It has 159 million active sellers and over 1.7 billion monthly site visits, making eBay one of the most popular marketplaces in 2022. But is eBay dropshipping dead? And with changes to the platform, is it banned? In this article, we take a closer look at how to become an eBay drop shipper. The pros and cons of the business model. Plus, how much money do you need to get started?
We'll also cover topics like why it's not too late to start dropshipping on eBay and tips for success. We'll show you why starting a local lead generation business is better. (At least if you want to control every aspect of your business). And how lead gen can help you harness time freedom and make a passive income.
What Is eBay Dropshipping?
eBay drop shipping is a product-sourcing business model. It's an attractive way to make money online because it's quick and affordable. Plus, because you're leveraging a marketplace, you have access to an established customer base. In fact, eBay has more than 885 million website visits each month and is the second-largest ecommerce site in 2023. So people are actively shopping on the platform. But unlike owning a Shopify dropshipping store, you're where the customers are already hanging out.
But because of the low barrier to entry, anyone can do it. That means there are a ton of people. And this creates high competition levels and low customer loyalty. So you have to sell products people are searching for and actively buying now. And you need to do product research. But you can take advantage of third-party tools like ShelfTrend and ZikAnalytics to access things like:
Product Research Questions To Ask:
You can also check out sites like TikTok Made Me Buy It or Amazon's Best Seller's List to see what products are selling well. Then source those items as cheaply as possible to make a decent profit. Plus, you need to get as many listings as possible. (Listings that are optimized and can get to the top of the page). That's where the people are, and that's where you'll make sales.
What Are The Pros and Cons Of eBay Dropshipping?
eBay dropshipping is a low-risk way to make money. You can earn a few bucks as a side hustle or invest the time and resources to scale to an online business. But like everything, the model comes with benefits and drawbacks, including:
Easy to set up and execute.
You have access to an established customer base of people actively looking to buy.
Low-risk and minimal overhead costs.
The customer belongs to the marketplace, so there's no consumer loyalty
You need to comply with eBay's policies and guidelines.
Extremely high level of competition for minimal profit margins.
Is Dropshipping Banned On eBay?
Dropshipping isn't banned on eBay. But in 2023, the rules have changed. Unfortunately, a lot of dropshippers were advantageous. So the platform tightened its eBay policy to minimize proliferation and now only allows wholesale dropshipping.
But as a dropshipper, you're still responsible for shipping within their guidelines. So if you don't comply, you could receive a lower seller rating, buying restrictions, loss of buyer power, or even account suspension. But eBay wants you to sell on their site. (They make a profit from every sale you make with your online store).
So to stay in favor, you need to follow the rules. But there are a few reasons why sellers get banned from the platform. A few prime culprits include:
Not keeping your seller metrics in line: eBay bases them on shipping, negative reviews, return rates, etc. Plus, eBay evaluates you periodically. So if you're not staying in line, you could get suspended. But here are a few tips to help keep your eBay account in compliance:
How To Keep Your eBay Account Compliant
Trying to save on fees: The platform algorithms will know if you try to make a deal or employ 'behind-the-back tactics.' And you will get caught.
veRo issues: Selling intellectual property rights or high-risk items (like one-off or highly bootlegged or suspicious stuff, high-end stuff like sneakers, Gucci purses, etc.).
There are certain products you just can't sell on eBay. So do your research. Plus, you need to be able to verify or have proof from a wholesale supplier. So you need to connect with a reliable supplier who can guarantee quality and fast shipping. A few options include:
But remember, the customer belongs to the platform. And they're not going to be happy if you don't provide their customers with the best shopping experience possible. eBay's biggest concern is that you or your dropshipping business will give a bad experience to their customer. So if you mess up, you risk their brand, which isn't going to work in 2023.
"More than 17 million sellers use eBay to sell their products". Forbes
Plus, as an eBay dropshipper, you have zero control over the platform. Their customers-their rules. So you're doing all the hard work selling profitable products, providing fast shipping times, etc. But you could still get banned. Or worse, have your account shut down. And with that kind of risk and legwork, why wouldn't you instead invest in a model like local lead generation?
One where you control every aspect of your business? You own the sites, the tracking number, and the leads. And the customer belongs to you. Plus, once you're site is at the top of Google searches, you own prime real estate. And you're providing a service that people actively search for every day. So, you get high-quality leads that you can sell to small business owners who are more than willing to pay for a piece of the pie.
How Do You Become A Dropshipper On eBay?
You can become an eBay drop shipper with four easy steps:
- Create An eBay Seller Account
- Choose Profitable Dropshipping Products To Sell
- Connect With A Wholesale Supplier
- Create Your Product Listings
The hard work is making money. The platform is super competitive. Plus, you're playing the retail arbitrage game, so your profit margins are razor-thin.
