How to Start Dropshipping on eBay in 2023

eBay dropshipping is an online business model that doesn’t require dealing with logistics or purchasing goods before selling them. All it takes is making a sale and redirecting it to the wholesale supplier. This makes dropshipping on eBay is one of the easiest ways to get into online entrepreneurship.

Learn everything there is to know about this business model in our guide and start your dropshipping business on eBay.

What is eBay Dropshipping?

eBay dropshipping is a fulfillment model where sellers purchase items from a dropshipping vendor and resell them on eBay with a markup in price.

This method means that there is no need to keep a stock of products in your own warehouse, nor do you need to manufacture them yourself. Order details pass through your store and go to your dropshipping supplier, who would then take care of packing the items and shipping them straight to your customer’s address.

For existing sellers, it's a good way to widen the number of brands and products they are carrying, without the need to get a big warehouse or funds to buy them. For new entrepreneurs, it offers a chance to test being a retailer business with minimal starting capital.

eBay dropshipping has downsides too, though — specifically low profit margins and high competition. The wholesale supplier and the items you’ve chosen also have a big role in determining your success.

What to Dropship on eBay?

eBay marketplace allows one to sell a wide range of things, from clothing and electronics to automotive, hobby products, cosmetics, and others. And of course, there are some niches and products that sell better than others, i.e.: women's clothing, car accessories, tools, beauty and baby products.

When looking for a product for your eBay dropshipping store, consider some of these:

Travel gear
Home decor
Cooking supplies
Gaming gadgets
Organic tea
Pet products
Bathing supplies
Home gadgets

Pros and Cons of eBay Dropshipping

There are a number of benefits to doing dropshipping on eBay, as well as drawbacks to it.

The Benefits of eBay Dropshipping

Dropshipping is a low-risk business model. Since you do not carry any inventory and do not manufacture the product itself, you can start with very little capital, sometimes even without it. It is also easier to switch to a different product or close your business.
It's fast and easy to start. Finding a supplier and setting up a store can take as short as a few days.
Your location as a seller is flexible. There is no need to be physically present in any specific location — the store can be managed online from anywhere with an Internet connection and a laptop.
You can choose from millions of products. Dropshipping gives the option to choose from dozens or even hundreds of suppliers and millions of products.
No need to manage inventory and logistics. Both the inventory management and shipping are done by your vendor (but you still need to update your store).
No need for high technical expertise. eBay is easy to use, and while you may need more skill if you want to use dropshipping automation software, it is still quite manageable compared to setting up your own e-commerce website.

The Drawbacks of eBay Dropshipping

Depending on the products you’ve chosen, you would have to face drawbacks:

Low margins. It often happens if you chose a cheaper product, but you may be able to have reasonable margins with items in the medium range, or expensive ones.
High competition. A low barrier of entry means a lot of sellers competing with each other in popular markets, and this in turn means you will have to lower your price (and your profit) or come up with some other way to stand out.
No direct control over the quality of products your supplier sends, nor over the shipping time. This is the other side of the coin of not having to manage inventory and logistics: you have no way to check the quality or speed up the shipping before it arrives to the customer.

How to Start Dropshipping on eBay: Step-by-Step Guide

Dropshipping on eBay includes picking a product, setting up a store, creating listings, as well as deciding on a price. This section will guide you step by step through the main points of each of these, and suggest the software that can make dropshipping work faster and easier.

Know the rules

There is a number of things to remember when selling items on eBay:

eBay’s marketplace allows dropshipping, but there are restrictions regarding where they can get products. Only genuine trade-only or wholesale suppliers are allowed. Another retailer is a hard no. Buying from Amazon, Walmart, or AliExpress and then selling on eBay can result in account suspension.
The seller is responsible for the safe delivery of the item within the timeframe that he or she stated in their listing.
The seller is responsible for the quality of the items he sells and for customers’ overall satisfaction with the store.
eBay requires brands to deliver items within 30 days of a customer’s order being placed.
You have to answer refund requests within 3 business days.
eBay gives 250 listings a month for free and charges a $0.35 insertion fee per listing for each one above that number.
There is also a final fee when the item is sold: its value for most categories is 13.25% of the sale price or lower, plus $0.30 per order.
New sellers have a selling limit of up to 10 items with a total value of up to $500 per month. eBay will review and adjust the limits automatically every month based on the sales volume and the feedback from buyers.

