eBay dropshipping is still profitable in 2024 if you have a reliable supplier and a winning product. Potential profit margin for eBay dropshippers usually ranges between 10% to 30%.
In a case study posted on YouTube, Aidan Snider shares how he made a total sale of $2,734.15 in the first 2 weeks of his eBay dropshipping business. According to him, he sold 59 backpacks and made a total profit of $650. “I think if you're wanting to start, it's a really good idea to keep in mind seasonal products because those are going to be in demand at specific times,” says Aidan.
eBay dropshipping is a low-cost and low-risk online business model. You're basically leveraging an existing customer base on a trusted platform. So you have access to potential customers armed with purchasing power and intent. As an ecommerce platform, eBay remains to be the second most popular website in the world, next to Amazon. The site currently has a 3.5% share of the ecommerce retailer market in the United States. In fact, there are over 3.67 million US users accessing the eBay app each month, while there are over 62 million users globally. While this means you can take advantage of eBay’s massive market reach, this also means you’ll have to deal with high competition. Plus there’s always the risk of having your account suspended by eBay.
In this article, we take a closer look at what you can do to boost your profit margins as an eBay dropshipper. We also show you how much you need to start and how much you can potentially earn. Towards the end, we introduce you to local lead generation - an alternate online business model that can be more profitable and scalable in the long run.
3 Tips For Higher Margins on eBay Dropshipping
1. Choose Reliable Suppliers for Your eBay Dropshipping Business
Choosing reliable suppliers for your eBay dropshipping business is the first step of ensuring profitability. Look for dropship suppliers that have a proven track record in providing quality products, stellar customer service, and fast shipping times. Also, order fulfillment is the apex of your online store, so you want to make sure your buyers are satisfied with your supplier’s performance.
Some of the top sources for you as an eBay dropshipper include:
AliExpress Amazon
Banggood BigBuy CJ Dropshipping Home Depot Spocket
Walmart Wayfair
PRO TIP
Don't use Target as your wholesale supplier because they don't like the dropshipping business model. Shipping overseas isn't ideal if you’re using Amazon or Walmart as your supplier. Also, avoid shipping items from China unless you are very clear with your customer about shipping times.
2. Sell The Best Products in Your eBay Dropshipping Store
Selling the best products in your eBay dropshipping store will help boost your profit margin. Look up high-demand products online to decide which ones to offer your customers.
Top profitable product categories in dropshipping include:
Electronics & phone accessories Clothing & beauty products Home improvement & office supplies
That said, you should still do your own product research. You can use software like Zik Analytics or ShelfTrend to determine:
- Which products are currently trending online.
- Which keywords are people searching for the most.
- Which products are selling well among your competitors.
- The current costs of products and how much profit you can make.
Your research can help you identify products to list online. Moreover, you can come up with a good marketing campaign and pricing strategy based on your chosen products and target audience. You can also consider using automation software like AutoDS to streamline your product selection and suppliers to save time and money.
PRO TIP
Using eBay’s shipping rate tables will provide you with a tool that automatically calculates shipping costs. You can charge your buyers with accurate fees and not lose any money. According to their site, you can “create up to 60 unique rate tables to specify shipping options and costs” for up to 5 US regions and other international regions.
3. Use Discount Gift Cards & Cash Back Options as an eBay Dropshipper
Using discount gift cards and cash back options as an eBay dropshipper can help you save money and increase profits. These can be purchased on sites like Raise.com or Overstock.com for retailers like BestBuy, Bath & Body, and others.
For example, if you can buy a $100 item for $80 with a gift card, that can increase your profit margin at the front end by up to $20.
What Is The Average Profit Margin For Dropshipping On eBay?
The average profit margin for dropshipping on eBay ranges from 10% to 30%. A one-person dropshipping business usually generates around 30% in profit margin but they can even go as high as 60%, especially if you're sourcing products from reliable suppliers that offer cheap products online. Also, take note that eBay charges sellers with certain fees.
