If you as an online retailer decide to use the DropShipping sales method, you will save yourself many problems that conventionally positioned salespeople have to deal with. With a DropShipping model, the products offered are not purchased in advance. Instead, the retailer selects them from one or more DropShipping suppliers and hires them for sale. If an end customer orders one of these products, the online retailer orders the goods from his supplier and has them shipped directly to the customer.
The advantages of DropShipping are obvious
While classical working traders have to spend a lot of money on product purchases at the beginning of their independence, the DropShipping trader gets by almost without capital. If one or more products in the assortment turn out to be unsaleable goods, this has no economic consequences for the DropShipping retailer. Since he did not buy the goods himself, he does not remain sitting on uneconomical stocks.
Especially beginners in the field of online trading like to resort to online marketplaces with a high reach at the beginning of their self-employment. The big advantage: countless consumers are already waiting here for attractive, interesting offers. Making your own shop known through search engine marketing costs time and effort. It can often take weeks or even months until offers have achieved a good position on the result pages of the well-known search engines, above all Google.
If, on the other hand, you discontinue your products on eBay & Co., you can usually enjoy your first sales within a very short time. It is left to the skill of the individual retailer to use the high presence on the marketplaces also for the direct traffic in his own shop. This can be done on the pages of the eBay profile provided for this purpose as well as in direct communication with the customers.
While DropShipping, as a trading model for founders with limited capital, provides ideal opportunities for starting their own business and the placement of products on marketplaces such as eBay ensures initial sales and targeted advertising for their own web shops, both models only develop into top form in combination. But how can drop shipping reconcile trading with the strict eBay guidelines? In the next section, we will clarify whether drop shipping is allowed and desired on eBay.
Is DropShipping on eBay compliant with the rules?
Online trading via drop shipping is becoming an attractive alternative to traditional trading for more and more providers on the Internet. Low capital requirements, reduced space and personnel costs as well as an extensive and convincing product range are the main advantages of modern drop shipments. Against this backdrop, many online merchants are faced with the question of whether eBay’s guidelines for the sale of products are met if goods on offer are not owned by the merchant at the time of sale, but are only ordered from his drop-shipping wholesaler after the order has been placed.
The reason for this uncertainty on the part of traders is easy to understand: In the past, eBay’s sales policy had insisted that a product offered must be in the seller’s possession to ensure that it could be shipped to the buyer immediately after the contract was concluded.
These guidelines have since been extensively amended. Germany’s largest auction house reacts to major changes in the mail order business via the Internet. In the past it was common for online merchants not only to offer their products on eBay, but also to store and ship them themselves, but in the meantime there has been a structural change in logistics. More and more retailers no longer store and dispatch their goods themselves but commission special service companies to carry out these tasks.
In addition, eBay’s amended guidelines also meet the needs of the owners of the so-called trademark shops. These are operated and managed by the respective manufacturers: However, the mail order business is generally handled by appropriately commissioned service providers here as well. Irrespective of whether eBay has also taken the growing segment of drop shipping merchants into consideration when changing the guidelines, this group will benefit from the new rules.
In order to exclude the possibility that this is only a gap in the regulations and that eBay does not clearly allow trading via DropShipping, we asked the auction house directly and asked for a corresponding statement. At our request we were informed that DropShipping on eBay is allowed and compliant. However, the seller is instructed to ensure that the goods can be delivered to the customer immediately after conclusion of the contract. This circumstance requires DropShipping dealers to satisfy themselves of a product’s ability to deliver before discontinuing it.
In everyday working life this is usually done by an automatic comparison of the set products and the stock at the drop-shipping wholesaler. If you have already had good experiences with your supplier partner, you can increasingly rely on him being able to dispatch the respective goods immediately after the order has been placed. However, in the case of new partnerships, regular monitoring of supply stocks should not be dispensed with. Ultimately, a breach of the eBay rules does not affect the wholesaler but the reseller, whose duty of care it is to ensure and guarantee the prompt delivery of a product.
