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eBay Dropshipping vs Shopify | Which should you choose for long-term success?

September 27, 2022

eBay dropshipping vs Shopify is a question aspiring online sellers often face when determining the best place to dropship from. eBay is an online marketplace with its own established customers, while Shopify is an Ecommerce platform that provides you with the tools to create your own unique online store. You can make money using either of these business models, just like you can when selling virtual real estate, but one of them is superior for establishing long-term success in online business. Let’s take a closer look at what you can expect when dropshipping on Shopify and eBay and which one you should choose if you’re serious about building something that lasts.

What is eBay?

eBay is one of the first online marketplaces. It became successful by allowing third-party sellers to list new or used items under an auction style for low fees. Upwards of 185 million active customers head to eBay every month, making it the second most popular Ecommerce site globally behind Amazon. eBay does not sell any of its own products, and therefore only provides a place for exchange between buyers and sellers. The Ecommerce platform attracts all kinds of sellers, from large brands who want to use eBay as a sales channel to small sellers using low-risk business models like dropshipping or retail arbitrage. 

How dropshipping works on eBay

Dropshipping on eBay is a fairly straightforward process. After setting up an eBay seller account, you create a product listing for your dropshipping product and set it live on the eBay marketplace for customers to see. When dropshipping on eBay, you can either list your item under an auction for the market to decide the value or for a fixed price. Because eBay is a platform with a reputation to uphold, you do have to follow some rules regarding dropshipping. You need to work with a legitimate wholesale supplier to source your products from and you can't dropship an item on eBay from another reseller or wholesale marketplace to your customer.

What is Shopify?

Shopify is a cloud-based Ecommerce platform that provides online sellers with a full suite of services for selling online, from an easy-to-use website-building software to SEO and marketing tools. In terms of sales, Shopify is the third largest online retailer in the US behind Amazon and eBay. Customers don’t actually purchase from Shopify as they do from eBay, they purchase from one of the many businesses that use Shopify for their Ecommerce needs. In fact, there are millions of Shopify websites selling to online consumers across the globe in over 175 countries. Even major corporations like Pepsi and Tesla leverage the advanced Ecommerce capabilities of Shopify for online sales. 

How dropshipping works with Shopify

When dropshipping on Shopify, you start by using Shopify’s website builder to create a simple online store for your business and then add your products. You can go the traditional route of finding dropshipping products yourself or use one of Shopify’s applications to easily help you find suppliers with the best prices and products for your business. Shopify provides many excellent tools to help you, but unlike eBay which has its own customer base, on Shopify, you’re solely responsible for getting your online store in front of potential buyers.

Ease of starting

Create an eBay listing and start making sales

Starting your dropshipping business on eBay can be done fairly quickly and with very little capital. You start by creating an eBay account and then registering it as a seller account. Then you need to set up a Payoneer account to receive payments through eBay. Within 5 - 7 business days, Payoneer will verify your account and you will be able to start selling on the platform. Once approved, you can start listing your dropshipping products on eBay and start making sales. eBay even gives you 50 free listings per month if you don’t purchase their extra eBay store subscription. 

There is a lot to learn before making sales on Shopify

Before you can list your dropshipping products on Shopify, you first have to create a Shopify store to list them on. The time to set up your Shopify website depends on a variety of factors, but according to the Shopify Theme Detector, you can build a basic website with your products and content in about 3 - 4 days. Once your website is ready for sales, you’ll have to tackle another beast altogether if you want to actually make sales, paid advertising through Google and Facebook. It can take a few weeks to a few months to get somewhat comfortable with paid advertising campaigns.

Winner: eBay

Platform fees

You can sell on eBay without a monthly subscription

There are a few eBay fees you have to pay if you want to access the enormous customer base of this online marketplace. 

Insertion (listing) fees: eBay charges you a fee to list each dropshipping product on its platform. Without an eBay store subscription, you get 50 free listings per month, which can be plenty for many dropshippers. After that, the cost to list in most categories costs just $0.35/item. 

Final value (selling) fees: eBay charges a fee on the overall sale price of 15% or less depending on the category. 

eBay store subscription: Paying for the monthly eBay store subscription makes it easier to scale an eBay dropshipping business by waiving the insertion fees on more products, lowering final value fees and providing access to additional tools to improve your business opportunities. An eBay subscription costs anywhere from $4.95 to $59.95/month depending on how much you’re selling, but is a totally optional fee. 

