Drop Shipping on eBay Secrets
Many search for information about how to sell on eBay. While usually the technical issues for a newbie resolves relatively quick, when you run out of old things you have in your attic, you find yourself searching for more products to sell on eBay. When searching for products many encounter the concept of drop shipping and try to use it to build their own retail business on eBay.
While drop shipping is a serious consideration when building an online retail business, it cannot stand by itself for the purpose of building a retail business, but first lets fully understand what drop shipping is:
Drop shipping is a trading method that allows you, as a retailer, to sell products that you don’t actually keep in your inventory. So, first you have to locate a supplier that allows you to buy his products, pay for them and send them to another address (not your address). When you find such supplier, you need to review his catalog and look products that you can sell on eBay. When you find a certain product, all you need to do is list it for sell on eBay, and then when somebody buying the product from you, you will pay your supplier and ask him to send the product to your customer’s address.
The benefits of drop shipping are that you don’t have to keep inventory, and you pay your supplier after you get paid!
The main problems with drop shipping are:
- You don’t control your supplier inventory, so you can find yourself with a customer’s order, but your supplier doesn’t have the product on stock.
- Low price margin, because you buy only one product at a time, the price margin you get between the price you buy the product and the price you sell it is fairly low! So you won’t make a lot of money by doing that.
To overcome the inventory problem, you can find more than one drop shippers to buy the same product from, so if one of them won’t have the product on stock, there is a chance the other one will.
The price margin problem is more difficult one, but there are some creative solutions to that. When you are using drop shipping you need to consider it more like a market research, and not an action that you can base your retail business on.
When I started selling on eBay I used drop shipping as the core of my business, this days I still use a lot of drop shipping, but in a different way. I can say that most of the products that I list on eBay are drop shipping products, but you need to have a certain strategy to make it works.
You can find more information on this subject here.
Michael Kahiri, MBA
eBay Seller
For more information and a FREE drop shipper’s list visit: http://www.ebaysmoney.com