Drop shipping is one of the easiest, yet most dangerous ways to get started on eBay. It is easy because you don’t need to carry any inventory and can get started right away without having to find warehouse space or sort out fulfillment, but it is dangerous because there are so many pitfalls. Here is how you can avoid these pitfalls and build a thriving eBay business:
Never Buy a Drop-Shipper List
Real drop shippers don’t advertise themselves on drop shipper lists. People selling these lists are almost always out to make a quick buck and you will seldom find high quality wholesalers on these lists. The only exception is Worldwide Brands, a drop shipper directory which is eBay-certified.
The best place to look for drop shippers is in trade magazines and trade shows. That’s where real world clients go to look for their suppliers, and it is also where top-tier suppliers go to advertise their services. Subscribe to as many trade journals as you can. They are usually advertising-sponsored and are free to recipients. Look for advertisements for products that catch your eye. Some may even directly advertise that they drop ship.
Don’t Compete in Thin Margin Markets
The drop-shipping fees you will be charged will make it very difficult to compete in thin margin markets. That means no $0.99 cent products and no electronics. If your competitor is buying RAM chips for $30 and selling them on eBay for $32.99; there’s no way you can compete if you are also paying a $3.50 drop-shipping fee. Instead, choose markets that either have few competitors, or have enough of a margin that you can still be profitable after paying the drop-shipping fee.
Keep a Close Eye on Your Wholesalers
Remember that even though you are outsourcing the fulfillment process, you are still responsible for the product purchase being fulfilled.
If possible, have your fulfillment company send tracking IDs to your customers when the item is shipped, with a copy to you. In that way, you can make sure the item has been shipped in a timely manner. The same applies for refunds. Ask your customer to send you the tracking ID for refunds, so you can be sure you are refunded the price for the item when it gets to the wholesaler.
If the wholesaler is late on shipping an item, or ships a defective item, make sure to set the expectation early on that that is unacceptable. Your suppliers should understand right from the start that you expect top-level service for your customers.
These are a few of the most common pitfalls to avoid in the drop-shipping arena. Drop shipping allows you to test out a variety of markets without having to invest a lot of money into any one market first. It is a potentially lucrative method to get started on eBay that doesn’t risk too much up-front cash.