Basic Shopify has everything you need to get started

You can get started on Shopify risk-free with their 14-day free trial, after which you will have to settle on a monthly subscription. The standard Shopify subscriptions range from $29/month for Basic Shopify up to $299/month for Advanced Shopify. However, you can save 50% by paying annually. Shopify also charges a transaction fee of 2.4 to 2.9% + $0.30/credit card transaction, but if you signup and use Shopify Payments as your payment provider, the transaction fees are waived.  Each Shopify plan comes with: 

  • No code online store builder
  • Sales channels for selling products within Shopify
  • All in one point of sale (POS) system with inventory tracking and staff management
  • 24/7 support

Shopify also offers the Shopify Lite plan for $9 if you just want to add functional buy buttons to an existing website or their premium Shopify Plus starting at $2000 if you plan to be drop shipping extremely high volumes and want an enterprise solution. However, the Basic plan has everything most dropshippers would ever need. 

Winner: Tie

Driving traffic

eBay is a giant search engine

eBay is a search engine people often use to find products they need, so there’s plenty of traffic already heading to eBay every day. eBay also spends hundreds of millions of dollars to drive traffic to their site so you can sell your products and they can take a cut. If you want to boost your sales on eBay, you can also use eBays on-platform advertising, Promoted Listings. With Promoted Listings on eBay, you only pay when your item actually sells and eBay takes from 1 to 20% of your final sale price, depending on what you decide. 

Get ready to pay for traffic with Shopify

As a Shopify dropshipper, you drive traffic to your own site through a combination of SEO and paid advertising. Although you have the potential to reach the billions of internet users that use Google and Facebook, you’ll have to have a decent sized marketing budget to promote your product in front of a relevant audience. Unlike eBay advertising, where you only pay when you make a sale, with Google and Facebook advertising for your Shopify dropshipping products, you’ll have to pay for each time someone clicks on your advertisement. Shopify recommends putting 10 - 30% of your revenue in advertising to keep your store generating sales. 

Winner: eBay

Local lead generation

Online traffic is extremely valuable, which is why businesses are willing to pay ALOT for it. With the local lead generation business model, you help drive online traffic and find valuable clients for niche businesses who pay you hundreds to thousands of dollars every month for your service. It takes a few months to rank a website on Google, but once you do, the income you generate becomes mostly passive. Want to learn more about local lead generation? 

Check out how to start a local lead generation business here.

Flexibility of receiving payments

Payoneer is your only option on eBay

If you want to receive payments, or even sell on eBay for that matter, you’ll need to have a Payoneer account. Payoneer is a global payment platform that lets you receive payments in a variety of currencies and different payment methods including, credit or debit card, bank transfer, and ACH. Payoneer charges up to 2% to withdraw your funds from your Payoneer account to another bank account. 

Choose from over 100 credit card payment processors with Shopify

If you choose Shopify’s in-house payment solution, Shopify Payments, Shopify waves third-party transaction fees. The transaction fees cover the cost of Shopify to integrate with external payment providers and vary depending on which Shopify plan you’re selling on. If you’re not using Shopify Payment, Shopify still allows you to receive credit card payments from over 100 global payment providers. However, it’s hard to beat what Shopify Payments offers, as you allow customers to receive payments from the most popular payment methods for very competitive payment processing fees.

Winner: Shopify

Design flexibility

Not much design flexibility for an eBay seller

As an eBay seller, you’re stuck with eBay’s basic template for your listings and store. You can do basic customizations to your eBay store like changing the name, adding a logo, selecting categories to feature, and adding a marketing banner. On your eBay listings, you can manage things like the product description, title, and images. At the end of the day, no matter which customizations you make, everything still has the design theme of eBay for the customer. 

Set yourself apart with Shopify themes

With the Shopify Theme Store, you get access to over 100 free and premium professional design templates that are optimized for both desktop and mobile. If you can’t find what you're looking for on Shopify, you can upload your own theme created by a professional designer or developer. Shopify allows you incredible flexibility in creating a branded store to attract the right customers.

Winner: Shopify

Analytic tracking

eBay provides the basics

eBay provides basic sales report tools to see how your business is doing in terms of listing performance, total sales, sales growth, and fees. For more advanced analytics, you can use a third-party analytics application. 

Create custom reports through Shopify analytics

The Shopify analytics tab provides you a high-quality dashboard to interpret sales, visitor, and online store data. Shopify analytics lets you select any date range and compare all your sales channels in one place. If using one of the higher Shopify seller plans, you can even create custom reports for your business.