So you need to pick the best products, treat your dropshipping store like a real business, and take the time to do your product research. Check out platforms like:
- eBay's Bestseller's Page
- TikTok Made My Buy It
- Alibaba's Most Popular Sellers
- Amazon Best Seller's List
And access things like:
You can also leverage third-party software like ZikAnalytics or Algopix to access real-time data and find the best product suggestions.
A few of the top-selling categories on eBay include:
- Home Improvement & Office
- Beauty & Décor
- Kitchen & Garden
Decide if this is a side hustle or a business. But remember that it's so easy to get started with eBay drop shipping because the barrier to entry is insanely low. And this has created a crowded space. So if you want to make real money, you will need to work the hours to make any profits. Plus, you'll need thousands of products to make decent sales.
"Electronics and accessories are the most popular category on eBay at 16.4%". StartUp Bonsai
So you need to hire VAs and automate your eBay store with tools like AutoDS. Or you need to invest your time to hunt down the best deals and bargain prices. Hardly a passive income. That's why I started a lead generation business. (Once my websites are at the top of the SERPs, they're pretty much hands-off). So not only do I generate a steady cash flow. But I harness time freedom.
How Much Does It Cost To Dropship On eBay?
eBay drop shipping is a low-cost business model that boasts minimal overhead. So, for example, you're saving money when you compare eBay dropshipping vs Shopify. But there are costs associated with the platform that includes the following:
Be sure to factor in all fees when calculating your profit margins. Use a profit calculator offered on sites like AutoDS or DSMTool. And a price checker tool like repricerexpress. (It allows you to set and adjust the prices of your eBay listings automatically. And is based on the criteria you provide). The key is to sell profitable products with a decent margin. Items that make you the money to cover your costs and still make a profit.
3 Tips For Succeeding With eBay Dropshipping
Your wholesale dropshipping supplier is the glue of your online business. So you want one who sells high-quality products. But you also need a large product base, so you don't run the risk of a single point of failure. (This could happen if you only have one drop shipping supplier). So you should work with a minimum of three).
But you need to find the best ones for your business—wholesalers who can offer fast times with a decent shipping cost. Again, the goal is to provide your customers with a stellar shopping experience. (And stay within eBay's guidelines). But a few popular options include wholesale drop shipping suppliers like:
eBay Wholesale Supplier Options:
You can also do your own Google search and contact the manufacturer directly. Or spy on another eBay dropshipper with software like JungleScout or ZikAnalytics to find out who they're using. You can also attend trade shows or leverage directories like SaleHoo or SourceLow. But take the time to vet your suppliers and consider factors like:
- Do they sell high-quality products for competitive prices? (To minimize returns or run the risk of negative reviews).
- Do they have excellent product reviews? (Listed on wholesale websites).
You need to gain insight and an understanding of the quality of the products they sell. So do your research around things like:
- Are people happy with this product?
- Does it match its item description?
- Is it a proven product that has been selling?
- Does it have a proven track record?
You also want a US dropshipping supplier (don't consider using a Chinese supplier, as your shipping times will be way too long for eBay).
Look for ones who have trackable numbers and information. (To allow your customers can track their products). But can also provide fast, efficient customer service and a reliable return and refund policy. (But be sure to get good conditions).
Then you can provide the same quality service to your buyers. Plus, you want suppliers who can give practical payment options. Remember, it needs to be convenient for your business and your eBay customer.
The goal is to secure suppliers who communicate well—one who will keep you abreast of the product's status, price, and stock availability. Then you stay in compliance with eBay. And you provide the customer with the best shopping experience possible.
You might have to pay to play if you want to make money as an eBay dropshipper. And there are two options to consider. But one of the fastest ways to get dropshipping stores to the top of the page is to invest in paid listings. For example, eBay offers promoted listings for dropshippers who are willing to pay for more eyes on their products.
But you need to sell a good product-one that people are actually searching for right now. So do your research with software like Terapeak. And find keywords people are searching for on eBay. (If you get it wrong, you won't make sales). You can also use sites like:
Where To Look For Products To Sell On eBay
You want to look for things like:
- Is there a product online going viral?
- Can you find an obscure item people want to buy?
- Is there a gap in the market you can capitalize on?
Your other option is to influence eBay SEO and find favor with the platform. So you need to understand customer psychology. For example, most customers will click the first product listing. While others only buy the lowest price available.
But if you price your items slightly lower than the competition and can make more sales, you'll rank higher on eBay's search engines. Then, you'll be awarded by the platform algorithm. And your listings will rise with every sale you make.
