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A Guide to Dropshipping on eBay

(Reproduced)A Guide to Dropshipping on eBay

Auction sites are a dropshippers dream. Huge amounts of consumer traffic pass through their auctions everyday, all looking for items to purchase. As the biggest of them all, by a considerable distance, eBay is a perfectly placed tool for dropshippers to take advantage and profit from.

That’s not to say there isn’t a downside, there is; you have to pay fees for listings, there is significant competition and there is a risk that the item will cost you money in fees if it doesn’t sell – whereas other methods of dropshipping might be less risky. But in most cases the benefits far outweigh the negatives.

So that being the case, how does a potential dropshipper best take advantage of eBay?

Tips to dropshipping on eBay

The idea behind selling on eBay is the same as anywhere else, make your auction the most attractive possible and ensure that the market is there for what you are selling.

Market research

Before jumping into an auction right away look through eBay. Is anyone else selling what you are (quite common when using dropshipping)? If so look at what they sell for, and if any fail. Make use of the option to watch an auction and see what items sell and what don’t.

Decide how you want to sell

There are numerous ways of selling items. Basic auctions, Buy it Now auctions, eBay shops etc. You need to decide what your strengths are an what the buyers are preferring for that niche. Each has its own advantages and disadvantages so don’t rush your decision.

Make sure you are aware of the fees

eBay charges for almost everything, and it is important that you make yourself aware of what your auctions are going to cost. Your profit margin is directly effected by your outgoings and there is no way of avoiding these fees – so ensure that you are including them as part of your calculations.

Test your sales copy

Assuming that you start selling items at a profit you should start looking at testing your sales copy – what is written about the item in an auction. By trying different techniques when you are selling an item you can come to understand what helps it sell and what hinders it. Selling is the only function you provide in the dropshipping sales process – so make sure you get it right.

Protect your reputation – use good dropshipping companies.

On eBay reputation is key in making people trust you enough to buy form you, so it is vital that you have a company that you trust to deliver the items they promise to, in the time frames they assure. Test the company if you need to, but make sure that you only use reliable companies – their performance will help decide if you succeed or fail.

Drop Shipping and E-Commerce

(Reproduced)Drop Shipping and E-Commerce

Dropshipping has often been linked to the e-commerce world, such as sites as Ebay and Amazon. However, before the e-commerce world, dropshipping was still alive and thriving with door-to-door salesman. For example, those that sell Mary Kay or Avon are using the dropshipping method. They show products that are in catalogs and are available for anyone that wishes to buy them. This allowed these companies to still have the benefits of employees, without having to pay for insurance, vacation time and whatnot, which is all standard aspects that are involved with business employees. However, when the Internet introduced e-commerce, the idea of dropshipping went to this area, and it does not work.

Dropshipping and e-commerce does not work for two main reasons. These are buying power and market value destruction. Buyer power refers to the profit you make on buying and reselling the product. With e-commerce the buyer power is zero. That is because when you sell a product on Ebay you usually only sell one of the product. Dropshipping is all about buying in quantity. For example, if a gold necklace runs around $10 at the wholesaler, who ten sells the necklace to a department store for $11.50. They sell a case of 10,000 of these necklaces. The profit for the wholesaler on this sale is around $15,000. Now take the same example except use it geared towards Ebay and the profit would drop to a $1.50. Think about the amount of time the wholesaler would have to go through and all for a little over the dollar. It’s not worth it and no dropshipper is going to agree to these terms. In order for the Ebay worker to even make a profit, they are going to have to charge quite a bit more, and consumers can find it cheaper elsewhere.

The second reason is market value destruction. Market value refers to the price at which you can successfully sell a product. This goes hand in hand with buying power. Many times products on websites go for much lower than they are intended to go, just because the competition to sell the product is high. For example, a necklace that is valued at $30, may first be posted for $25, then drop until it reaches the ridiculous cheap amount of $10. No doubt, this is good for the consumer, however the profit for the seller is minimal if any at all.

Though most people who like for everyone to believe that drop selling works great for the Internet, it most certainly does not. The numbers speak for themselves.

Choosing a Reliable Dropshipper

(Reproduced)Choosing a Reliable Dropshipper

When working with a dropshipper, it is essential to ensure that they are a reputable business which will be a reliable partner. Retailers have to place a lot of trust in their dropshipper since the dropshipper will be responsible for the quality of the products that are being sold and the swift, safe delivery of those items to the customers. It is, therefore, vital that the retailer chooses the right dropshipper.

A good dropshipper will offer a suitably large range of high quality products. It is usually best to work with a single reliable dropshipper than to have to deal with a number of different suppliers, so a dropshipper that offers many products is generally preferable over one with only a small range of items. The quality of the products is very important since it will increase the chances of making a sale and reduce the number of complaints or refunds that are received afterwards.

