10 Tips - How to Make Money Dropshipping on eBay

An exciting and relatively risk-free way to make money off of online shopping is to execute the dropshipping model on eBay, Amazon (e.g. “fulfilled by Amazon” orders), and other such vendor sites. However, dropshipping is not as easy as it may seem, nor is it without its disadvantages.

So, how do you make money dropshipping on eBay? You can make money dropshipping on eBay by finding good suppliers, researching the best items to sell, and prioritizing communication and your reputation.

The great thing about dropshipping is that you don’t need an enormous amount of capital to invest at the beginning of your venture, and you can work from home.

You can easily start this type of business venture when you are working another job or as a student, making it ideal for earning some pocket money—as you learn the tricks of the trade, you can then translate your skills and knowledge into making this your main source of income.

First things first: some of you may not know what dropshipping is but may still be eager to make money through eBay sales. To help facilitate your understanding, we’ve put together a simple explanation of the concept and process before we get into the specific tips and tricks.

Essentially, dropshipping means that the vendor does not sell products that he or she has in their own stock. Rather, when the vendor sells an item, the first purchase that item from their supplier. The supplier also takes responsibility for shipping the item. This way, the vendor never has overstocked items that are no longer interesting to or attracting customers, and they never lose money that they invest in these items for their own stock.

You can also list items for a higher price than you know you can purchase them for on another site or other location and then ship that item to the purchaser’s address. Of course, with this method, you must choose how high a markup you wish to add onto the item, and depending on your profit margin, it may either be unsustainable or difficult to capture the customer’s interest.

However, this method does ensure that you will not run out of stock, as Amazon generally lists many suppliers per item. However, please keep in mind that dropshipping from other sites on Amazon is not permitted.

Take care when choosing your suppliers—choose those who come highly recommended and have good reviews. If possible, you should strive to meet your suppliers in person, or chat with them on the phone or on a video call. Establish a clear line of communication and maintain it throughout the entire time you are in a business relationship with them.

You should ask your supplies what their packaging materials are, their handling and shipping fees and times, guaranteed delivery dates, and quality assurance. Keep in mind that if something goes wrong with the delivery or if there is some defect or other issues with the item, your customer will be complaining to you and not the supplier. Also, since you will not be in charge of the packaging or shipping yourself, you generally won’t be able to guarantee fast shipping to your customers.

In order to land the best suppliers, you must also have something to offer the suppliers themselves—it’s not just about the customers! You have to be able to prove to them or assure them that you will be providing the best “middleman” service, but also that you will provide the best customer service, sales, and marketing experience.

It may take a long time to find good suppliers—weeks, months, or years. However, if you intend to pursue dropshipping, it is well worth the investment (of your time and finances). A good supplier and a good, personal relationship with your suppliers will always pay off in the future, whether you are the among the first to know of new products, or they help you with customs issues (for international shipping), or they extend you some credit when you are having cash flow problems.

Do not choose a supplier who demands a fee (monthly or annual). You may need to provide a “deposit” to prove that you are a legitimate vendor who will provide them with lots of sales and return business, but chances are that the supplier is fake if they are asking for a membership fee.

Lastly, do not choose a supplier simply because they offer the cheapest prices for the product, shipping, and handling. There is always the chance that they offer cheaper prices than competitors because they skimp on quality and care. In the end, you always want to invest a little more to ensure that you are delivering the best product possible to your customers so that you earn a good reputation as a vendor and receive good reviews. Keep in mind that if anything is wrong with the product, you will be the one refunding the customer.

To find suppliers as you start your dropshipping venture, contact or personally visit wholesalers of the field or category you are looking to sell items from—for example, if you are planning on selling camping goods and items, you should seek out and visit a camping goods supplier (always in person when possible).

You can also purchase dropshipping directories for less than $50—these lists include companies that come personally recommended and reviewed by other, experienced dropshippers, so you can rest assured that they will be reliable, responsive, and provide good quality items and service. One of the best directories to help you save time on finding legit suppliers is Salehoo. You can read my full Salehoo review here.

Also, you can attend tradeshows and conventions to seek out suppliers in person and establish good relationships with them right off the bat—they will appreciate and respond to your initiative and enthusiasm.

When you are deciding which items to sell, you want to focus not only on the things that people want to buy or things that will be the most profitable for you to sell, but also the add-on items or services that you can personally offer another site cannot.

For example, if one of the items you are looking to sell is a desktop monitor, you may find that your supplier also stocks other desktop computer items that will be of interest to your customers. You can then bundle items together in anticipation of the customers need, creating a “one-stop-shop” experience they may not find elsewhere.

Once you are more established, pay attention to your sales data—make sure to list items for sale that are in high demand. For example, holiday-scented candles during the winter season will likely sell well.

1. Always make sure you have at least two suppliers for any given product you are selling (otherwise you risk selling an item that you cannot supply).
2. Since dropshipping became popular in recent years, entering and succeeding (e.g. making high profits) has become more and more difficult. You must be offering something different—competitive prices, great customer service, and so on—to stand out in the business. In this sense, it’s just like any other business.
3. For your most popular items, you may find that it is easiest and more profitable to keep a small, personal stock of them for quick delivery.
4. Prioritize communication with your suppliers and customers above all else—even your profit. This will affect your reputation, and a good reputation will lead to profit again quickly, whereas a bad reputation is hard to recover from once gained, meaning turning a profit will always be difficult.
5. Once you get the ball rolling, and you start to earn a steady flow, you should set up a business, a business bank account, business credit line, and online banking/payment (such as Venmo, Paypal, etc.). If you become really serious about dropshipping and decide to make this your full-time business or main source of income, you should consider hiring an accountant (who is experienced with online businesses).
6. As you begin to receive feedback and questions from your customers, consider adding frequently asked questions and the answers as information on the item listing. This way you will not need to spend as much time answering similar questions.
7. When you are starting out, make sure to factor in processing fees from Paypal (or whichever platform you are using), banking and conversion fees, taxes, etc. as well as the supplier’s price for the item(s) and shipping/handling into your profit margin.
8. Consider using an app to keep your suppliers notified when you make a sale—this way you don’t have to send an email or pick up your phone every time you sell an item. This is especially important when your venture starts to take off.
9. Check out what items best-selling and popular dropshipping vendors are listing for sale. Chances are that they know what they are doing and are listing these items for good reasons. Keep checking in on the competition as well to keep yourself in the loop and informed of your competitors.
10. If you are unsure of a supplier or their products, purchase the item yourself to research the quality of the item, the packaging materials, etc.

Technically there will always be some fees for eBay and PayPal, etc. themselves, but your profit should always be positive. Briefly: do your research to find items that are in demand and will interest customers, find good suppliers who don’t require a hefty deposit or fee, and then list your item for a price that will earn you a profit.

The best dropshipping suppliers are Alibaba Suppliers, eBay / Amazon / Aliexpress, Shopify, BigCommerce, Doba, and Sunrise Wholesale. Some of these provide a directory of suppliers and require a fee for access, but this is not the same as requiring a monthly or annual fee as many fake suppliers.