eBay Dropshipping 101
Have you tried different ways to make money online and nothing seemed to work out well for you? I bet you have heard of eBay Dropshipping and you are probably wondering what’s all that about…
If there’s a person you’d like to learn about dropshipping from, it should be from someone who does it every day. There will be things that you may stumble upon and find a little daunting, but there’s nothing to worry about since it’s not as complicated as you think it is.
That’s why I’m here! I have been an eBay Dropshipper for quite some time now and have successfully earned 6 figures in revenue in 2019 alone. I’ll walk you through this process and help you start your own dropshipping business through simple and easy steps!
You don’t need to grab a pen and paper, just make mental notes of these and you’ll have your own business up and running by the end of this article!
What Is Dropshipping?
This is a method known as product sourcing. Basically, this is a great way to have your own business without ever having to worry about the inventory, packaging or wondering what’s the best way to ship your items.
We are all used to brick-and-mortar businesses that need to stock up inventory. But if you want to create an online business that does not require you to keep tabs on how much is left in your stock. Or when you need to buy more of them so you can continue selling the items, dropshipping is a great way to free yourself from all that hassle.
All that you need to do is look for a supplier you can work with, purchase the merchandise after your customer pays you on eBay and let your supplier deliver them to your customers. Sounds easy? I told you, it’s not going to be that complex!
This is a legitimate way of generating profits online! And the best platform to do that is on eBay. You might not know this, but most sellers on eBay are actually sourcing their products from a supplier.
Dropshippers are basically middlemen existing between suppliers and consumers. What makes it more interesting is that you can set how much the products are worth at your desired prices.
Are you ready? Then, let’s get started!
Steps To Start eBay Dropshipping!
1. Create An eBay Account
Of course, you’ll need to create an eBay account to get started. This is the first step to success and it saves you the hassle of setting up your own e-commerce or online store. I recommend an account name that reads like a brand: “Mark’s_Electronics” or “Top.Notch.Deals”.
I have to remind you that every new eBay account is limited to listing 10 items only. For starters, it’s typical but you can eventually raise your limits by asking eBay to increase them.
If you’re wondering if starting with only 10 items for listings will hurt sales, it does not make any difference.
2. Create A Paypal Account
You need a platform where you can receive your profits and that’s why you need to create a PayPal account. This will be linked to your eBay and once it’s fully activated, you can easily access your earnings.
Here’s an important note: for starters at eBay dropshipping, Paypal sets a probationary period. They will hold your profits for seven days from the sale date. This is just to make sure that you do ship out the items you’ve sold to customers.
As soon as Paypal releases your funds, you can then immediately use the money you’ve earned. Do not worry, because this happens to everyone and the probationary period is only a couple of weeks. After that, you can instantly access your profits.
3. Create A Business Entity
Are you a resident of the United States and is adamant in becoming an eBay drop-shipper?
Before you can make a tax-exempt purchase from your supplier, you’ll be required to have a Sales Tax ID that you can get from your local government website or visit your local county clerk’s office. This authorizes you to charge sales tax from any of your buyers. This is applicable even if the transaction is done online.
*As sellers because our purchases were tax-exempt, we were required to charge our customers tax and remit(give) the tax money collected to the government. eBay now collects sales tax from most your customers on your behalf.
**WE HIGHLY RECOMMEND CONSULTING A TAX PROFESSIONAL**
From eBay: “If you sell to buyers in the US, some states may require you to collect applicable Internet Sales Tax on your transactions. By January 1, 2020, a total of 38 states require the collection of sales tax. In such cases, eBay collects and remits Internet Sales Tax on your behalf.
Learn more about Internet Sales Tax, on our Help pages, or from your tax advisor.
Starting in November 2019, the way taxable transactions are processed and how taxes are collected for remittance will change, as follows:
- In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax.
- Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.
- A record of the sales tax portion of the order will be available on the Seller Hub Order details page and through our Download order report.
The full list of states can be found here eBay Tax Collection*
TaxJar is a service that you can connect to your paypal account and it will keep track of which states you collected tax for in the event that eBay does not. TaxJar can save you a lot of headaches. TaxJar.com
Starting a business can be difficult and there will be instances you are not sure if you are doing it right or not. It will only get easier if you have the right people to connect with or ask questions to.
As an aspiring entrepreneur, you don’t have to feel lost in your journey to success. If you are looking for the best ways to come up with effective strategies to leverage your business, I have the right place you can do that.
Easily schedule appointments at Christal’s Business Consulting and learn about the best ways to maximize your business!
4. List Items To Sell (before you start dropshipping)
**If you try to skip step 4 your account may get suspended by eBay.**
For brand new sellers on eBay, it’s ideal that you start selling items that you own. This is an effective way to build your reputation on eBay. You should not immediately start eBay dropshipping.
As I have mentioned before, you are limited to 10 items in total. What you can do is look for items in your house that are in good condition to be sold. You shouldn’t immediately put just any item on sale because you’re not using it anymore. That’s not how this works. Doing this first will help you learn the platform and how to address any issue that may arise when you do start dropshipping.
Choosing The Products
First, you need to consider whether or not the item you have chosen is on high-demand. For example, electronics are more likely to be faster to sell than a couch that has been sitting in your basement for years.
