ship Source Directory or the Thomas Registry.

2. Arrange a drop-shipment contract as a retailer directly with the manufacturer. Include provisions covering fulfillment times and quantities, price controls, returns policies, a repair policy and any warranty placed on the products. You will also need to negotiate a wholesale price for the product that you have to pay for each unit shipped to the customer, as well as shipping rates. A provision covering non-fulfillment penalties is desirable as well to provide you with options to pursue should the manufacturer fail to uphold the contract.

3. Ask the manufacturer for a list of distributors if they do not offer drop-shipping themselves. Contact the distributors to arrange drop-shipping through them. The price paid for the merchandise on your end will be slightly higher than if you had a contract directly with the manufacturer due to having to pay additional fees to cover distributor costs. Arrange the drop-shipping contract with the distributor as you would with a manufacturer.

4. Ask the manufacturer or distributor for Public Relation, or PR, materials related to the product, such as product descriptions, manuals and pictures that you can use when setting up your Ebay shop.

5. Open your internet store on Ebay, registering as a merchant and adding a shopping cart to the store for the acceptance of credit cards. Use the product information provided by the manufacturer or shipper to fill out your product pages with the details a buyer needs to make their buying decision.

6. Set a price for the product that covers both the wholesale price you have to pay, including any additional fees, with an additional amount added for your profit. List the shipping fee as well. Do a search on the site for other sellers offering the same product to determine the average price point. Set your price within the average range or slightly lower to attract buyers.

7. Make a sale on your Ebay account and collect the purchase and shipping fee by credit card or other acceptable payment method like e-check. Send the order by email to the manufacturer or distributor containing the purchase information, including customer name and address.

8. Wait for the shipper to mail out the product, using your store name. The shipper then charges you the negotiated price and shipping fee. The difference between the price plus fee and the amount charged the customer is your profit for the sale.

Tips & Warnings

• E-checks can take up to one week to clear. Do not send out the order information to the distributor or manufacturer until the funds are available.

References

• Skip McGrath's Online Seller's Resource; Dropshipping for eBay & Amazon; Skip McGrath; 2011
• Skip McGrath's Online Seller's Resource; There is More Than one Way to Drop Ship for eBay; Nate Gilmore; 2011
• Skip McGrath's Online Seller's Resource; What Is Drop Shipping?; Chris Malta; 2011
• "Entrepreneur"; How to Find a Drop-Shipper; Corey Rudl; June 2004

Resources

• Read this Article in Spanish
• Thomas Register of American Manufacturers: Home
• Drop Ship Source Directory: Home