Then you can raise your price ($1 at a time) until you reach your desired profit margin. Of course, you might have to take a loss or only break even until you get to the top. But once you're at the top of the page, you'll get more views and make more sales.
The average eBay customer shops on the platform because they want a deal. They enjoy finding the best price (especially when buying a new product). And eBay allows them to compare multiple listings at once. So, if you're going to sell more wholesale products, you need to take advantage of pricing strategies like:
For example, instead of selling one item for $25, consider selling 3 for $60. (Note: this only works with products people typically buy in bulk).
Run A Sale
Use eBay's Markdown Manager tool to run a sale. Not only do the customers love a deal. But you'll make eBay's algorithms happy. As a result, you'll get positive reviews, more sales, and an increase in your seller account standing.
Offer Volume Pricing
Let the customer make you an offer. (Don't forget to include your own bid).
You can also employ pricing breaks with things like:
- Discounts For Bundles
- 'Frequently Bought Together' Items
- Free Shipping On Orders Over XXX
- use eBay Coupons
Remember, you have a ton of competition. So the more you can improve your standing and drive your listings to the top, the more money you can make as a drop shipper.
Is It Too Late To Start eBay Dropshipping?
It's not too late to start eBay dropshipping. And it's not dead. But the way it used to work is dead. The platform has evolved over the years. So you need to stay on top of those changes. You need to do product research and find profitable items that people want to buy.
Use software like ZikAnalytics to see how well other sellers are doing on eBay. (Or if they're actually dropshippers as well). The key is to buy low and sell high. Plus, you need to optimize your listing for eBay's Best Match with things like:
- Keyword In The Title & Subtitles When Possible
- High-Quality Images & Detailed Descriptions
- Positive Reviews & Clear Return Policy
You can also leverage eBay-promoted listings. They're quick and easy to set up with an upfront flat fee. Three options include:
eBay Promoted Listing Options:
Additional ad costs include a percentage of the sale price (excluding shipping and taxes) with varying price options. And ads are based on the length of your auction and item category. So, for example, for a standard ad, if you sell a product for $50 and your ad rate is 5%, you will pay $2.50.
Is It Still Worth It To Dropship On eBay In 2022?
eBay dropshipping is still worth it if you're looking for a low-cost, low-risk side hustle. However, you need to be a savvy shopper and find products as cheaply as possible. Items you can get a decent profit for are but are in demand. Consider that the average eBay customer shops on the marketplace because of things like:
- The best deal
- Unique or obscure products
- Trusted platform
- Only shop on eBay
But again, you need to sell a ton of items and products that have a decent profit margin. And the goal is to get your listings to the top. So you need to stay in compliance and increase your seller rating. But you can leverage tactics like buying gift cards and using cash-back sites or points.
And connect with wholesale suppliers who give you the best price and customer experience possible. But if you can find an untapped market or a unique product to sell. Then you can still make money with the model.
Why You Should Consider Lead Generation If You Want To Make Money In 2023
I understand the appeal of eBay dropshipping. It's the dropshipping business model's most low-risk and low-cost option (much less than owning a Shopify store). But I need help understanding why you would invest that much time and effort in something where you have no influence. Think about it. eBay controls every fundamental aspect of your business. From your product listings and what you can sell. To their expectations around customer service.
Plus, the consumer belongs to eBay. So not only are there no loyal customers, but you're not likely to generate recurring sales. Plus, the competition is fierce. So you need to always be on the hustle. Or stay one step ahead of trends and find the best products to sell if you want to make sales. But with lead generation, natural barriers like location and a learned skill set minimize the competition. And you don't need a ton of upfront capital to start.
Take this site above, for example. I built this site in 2015 for a total cost of $500. But this site has been making me $2000/month for seven years. Plus, because this lead gen site now sits at the top of Google, it's almost entirely hands-off. So not only have I secured a passive income.
But I've been able to buy back my time. (Plus, this site is only one of over 80 I own). It only takes around 6-weeks-6 months to rank your sites. Then you find a small business owner who wants to grow and sell your leads for a piece of the profit. And with profit margins sitting around 95%. Those numbers make a lot more sense to me.
eBay dropshipping isn't dead. Yet. But there have been significant changes to the platform, and they're not done. In fact, in Australia, Amazon FBA isn't allowed at all. So it might only be a matter of time before dropshippers in North America face similar restrictions. You have zero control over the platform, and the customers belong to eBay.
So as a store owner, you either do it their way or no way—another reason local lead gen is a better way to make money online. If you don't comply with eBay's rules, you could have your listings banned, face the wrath of their algorithms or even have your account suspended. But if you stay in line and can find products to sell, that will make you a decent profit. Then eBay dropshipping isn't dead, and it's still a guaranteed way to make money in 2023.