Expressly permitted: Online trading via DropShipping on eBay
If you are familiar with the eBay guidelines, you know that the World’s largest online auction house insisted some time ago that every eBay seller must actually own the products they offer at the time the offer was made. This restriction would make the DropShipping trade on eBay irregular if the auction house had not decided some time ago to amend these guidelines. The decision makers on eBay did not initially have the growing group of drop shippers in mind. Rather, the adjustment was necessary because more and more professional dealers have outsourced the logistics of their products to external service providers. Thus, these sellers are not actually in possession of the respective goods at the time the offer is made or at any time thereafter.
In order to enable these merchants to sell products on eBay, this includes in particular the relatively new brand shops of well-known manufacturers, which are usually not operated by the respective companies, paragraph 9 of the General Terms and Conditions of the auction house states: “Suppliers must be able to transfer the offered goods to the buyer immediately after conclusion of the contract”. So there is nothing more said about the fact that a product must be in the possession of the dealer to be allowed to be offered on eBay. Rather, it is sufficient if the seller ensures that the goods can be dispatched to the buyer immediately after conclusion of the contract. Since this also applies to the DropShipping business model, the amended policy will provide an indication of eBay’s acceptance of DropShipping merchants.
What distinguishes an optimal DropShipping product on eBay?
DropShipping suitable products for eBay must meet three main characteristics: On the one hand, they must be in great demand from as many consumers as possible. Secondly, competition must not be excessive. Thirdly, the products must be available for purchase at a price that provides the online retailer with a sufficiently large profit margin. Strong demand is the basic prerequisite for a successful sale. Only if a sufficiently large customer group searches for the respective article, the chance for successful sales exists.
If there are already numerous suppliers who also offer the identical product, the chances of a high sales quota are reduced. It should be noted that eBay customers prefer to use merchants who already have a large number of positive customer reviews. In many cases, trust in a retailer is more relevant for purchasing than the actual selling price. For DropShipping dealers on eBay particularly suitable are in this respect articles, which are characterised both by a high demand and by a rather small offer.
The favourable purchase price of products not only secures the DropShipping dealer the profit margin he needs for his entrepreneurial concept. It is also a prerequisite for being able to offer products at competitive prices. DropShipping dealers must bear in mind that their purchase prices are often not quite as low as those of dealers who purchase a larger quantity of products from their suppliers in advance and at their own risk. These dealers have to bear the disadvantage that they have to pay for the capital commitment, storage and shipping from their own resources. DropShipping dealers save these expenses and can therefore often manage with a lower profit margin than their conventional colleagues.
Targeted research of products for eBay DropShipping
Drop-shipping trading, as we have shown so far, has many advantages, especially for newcomers to online trading. In combination with the expressly permitted sale via the online auction house eBay, the modern trading system presents itself as an attractive opportunity for founders and young entrepreneurs and quickly helps them to achieve their first successes in e-commerce.
However, the selection of suitable products, their target-oriented marketing and a permanent review of one’s own trading structures are decisive for this. With the following five tips, we want to provide helpful support especially for newcomers to online trading. You will learn how to use your time optimally for product research and the placement of your offers, how to track down current trends and novelties on the online markets, how to create the prerequisites for sustainable profitable trading by constantly checking your suppliers, how to ensure high product and service quality through your own controls and how to use drop shipping directories and databases to optimize your own trading model in the long term.
Tip 1: Use the time saved sensibly for research and the optimal marketing of your products
As a DropShipping retailer, you save a lot of time compared to conventional vendors because you don’t have to worry about purchasing, storing or shipping products. Use the time saved and invest it consistently in researching suitable products, searching for optimal drop shipping suppliers, negotiating prices and conditions, providing exemplary customer service and marketing your products on eBay and in your own shop.
The choice of the DropShipping trading model pays off not only during the start-up phase of your company. Even during operation, you have time reserves at your disposal due to the reduced effort, which you can use sensibly to make your business model as successful and profitable as possible.
Tip 2: Determine current demand reliably through customer opinions and Internet forums
Success in drop shipping via eBay depends above all on the selection of suitable products. These should be in as high a demand as possible and not yet offered excessively often by Germany’s largest online auction house. The Internet offers DropShipping dealers ideal conditions to inform themselves about new trends and directions on the markets. Especially recommended are customer opinions and special consumer forums.