Pick a product

When choosing a product, you could approach it from two different angles:

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What is popular and in trend right now? It is easier overall and does not require much experience.
What would make a good long-term business? This approach would require experience in business from the seller or for them to have a good marketing team.

In order to find popular items, take a look at:

Popular categories and products on major platforms like eBay and Amazon.

What is trending on Google Trends or Exploding Topics?
Can you find a reliable wholesale supplier?
What are their prices on eBay, and what prices you can find them for from dropshipping vendors?

Think about whether you could source the same or similar products at a reasonable rate from a dropshipping vendor. The drawback of this is that products may go out of trend pretty quickly, and you’ll need to find a new item to sell.

It is also better to choose things that are easy to ship and which have low return rates.

Also, eBay has a list of prohibited or restricted items that can not be sold on the platform or with special rules about selling them. For instance, adult-only products, used cosmetics and perfumes, counterfeit currency, and stamps. Make sure to check the list to avoid penalties.

Set up pricing

When it comes to pricing, the margin between the purchase and resale price has to be enough for the whole thing to be profitable. On the one hand, you’d want to make it as high as possible, but on the other hand, it needs to be within the range customers are willing to pay.

When deciding on the price of your product, consider these factors:

The cost of buying the product from your vendor.
Your other business expenses (i.e., eBay fees, salaries of people you hire to create listings and handle customer support).
How much profit you’d like to make.
The prices of competitors.

To promote higher sales, consider adding bundle pricing with discounts for bundle orders.

Get an eBay Seller Account

You will need an eBay seller account to start selling on the platform.

Head to the registration page and enter basic information about your business.
Subscribe to the store option that suits your situation.
Link your checking account in order to receive payment from orders.

You will also need to set up the store name and some more settings afterward, and then you can get to setting up your product listings.

Create a Listing

Create a listing for each item that you are going to sell on eBay.

The following areas are especially important:

Product title that contains keywords.
Product description. Describe exactly what is being sold in the listing, including its key selling points. I.e.: if an item is a pot, specify whether the lid comes with it.
High-quality images or videos.
Customer reviews.
Returns policy of your supplier.

These will influence how eBay's algorithm evaluates your listing and how likely it is to show it to potential buyers. Make sure to include in the product title keywords that your target customers use to search for such products.

Automate Shipments

It is possible to automate order processing, order tracking, product pricing, update inventory information in the store based on your eBay dropshipping suppliers data, and do a number of other things with the help of automation software. This will help deal with repetitive or tedious tasks, remove human errors, improve efficiency, and free up sellers’ time.

The con is that to get to the software’s really good features, you may need to take a paid plan.

Here are three dropshipping apps that offer an efficient way to streamline the processes:

DSers. Works with Shopify, WiX, and WooCommerce stores (which means that you need to have a store working on one of these platforms and integrate eBay into it to use the DSers). Supports suppliers and automated orders from AliExpress only.
Spocket. Works with thousands of vetted suppliers from the US and EU. Integrates directly with eBay. Offers automatic inventory and price updates, personalized invoicing, quick delivery times, great support, and return policies.

Start Your eBay Dropshipping Journey

Dropshipping on eBay is a good business model if you are looking for a low risk venture with the potential to expand into a full-scale business. It comes with low starting costs, it is fast and easy to set up, and most importantly, there is no need to deal with inventory and shipping of the products you sell.

The drawbacks you may face are low profit margins and high competition while being free from inventory and logistics management also means you completely depend on your suppliers for quality and on-time delivery.

All in all, eBay dropshipping can be a great start for new entrepreneurs, as well as a way to expand established e-commerce stores without increasing their physical inventory.