How to Use a Dropship Website for eBay Inventory

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By A. Suzanne Wells
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Use a Dropship Website for eBay Inventory

A dropship website provides items for eBay stores and other ecommerce businesses. Dropshipping is an inventory management system where a seller does not physically keep inventory in stock on the premises, but is an order-filler between the wholesaler and the final customer. The seller advertises the item, collects money from the customer, pays the dropshipper, and the dropshipper ships the item to the customer. Some new eBay sellers assume that using a dropship website is a fast and easy way to make a lot of money; however, this is not always the case. Learn the potential disadvantages of a using a dropship website.

Difficulty: Moderate

Instructions

Step 1

The first issue is the fee charged by the dropship website. Many of these companies charge registration fees, processing fees, or maintenance fees. As an eBay seller, you will already be paying eBay fees, Paypal fees, buying shipping supplies, and among other expenses. Do you really need another fee? Be sure to check out any fees involved in using the site.
Step 2

Some dropship websites operate pyramid schemes. The key is to get new members to sign up under a referral link. This is why you see so many ads for dropship websites – and so much “sales talk” about joining them. You’re going to be helping someone else earn money if you sign up.
Step 3

When working with a dropship website, you will never see, touch, or handle the product. Is that a good thing? If it is a technical product, such as an electronic device, how can you answer customer questions if you don’t even have the product to look at? If you are selling clothing, and a customer asks for measurements, how can you provide an accurate answer if you don’t have the item in front of you? Make sure this issue is covered if you decide to use a dropshipper.
Step 4

eBay is oversaturated with many of the same products from the same dropship websites. Go on eBay and do a search for iPods. Look at how many have the exact same photo, description, and price. This is because all of those sellers are working with the same dropship website. How can you possibly stand out among hundreds or thousands of sellers offering the exact same product? Make sure you understand this situation before making the decision to work with a dropshipper.
Step 5

Margins on products from dropship websites are low. Keep in mind that the dropshipper will take his cut, and you will have to pay eBay and Paypal fees. There isn’t much profit left over. Do the math before you decide to dropship.
Step 6

Finally, returns can be confusing. You cannot survive on eBay for very long without a fair return policy. So if the customer wants to return the item for whatever reason, does it go back to you or the dropshipper? You will have to refund the customer's money from your Paypal account, so how do you get reimbursed, and what are the conditions? You could lose money. Make sure you understand the dropshipper’s return policy.
Step 7

See the resources section below for more information on drop shippers and other alternatives.

Comments

street-smart said

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on 2/5/2009 Good info! Do you have any thoughts about dropshipping clubs where you pay a fee to join and get a group rate on the products?

chocolate00 said

on 2/1/2009 Thanks for the info - I've thought and researched about drop shipping before - never done it - too pricey. This has such great info!

Kallicat said

on 1/10/2009 Very good information. I had been looking into dropshipping but have yet to find a unique but marketable product.

dlcass said

on 1/1/2009 As a fellow eBay seller I'm glad to hear about this. I was considering Drop-Shippers, but I think I will stick to selling my antiques. I enjoy the hunt and preserving items from the past.