Consumers do not only comment on their experiences with certain products, but also, through their comments, allow conclusions to be drawn about products in which there is a great deal of interest but which have so far been offered only rarely or not at all. DropShipping retailers can use such consumer opinions as inspiration for their own product ideas and thus specifically fill attractive market gaps with offers.
Tip 3: Only regular reviews of your own trading structures ensures high profit margins
To ensure that the drop shipping trade on eBay is not only successful in the short term, but also develops into a permanently profitable business model, the company’s own purchasing and trading structures must be regularly reviewed and optimised. The main point here is that supposedly cheap suppliers are in many cases themselves only resellers of certain products. However, successful retailers should always purchase as close as possible to the original source of a product, i.e. from manufacturers, wholesalers or direct importers.
Anyone who unknowingly buys from an intermediary finances the profit margins of the intermediaries with his purchase price and is often not competitive with his own sales prices. So check regularly whether your suppliers buy the products themselves only from another dealer and try to get as close as possible to the actual origin of a product.
Tip 4: Continuous quality control as a prerequisite for successful eBay trading via DropShipping
DropShipping dealers have only a limited influence on product quality. Since you as DropShipper do not come into physical contact with the products, you have to rely on the promises of your suppliers. Especially with regard to eBay trading, keep in mind that negative customer opinions always fall back on you and not on your suppliers. In addition to the actual product quality, pay particular attention to the punctuality of deliveries to your end customers, the condition of the goods shipped and the quality of the packaging.
As a DropShipping dealer, you should carry out regular test orders so that you do not have to rely exclusively on the promises made by your suppliers and the statements made by your customers. If you find that the quality and condition of the products or the quality of the packaging are not optimal, then you should contact your supplier and ask for improvement.
Tip 5: DropShipping directories as a tool for the best possible purchase
The reliability and efficiency of the suppliers is decisive for the success of DropShipping concepts. Remember that your performance as an online retailer in this area can only be as good as the performance of the selected suppliers allow. In this respect, the selection and continuous monitoring of the affiliated supplier partners is always of particular importance.
If you don’t want to search for proven, reliable and efficient suppliers on your own, you can use the service of special DropShipping directories. As in the example of the www.DropShipping.de database, these only contain addresses and contact data of reputable suppliers who are already actively offering DropShipping to their customers and who have proven themselves on the market. Use DropShipping directories as a valuable source of information for setting up your own supplier network and benefit from the many long-term advantages of the modern DropShipping trading model.
More success in online trading through researched DropShipping products on eBay
In the previous article we introduced you to the possible combinations of DropShipping and trading on eBay. Both models are ideal for setting up your own trading company on the Internet and complement each other perfectly. While the DropShipping concept relieves prospective Internet merchants of the burden of high start-up costs and the great expense of their own warehouse and shipping logistics, the presence of products on eBay ensures that the offers of new merchants are also present on the Internet from the very first moment.
Despite all the advantages offered by the model presented, however, it should not be forgotten that online traders who are set up accordingly must invest time and energy in order to help their own business concept achieve sustainable success. Use free time reserves for researching trends, ideas and products. Determine the concrete demand on the market and check, among others via eBay, terapeak or baywotch, how strongly and at what prices and conditions certain products are already offered.
Check your own trading and above all purchasing structures regularly and carefully. Pay particular attention to whether you can purchase products from other suppliers more cheaply than from your current partners. Test existing suppliers for reliability and performance by placing test orders. A single test order at the beginning of the collaboration does not say anything about the long-term performance of a company. Not only determine suitable suppliers on your own, but also rely on special drop-shipping directories on the Internet. Here you will discover tested and proven DropShipping suppliers who will support you in the successful operation of your own company.
Selling via eBay or other marketplaces is simple, uncomplicated and secure. But it also plays a role how your assortment is structured. We show you step by step in our guidebook, for which products DropShipping is unbeatable and explain to you how to make the most of your advantages.