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Is eBay Dropshipping Profitable? 3 Tips For Higher Margins

March 9, 2023

eBay is an active sellers' marketplace. In fact, the platform makes up almost 5% of the US eCommerce market. But is eBay dropshipping profitable? And what are the pros and cons of the business model?

In this article, we take a closer look at the average profit margins of an eBay dropshipper. And if you can still make money with eBay dropshipping in 2024. We'll also cover topics like how much money you need to start. Or if it's even legal. Plus, why you should consider the local lead generation business model if you want to make money online. And three tips for higher margins with eBay dropshipping you can do right now. 

What Is eBay Dropshipping?

eBay dropshipping is a retail arbitrage-style business model. But it's also a fantastic opportunity if you want to start an online business. Consider that you're leveraging an existing customer base on a trusted platform. So you have access to potential customers armed with purchase intent. Plus, you don't need to own, touch or handle products.

Instead, as soon as the customer orders your product, you purchase it from your dropshipping supplier. Then they ship it directly to your customer. So you have no out-of-pocket expenses. And you don't need to store inventory.

As a result, you're always cash flow positive. But eBay dropshipping is competitive. In fact, there are around 1.6 billion live listings on the platform today. So you need to know how to optimize your listing. And you need to sell products people want to buy. 

You can use software like Terapeak or ShelfTrend to find a profitable product and look at things like:

Tips For Doing Product Research:

  • What products are selling well right now?

  • What items is another drop shipper seeing success with on the platform?

  • Is there a gap in the market?

  • What keywords are people searching for the most?

The goal is to get as many listings on the site as possible. And get your product listing at the top of the page, so you get more views and sales.

Pros & Cons Of eBay Dropshipping?

People are still buying on eBay. But it's not like doing drop shipping with a Shopify store because it's a marketplace. So you already have traffic and can go where the customers already are. So you don't need to spend money on paid ads or cough up the coin for hosting and domain fees. But like every online business model, eBay drop shipping has advantages and disadvantages. And these include things like:


It's a low barrier to entry and a simple business model that's easy to learn and execute.

eBay has fewer rules than Amazon drop shipping. But it still has a well-established consumer base. (Almost 187 million people actively use eBay).

You can sell various products from more than one wholesale supplier. 


It's an ultra-competitive market; more than 17 million sellers use the platform to sell their products

The customers belong to the platform-not you. 

Up to 10% of your sales go to eBay.

How Much Does It Cost To Dropship On eBay?

eBay dropshipping is low-budget and low-risk. In fact, all you need is an eBay account. But it's not entirely free. In 2024, eBay fees include the following:

  • 250 free listings and then 35¢ per listing 
  • Final value fees (up to 12.9% of the sale price per product)
  • Store subscription ($4.95 and up every month)

But even with its associated overhead costs, eBay dropshipping vs Shopify dropshipping is still less costly or risk intensive. Plus, using automation software like AutoDS can streamline your product selection and suppliers to save time and money. 

How To Dropship On eBay:

Create an eBay Seller Account

To be a drop shipper on eBay, you need a seller account which is free to set up. Enter your information and link a bank account to get paid for sales. Then, pick a name, and you can start listing items to sell in your online store. Find profitable products to sell and take the time to do product research using platforms like:

  • eBay's Bestseller's Page
  • Amazon Best Seller's List
  • Alibaba's Most Popular Sellers
  • TikTok Made My Buy It
But you can also leverage third-party tools like Terapeak and Algopix.

Then you can see real-time data to find profitable product suggestions. Look for items that people are interested in buying now. (But are also easy to ship with a low return rate) like:

  • Beauty & Office Supplies
  • Kitchen & Dining
  • Yard & Garden
  • Home Improvement & Phone Accessories

The goal is to generate the highest profit. So look for inventory you can buy for minimal cost. But that still has room for a decent markup. 

Vet Your Dropshipping Suppliers

You need a reliable dropshipping wholesale supplier. One who can provide you with the product at the lowest cost. But there are numerous options available that include: 

  • Wayfair & Home Depot
  • Spocket & Doba
  • Walmart & Amazon

Shipping and customer experience are the most critical aspects of eBay dropshipping. So your US dropshipping supplier needs to be able to provide fast shipping and easy returns. 

