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Guide 2 Auctions   >   Selling Items   >   eBay Drop Shipping

eBay Drop Shipping


eBay provides many people who want to quit their corporate nine-to-five jobs with an alternate way to make a good living, without having to put up a lot of start-up capital. One of the nice things is about eBay , is that even if you want to make a full-time living at it, you don't necessarily have to have a product of your own to sell.

So if you don't have your own product, what would you sell on eBay ? The answer is obvious: you buy products produced by others, and re-sell them to your customers. One of the simplest ways to do this is with the help of of a drop shipping company.

Drop shipping companies are companies that send merchandise to the customers of business owners, and since you have an eBay business, you could be one of those business owners! Or, to put it another way, by working with a drop shipper, you will be able to offer a wide variety of items in your eBay store, without having the need to actually warehouse (or even ship yourself) all of those products.

Here's how it works:
  1. You set up your auction, and sell the product.

  2. You then pass the customer's information on to the drop shipping company.

  3. The drop shipper actually ships the product to the customer. They will even use your company information, as well as your company logo if you have provided it to them.

  4. When the product arrives at your customer's home, they will have absolutely no idea that your company didn't send it.
To summarize: The dropshipper will package, label, and ship the products that you sell, allowing you more time to set up even more auctions, for greater profits.

When you are starting out and do not yet have an established record, most dropshipping companies will require you to pay for the items that your customers order, before they are shipped. Since you will want to fulfill your customers' orders promptly, you will need to pay the drop shipper as soon as you can, most likely with a credit card. Eventually, as you gradually establish relationships with drop shipping companies, you should aim to negotiate a deal where the drop shipper will immediately fulfill your orders, and then bill you for them later.

There really is only fundamental thing that you need to remember to make this a profitable business: you must sell the items for a higher price than the price that the drop shipper will be charging you for the item. Thus, when you set up your eBay auction listings, you need to make sure that you set the reserve price appropriately. Depending on the item you are selling, a markup of about 10% should usually be about right, but you should do some research to see if the item is selling for a lower price in another eBay auction, or through other online sources (of course if the items goes for higher than the reserve price, then you will make more than 10% profit).

The best part about starting an eBay business using the drop shipping method, is that there is no significant financial risk involved (the only risk is eBay listing fees if your items never sell - but these really are quite minimal). Additionally, once you've become established, you will eventually be selling products even before you pay the drop shipper, resulting in quick and immediate profits.

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