Many eBay sellers find success by drop shipping. Dropshipping is an excellent way to reduce inventory while at the same time, increasing product offerings. However, it can be more profitable to consider in-house or third-party order fulfillment and skip drop shipping altogether.
This article will help you make sense of all that eBay dropshipping entails, along with other fulfillment options that may work better for your needs.
The idea is that you list a product for sale on an online marketplace like eBay, but the product ships from somewhere else. The drop shipper will send out the order from their location after the sale is made, and you pay the drop shipper’s wholesale price. To make a profit, the end customer pays a higher retail price for the item. The difference between the wholesale price and the retail price is yours to keep.
Dropshipping is one way to get started in online retail. eBay sellers with little investment capital only pay for the item after it has already been paid for by the customer. This makes it perfect for selling online without any money. One significant benefit is that you don’t have to store inventory since the drop shipper has the items in their warehouse. Finally, the drop shipper handles packaging and shipping the product for you, freeing up your time to focus on growing your business.
Here’s what you need to do to be successful.
You are the person responsible for getting the product that was represented online to the customer just as it was described online. As the seller, you are responsible for any returns, complaints, and order problems. Working with a reputable drop shipper that can ensure high quality-control and realistic product representations is critical.
Neither you nor your customers want to be blindsided by backordered or out-of-stock items. Buyers expect to receive goods promptly and get what they paid for. Excessive problems like this can trigger a non-performance violation on eBay. That can lead to eBay account termination eventually. Develop a relationship with the drop shipper and ask them to keep you up to date on what’s in stock. This is sometimes easier said than done, though.
Asking customers for feedback is vital to know how well the drop-shipper is satisfying their delivery needs. Late orders can cause buyers to look elsewhere, making delivery speed one of the most critical factors. Keeping tabs on active orders is smart, too. That way, you can notify customers if an order is late. Customer satisfaction is essential for keeping your eBay seller stats in good shape. And all eBay sellers know that terrible feedback can kill sales quickly!
You have three choices when deciding how to run your eBay business. You can fulfill orders yourself, outsource fulfillment to a third-party or start drop shipping.
Most new online retailers start out fulfilling orders themselves. They pick and pack orders one by one, starting with a small operation. Many eBay sellers work from home doing this. As sales grow, you may outgrow this way of doing things. Your family might not enjoy tripping over boxes and having packaging supplies all over the dining table for too long. While it’s great that sales are growing, problems can arise if you start struggling to keep up with orders or realize you need to pay for pricey storage space.
Ecommerce fulfillment companies specialize in taking order fulfillment off your hands entirely. This is often the next step for sellers who either don’t want to handle picking and packing orders themselves or for eBay sellers who have outgrown in-house fulfillment. Outsourcing fulfillment tasks can improve efficiency, streamline costs, and take a whole lot of stress off your plate.
This is an excellent option for eBay sellers who want a hands-off selling strategy. But being too hands-off can sometimes be a problem. We already talked about some of the benefits of drop shipping, so let’s go over some cons.
One downside is that it is harder to keep up with stock levels and quality control than it is with an eCommerce fulfillment company. Dropshipping can sometimes eat into your profit margins more as well. That’s the price you pay for totally hands-off order fulfillment. Still, dropshipping is a decent option for eBay sellers who are willing to try it.
Dropshipping is very popular in 2019. But if you want to remove the hassle of storing inventory and fulfilling orders yourself, an eCommerce fulfillment company could be the way to go.
Fulfillment companies allow you to keep stricter quality control standards since you will ship the product to the fulfillment company in bulk. Having the product in hand will enable you to ensure the items are as expected — something you can’t do when dropshipping.
Ecommerce fulfillment companies are the happy medium for sellers who want hands-off order fulfillment while still maintaining some control over their goods.
The bottom line is that both options allow you to make money without the hassle of picking, packing, ѕhiррing, renting storage space, and other overhead costs. Dropshipping can sometimes be the riskier of the two options since you have less control.