Ultimately, your profit margin depends on the total quantity of products you sell per month, the level of competition in your niche, and the expenses you'll need to pay as an eBay seller.
How Much Does It Cost To Dropship On eBay?
Dropshipping on eBay will cost you:
- 35¢ per listing (after using up 200 free listings per month)
- Final value fees (up to 12.9% of the sale price per product, plus 30¢ per order)
- eBay store subscription (a minimum of $4.95 per month for a Starter Store)
Even with its associated overhead costs, eBay dropshipping is still fairly less costly compared with other online business models.
Is dropshipping on eBay worth it?
Dropshipping on eBay can be worth it if you can partner with a reliable wholesale supplier to fulfill your product orders. Although eBay allows dropshipping, the platform requires that orders are fulfilled directly from a wholesale supplier. As such, dropshipping from a marketplace like AliExpress is not allowed on eBay. Ecommerce sellers on eBay that dropship from a marketplace like AliExpress can often pass under the radar for a time, but chances are high that eBay will eventually find and suspend the seller's account.
One of the main reasons dropshipping usually doesn’t work well on eBay is because customers want to receive their items quickly, but dropshipping suppliers typically require extensive shipping and handling time. However, dropshippers that can find suppliers who can fulfill orders quickly can gain a competitive advantage on eBay by providing expedited shipping.
In fact, this is one of the primary strategies that eBay dropshipper Mike Macaluso used to generate over $220,000 in revenue in just one year. Mike noticed that eBay showed an orange-colored badge on product listings with shipping and handling longer than 3 days, while 1 - 3 days generated a green badge on the listing. Mike realized he could attract more sales by partnering with suppliers who could accommodate expedited shipping to his customers.
Another successful eBay dropshipper on Reddit suggests that the business model can be worth it, but only if you target a suitable niche and are prepared to test many products until you find profitable opportunities.
Many online sellers find that dropshipping on eBay is not worth it because you have limited flexibility in pricing your items. Dropshippers on eBay often sell the same products as many other sellers, meaning there is an acceptable market price for the product. Pricing a product higher than the market price deters customers, while setting a price below the market price cuts into your profits and can lead to a “race to the bottom” as other sellers of the product may cut their prices below yours in defiance.
Dropshipping on eBay also requires that you pay eBay’s seller fees, which many dropshippers describe as expensive. An eBay dropshipper on Reddit notes that they are moving operations away from eBay because of the poor results they have realized while paying eBay a chunk of their earnings.
How To Dropship On eBay:
Creating an eBay seller account gets your foot in the door. You can use your email for this. Otherwise, you can use your Google, Facebook, or Apple account to get in. Enter your information and link a bank account to receive payment for your sales. After that, pick a name and you can start listing items in your online store.
You can then find profitable items to sell online by doing product research using platforms like:
- eBay's Bestseller's Page
- Amazon Best Seller's List
- Alibaba's Most Popular Sellers
- TikTok's #TikTokMadeMyBuyIt hashtag
Assessing your dropshipping suppliers makes it possible for you to do eBay dropshipping the right way. Your goal is to find a third-party provider that can offer quality products at the lowest costs.
Common options for dropshipping business owners include, Amazon, Home Depot, Wayfair, and Walmart, among others. Aside from product quality, you also want to check their performance in terms of shipping time and customer satisfaction. Read reviews to see what previous clients have to say about their services. Ideally, you should go with a US-based dropshipping supplier that can guarantee fast shipping and easy returns.
Pricing your products based on your supplier's costing will help you make a decent profit from your eBay drop shipping business. The key to making money with this business model is to choose trending products that offer plenty of opportunities to earn. So you need to source the lowest possible price and still factor in costs like fees and shipping. Check the prices of your competitors to get an idea for your own pricing strategy. Naturally, you wouldn't want to price your products too high - or you won't make any sales. However, pricing too low will mean you won't make money. So test and retest various dropshipping products until you find the sweet spot.