Pro Tip: Vet your wholesale suppliers by accessing their seller ratings, reviews, fees, and delivery times.

Price Your Products

The key to making money with this ecommerce platform is to choose products that offer a decent profit. You need to source the lowest possible price and still factor in costs like fees and shipping. Check the prices of your competitors or another dropshipper on the platform.

You don't want to price too high, or you won't make sales. But if you price too low, you won't make money. So test and retest until you find the sweet spot.  

Create Your eBay Listing

You need an optimized listing. In fact, the fastest way to get to the top of the page is with a well-optimized listing. So you need to include things like:

  • Product title with keyword
  • Subtitle when possible
  • UGC product descriptions

  • Professional quality images

  • Customer reviews

  • Return policy & reviews

Pro Tip: The better optimized your product listing, the higher your chances of finding favor with the platform's algorithms and being seen by your ideal eBay customer. 

What Is The Average Profit Margin For Dropshipping On eBay?

Profit margins are anywhere from 10%-60%. And what's left after you subtract any fees, shipping, taxes, etc. Traditionally a one-person show generates around 50% profit margins. But they can even be as high as 60%, especially if you're sourcing products from flea markets, auctions, bargain stores, etc. But you need to always be on the hunt for deals. So you trade time for money. And that doesn't equate to a passive income. 

Still, if you enjoy shopping or have a keen eye for a bargain, you might enjoy this side hustle's shopping aspect. However, as you scale, your profits get smaller. And this is because you're putting your money to work instead of your time. So, for example, if you're sourcing products from sites like Amazon or Walmart, you'll pay more for your best dropshipping products.

But you buy back time freedom. Or if you hire VAs, pay for storage, etc., you will incur additional expenses. But you should still earn 20-40% profit margins. (At least when you have a team working for you but are generating substantial earnings).

Is eBay Dropshipping Profitable? 3 Tips For Higher Margins:

1. Choose Reliable Suppliers

You can get quick wins with eBay dropshipping. But only if you provide a stellar experience for your potential customer. So you need to find a reliable supplier. One who sells quality products and can deliver on short shipping times that you can sell in your dropshipping store.  A few top contenders include:

Consider that order fulfillment is the apex of your online store. Plus, the platform has stringent rules around its delivery and eBay dropshipping policy. And at the end of the day, the customer belongs to the eBay platform. So they control how often your listings get seen or where you fall in the algorithm.

Unlike owning a lead generation business. Where you ultimately control every aspect of your business. You build and rank generic websites that you own. Plus, you own the site, the tracking number, and the leads it generates that you can sell to small business owners. You take a piece of the profits for your hard work. And create a steady cash flow on autopilot. 

You can dropship from Amazon and sell Amazon products on your store. But only if you do it the right way. For example, don't use an Amazon Prime Account, and don't use their tracking number.

But investing in an API software tool like AutoDs or Ordoro can generate usable tracking numbers and ensure that your listing stays at the top of the page. But, again, the goal is to get the biggest discounts to make the highest profit margins.

Pro Tips: Don't use Target as your wholesale supplier (they don't like the dropshipping business model).
Shipping overseas isn't recommended if you use Amazon or Walmart as your supplier. 
Avoid shipping items from China unless you are very clear with your customer about shipping times.

2. Sell The Best Products

If you want to make money, you need to sell the best dropshipping product possible. In addition, you want to sell items that the average customer is actively searching for on the platform. Top categories include things like:

  • Electronics & Phone Accessories
  • Clothing & Beauty
  • Home Improvement & Office Supplies

But you can do product research with software like Zik Analytics or ShelfTrend and determine things like:

  • What are people buying?
  • What product does another dropshipper have success selling?
  • Can I buy this product cheaply and make a profit?

Consider selling more large or oversized items. Your competition is less because most eBay dropshippers don't want to do this. After all, it's more challenging, and shipping costs are higher.