Winner: Shopify

Brand loyalty and customer retention

Customers are loyal to eBay

When running your dropshipping company from eBay, customers will associate their purchase as purchased from eBay, and not your brand. Although your seller name and rating are visible on your eBay listing, customers will return to eBay to find the product they need at the best price and only reference the seller rating to make sure they are purchasing from a trustworthy source. If a customer that bought a product from you needs that product again, they’re likely just going to search for that product again in the eBay search bar and not look for your store directly. 

Build a lasting brand with Shopify

Even when you’re just dropshipping on Shopify, you have the ability to build customer loyalty. If you work with a dropshipping supplier that provides your customer with high-quality products in adequate shipping times, your customers are likely to continue returning to your store repeatedly when they have a need for that product. Relationship building is a cornerstone for the long-term success of a business, and a Shopify store allows you the ability to create lasting customer relationships.

Winner: Shopify

Additional tools and features

Integrate with third-party tools as an eBay dropshipper

If you’re selling on the eBay platform, you can access high-quality software tools to improve your business through eBay third-party providers. There is software to help you with eBay listing optimization, manage multi-channel inventory, order fulfilment, accounting, and much more. There are also a number of on-platform tools you can gain access to on eBay with a store subscription. 

Choose from thousands of apps on the Shopify App Store

Shopify provides its own suite of tools to Shopify store owners through the Shopify App Store. There are thousands of free and paid options a business owner can use to customize their Shopify store and optimize their results. Some of the most popular options include apps to efficiently advertise on Facebook and Google, attract product reviews, help with finding the best dropshipping products for your store, and thousands more. All applications are rated and reviewed to help you decide which are best for your business.

Winner: Tie

Help and support

eBay’s support skewed towards buyers, not sellers

eBay provides a self-service resource in Seller Help to anyone who has sold or listed an item in the past 120 days to manage refunds, returns, and other common selling issues. All sellers can also request additional support in the form of live chat, email or phone communication. However, sellers commonly complain that eBay does not support them when buyers scam them. eBay has millions of people wanting to sell on the platform, but they make money from the buyers. Therefore, their priority is to keep their buyers happy and returning to the platform so they continue to make money.

High-quality support on all Shopify plans

Shopify doesn’t have any of their own buyers as they are not a marketplace, so sellers are their sole source of income and where they focus support. All Shopify plans come with professional 24/7 phone, email and live chat support. You can also seek support and advice from other Shopify merchants through Shopify Community, which lets you discuss and find solutions for common issues through online forums.

Winner: Shopify

Future business trend outlook

eBay is shrinking

eBay is losing buyers and reporting declining sales volumes at a rapid rate. eBay was often the platform of choice for finding second hand items at a discount, but now there are other niche marketplaces like Etsy and Facebook marketplace that are drawing attention away from eBay. It’s also not a good sign for the future of eBay when Amazon still seems to be growing and there are many other international Ecommerce platforms gaining market share as well. eBay now has less than 5% of the Ecommerce market share in the US, and the competition level is only getting higher. 

Sales from Shopify stores continue to grow 

The Gross Merchandise Volume (GMV), or the value of all products sold through the online stores hosted on the Shopify platform, has a compound annual growth rate of 50% as of mid-2022. Shopify has shown incredible growth, and doesn’t appear to be stopping that positive trend anytime soon. This healthy growth indicates that Shopify stores are likely to have a bright future in the world of Ecommerce.

Winner: Shopify

eBay is better for beginners, but Shopify is better for long-term success

Starting your dropshipping journey on eBay is great for those with a low budget that want to generate some cash flow and learn the ropes of Ecommerce. However, Shopify is much better for those who are looking for long-term success in online business. With Shopify, not only will you be able to build a unique dropshipping store, you’re also forced to learn digital skills like: 

  • Building a functional website
  • Running paid advertising campaigns
  • Web design and SEO to rank on search engines

Even if your Shopify dropshipping store doesn’t work out, these are invaluable skills you can leverage for future success in online business.

Conclusion

Before spending your hard earned cash and limited time on a business, it’s important to first weigh your options. Amazon dropshipping is another popular option, which is why many online sellers also compare ebay dropshipping vs Amazon. However, dropshipping itself has many drawbacks, which is why an online seller may also consider the enhanced opportunities Amazon FBA provides, like outsourced customer service and rapid order fulfillment that dropshipping just can’t compete with. Whether you choose the Ecommerce route or go with a more passive income model, the most important thing you can do is to get started!

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