| Dropshipping is a method of reselling in which one can | | | | the average selling price. Market saturation is also a |
| offer merchandise for sale without actually | | | | factor, as the market can quickly become saturated |
| maintaining a physical inventory. Through agreement | | | | with similar items when hundreds of Ebay sellers are |
| with a wholesale distributor a product is offered for | | | | all using the same distributor network. Yet another |
| sale in either a fixed price or auction format. If the | | | | issue that must be factored is the "fee" that many |
| item sells, the wholesale cost of the item plus | | | | distributors charge for making their service available |
| shipping is forwarded to the distributor and the | | | | to you. |
| distributor then ships the item to the buyer. The | | | | Do the math very carefully. Your profit per item sold |
| difference between the wholesale price and the | | | | will be based on the winning bid (or BIN) minus your |
| selling price is your "profit". You essentially become | | | | cost for the item, listing fee, final value fee, any |
| the middle man between your customer and your | | | | extras such as gallery fees, Paypal or CC fees, and |
| distributor. | | | | any (pro-rated) distributor fees. It can get very tight. |
| It is a very attractive arrangement on paper as you | | | | So is it actually possible to make money with |
| neither have to purchase, store, or ship merchandise. | | | | dropshipping? The answer is yes. What separates the |
| Unfortunately for many the reality can be much | | | | successful sellers from the unsuccessful is extreme |
| different. Your product availability is completely in the | | | | attention to detail. The ideal situation is a distributor |
| hands of your distributor. Items that are out of stock | | | | that is personally known to you or with which you |
| or not shipped in a timely manner will quickly | | | | have a previous or ongoing business relationship. |
| skyrocket your negative feedback and severely | | | | Barring that, it is vitally important that you fully read |
| damage your reputation as a seller. In this situation | | | | and understand the policies of a prospective |
| there is very little you can do beyond damage | | | | distributor. Do not be swayed by promises of |
| control. | | | | fantastic profits. Research your market and do a |
| While this is probably the primary issue with using | | | | thorough cost analysis. Move slowly and honestly |
| dropshippers there are several other caveats that | | | | assess whether a particular arrangement will be |
| also must be considered. | | | | profitable. |
| It is absolutely essential that you know the true | | | | If all looks well, the wise move is to then slowly |
| wholesale cost of merchandise before you commit to | | | | integrate dropshipping into an existing Ebay business |
| selling it. Many dropshippers do a great business selling | | | | and carefully evaluate the results. If you have done |
| items to naive ebayers who then find they are | | | | your homework, you should be able to profitably |
| unable to resell them at anything near profit. | | | | increase your dependence on dropshipping. If things |
| Research your market thoroughly with a tool such as | | | | do not work as planned, you can move along with a |
| Terapeak to get a feel for how well an item sells and | | | | minimal amount of damage to your business. |