Creating your eBay listing officially starts your dropshipping business. When doing this, make sure to use good photos and well-optimized product description. So don't forget important details, such as:
- Product title with keyword
- Subtitle, when possible
- User-generated content for your product descriptions
- Professional quality images
- Customer reviews
- Policies on shipping and product returns
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.
Pros & Cons Of eBay Dropshipping
Pros
eBay dropshipping has a low barrier to entry. It is a simple business model that's easy to learn and execute.
eBay dropshipping has fewer rules than Amazon dropshipping. But it still has a well-established consumer base with over 132 million active users on the platform.
eBay dropshipping allows you up to 200 free listings on your store per month before they start charging you with listing fees.
Cons
eBay dropshipping is an ultra-competitive market. There are more than 17 million sellers using the platform to sell their products online.
eBay dropshipping means the customers belong to the platform - not you.
eBay dropshipping requires you to pay up to 10% of your sales to the platform.
Is eBay Dropshipping Legal?
eBay dropshipping is legal, although the site only allows wholesale dropshipping suppliers. Retail dropshipping is not allowed in this business model. Non-compliance to this specific guideline can lead to account suspension, so observe the rules to continue using the eBay platform.
Also, research on the existing regulations and requirements in your area to ensure that your dropshipping store stays compliant. See if you need to acquire any business license or sales permit before you can operate your business.
Can You Make Money With eBay Dropshipping?
You can make money with eBay dropshipping. In fact, average earnings can be as much as $100 to $1,000 per day, depending on your product, niche, and market. People are still buying on eBay and the number of online shoppers continues to grow each year. However, the platform continues to change, so you need to research and test products all the time. You can only scale your business as you adapt and keep up with the latest changes. For example, you may have to invest in effective advertising strategies to drive traffic to your products.
In a Quora post, Ali Naqi points out that while making money on eBay dropshipping is possible, it's not entirely without its own set of challenges. In addition to competition, an eBay seller also has to offer "unique value propositions" to gain buyers. Competitive pricing is another concern, especially since you'll be selling the same products being sold by similar dropshipping stores. If you don't price your products correctly, you can potentially lose money.
Of course, your end goal is to provide the best customer service possible. 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.
You can further increase your earnings as you:
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
What Are The Best eBay Dropshipping Courses To Take?
The best eBay dropshipping courses to take include:
- eBay Dropshipping Guide by David Vu
- eBay Dropshipping Retail Arbitrage Companion by Jack Pitman
- Dropshipping University by Tom Cormier
- Dropshipping Titans by Paul Joseph Lipsky
- Manual Dropshipping by Suliman Farooq
Taking an eBay dropshipping course can provide you with the guidance you need to start and succeed in the industry. In these courses, experts share their insights, experiences, and strategies in eBay dropshipping. Some even offer one-on-one mentorship to help learners and address specific questions.
Why Local Lead Generation Is A Better Way To Make Money Online
eBay dropshipping can be a great way to make some money online, but it has really become a competitive platform. Earning big is possible if you put in a lot of time and effort.
In comparison, local lead generation is not as hard nor is it as competitive. With this business model, you build business websites and then work on ranking them high on search engine results. Once your sites achieve top ranking, you can offer them for rent to local business owners who want to grow their companies. You, as a lead gen provider, will drive traffic and leads for their businesses and then you get paid in return. Also, a top-ranking site will require little to no work on your end. So with lead gen, you harness time freedom and it allows you to create a passive income. More importantly, you own the lead gen sites and so you don't have to worry about eBay suspending or banning your account.
Take this site above, for example. I built this site for $500 over 6 months. It has since been making me $2,000 per month for several years now. Even better is that it’s only one of the 80 websites I own. In total, I usually earn at least $52,000 or more per month providing local lead generation services to my happy clients.