It is a good idea to choose a dropshipper who provides a lot of information about the products they sell since this will make it easier to choose which products to promote and to answer any questions from customers. If the dropshipper provides samples of their products, this is a good sign since it indicates that they are a responsible and honest business.

The prices which are set by the dropshipper should also be considered and compared to those offered by other dropshippers, suppliers and retailers. In order for the retailer to be able to make a profit, prices and delivery costs should be as low as possible. There should not be any unreasonably large handling fees. Some dropshippers may offer credit to retailers after they have worked together for a certain period. This can be a useful facility, so it is worth finding out whether it is available.

It is important to be able to communicate with the dropshipper quickly and easily. They should respond to any questions as soon as possible, and they should make every effort to keep retailers up-to-date with their stock levels and which products are available. The dropshipper should have a good returns policy and support service for customers.

The dropshipper should also have a good reputation. They should be registered with the Better Business Bureau, and the BBB should be able to confirm that no complaints have been made against them. A reputable dropshipper should not ask retailers to pay any membership or license fees, and they should not try to market anything directly to the retailer’s customers.

Advantages of Dropshipping

(Reproduced)Advantages of Dropshipping

Dropshipping offers retailers a number of significant benefits that can reduce the costs and the workload involved in making sales. Using a dropshipper can allow a retailer to focus on customer service and the marketing of products rather than on arranging deliveries and handling their inventories. This will be particularly beneficial for small and online businesses, which may not have the space to store products or the means to employ enough people to be able to easily cope with every aspect of the process. Some retailers only sell products through dropshippers, while others combine more conventional methods with dropshipping.

Dropshippers can take on a lot of the work involved in selling products. They relieve the retailer of the need to store items, manage their inventory or arrange deliveries to customers. This can save time and money for the retailer.

Using a dropshipper means that items are delivered directly from the supplier to the customer. This can reduce delivery time since there is only a single delivery. Items do not have to be delivered to the retailer before they can be sent on to the customer. The retailer does not need to have enough storage space to maintain adequate stock levels to supply their customers, and they do not have to keep an inventory.

Retailers only need to buy products from their dropshipper when they have already made a sale to a customer. This means that there is not need to pay for an item before a customer has purchased it. Therefore, there are no initial, upfront costs and there is no risk that the retailer will be left with unsold or outdated stock.

The retailer can buy any quantity of items from their supplier, without being penalized for making small purchases. Using a dropshipper means that it is possible to buy small quantities of goods at a reasonable price. Usually it is necessary for retailers to buy in bulk in order to benefit from reduced prices, but dropshippers are set up so that retailers can make small orders. The dropshipper may themselves buy in bulk, at low cost, and pass on some of these savings to the retailers.

Another benefit of using a dropshipper is that the retailer can offer their customers any number of different products. Usually the need to manage the inventory and store the stock would limit the range of items that can be offered, but since there is no need for the retailer to handle items themselves, it is possible to promote any number of items.

Disadvantages and Risks of Dropshipping

(Reproduced)Disadvantages and Risks of Dropshipping

Dropshipping can be a convenient way for retailers to sell products without having to store them or arrange deliveries, but there are also a number of disadvantages involved in using a dropshipper.

Many of these disadvantages relate to the loss of control that is inherent when some responsibilities are handed over to a dropshipper. The retailer must rely on their dropshipper to provide good quality products, to package them safely and to deliver them quickly to the customer who has paid for them. Since the dropshipper will be taking on so many of the responsibilities that would usually rest with the retailer, it is vital for the retailer to ensure that they are working with a reliable dropshipper.

Another disadvantage of using a dropshipper is that, although the dropshipper will be handling the goods and the deliveries, it will be the retailer who must deal with the customers. Providing customer support can be difficult when the retailer is not handling the items themselves. The retailer may need to answer questions about products which they do not have before them. It may be necessary for the retailer to contact their dropshipper to ask them about the product before they can offer an answer to the customer. The retailer will also have to deal with any complaints from customers, even about aspects of the sale for which they are not directly responsible. If an item is not delivered on time, it will be the retailer who will be contacted by the customer even though it is the dropshipper who handled the delivery.

The retailer will also have to consider the returns policy set by the dropshipper, which may not be in line with the retailers own usual policy. The retailer must go along with whatever policy the dropshipper has decided upon, or risk losing money if they agree to refund customers without receiving a refund from the dropshipper.

Not having to manage an inventory can be a useful time saving benefit of dropshipping, but the fact that the retailer does not handle the inventory can also be a disadvantage. If the dropshipper does not organize their inventory well and communicate with the retailer, then it is possible that the retailer may sell an item that the dropshipper no longer has in stock.

In addition to the disadvantages related to the loss of control which occurs when using a dropshipper, there may also be disadvantages relating to the cost of the items. Some dropshippers offer excellent value for money, but others may overprice the items that they sell or charge large handling fees that means retailers cannot make reasonable profits.