But if you set your postage rates table, it will automatically calculate the shipping price. So the customer knows how much shipping will cost. You can do this on the platform under the account tab. Plus, you can create up to 40 postage rate tables based on your site and postage preferences for your online store. 

You can also employ the 1 in 10 principle, where every tenth item you list on your online store is exclusive to your wholesale supplier. So not only can you charge more because it's a unique product. But your competition will be less. 

3. Use Discounted Gift Cards & Cash Back Options

You can take advantage of gift cards to increase profits. These can be purchased on sites like or for retailers like BestBuy, Bath & Body, etc. For example, if you can buy a $100 item for $80 with a gift card, you can increase your profit margin at the front end by $20.

You can also leverage cash back or points using a credit card or connecting with sites like ebates. But you need to make sure you stay within eBay policy and platform guidelines. Plus, it's your responsibility to ensure your customer gets their product.

Is eBay Dropshipping Legal?

Yes, wholesale drop shipping is 100% legal on eBay. But retail dropshipping isn't allowed. Well, it's not so much that it's not allowed but discouraged. However, if you can stay under the platform's radar by complying with its guidelines and you can show that you're a good seller by getting good reviews. Plus, you're providing excellent customer service. Then you should be fine.

Can You Make Money With eBay Dropshipping?

Yes, you can make money with this model. In fact, average earnings can be from $100-$1000s+/day. The key is to know how. But the platform continues to change. So you need to try new stuff instead of becoming stagnant. That means you need to adapt and keep up with recent changes.

So leverage API software like AutoDS or Deliverr to run and automate your store. Not only do tools integrate with eBay to make changes to listings. But they can provide a direct connection between the software and the platform. And this has a lot of benefits. Like price changes, stock updates, messaging customers, auto orders, etc.

Your end goal is to provide the best customer experience possible. And the more positive feedback and reviews your listings get, the more you will be recognized as a top seller and make more sales with your eBay store. But there are a few ways to up the ante like:

How To Make More $$$ 

  • Increase your selling limit because the bigger your selling limit, the more products you can list.

  • Optimize your listings and include a strong title and subtitle where possible.

  • Add eBay free 3-day and free 4-day tags to your listings to increase customer confidence and conversions.

  • Post-high-quality images with alt tags in your item descriptions.

  • Include keywords in your title and description.

  • Publish scroll-stopping copy and detailed product descriptions.
  • Offer fast delivery & seamless returns.

Of course, you can lose money with eBay dropshipping too. For example, if you don't price your product correctly. Or if the product takes too long and there's a price change. (Before the item is shipped and the price has gone up). Then you could lose money. But don't be afraid to experiment and try new things. Scale what works and pivot when things don't. 

Why Local Lead Generation Is A Better Way To Make Money Online

eBay dropshipping is a chance to make some money online. But it's a competitive platform. Plus, remember that the customer belongs to them. That's why the lead generation model is my number one recommendation. Not only do natural barriers minimize the competition. But you own the websites and the leads. So the customer belongs to you. Find a local business owner who wants to grow and then sell your leads for profit. Plus, you don't need a ton of capital to start lead gen.

Tree Care Lead Gen Site

Take this site above. I built this site for $500 over 6 months. But this site has been making me $2000/month since 2015. Even better is that it’s only one of 80 sites I own. Plus, once your site sits at the top of Google search engines, it's pretty hands-off. So with lead gen, you harness time freedom. And can create a passive income. 


eBay dropshipping is still profitable. In fact, it's an excellent place for a beginner to start dropshipping. But you need to find bargain basement deals for products that people want to buy. Plus, it's a competitive marketplace. So you need to optimize your listing. And provide the customer with a fantastic shopping experience. But consider that you have access to a massive consumer base on a trusted platform.

So you are where the customers are. But remember, the customer belongs to the platform. So they hold the reins around quality control. And unlike the local lead generation—a business model where you're in total control. eBay can suspend you if you don't comply with their policies. But if you get positive customer reviews and ride under the radar. Then you can make money as an eBay dropshipper in 2024

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Ippei Kanehara

$52K per month providing lead generation services to small businesses is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

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