We know that there are buyers who choose to purchase from sellers who have better feedback. Since you are new on eBay, your feedback is absolutely zero but this does not mean you can’t make some sales. Every account starts with zero feedback.
Here comes the next step. That’s why it’s important to do competition research and make sure that you are offering buyers a better deal. You can do this by going over to eBay’s listing of sold items similar to your product or the same brand as yours. Check the average price. Make sure you have sorted the listing as recently sold items.
Then, check the ones that are currently listed or being sold. From there, you can strategize on how you can offer customers a better bargain than your competitors. Do not aim for a higher price, this will only cause buyers to settle with those who are listed cheaper and have better feedback than you do. Remember, your goal in this beginning stage is to establish your account as trustworthy with eBay. Aim to give exceptional service over crazy profits for now. $1 – $2 profit is just fine!
Writing Product Descriptions
Remember to be truthful in creating your product descriptions and include the flaws.
In providing photos for the items, make sure that it’s you who have taken them and not a stock photo of the product!
Listing Your Products on Sale
Make sure to list it as “Buy It Now”! Make sure that you have the supplies to package and ship these products. You’ll only have to do this to increase your feedback status as a seller on eBay.
Lastly, it’s important to let your customers know that you are an actual person. You can do that by adding a thank you note for every package you ship. Also, include statements that will let them know they can reach you if they have problems with the item. And if they are satisfied, ask for feedback!
After you make a few sales, move on to step 5. If you try to skip step 4 your account may get suspended by eBay.
*Feedback hack: Buy stickers on eBay for .05 to .10 cents. After you make the purchase the Seller will leave positive feedback. The feedback you receive as a buyer will be tallied with the feedback you receive as a seller. It’s an easy way to get some feedback early on
5. Create An Account On Supplier’s Website!
You must know what products you want to sell in your eBay dropshipping business. You can focus on one category, let’s say electronics. Or if you want to have a variety of products to offer, it’s up to you.
Whoever you want to source products from, you must create an account on their website. Note that eBay will charge 10% per sale as a “Final Value Fee”(Unless you upgrade to a store. If you upgrade to a store eBay will charge less per sale.) and collect the tax on your behalf.
In order to make a tax-exempt purchase, you will need to apply on the supplier’s website. If they do not have that option then call and ask if they offer tax exempt purchases for businesses.
Most states require sales and use tax numbers, in some cases your tax ID is all you need but there are also some that do not require sales and use tax numbers at all. These are Alaska(Don’t ship here. Suppliers tack on extra shipping fees), Delaware, Montana, New Hampshire, and Oregon. Your supplier will let you know which states need which document numbers. It seems intimidating but it’s a fairly straight-forward process.
IMPORTANT NOTE: Do not immediately start dropshipping unless you have sold 4 items you own and got from your home. If you do not keep this in mind, there is a huge chance that eBay will end up banning you.
6. Start Sniping Dropshipping Items From Other Dropshippers
Let’s say that you have chosen Lowe’s as the supplier for your eBay Dropshipping business. Search on Lowe’s website for their store brands such as Allen + Roth or Harbor Breeze or Kobalt.
Then click on an item to see the product overview. Make mental notes of what photos are included in there and copy the product title.
For example, I have chosen this item. Then I copied the title and pasted it on eBay to Search. The results below show the exact product from other sellers, and this means that these accounts are also drop-shippers.
They also have the same photos from Lowe’s, so that could mean that it is their supplier as well. To verify that this account is also a drop shipper, click their listing and navigate to their other items. If you see any other Allen + Roth or any of the other Lowe’s brands, you’ve found someone to snipe from.
If you think it’s a great product and want to sell the same item, there’s a button within the listing that says “Sell one like this”. Once you click that, you’ll be redirected by eBay to a page where you can create your listing.
Most of the form will pre-fill with the other seller’s information. Double-check that they have promised the same thing that your supplier did. For example, if Lowe’s states that this is a Queen bed, don’t just copy King bed from the other drop-shipper. Make the correction.
It doesn’t pay to be unorganized, so make sure that each product you drop ship is recorded so that you have an overview of how many items were sold, how much profit you made, etc.
If you have no idea how to get started with that, don’t worry I have the solution for you! You can easily download our FREE SPREADSHEET TEMPLATE. Utilize it for setting product prices as well as managing inventory and orders placed.
As mentioned previously, to find other products you can sell, go check the stores of any of the drop shippers you’ve seen on the searches you have made. You can repeat this process for every product you are interested in selling.
Make sure to weigh out any possibility and that each item you are aiming to have in your eBay dropshipping business are highly-desirable and are on demand.
7. Repeat Step 6
If you are constantly having worries about what items are more likely to sell fast, and what great offers you can give customers, just repeat step 6.
Do not worry about the feedback you have since you are just starting out. People are more likely to look past that once they know that you are offering them a deal that is good enough or if it’s better than your competitors.
This is a strategy of effectively maximizing your competition research. It is a must to do your research, look for the right items, list it at the right price for a guarantee that you can sell fast and successfully.
Now that you know how to get started with eBay Dropshipping, I believe you’ll eventually reach success as I did. You can learn about my journey as a drop shipper and how I have reached the point of financial stability at Hustle and Motivate Podcast on iTunes!
Do you have inquiries or you want some ideas on how to maximize your eBay Dropshipping business,? You can schedule a consultation with me right here at HustleAndMotivate.com!
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