eBay Dropshipping: The Ultimate Guide to Dropshipping on eBay

eBay dropshipping is becoming a no-go, according to eBay’s updated dropshipping policy. With eBay threatening to “remove your listings from search, display them lower in search results, or remove them completely from the site,” eBay dropshippers have been looking for alternative channels to promote their products. In this eBay dropshipping guide, we’ll break down if eBay dropshipping is worth it, take a look at their dropshipping policies, and share what platforms to use instead.

What is eBay?

eBay is an online auction website where you can sell your products online.

Like other ecommerce marketplaces such as Amazon and AliExpress, eBay’s user base has been steadily increasing for years. In Q4 of 2018, the platform reached 179 million users.

The high volume of users on the platform has attracted online sellers looking to find customers for their products.

ebay statistics

How Does eBay Work?

You can find, bid on, and buy almost anything on eBay – from cars to jewelry.

On eBay, sellers post their products with a starting bid. The lower the starting bid, the more likely it is that customers will bid on the product. Customers bid on the product for the specified number of days set by the seller until the highest bid finally lands the sale.

However, sellers can instead add a “Buy It Now” option on their product page to control the product price and to allow customers to purchase, without bidding, at a fixed price.

how does ebay work

What is Dropshipping?

Dropshipping is a business model where a business owner resells a supplier’s products. The supplier creates, stores, and ships products on the business owner’s behalf. Since the supplier is responsible for creating, storing, and shipping goods, business owners have more time to focus on marketing and customer service to grow a brand in a shorter period.

Benefits of Dropshipping

There are numerous dropshipping benefits, here are a few:

  • Low risk: Dropshippers only purchase goods as customers purchase them. There are no minimum order quantities. So if a customer only buys one necklace from your store, you only need to pay for that one specific necklace. It’s a great business model for new entrepreneurs looking to experiment or experienced entrepreneurs looking to try a new niche.
  • Highly automated: Using dropshipping marketplaces like Oberlo, you’ll be able to automate most of your dropshipping efforts. It only takes one click to add a product you want to sell on your store. Once a sale rolls in, it only takes one click to process the order. This gives you more time to focus on what matters: marketing and customer service.
  • Lower costs: Since you’re selling a manufacturer’s product instead of designing your own, business owners tend to pay wholesale pricing. Depending on where you’re dropshipping from, you might even benefit from having low shipping rates (sometimes even free) that keep costs low for yourself and your customers.
  • Save time: You only need to focus on a couple of administrative tasks, marketing, and customer service. The manufacturer tends to carry the weight of the most time-consuming (packaging and shipping) and expensive (carrying inventory) tasks.
  • Choose from millions of products to sell: You can choose from millions of products from a wide-range of dropshipping niches. Simply look through product marketplaces like Oberlo and add any product to your store in only one click. You can sell proven products rather than trying to create your own.

Is Dropshipping on eBay Allowed?

Even though dropshipping is completely legal, whether eBay allows dropshipping is another topic altogether. So, let’s take a look at eBay’s dropshipping policies next…

eBay Dropshipping Policies

Is dropshipping banned on eBay? Not exactly. But it is restricted. Dropshipping is technically allowed on eBay provided that you “fulfill orders directly from a wholesale supplier.” So, what does that really mean? It means that if you purchase bulk quantities from a wholesale supplier, you can promote those products on eBay.

What can’t you sell on eBay? Well, if you’re re-selling products from another retail website or marketplace – think Amazon or AliExpress – you can’t dropship on eBay. eBay states, “purchasing the item from another retailer or marketplace that ships directly to your customer is not allowed on eBay.” So, dropshipping from Amazon to eBay isn’t allowed: You can’t list something on eBay, buy it from Amazon, and then ship it to your eBay customer.

And eBay is strict about this policy, stating that they’ll remove or lower your listings in their search results. If you’re a long-time seller, they may even lower your rating or status on the platform. Ouch!

ebay dropshipping policiesDropshipping from Amazon to eBay

Amazon sellers, in particular, have been hit the hardest with eBay’s dropshipping policies. Previously, Amazon sellers have used Amazon-to-eBay dropshipping software like Easync and PriceYak to sell their Amazon products on eBay. This way, eBay sellers could resell Amazon products at a higher price.

However, with new policies in place, some store owners have suffered the consequences.

In an 18-page thread on eBay, customers were frustrated having ordered a product on eBay, only to receive an Amazon package in the mail with a gift receipt inside. Knowing that they were paying a premium for purchasing on eBay naturally led to angry customers hurting the eBay brand. So policies were changed to stop sellers from dropshipping from Amazon to eBay.

How to Dropship on eBay

There’s only one way to dropship on eBay – but it’s not what you think. To dropship on eBay, you’ll first need to buy bulk inventory from a wholesaler.

You can negotiate with your wholesaler to ship out products to customers on your behalf. However, you might find you get rejected but most wholesalers.

That doesn’t mean you won’t be able to make it work, though. So, after buying your inventory, you can ship the products out to a fulfillment service. That service will monitor inventory, package, and ship products on your behalf.

One big downside, of course, is that you need to buy inventory up front. And there’s no guarantee that your products will sell. The business risk is a bit higher than traditional dropshipping, as you won’t only be buying inventory customers have purchased.

Is Dropshipping on eBay Worth It?

In short, no. Here’s why:

Dropshipping on eBay requires you to buy bulk inventory, pay listing fees, and you don’t even get to own your customer base. In other words, lots of the very best things about dropshipping – like not having to buy in bulk and owning your own store – are removed from the equation.

Unless you can find a wholesaler who will allow you to buy individual products to sell online, you’ll likely need to buy bulk inventory. This can add costs. Plus, you aren’t even guaranteed to sell the items you buy, increasing your risk as a seller. And if you’re buying inventory from a wholesaler, you aren’t really “dropshipping” on eBay.

To list a product on eBay, you need to pay a listing fee. They have a free option available in case the product doesn’t sell – but there’s a catch. The starting price of the product needs to be between 0.01-0.99 cents. And you probably wouldn’t do that. So you risk paying for a listing fee for a product that might not even sell. This makes eBay dropshipping more an expensive venture.

But the worst problem when it comes to dropshipping on eBay is actually the fact that you don’t get to own your customer base. You’re helping eBay grow their business instead of growing your business. You can’t retarget customers to win back the sale. Building an email list so you can promote your other products to customers isn’t possible. And when people tell their friends where they bought their product, they’ll tell them “eBay” instead of the name of your shop.

And that’s to say nothing of eBay’s evolving (and increasingly restrictive) approach to dropshipping.

eBay Dropshipping Alternatives

While the idea of dropshipping on eBay sounds appealing, the reality is it’s not practical. So what can you do instead of eBay dropshipping? Start your own Shopify store.

Here are a few benefits of dropshipping with Shopify:

  • Only pay for price of goods after each sale on your store
  • Choose from millions of products to sell on the Oberlo marketplace, which can be found in the Shopify App store
  • Low barrier of entry: perfect for a new entrepreneur
  • Own your own assets (customers, email list, website)
  • Own your own marketing (remarket to your customers, on your own terms)

oberlo marketplaceThe main reason why dropshipping on Shopify is better than eBay dropshipping comes down to ownership. Would you rather help another company make money or would you rather help yourself make money?

With your own brand, you control how much you charge, how much you market, and how much you own. You can market to your customers at the frequency you’d like. You can create retargeting ads which have proven to perform well for many store owners. You can finally build your own email list. What Shopify offers that eBay dropshipping can’t is entrepreneurial freedom. You can take your dropshipping business in any direction you’d like.

Conclusion

So while you can dropship on eBay, you’re better off building your own brand to dropship products. By listing products on eBay, you need to buy inventory from wholesalers, pay listing fees, and you risk getting kicked off the platform when policies change. However, by running your own online store, you’re able to own your customer base, remarket to them through social and email, and build an unforgettable brand for years to come. 

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